How to price a response
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Loading ...Make sure that your pricing makes sense for you and the government. Carefully consider your pricing as you will be held to it if you are awarded the contract.
You should identify and estimate every cost such as direct labor, fringe benefits, materials and services, overhead, royalties and travel. In addition, you should research past historic costs for similar contracts to get an idea of your projected costs.
Your cost strategy should be based upon information provided by the federal agency and your competition, as well as your company’s goals. You should always research the agency in order to obtain information about the agency’s budget and target price.
Make sure you accurately calculate your figures in order to avoid mathematical errors. You do not want to lose a contract because your bid was too high or be hit with a substantial loss because you miscalculated your bid. Make sure your budget analysis is clear, concise and easy to understand.
Consider the following when you establish your price:
• Your fully loaded costs to provide the products and services
• What your competitors might bid to provide the same products or services
• A reasonable profit.
If your response involves either service or construction workers, be careful to adhere to the wage determinations established, often on an area or regional basis, for certain categories of workers. Federal contracting officers must make sure that all pertinent contracts adhere to these rates -whether covered by the Service Contract Act or the Davis-Bacon Act. These rates also specify fringe benefit rates for each classification of worker.
Wage determinations change frequently, so it is best to go online to the U. S. Department of Labor’s website (http://www.dol.gov/) and follow the link to the Wage and Hour Division. From there you can find the rates for the region or area where the workers will be.
It is extremely important to follow and conform to the various regulations affecting the proper pricing of proposals and preparations of bids. Such contract pricing regulations (mostly contained in the Service Contract Act and its regulations) are contained in the CD ROM at the back of this booklet.
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