Preparing the GSA Schedule Pricing Proposal
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Transcript of Preparing the GSA Schedule Pricing Proposal
Preparing the GSA Schedule Pricing Proposal
Today’s Objective:
Help you understand the Requirements of the
GSA Price Proposal Instructions so that you can
Create and Submit a successful Proposal.
Dinora GonzalezFederal Procurement Advisors, LLC
614.434.6672
Art BrownLeScot Enterprises, Inc.
770-732-9392
. . .your connection to federal contracts
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Topics We Will Cover:• Fair & Reasonable Pricing• Basic Pricing Guidelines• The Proposal Price List Template & Calculating the Industrial Funding Fee (IFF)• Labor Categories & Service Contract Act Requirements• Organizing your Data / Information• Describing your Commercial Sales Practices• Supporting Documentation: Making Your Case
Review:
The GSA Schedule Program
Pre-negotiated contracts where prices; contract terms; and, conditions have been agreed to in advance and are considered “fair and reasonable” by the government;
Agreements between the federal Government and eligible vendors who agree to honor negotiated prices, terms and conditions IF and WHEN an agency places an order.
What is a GSA Schedule Contract?
A "PRE-APPROVED FEDERAL PRICE LIST."
How Does It Work?Pre-Approved Vendors are listed on the online shopping
catalog called GSA Advantage. Buyers are allowed to purchase through this catalog.
Download and fill out the appropriate solicitation for
products or services;
Submit pricing and technical capabilities as specified by
the solicitation;
Go through a past performance evaluation6
Features of the GSA Schedule Contract:• Widely Used by Federal Buyers:
Streamlined Procurement Process
• 5 Year Basic Contract with 3 five year option periods
• Non-Bid Contract: Vendors can apply for a GSA Schedule Contract by filling out and submitting the appropriate solicitation
• Vendors can offer their commercial price (with a discount)
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Participation Criteria• Sales: $25,000 in sales per year (or show potential)
• Registration / Certification• Duns & Bradstreet: www.dandb.com/DUNS
(866) 403 5579• Systems Award Management: www.sam.gov
• Experience / Performance HistoryOpen Ratings (http://www.ppereports.com)
• Accept Credit Card as payment
Basic Pricing Guidelines
1. Commercial Items with Established Catalog Prices: Offerors shall submit a copy of their established commercial catalog (published and dated), internal business memorandum, pricing guide, rate card or other documentation with relevant SIN
2. Commercial Items without Established Catalog Prices: Offerors shall provide documentation to substantiate proposed pricing (e.g., agreements with corporate customers, internal policies, market prices, quote sheets, invoices, etc.). The pricing documentation shall assure that customers, effective period, pricing and price related terms and conditions are clear.
3. Cost-Based Rates: Offerors shall demonstrate rates, profit, overhead, G &A and Industrial Funding Fee; showing the calculation of the proposed fully burdened rates for each labor category in each respective SIN. Provide documentation to substantiate pricing (e.g., agreements with corporate customers, internal policies, quote sheets, and invoices, etc).
Other Direct Costs: Other Direct Costs (ODCs) include such things as materials, commercial production, equipment rental, labor, etc. that support the services to be performed.
• Labor as an ODC is usually a subcontractor. The pricing proposal should include supporting documentation for the actual ODC expenses paid by the offeror.
• Cannot be procured as a stand alone item or service.
Price Template• Price proposals to the Government should be priced the
same way as price proposals to commercial customers.• Offerors are required to include a 0.75% Industrial Funding
Fee (IFF) in the prices submitted with their offer (See contract clause 552.238-74)
• Prepare an Escalation Rate Matrix if requesting an annual escalation rate under EPA Clause I-FSS-969 (b) (1); OR – indicate economic indicator (normally Department of Labor BLS Table 5) under EPA Clause I-FSS-969 (b) (2)
• GSA labor categories should reflect your business practices and your people:–Be prepared to demonstrate commercial sales
of all labor categories proposed.– Labor categories should resemble commercial
or internal labor categories. –Providing a crosswalk between labor categories
may be necessary during negotiations.
Developing a GSA Labor Category and Pricing Strategy:
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• Labor category descriptions should contain clear and quantifiable requirements including:–Minimum years of experience;–Minimum education;– Functional roles and responsibilities of the
position;–Any applicable training, licenses or certifications;–A methodology for substituting experience for
education.
Developing a GSA Labor Category and Pricing Strategy:
Price Proposal Guidelines & Best Practices
• Many contractors do not have a published commercial catalog for services. The GSA catalog was created to sell products and services.
• Professional services business practices and pricing do not fit well within the current GSA contracting model.
• Regulatory guidance not adequately updated
Challenges
• The concept of a fair and reasonable price has been described as the price that a prudent business person would pay for an item or service under competitive market conditions, given a reasonable knowledge of the marketplace.
• Your price(s) should be easy to justify and one that reasonably reflects a price that you should expect to pay for your customer’s requirement.
What is Price Reasonableness?
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Evaluating Fair & Reasonable Pricing (FAR 15.404-1)
• Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit.
• Cost analysis is used to evaluate the reasonableness of individual cost elements in addition to looking at the bottom-line total price.
PRICING MUST BE SUBSTANTIATED BY:• Established commercial catalog prices (published and dated pricelists)
• offerors who do not use a published and dated commercial pricelist must submit cost or pricing information such as copies of contracts, invoices, agreements, internal business memorandums, quote sheets, or additional information requested by the contracting officer.
• Proposed hourly and unit pricing should include direct and indirect costs, and profit, that contribute to the proposed hourly or unit price.
Bottom Line:The pricing proposal should include sufficient
information for each service offered to enable the contracting officer to perform a price analysis in accordance with far 15.4.
Commercial Sales Practices
Commercial Sales Practices*You must disclose your current procedures /
process for selling to the commercial market• Who is your Most Favored Customer?• What prices, terms, and discounts do they
receive?• Describe any deviations from your normal
pricing.
*FAR Clause 552.212-70, Preparation of Offer (Multiple Awards Schedule).
What are your Commercial Sales Practices?• What am I selling?–Products / Services / Both?
• How do I price it?– Labor by the Hour (or other appropriate unit)–By Service / Task (does not matter how long it
takes)– Time + Material (labor and material /
equipment)–A Mix of the above
What are your Commercial Sales Practices (Cont. .)?• How are you selling it? (pricing structure)– Commercial Price List (Catalog Pricing) – Market Pricing
• Do you have a discount policy?• Which customers receive your best (lowest) rate;
discounts; and terms?• Do you have evidence / proof of pricing?
Supporting Documentation: Making Your Case
• Review & organize your purchases orders / invoices / receipts:– Dated; must describe work or product being purchased
at the rate you stated in your commercial sales practices.
– Deviations must be explained. • Review Statements of Work (Master Agreements,
contracts or letter agreements). Must be dated and describes the scope of work to be performed
• Your documents should verify your pricing and the work performed.
Organizing Your Data / Information Documents:
Supporting Documentation Could Include:• Competitor’s Comparison Matrix / Historical
Pricing Analysis• Detailed description of the analysis performed to
arrive at the proposed prices.– Limited Cost Data or Price Analysis (If offering Market
Pricing, you must show how you derived at price / cost. One way is to “back in” to your price by providing a breakdown of components and related price that makes up the total price).
• Build a spreadsheet model to price the action• Use if offering market pricing without established
catalog– Includes all cost elements & Profit– Model should validate accuracy of contractor’s
proposed price• Cross-Reference with invoices; purchase
orders; receipts.
Pricing Models
Best Practice: Create a Price Reasonableness Narrative• Overview of the business, its service offerings and
organizational structure• Overview of customer categories (e.g., State &
Local, Commercial, Healthcare, etc.).• Detailed description of the analysis performed to
arrive at the proposed prices.
Price Reasonableness Narrative (cont. . .)• Explain any deviations from standard pricing
practices and the frequency with which they occur.
• Overview of the proposed BOA customer(s) and an explanation of why that customer is appropriate.
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Dinora Gonzalez
614-434-6672
Federal Procurement AdvisorFederal Procurement Advisor
Dinora GonzalezFederal Procurement Advisors
614-434-6672
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. . .your connection to federal contracts
Art BrownLeScot Enterprises
770-732-9392
Contact Information
Good Luck!