Contract Pricing and Pricing Fundamentals

Many federal contractors are wasting significant amounts of time and increasing audit risk and exposure by the improper use of price and cost analysis. Many contractors and Government oversight officials do not understand the true requirements contained in the Federal Acquisition Regulation (FAR) regarding the use of Price Analysis versus Cost Analysis. This results in significant time and expense preparing and justifying detailed cost estimates when the most basic price analysis tools and techniques, which require far less effort, are all that is required. This has been made even more challenging by clarifications made to the FAR in 2011 that actually encourage contracting officers to reach out and obtain cost details, even when they are not required.

This course will examine the principle phases of price and cost analysis – from the initial contract solicitation to the final contract award. We will cover methods for identifying, considering and understanding whether the ultimate price will require either cost analysis or price analysis. We will also cover relevant costs, tools and techniques associated with price analysis, key elements associated with cost proposal requirements including documentation of direct labor, material and subcontracts and the associated cost analysis and cost realism analysis. This foundational knowledge can help companies to provide the appropriate levels of data to customers and demand appropriate levels from vendors and subcontracts.