Now that you have decided to become a government contractor and have purchased your DCAA compliant software you’re not done preparing for proposal review. When dealing with the government and pricing you must be able to verify your pricing; hopefully you have selected DCAA compliant software that helps you with basis of estimate (BOE).
So what is BOE? BOE is a cost structuring/explanation method. The goal and value of BOE is that it provides solid numbers when determining if you can perform a project at a given number and if that number allows you to offer a competitive bid. Your DCAA compliant software should be able to help you provide the proper numbers that deal with costs and report them in a helpful thorough manner. Remember, you want to make the DCAA’s job easier as well as ensuring that your numbers aren’t conservative, but realistic. Overly conservative numbers will put your company at risk at not being able to meet the demands associated with your contract. This is what makes BOE useful because it makes you look at your company’s capabilities in a comprehensive manner, you will actually know what you are talking about when discussing your contract with other parties while being able to supply a perfectly structured report. Your DCAA compliant software will be able to guide you through the basic elements of BOE.
Basic Elements of BOE
Proposal Information. The proposal information is extremely important and all too often not completed in a thorough manner. Once you have DCAA compliant software, take the time to properly fill out the information. From this point onward, the system will remember the inputted information for each and every proposal. All you will have to do is adjust for proposal name so there is protection against wrongfully placed data.
Task Information. This area of your BOE should be succinct but extremely detailed. Each task that will be completed should be listed to include each phase. It should also include any activities or other aspects of costs associated with final deliverables.
Assumptions & Considerations. In this section of your DCAA compliant software report you will inform what the possibilities are, both good and bad, within your proposal. Perhaps there is an area in which things could go array if it is contingent on other task objectives. Note, that often when preparing a BOE, individuals go overboard and write every single problem possible. There is no need for this, just inform of issues that could truly harm the goals of the proposal and its costs.
Estimating Methodology. In this section of your BEO, your DCAA compliant software will truly offer a helping hand. This is where you explain the costs associated with your proposal. Although no item must use the same method of pricing there should be consistency in prices. For example, a piece of wood used in section A of your project shouldn’t cost different during section B if the wood is exactly the same. Yet, a specialist needed for the project will not cost the same in labor as the janitor.
Justification. In this area you will need to create an argument of why your offerings are worth your pricing. This is your chance to sell your company as a government contractor. Make sure that for each proposal you address this section within your DCAA compliant software. There is no “cut and paste” in this section, each proposal will be different.
Cost Estimate Distribution. This is where you will create a spread of your costs over the timeline of your project. Your DCAA compliant software will help you do this with proper attention to week-by-week costs and labor usage. This will help you stay on target with costs and project completion.