Cost or Pricing Data Proposals
Proposal Compliance
Material Acquisitions Strategy and Adequacy (MASA)
PIRA #TLS202203004
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Proposal Compliance
Our customers rely on Lockheed Martin and our suppliers to provide timely and compliant
proposals to support the USG timelines
Supplier’s willingness to be proactive and diligent in meeting requirements is appreciated!
• The proposal function drives future revenue for your
business
• It is critical for Lockheed Martin and our Global Supply
Chain to deliver timely and compliant Proposals with
Certified Cost or Pricing Data
• Department of Defense and Oversight Agencies are
pushing contractors by demanding greater
accountability and protecting taxpayer interests
• We all need to deliver on the commitment of providing
FAR compliant proposals on the due date
• Noncompliant proposals are deemed by the Oversight
Agencies as “unsupported”
• Only 1 in 3 proposals from our Global Supply Chain
partners is adequate upon submission
Overview
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Proposal Compliance
The objective of this training is to provide an overview of the Lockheed Martin proposal process.
The training will outline the FAR (Federal Acquisition Regulation) requirements for submitting a
proposal and provide guidance on completing the required documents, estimates and
compliance checklist.
• FAR 15.408, Table 15-2
• The Truthful Cost or Pricing Data Act
(1)
requires Cost or Pricing Data for
proposals:
• $2,000,0000 for prime contracts awarded after July 1, 2018
• $750,000 for prime contracts awarded prior to July 1, 2018
• Proposal Adequacy Checklist
(2)
• Lockheed Martin Form F330
• Document submitted by supplier to certify proposal compliance to
FAR
(1) Previously known as the Truth in Negotiations Act (TINA)
(2) FAR 252.215-7009 Proposal Adequacy Checklist as prescribed in 215.408 (4)
Download the F330:
Overview (Continued)
Here
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Proposal Compliance
Minimum Documents Required for a FAR Compliant Proposal
• Expectation: Proposal needs to be responsive to the RFQ and include:
• Price Buildup Model (working excel spreadsheet)
• Including CBOM
• Basis of Estimate – explain estimating methodology
• Proposal Cover Letter – SA1235 / SF1411 / Supplier Created
• Cost Accounting Standards Notices and Certification – RF540 form
• Adequacy Checklist – F330 form
• Index or Table of Contents of documents submitted
• Any other RFQ required documentation
• If necessary, Audit Denial Letter
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Proposal Compliance
What is your Proposal Process?
• Business Systems
• Accounting system
• Cost estimating
• Purchasing
• Time keeping
• Property management*required if government furnished property is provided
• Earned Value Management *generally applicable to large business
• Material management *generally applicable to large business
• Standard Operating Procedures (SOP)
• Do you apply continuous improvement initiatives to your
proposal process?
• Who is responsible to submit the proposal to Lockheed
Martin?
• Internal timeline per organization?
• Who supports each of the cost elements included in the
proposal?
• Estimating Process
• Material
• Escalation methodology
• If applicable, sub tier over threshold, CID, cost analysis, proof of
competition
• Labor hours
• Labor rates
• Escalation methodology
• Indirect rates
• ODC
• other
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Proposal Compliance
Proprietary Information – Access to books and records
Download a sample:
At time of proposal submittal, all elements of
cost must be ready to be audited
• Determine which entity you will allow access to books and
records
• Evaluation will be conducted either by Lockheed Martin or the
US Government
• Specify which cost elements will be reviewed by which entity
If access is denied to Lockheed Martin a
Refusal/Release letter
will be required, and
must:
• Identify the specific cost and pricing data element that LM is
being denied access to
• Specify whether permission is granted for the “US government
to release a copy of their findings to Lockheed Martin”
(sanitized/redacted)
Full DCMA Assists Audit:
Audit Refusal/Release letter on Supplier’s letterhead stating that the Supplier will
not allow Lockheed Martin to perform a Fact Find; however, the DCMA will be
allowed to visit the Supplier to perform an Assist Audit.
Completed Proposal Cover Sheet
Supplier must be ready for the DCMA to come in and conduct the full assist audit
with a fully FAR compliant proposal at the time the RFQ response is submitted.
Complete the adequacy checklist in preparation of the assist audit. The DCMA
assist audit will be initiated upon receipt of the Supplier’s bid. DCMA assist audits
take months to complete and in order to meet our timeline, the Supplier must be
fully prepared for the audit.
Rate-only DCMA Assists Audit:
Audit Refusal/Release letter stating that Lockheed Martin will not be allowed to
fact find the Supplier’s rates and factors, but the DCMA will be allowed to perform
an assist audit of the rates and factors.
Completed Proposal Cover Sheet
Completed and signed F330 Adequacy Checklist
CCOPD for the direct material, subcontractor cost, ODC and labor hours in the
proposal. Lockheed Martin will conduct a fact find of those direct cost elements
.
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Proposal Compliance
Federal Acquisition Regulation (FAR) 15.408 Table 2
FAR 15.408, Table 15-2 outlines instructions for submitting Cost/Price When
Certified Cost or Pricing Data (COPD) and includes 3 main subject areas:
*Cost by Fiscal Period is required
Cost Elements
Formats for
Submission of
Line Item
Summaries*
Required Item FAR Section
Cover Sheet FAR 15.408, Table 15-2, I.A
Index of Cost or Pricing Data FAR 15.408, Table 15-2, I.B
Subject
General
Instructions
Cost or Pricing Data FAR 15.408, Table 15-2, I.C
Cost Element Breakdowns FAR 15.408, Table 15-2, I.D
Summary Cost Element Breakdowns FAR 15.408, Table 15-2, I.E
Incurred Cost FAR 15.408, Table 15-2, I.F
Forward Rate Pricing Agreement (FPRA) FAR 15.408, Table 15-2, I.G
Certificate of Current Cost or Pricing Data FAR 15.408, Table 15-2, I.H
Materials (CBOM) FAR 15.408, Table 15-2, II.A
Direct Labor FAR 15.408, Table 15-2, II.B
Indirect Costs FAR 15.408, Table 15-2, II.C
Other Costs (ODC) FAR 15.408, Table 15-2, II.D
Royalties FAR 15.408, Table 15-2, II.E
Facilities Capital Cost of Money (FCCM) FAR 15.408, Table 15-2, II.F
New Contracts FAR 15.408, Table 15-2, III.A
Change Orders, Modifications, and Claims FAR 15.408, Table 15-2, III.B
Price Revision / Redetermination FAR 15.408, Table 15-2, III.C
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Proposal Compliance
Cover Sheet
A Cover Sheet is required with each proposal submitted to Lockheed Martin and must
include all
11 items listed below:
1. Solicitation, contract, and/or modification number
2. Name and address of Offeror
3. Name and telephone number of point of contact
4. Name of Government contract administration office (if available)
5. Type of contract action
6. Proposed cost; profit or fee; and total
7. Whether the offer will use Government property, and, if so, what property
8. Whether the organization is subject to Cost Accounting Standards (CAS)
9. The following Required Statement
10. Date of Submission
11. Name, title, and signature of authorized representative
“This proposal reflects our estimates and/or actual costs as
of this date and conforms with the instructions in FAR
15.403-5(b)(1) and Table 15-2. By submitting this proposal,
Offeror grants Lockheed Martin and or, the Contracting
Officer and authorized representative(s) the right to
examine, at any time before award, those records, which
include books, documents, accounting procedures and
practices, and other data, regardless of type and form or
whether such supporting information is specifically
referenced or included in the proposal as the basis for
pricing, that will permit an adequate evaluation of the
proposed price.”
Federal Standard Form (SF) 1411, includes all 11 items and can be submitted as the Cover Sheet
This is primarily an administrative item and may be more efficient to fill out after the proposal is completed but before submitting to LM
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Proposal Compliance
Cover Sheet
Supplier Created Example
Each number
correlates to one
of the 11
subparts of
FAR.408 Table 2
Section 1.A
Contract Number: 0326015NDW
(D3) Decelerometers
500 Harmony Road
Floyd, Virginia 20001
Point of Contact
Dave Higgens
D3 Contracts Manager
(444) 333-2222
d.hasselhoff@d3.com
Contract Administration Office
DCMA Blacksburg
Tom Stoppard, DACO
300 Anderson Station Blvd, Blacksburg, VA 20002
(434) 222-3333
tom.stoppard@dcma.mil
Type of Contract Action: New Contract / FFP
Proposed Cost + Proposed Fee = Total
$3,259,376 + $488,906 = $3,748,282
Government Property: We will not require the use of any Government property in the performance of this work.
Cost Accounting Standards (CAS) and Estimating & Accounting Compliance
D3 is subject to the Cost Accounting Standards Board (CASB) Regulations (Public Law 91-379) as amended and FAR Part 30. This
contract action is subject to CAS. D3 submitted a CASB Disclosure Statement to the above referenced DACO on January 15, 2014. D3
has not been notified that we are or may be in noncompliance with our Disclosure Statement or CAS. No aspect of this proposal is
inconsistent with our disclosed practices or applicable CAS. This proposal is consistent with our established estimating and accounting
practices and procedures and FAR Part 31, Cost Principles.
This proposal reflects our estimates and/or actual costs as of this date and conforms with the instructions in FAR 15.403-5(b)(1) and FAR
15.408, Table 15-2. By submitting this proposal, we grant the Contracting Officer, Lockheed Martin and authorized representatives the
right to examine, at any time before award, those records, which include books, documents, accounting procedures and practices, and
other data, regardless of type and form or whether such supporting information is specifically referenced or included in the proposal as
the basis for pricing, that will permit an adequate evaluation of the proposed price.
January 25, 2020
Dan Little, President/CEO
Dan Little
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Proposal Compliance
Cover Sheet
SF 1411 Example
1. Solicitation, contract, and/or modification number
2. Name and address of Offeror
3. Name and telephone number of Point of Contact
4. Name of Government contact Admin Office
5. Type of contract
5. Type of contract
6. Proposed Cost; profit or fee; and total
7. Whether Government
Property is Required
8. Whether the offeror is subject to Cost Accounting
Standards
9. Required FAR
statement
11. Name,
Title and signature
10. Date
Download the SF1411:
Here
Each number
correlates to one
of the 11
subparts of
FAR.408 Table 2
Section 1.A
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Proposal Compliance
Include an Index, appropriately referenced, identifying all certified cost or pricing data and information
accompanying or identified in the proposal and is a separate table from the Table of Content.
This document can be completed after the supplier has put together the proposal, so accurate page numbers are used in the Index
• This is a living document that is updated
throughout review and analysis
• The document is updated with any future
additions and/or revisions, up to the date of
agreement on price
• This index and all supplements must be
included as an attachment to the Offeror’s
Certificate of Current Cost or Pricing Data to
be provided at the conclusion of negotiations
Index
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Proposal Compliance
Cost Element Breakdown typically includes but is not limited to the following cost elements:
• Total Direct Labor hours and cost
• Total Material cost
• Other Direct Cost (ODC)
• Indirect Cost (G&A, Overhead, Fringe, etc.)
• Profit/Fee
Cost Elemental Breakdown
Proposals covering multiple years or price points (min/mid/max) require a cost element
break down and summary totals for each year or price point
• Ensure that part pricing is included in the proposal and reconcile to summary pricing
• All numbers (hours, rates, qty) need to be supported with logical tracing/mapping back to
the source data
• Nonrecurring Expenses (NRE) are considered a separate line item
If a proposal has multiple CLINs, it must include cost elemental breakdown per CLIN which flows
into a total cost summary breakdown
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Proposal Compliance
Total
Rates
Part 1
Part 2
2021 Total
Rates
Part 1
Part 2
2022 Total
All Years
Manufacturing Direct Labor Hours
6000 3600 9600 6000 3600 9600 19200
Manufacturing Direct Labor Cost
$20.00 $273,900 $164,340 $438,240 $20.60 $277,656 $166,594 $444,250 $882,490
Manufacturing Overhead
300.00% $27,910
$16,746
$44,657 305.00% $26,794
$16,076
$42,870 $87,527
Manufacturing Cost
$301,810 $181,086 $482,897 $304,450 $182,670 $487,120 $970,016
Engineering Direct Labor Hours 3000
2160 5160
3000
2160
5160 10320
Engineering Labor Cost $45.87 $167,610 $120,679 $288,289 $47.13 $171,378 $123,392 $294,770
$583,059
LOE Labor Hours
10 25
35
10 25
35
70
LOE Labor Cost
$45.76 $358 $894 $1,252 $46.98 $370 $925 $1,294
$2,546
Direct Material $11,128 $80,057
$91,185
$11,295 $80,774
$92,070
$183,255
Material Handling 10.60% $2,849
$20,494
$23,343
10.69% $3,128
$22,366
$25,494
$48,837
Material Cost $13,977 $100,551
$114,528
$14,423 $103,140
$117,564 $232,092
ODC
$0.00 $5,710.00
$5,710
$0.00 $0.00
$0 $5,710
Subtotal Cost $483,755 $408,921
$892,676
$490,621
$410,127
$900,748
$1,793,423
G&A 7.57% $36,620
$30,955
$67,576
7.93% $38,926
$32,539
$71,465
$139,041
Total Cost $520,376 $439,876 $960,251 $529,546 $442,666 $972,213
$1,932,464
FCCM 0.36% $1,873 $1,584
$3,457
0.38% $2,012 $1,682
$3,694 $7,151
Profit
11.08% $57,662
$48,742
$106,405
11.08% $58,679
$49,051
$107,730 $214,134
Price $579,911 $490,202
$1,070,113
$590,237 $493,400
$1,083,637 $2,153,750
2021
2022
Show each part
Show each proposed year
Show combined total
Proposal Total
Direct
Labor
Material
ODC
Indirect
Cost
Profit
Cost Elemental Breakdown Example
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Proposal Compliance
Incurred Cost
Incurred Cost, per FAR 15.408, Table 15-2, I.F, are costs associated with work performed before submitting the
proposal
• If the supplier has incurred cost, they must be identified in the Cost or Pricing Data
Forward Pricing Rate Agreement (FPRA)
Agreements with the Government on use of forward pricing
rates/factors, FAR 15.408, Table 15-2, I.G, are to be included with
the proposal submission and include
• A copy of the FPRA approval page
• Description of the nature of the agreement
If there is no FPRA, the proposal must identify all rates and
factors by year that are utilized in the development of the
proposal and the basis for those rates and factors
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Proposal Compliance
Certified Cost or Pricing Data
FAR 2.101 defines certified cost or pricing data as “cost or pricing data” that were required to be submitted in
accordance with FAR 15.403-4 and 15.403-5 and have been certified, or are required to be certified, in accordance
with FAR 15.406-2
Certified cost or pricing data are factual, not judgmental, and are verifiable. While this data does not indicate the
accuracy of the Offeror’s judgment about estimated future costs or projections, it does include the data forming the
basis for that judgment
Keep in mind that certified cost or pricing data are more than historical accounting data; they are all facts that can be
reasonably expected to contribute to the soundness of estimates of future costs and to the validity
of determinations of costs already incurred
This is the certification that the data submitted, in support of the proposal, is in accordance with FAR. It is
independent of the certification that is required at the time of price agreement
FAR 2.101 further defines “cost or pricing data” as all facts that, as of the date of price
agreement or, if applicable, an earlier date agreed upon between the parties that is as
close as practicable to the date of agreement on price, prudent buyers and sellers
would reasonably expect to affect price negotiations significantly
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Proposal Compliance
Items are to be submitted with proposal or provide a schedule showing expected submission date
A Consolidated Bill of Material (CBOM) is a roll up of all the individual material parts and
services in the proposal. A CBOM is a consolidation of the individual line item Bill of Materials
(BOMs)
• The CBOM is used to aggregate the quantity of material used,
and evaluate if there are duplicate efforts in the acquisition
• Determines the price reasonability if the same material is used
in multiple Work Breakdown Structures (WBS), Task Orders
(TOs) or Contract Line Item Numbers (CLINs) and provides the
basis for pricing
• Ensures uniformity and consistency among proposals
• Material estimating methodology needs to be supported and
include rationale
• Escalation
• Other markups
• Material CBOM must reconcile to the Cost Element Breakdown
Part
# Desc.
Q
T
Y
Unit
Price
total
Price Supplier Basis
1.2 Screw 5 $.54 $2.70
Hold
Inc.
Invoice
45.d Pump 8 $90.85
$726.80
Island
Corp.
PO
Total Material
$729.50
Part
# Desc.
Q
T
Y
Unit
Price
total
Price Supplier Basis
6.A Tire 4 $98.76
$395.04
Mars
Inc.
Invoice
1.2 Screw 47 $.54 $25.38
Hold
Inc.
Invoice
Total Material
$420.42
Bill of Material - Part X
Bill of Material - Part Y
Part # Desc.
Q
T
Y
Unit
Price
total
Price Supplier Basis
1.2 Screw 52 .54 $28.08 Hold Inc. Invoice
45.d Pump 8 $90.85 $726.80
Island
Corp.
PO
6.A Tire 4 $98.76 $395.04 Mars Inc. Invoice
Total Material
$1,149.92
Consolidated Bill of Material
Material
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Proposal Compliance
1. Item (Part Number and description)
2. Quantity (Unit of Measure)
• If the contract Period of Performance exceeds one year, quantify annual
spend and provide total effort summary
3. Source (Supplier)
• Identify sub tier suppliers over applicable threshold
4. Cost Basis (negotiated/invoice prices, vendor quotes, average unit pricing,
prior purchase history, long term agreements, etc.)
5. Price (Unit Price and Extended Cost)
• Unit price on CBOM should tie to BOM, which should tie to support
A Consolidated Bill of Material (CBOM) needs to include the following 5 basic elements:
FAR 15.403-1, effective July 2019, requires two or more responsible offerors, competing
independently, to satisfy adequate competition
Material (Continued)
18
Proposal Compliance
Identify sub tier suppliers over applicable threshold
If the total potential price of material procured from any
one vendor exceeds The Truthful Cost or Pricing Data
Act threshold, supplier/sub contractor needs to conduct
adequate substantiation of sub tier spend using one of
the following:
• Cost Price Analysis
• Adequate competition must provide evidence of receipt of
competitive bids
• Commercial Item Determination (CID)
• If a sub-tier supplier claims Commerciality, the Supplier will conduct a CID
review and provide a robust CID report to Lockheed Martin with supporting
documentation
Sub-tier
Supplier
Sub-tier
Description
Type
Dollar
Amount
Provided or
Due Date
A/R Products
Aluminum
Latches
CoPD $2,947,082 30-Jul-20
GDO Lighting
Valve and lights
Competitive $11,567,587 Provided
Vance tooling
Latches
CID $4,541,822 01-Aug-20
Sub tier over the threshold:
Schedule for Cost and Pricing Data
Competitive quotes, CID and CoPD reports
must be submitted with proposal or if not
available, provide an estimate date when data
will be provided
Material – sub tier suppliers over threshold
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Proposal Compliance
Escalation Rate
Total
2022
2021
Item
Part #
Item
Description
Supplier
Cost Basis
Unit Price
Extended
Annualized Cost
Extended Period of
Performance Cost
CBOM
Total
Extended Period of
Performance QTY
Material – CBOM Example
20
Proposal Compliance
Identify the proposed direct labor rates
Explain how the proposed direct labor rates were derived and calculated
Provide detailed explanations and reference to rate estimating methodology and
adjustments, such as wage rate escalation and salaried workers labor rate
conversion
• Direct labor rates are expected to be
presented in hours
• Time phased Breakdown of direct
labor costs by proposed labor
category
($100,000 / 2,080 hours = $48.07 per hour)
Direct Labor Rate
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Proposal Compliance
Explain how proposed labor hours were derived and calculated
Describe your Basis of Estimate (i.e. Historical, similar to programs/products,
learning curve, engineering estimate, Standards, Cost Estimating Relationships
(CERs), etc.)
Provide time phased breakdown of hours by deliverable items and proposed
labor category
Supporting data to substantiate will be required during the proposal analysis phase
• Breakdown of direct labor hours by proposed
labor category, summarized by year and at
contract level
• Direct Labor rate and hour data must reconcile
to the Cost Element Breakdown
Direct Labor Hours
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Proposal Compliance
Basis of Estimates (BOE)
• FAR 15.408, Table 15-2, II. Cost Elements, B. Direct Labor states “Provide a time-phased (e.g., monthly,
quarterly, etc.) breakdown of labor hours, rates, and cost by appropriate category, and furnish bases for
estimates.”
• Sole-source / ECP proposals with U.S. Government customers require full DFARS and RFP compliance
that demands substantiated Basis of Estimates
• A BOE is written so that customers and auditors can validate our estimate
• Documents and substantiates effort required to perform tasks
o Details understanding of requirements & conveys credibility by clearly defining the task
o Demonstrates that estimates are credible, defendable and realistic (historical data)
o Time-phased consistent with IMP/IMS & Aligns with WBS and SOW
• The Basis of estimate needs a clear rationale for each proposed labor category
o Engineering Estimates
o Cost Estimating Relationships (CERs)
o Standards
o Historical labor data, if applicable
o Similar to program or products
o Learning curves
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Proposal Compliance
Basis of Estimates (BOE)
MATERIAL
• A BOE should be created for Material as well to include the following:
• Total Material Cost at Base Year
• Escalation applied with a basis or source of the applied escalation annually
• Scrap Rate applied with a basis of the source of the scrap rate
• Any other factor applied with an explanation of the basis and source of that factor
• Equations as applied to the base material
ODC
• A BOE should be created for ODC costs
• ODC will be covered below
Rates and Factors
• A BOE should be created to show base rates and basis of rates
• Should include any escalation or factors applied to the rates and the basis of the escalation or factors applied
• Equations as applied to the base rates
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Proposal Compliance
BOE Relationship to Customer Requirements (RMS)
Task Description
Task Descriptions should provide
the detail of what must be done to
provide the products/services
described in these volumes.
Past Experience
Justifications should be based on
programs cited in this volume.
CLIN
WBS
SOW
Specifications
Period of Performance
Time Phased Breakdown
of Hours
Equations
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Proposal Compliance
Indirect Cost
In your Basis of Estimate, describe your estimating process, including how your
indirect rates were calculated and applied
Example of indirect rates may include overhead, G&A, fringe, material handling,
cost of money, etc.
Provide trends and budgetary data as a basis for evaluating the
reasonableness of proposed rate
• FAR expectation is minimum three years of historical data
• Flatlining of indirect rates is considered to be not FAR compliant
Indirect cost data must reconcile to the Cost Element Breakdown
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Proposal Compliance
Other Direct Cost (ODC)
List all other costs not otherwise included in the categories previously discussed and provide
basis for pricing
Download a sample:
For illustrations of the Cost Elemental Breakdown (CEB), Bill of Materials
(BOM), Consolidated BOM (CBOM), Labor, and Other Direct Costs (ODC)
Travel
• Each trip must include
• number of attendees
• days on the trip
• locations visited
• Travel rates (Car Rental, airfare,
per diem, etc.)
Other examples of ODC:
• consultant services
• Rental equipment
• Packing and packaging
ODC data must reconcile to the Cost Element Breakdown
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Proposal Compliance
Facilities Capital Cost of Money (FCCM)
If royalties exceed $1,500,
provide the following information
on a separate page for each
separate royalty or license fee
Submit Form CASB-CMF if FCCM is proposed
Royalties
(1) Name and address of licensor;
(2) Date of license agreement;
(3) Patent numbers;
(4) Patent application serial numbers, or other basis on which the royalty is
payable;
(5) Brief description (including any part or model numbers of each contract item or
component on which the royalty is payable);
(6) Percentage or dollar rate of royalty per unit:
(7) Unit price of contract item;
(8) Number of units;
(9) Total dollar amount of royalties; and
(10) If specifically requested by Lockheed Martin, a copy of the current license
agreement and identification of applicable claims of specific patents (see FAR
27.202 and 31.205-37).
Download a Form:
Here
Royalties and FCCM data must reconcile to the Cost Element
Breakdown
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Proposal Compliance
Formats for Submission of Line Item Summary
New Contacts
(1) (2) (3) (4)
Cost Elements
Proposed Contract
Estimate – Total Cost
Proposed Contract
Estimate – Unit Cost
Reference
(1) (2) (3) (4) (5) (6) (7)
Cost Elements Estimate
Cost of Deleted
Work Already
Performed
Net Cost to be
Deleted
Cost of Work
Added
Net Cost of Change Reference
Change Orders, Modifications, and Claims
Price Revision / Redetermination
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
Cutoff Date
Number of
Units
Completed
Number of
Units to be
Completed
Contract
Amount
Redetermination
Proposal Amount
Difference
Cost
Elements
Incurred Cost
–
Preproduction
Incurred
Cost –
Completed
Units
Incurred Cost
–
Work in
Process
Total
Incurred
Cost
Estimated
Cost to
Complete
Estimated
Total Cost
Reference
Download Instruction:
For detailed Instructions on each column referenced (#)
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Proposal Compliance
• Not answering all questions or not answering correctly
• No Index
• Estimating methodology applied is not discussed
• No Cost Breakdown provided for each part
• NRE included in recurring part price
• No CBOM (Consolidated Bill of Material)
• Sub-tier suppliers are not substantiated
• Non-competitive $2M+ Sub-tier CPA reports are not provided with proposal
• Competitive $2M+ Sub-tiers – missing all competitor’s quotes to validate competition
• Inter-organizational cost is not substantiated or is incorrectly treated as a sub-tier
• No BOE for Labor; labor cost not broken down by Category, Skill, Task, WBS, Hours, Rates
• No support provided for Indirect Rates (or inadequate support provided)
• FCCOM is proposed but not substantiated
• Supporting Data is not provided in Excel
• No letter of refusal provided when requesting DCMA audit assistance
• Letter does not specify whether permission is granted for the “US government to
release a copy of their findings to Lockheed Martin”
Common Proposal Adequacy Checklist (F330) Errors
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Proposal Compliance
Questions
Scott Gordon
MASA / TLS CAPA Manager
Phone (407)306-3406
Mobile (817)507-8553
[email protected]
End
32
Proposal Compliance
Back up Slides
33
Proposal Compliance
Adequate Price Competition
• FAR 15.403-1 change
• Effective July 12, 2019 – Immediate implementation with no grace period
• Procurement Contracting Officers cannot waive the new requirement
• The new FAR requires two or more responsible offerors, competing independently,
submit priced offers that satisfy the requirement
• Eliminates competition exception when only one responsible offer is received
• Based on section 822 of the National Defense Authorization Act
• “Section 822 excludes from the standard for adequate price competition the situation in which
there was an expectation of competition but only one offer is received.”
• from 27494 Federal Register / Vol. 84, No. 113 / Wednesday, June 12, 2019 / Rules and Regulations
• Department of Defense (DoD), General Services Administration (GSA), National Aeronautics and Space Administration
(NASA)
34
Proposal Compliance
G&A
Expense
Examples
Show 3 Years
Of Actuals
Direct & Indirect
Manufacturing
Cost
G&A Expenses minus Unallowable
G&A Rate
(Total Allowable / Total Manufacture Cost)
Indirect Cost Example
G&A Rate
Expense
2017 Actual
2018 Actual 2019 Actual
2020
2021
Salaries/Wages
- Officer
$469,566
$391,305
$439,669
$494,010
$525,627
Salaries/Wages
$53,907
$56,744
$59,730
$62,874
$66,898
Interest
$10,186
$11,317
$12,575
$13,972
$14,866
Payroll Taxes
$20,210
$26,946
$35,928
$47,904
$53,652
Vacation
$22,444
$25,504
$28,982
$32,934
$32,440
Holiday
$24,475
$20,395
$23,443
$26,946
$26,919
Sick Leave
$3,518
$3,953
$4,441
$4,990
$2,280
Legal Fees
$5,990
$6,305
$6,637
$6,986
$13,972
Accounting Fees
$5,093
$5,659
$6,287
$6,986
$8,663
Computer
$7,368
$9,824
$13,099
$17,465
$14,845
Rent
$13,911
$11,593
$13,174
$14,970
$14,820
Advertising
$5,597
$6,434
$7,395
$8,500
$8,415
Telephone
$7,046
$7,496
$7,974
$8,483
$8,398
Insurance
$6,640
$5,534
$6,218
$6,986
$7,782
B&P (including labor and overhead)
$7,273
$7,656
$8,059
$8,483
$9,450
Total
$663,224
$596,665
$673,611
$762,489
$809,027
Unallowable
Interest
($10,186)
($11,317)
($12,575)
($13,972)
($14,866)
Contributions
($6,845)
($7,206)
($7,585)
($7,984)
($3,649)
Advertising
($5,597)
($6,434)
($7,395)
($8,500)
($8,415)
Total Allowable
$640,596
$571,708
$646,056
$732,033
$782,097
Direct Labor
$2,184,929
$2,427,698
$2,452,221
$2,229,29
2
$2,318,463
Labor Overhead
$1,089,105
$1,042,867
$1,167,582
$1,311,71
3
$1,317,048
Other Direct Costs (ODC)
$29,351
$29,057
$28,767
$29,351
$29,057
Direct Material
$5,554,032
$5,776,193
$6,007,241
$5,554,03
2
$5,776,193
Material Handling
$229,031
$214,120
$240,622
$270,732
$281,095
Total Allocation Base
$9,086,448
$9,489,935
$9,896,433
$9,395,12
0
$9,721,856
General & Administrative Rate
7.1%
6.0%
6.5%
7.8%
8.0%
35
Proposal Compliance
Supplier Compliant and Timely Proposal Requirements
The Following is Required From Supplier with RFQ Response:
Access to books and records
Lockheed Martin or US Government
Supplier’s Proposal
Proposal including all non-competitive part numbers and NRE
Form F330 Adequacy Checklist
Filled out completely, manually signed and with page numbers/tabs referenced
Form RF540
CAS Certification
Certified Cost or Pricing Data (CCOPD)
Documentation to support all cost elements must be provided with the proposal on due date
A Cost Breakdown by cost element for all part numbers and NRE is required