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Breakout Session # 1603 Dr. William DeGeorge, President Date: April 23, 2007

A Strategy for Avoiding Should-Cost Increases in PBC Cost Proposals. Breakout Session # 1603 Dr. William DeGeorge, President Date: April 23, 2007 Time: 2:50 p.m. – 3:50 p.m. Government Contracting. Activity-Based Versus Performance-Based – Which One Favors a Creative, Innovative Bidder?

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Breakout Session # 1603 Dr. William DeGeorge, President Date: April 23, 2007

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  1. A Strategy for Avoiding Should-Cost Increases in PBC Cost Proposals Breakout Session # 1603 Dr. William DeGeorge, President Date: April 23, 2007 Time: 2:50 p.m. – 3:50 p.m.

  2. Government Contracting • Activity-Based Versus Performance-Based – Which One Favors a Creative, Innovative Bidder? • How Does a SOO Differ from a SOW? • Government is at Risk in an Activity-Based Contract • Contractors are at Risk in a Performance-Based Contract – But they Manage the Risk with their Own Processes

  3. What is Performance-Based Acquisition (PBA)? Performance Based Contract • PBA is a Method of contracting where the government defines the RESULTS it is seeking…… rather that the PROCESSES by which those results are attained (FAR2.101)

  4. Source Selection Factors (Best Value) • MISSION CAPABILITY • PROPOSAL RISK This Evaluation Criteria is Most Important to this Presentation. Proposal Risk is the Perceived Risk to Performance, Schedule, or Cost DUE TO BIDDER’S APPROACH. • PAST PERFORMANCE • PRICE/COST

  5. Mitigating Proposal Risk to Performance Cost Schedule Performance Bidder’s Technical Proposal • WBS and WBS Dictionary – That reflects Bidder’s solution and justifies the hours (cost) • Value Adds – that Lower Cost or Enhance Performance • Best Practices – That demonstrate gains in productivity or Improvement in Performance • Processes & Tools – Consistent with customer’s infrastructure

  6. Mitigating Proposal Risk to Schedule Cost Schedule Performance Bidder’s Technical Proposal • Events in Bidders Solution that are key progress demonstration points • Accomplishments that define interim and final steps to producing the outcome of each event • Criteria i.e., the measurable information about each accomplishment • Event Sequencing (Timeline), i.e, schedule for events and accomplishments

  7. Defining Cost In A PBC Proposal • COST/PRICE REASONABLENESS • Activity-based: Competition • Performance-based: Basis of Estimate • COST REALISM: ACTIVITY-BASED AND PERFORMANCE-BASED • Realistic per government’s Independent Government Estimate • Reflects understanding • Consistent throughout proposal elements

  8. Mitigating Proposal Risk to Cost Cost Schedule Performance Bidder’s Technical Proposal Basis of Estimate Proposal Risk to Cost is Mitigated by the BOE

  9. Building an Effective BOE-1 CWBS SOO Accomplishments Bidder’s Technical Solution 1.1 1.2 2.1 2.2 Event 1 Event 2 Event 3 Event 4 Critical Path

  10. Building an Effective BOE-2 Build from Technical Solution CWBS 1.0 Event 1 1.1 Accomplishment 1.2 Accomplishment 2.0 Event 2 2.1 Accomplishment - Criteria 1 - Criteria 2 2.2 Accomplishment Add Criteria as Identified

  11. Building an Effective BOE-3 4) PWS 5) Proposal Outline 1.0 Event 1 1.1 Accomplishment 1 1.2 Accomplishment 2 2.0 Event 2 2.1 Accomplishment 1 2.2 Accomplishment 2 3) CSOW 6) Technical Discussion 2) CWBS 1B) Technical Solution 1A) SOO

  12. Building an Effective BOE-4 Date 1 Start Date 2 Event 1 Accomplishment 1 Accomplishment 2 Event 2 Accomplishment 1 Accomplishment 2

  13. What Does the BOE Look Like? Cost Schedule Performance Bidder’s Technical Proposal Spreadsheet + Basis (Narrative) Estimate (Spreadsheet)

  14. Narrative Part of the BOE – the BASIS • Understanding the Agency’s Problem – a narrative • Bidder’s Solution – the WBS with events, accomplishments, criteria and the WBS Dictionary – the BOE for hours estimated • Overview of Technical Approach –a narrative, the CONOPS • Value added with benefit to Agency – a table showing features and benefits • How we Mitigated Proposal Risk to Performance – a bullet listing • Processes and Tools used to accomplish work – a bullet listing • Proposed Schedule for duration of contract – a Microsoft project schedule • How we Mitigated Proposal Risk to Schedule – a bullet listing • Source for hours, rates, escalation, and ODCs – a narrative

  15. Spreadsheet Part of the BOE – the ESTIMATE • Labor classifications against WBS elements • Hours and rates for each classification • Pricing and calculations for escalation • Pricing source for Start-up costs • Other Direct Costs • Computations for the period of performance

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