Business/Cost Proposal Preparation Assistance

The Claro Group’s Government Contract Consulting Practice has extensive experience assisting clients with the preparation of successful Cost Proposals for large multi-year procurements ranging in size from tens of millions to billions of dollars. Our team understands the necessary interaction and coordination with the Technical Proposal team to ensure consistency in the resulting Cost Proposal. Claro combines our financial skills with our technology skills to develop customized and responsive financial models which facilitate flexibility for our client and evaluation and review by the Government. In addition to the dollars and cents, Claro assists in the preparation of the Basis of Estimate/Proposal Narrative documentation which is critical to a successful Cost Proposal. Finally, we understand the specific requirements imposed by the Federal procurement regulations applicable to the proper preparation of the Cost Proposal and can effectively minimize the compliance risk.

There are many critical factors to consider in developing successful proposals for government contracts. Federal government contract proposals typically require the submission of separate Technical and Business or Cost (“Cost”) Proposals. The key to the development of a successful proposal is a closely integrated effort between the Technical and Cost Proposal team members. All too often, the evaluation of unsuccessful proposal efforts points back to Cost Proposals that are inconsistent with the Technical Proposals or are insufficiently supported to allow for proper evaluation of the cost/price reasonableness by the Government evaluators. Many times companies prepare the Technical and Cost Proposals with separate teams with little or no interaction and coordination or the Cost Proposal is prepared as a final step in the proposal process.

The Cost Proposal is critical to the ultimate success of a company’s ability to win contracts, even where Government evaluation criteria states that it plays little or no weighting in the decision process, as is typical in Best Value Procurements. Realistically, Cost proposals carry a significant influence in the Government’s final decision process, even if the winning bid is not deemed to be the lowest proposed price. Accordingly it is important to prepare competitive Cost Proposals that are strategically sound and effectively manage and protect the Contractor’s financial, operational, and compliance risks. Proper preparation of a proposal, especially the Cost Proposal (i.e. Price/Cost Proposal), is critical for minimizing a company’s risk, from both a financial and compliance aspect. Many companies mistakenly believe that compliance risk is a matter to address after a contract is awarded, when in fact an improperly prepared Cost Proposal may actually create the compliance exposure for the Company.

Whether you are the incumbent contractor or trying to unseat the incumbent, Claro can be a valuable team member to your proposal efforts. We bring proven techniques and practices that can improve and strengthen the ultimate Cost Proposal prepared and submitted. Our involvement in your Proposal preparation process can range from high-level consultation to hands-on preparation and development of the financial models and accompanying proposal documentation.

There are typically three distinct phases in the proposal preparation process and Claro’s Government Contract Consulting Practice can assist companies though any or all of these phases:

Phase 1 – Organizational Compliance Assessment & Preparation

Claro has significant experience in assisting companies assess existing internal control and accounting systems for compliance with applicable Federal procurement requirements. In addition, we assist organizations in identifying and developing necessary enhancements and changes to financial reporting systems in order to address noted compliance gaps. Finally, we help our clients implement necessary corrective actions as requested.

It is critical that organizations understand that certain compliance requirements cannot be addressed after contract award. Demonstrated ability to comply with the applicable regulations and contractual requirements is a critical evaluation factor for contract award by the Government.

Compliance with the Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS) requirements needs to be addressed at a minimum for (not all inclusive):

• Accounting Systems (financial and cost/project)
• Cost estimating
• Project or job costing
• Purchasing
• Billing
• Contractor budgeting and planning
• Material management and accounting, as applicable
• Compensation techniques
• Identification and elimination of unallowable costs (FAR Part 31)
• Timekeeping and labor distribution
• Cost accounting structure (Direct and Indirect Costs)
• CAS compliance and preparation of CAS Disclosure Statements (as applicable)

Phase 2 – Proposal Planning – Strategic Planning & Competitive Assessments

Contractors, to the maximum extent possible, need to have technical and operational solutions as well as pricing strategies developed prior to RFP issuance.

Claro develops corrective action plans to enhance a contractor’s price competitiveness and assists with the successful transition into the next phase of proposal preparation.

Claro helps contractors:

• Understand the Statement of Work from prior RFPs, RFIs and pre-solicitations
• Assess previous contract debriefs and evaluations
• Assist incumbent contractors in identifying and determining new processes and techniques to increase the competitiveness of the organization for purposes of the follow-on contract.
• Identify contractual requirements of the solicitation
• Develop clarifying questions seeking additional information concerning the RFP from the procuring Government Agency
• Evaluate the solicitation and identify a proposal work plan based on the Statement of Work requirements
• Identify proposal deliverables
• Develop a preliminary strategic pricing analysis
• Establish Proposal team roles and responsibilities and critical timelines
• Assess and coordinate partnerships and subcontractor relationships for Cost Proposal purposes

Phase 3 – Cost Proposal Preparation

Claro’s Government Contract Consulting Practice has assisted companies across a wide variety of industries in preparing Cost Proposals in responding to contract solicitations.

During this phase, portions of which are performed simultaneously with Phase 2 activities described above, Claro helps contractors solidify the financial estimates associated with the proposed Technical Proposal solution and finalize the Government deliverables. Claro assists contractors in every step of this complicated proposal process (as requested), including:

• Analysis of solicitation requirements
• Analysis of FAR contractual clauses (typically Section I requirements)
• Assistance with the Cost and Technical proposal project management
• Development of labor and various other cost estimates
• Calculation of forward overhead and G&A rates
• Development of basis-of-estimate narratives
• Cost realism modeling and support
• Consultation on technical proposal development
• Development of work breakdown structures and cross-walks to the technical proposal
• Creating pricing strategies
• Assisting with subcontractor negotiations
• Safeguarding from “Defective Pricing” resulting from non-compliance with the Truth in Negotiations Act (“TINA”), as applicable
• Final cost proposal preparations

This stage is critical to ensure that contractors maximize their ability to assert and recover financial impacts associated with Contract Modifications (i.e., change orders) that will inevitably arise during the contract performance period.

The Claro Government Contract Consulting Practice is uniquely qualified to assist and team with Companies in the preparation of their government proposals to enhance and maximize the potential for success. Since 2005, our professionals have successfully assisted our clients obtain government contract awards in excess of $18 billion dollars.

Please contact John Sasaki for more information about The Claro Group's proposal preparation assistance solutions.