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Federal Government Contractor Guidance

Preparing a Cost Proposal

The U. S. Government is the largest buyer in the world of services and goods. 

Seeking and receiving a Federal Government Contract can be beneficial to the private contractor. The government advertises its intent to contract for goods and services through various means but searching on the internet is very quick and easy for a contractor. The government will solicit cost proposals and award contracts on a sealed bid or negotiation basis.

It is important to thoroughly review the requirements or terms of the solicitation (Request for Proposal; RFP or Request for Quotation; RFQ). Among many things, this document explains what the government wants to buy, in what quantity, for how long, product quality requirements, financial terms, etc.

Federal Law requires Contracting Officers to obtain information to determine price reasonableness for negotiated contracts. The Sealed Bid process assumes that price reasonableness is met because of adequate competition. Contractors seeking a successful contract award must submit an adequate proposal that meets the requirements of Federal Acquisition Regulation (FAR) 15.408, Table 15-2 Section I Paragraph A. This section describes the requirements of an adequate proposal and the adequacy of Cost and Pricing Data.

There should be a summary page listing the total cost by cost element (Direct Labor, Overhead, Materials and Material Overhead, if applicable, G&A and Profit).


Additional schedules should show the following:

Kline & Company is available to advise and help you prepare a cost proposal that meets the requirements of FAR 15.408.

This article was authored by Mac Young of Kline & Company for the purpose of providing guidance to our existing and potential clients.



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