Cost/Price Proposal

Typical Content

• Price summary by CLIN and period of performance
• Labor rate build-up by category (direct labor, fringe, overhead, G&A, profit)
• Basis of Estimate (BOE) for labor hours by task area
• Material and ODC cost estimates with supporting data
• Subcontractor pricing and basis of estimate
• Indirect rate proposals with supporting schedules
• Fee/profit rationale consistent with weighted guidelines
• Compliance with cost or pricing data requirements (if applicable)

Common Mistakes

• Inconsistency between technical approach staffing and cost proposal labor hours
• Unsubstantiated labor hour estimates without traceable basis of estimate
• Using indirect rates inconsistent with DCAA-approved or FPRA rates
• Failing to price all CLINs or leaving pricing gaps in option years
• Unrealistically low pricing that raises concerns about performance capability
• Not following the pricing instructions in Section L of the solicitation

Best Practices

• Ensure perfect consistency between the technical volume staffing and cost volume hours
• Provide a detailed Basis of Estimate that traces hours to specific tasks and deliverables
• Use DCAA-approved rates or forward pricing rate agreements where available
• Include escalation factors that are realistic and supportable
• Cross-check all arithmetic — pricing errors create credibility concerns
• Have the pricing team and technical team jointly review for consistency before submission

Evaluation Weight

In best-value tradeoff, cost/price is evaluated for realism (cost-type) or reasonableness (fixed-price) and balanced against non-cost factors. In LPTA source selections, the lowest-priced technically acceptable offer wins. Cost realism analysis may adjust proposed costs to reflect probable costs. Price is always a factor but its relative importance varies by acquisition strategy.

Other Proposal Sections