Proposal Preparation
Overview of Estimating Systems
Preparing an estimate in response to a Request for Proposal (RFP) requires a somewhat formalized system. There are usually two methods for determining price – top down and bottom up.
Top down is the easiest approach. Find out how much money the customer has and cost accordingly, remembering to customize your Statement of Work as you go. This type of pricing usually occurs in smaller procurements and lower dollar thresholds.
Bottom up, while tedious, is usually a good practice for high dollar purchases that require a lot of communication and integration between parties. The Defense Contract Audit Agency (DCAA) routinely performs estimating system audits to verify the accuracy and completeness of submitted proposals. The following list of elements of Good Estimating Practices will give you an idea of the things that DCAA will be expecting.
Elements
• The objective (purpose) of the estimate is stated in writing
• The product to be produced is clearly described
• The tasks to be estimated are clearly identified
• People from related but different projects or disciplines are involved in the estimating process
• The validity of the estimate is supported by relating it demonstrated performance on completed projects
• More than one cost model or estimating approach is used
• Potential cost and schedules impacts are estimated for all identified tasks
CCA can assist you in establishing compliant estimating systems. Contact us…