Management Concepts

# Intermediate Cost and Price Analysis

## Available dates

##### Disclaimer

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Full disclaimer.## About the course

Contracting professionals serve as business advisors promoting the best interests of the government. Adhering to the FAR and Contract Pricing Reference Guide (CPRG), you will build on the skills of your current certification to conduct a thorough cost and price analysis and gain proficiency in the necessary quantitative tools and techniques to help in the decision-making process. You will go through relevant, complex, and realistic scenarios that will prepare you to tackle any contract arrangement issue you may encounter.

## Learning Objectives

- Given a contractor’s proposal information, develop an Excel spread-sheet to model a proposal
- Given market research and proposed information from offeror(s), using sampling data, select the appropriate statistical information to use in facilitating the decision-making process
- Given market research and proposed information from offeror(s), using historical data and regression analysis, select the appropriate statistical information to use in facilitating the decision-making process
- Assuming an advisory role in evaluating acquisition proposals, successfully summarize the development, assumptions, application, and risk of cost estimating relationships (CERs)
- Given market research and proposed information from offeror(s), using historical data and estimating factors, select the appropriate statistical information to use in facilitating the decision-making process
- Given market research and proposed information from offeror(s), using historical data and improvement curve analysis, select the appropriate statistical information to use in facilitating the decision-making process
- Given market research and proposal information from offeror(s), use historical data to determine the impact of variations in quantity
- Given a contractor’s proposal information and using cost estimating relationship analytical tools, develop a government price objective
- Given a proposed contract change, identify issues and factors to be considered in developing the government’s negotiation objective for a contract equitable adjustment
- Given a contract termination, identify issues and factors to be considered in pricing a termination settlement
- Given a point estimate (contract cost, ceiling price), analyze the associated cost risk
- Given an acquisition requirement, identify the appropriate incentive contract type arrangement to meet the customer’s needs and that will motivate the contractor to perform in the best interest of the government
- Given a contract type in a competitive environment, explain the issues and factors to be considered when performing a cost realism analysis

## Course Topics

Proposal Modeling

- The Process of Cost Analysis
- Exercise 1-1: ACME Proposal
- Exercise 1-2: GPS Modifications
- Wesley Case Study Introduction

Using Statistics in Contract Pricing

- Organizing the Data Example
- Stratified Sampling — 100% Analysis Example
- Measures of Central Tendency: Contractor A
- Measures of Central Tendency: Contractor B
- Exercise 2-1: Services Contract
- Measures of Central Tendency: Contractor C
- Exercise 2-2: ACME Proposal: Evaluating Wage Rates
- Question from the Field — Making Probability Statements
- Exercise 2-3: Sports Officials
- Question from the Field — Confidence Intervals
- Descriptive Statistics
- Exercise 2-4: Record Time
- Exercise 2-5: Emergency Meals
- Exercise 2-6: Generator Overhauls

Using Regression Analysis in Contract Pricing

- Regression Analysis
- Water Purifier Example (Parts 1 and 2)
- Dependent and Independent Variables Discussion
- Significance of the Equation
- Exercise 3-1: Newton Corporation (Part 1)
- Statistics to Regression Transition: Mobile Water Purifiers
- Exercise 3-1: Newton Corporation (Part 2)
- Exercise 3-2: ACME Proposal: Forecasting Wage Rates
- Exercise 3-3: Janitorial Services
- Data Analysis Toolpak
- Exercise 3-4: Regression Practice Problems
- Exercise 3-5: IT Support

Using Cost Estimating Relationships in Contract Pricing

- Steps to Developing CERs
- Exercise 4-1: ACME Program Support Factor (Parts 1 and 2)
- Exercise 4-2: CER Practice Problems

Using Improvement Curve Analysis in Contract Pricing

- Exercise 5-1a: ACME Manufacturing Hours
- Improvement Curve Theory
- Exercise 5-1b: ACME Fabrication Hours
- Variation in Quantity
- ACME Manufacturing Hours – Individual Exercise
- Exercise 5-2: Could This Be Happening?
- Discussion & Lesson Review
- Wesley Case Study

Pricing Equitable Adjustments

- Modification Process
- Defining Equitable Adjustments
- Approaches to Pricing Equitable Adjustments
- Eichleay Formula
- Exercise 6-1: Conrad Corporation
- Exercise 6-2: ABC Construction Company

Pricing Termination Settlements

- Contract Termination
- Duties of the TCO and the Prime
- Commercial Item Termination
- Noncommercial Item Termination
- Exercise 7-1: Monster Termination
- Exercise 7-2: Crane Termination

Cost Risk Analysis

- Estimating Most Likely Cost
- Contract Risk and Contract Types
- Symmetric Approximation
- Practice Exercises
- Exercise 8-1: Radar Modification Risk Analysis
- Weighted Guidelines Refresher

Incentive Contracting

- CPIF and FPIF Clause and Application Discussion
- Graphing Practice
- Policy Directions
- Exercise 9-1: An Acquisition Planning Exercise
- Exercise 9-2: 50/50, 120% FPI with ACME
- Exercise 9-3: ACME FPIF Ceiling Price Test
- Incentive Sharelines
- Exercise 9-4: Evaluating Three Competing Offers
- FPIF Using the 50/50, 120% “Starting Point” Discussion
- Week 2 Integrating Case

Conducting Cost Realism Analysis

- Source Selection Review
- Cost Realism
- Exercise 10-1: Aircraft Maintenance Repair and Overhaul Impact of Uncompensated Overtime on Cost Realism Analysis
- Impact of Uncompensated Overtime on Cost Realism Analysis
- Exercise 10-2: Most Probable Cost Estimate/Uncompensated Overtime
- Cost Realism in Cost-Reimbursement Proposal Evaluation
- Cost Realism in Fixed-Price Proposal Evaluation
- Exercise 10-3: Individual Graded Exercise

## Who should attend

The course is designed to prepare individuals seeking a Federal Acquisition Certification in Contracting (FAC-C) or Defense Acquisition Workforce Improvement Act (DAWIA) Level II certification for follow-on courses.