Contract Pricing and Negotiations
Good Intentions Technology, (GIT) submitted a Firm Fixed Price Proposal (FFP) to the Federal Watchout Agency (FWA), in response to a Firm Fixed Price Solicitation, to build 75 B1-RD type Aerial Surveillance Cameras (ASC). GIT is a world leader in surveillance systems and has delivered over 750 of the B1 series cameras. The ASCs must be delivered no later than 24 months after receipt of order.
After a series of questions, information exchange, and clarification requests, GIT and the FWA have agreed to meet in a formal fact finding session at an undisclosed location. GIT responded to the FWA RFP with the Cost Summary Detail provided below, and is interested in a Cost Plus Fixed Fee (CPFF) arrangement. GIT’s Program Management asserts that a cost type effort may be better suited for delivering the FWA requirements, than the Firm Fixed Price.
Your task,is to provide preparation documentation to support face-to-face meetings between GIT and the FWA. You must develop a simple fact-finding meeting agenda, which includes your pre-negotiation objectives that you expect to accomplish. Additionally, you must explain how you plan to document the structure of your future negotiation settlement, assuming that the FWA accepts the GIT Proposal, with no further discussion.
The Paper content should include framing and documenting each one the following points, for which you may take either the FWA or GIT perspective:
· High-level Fact-finding Meeting Agenda between GIT and FWA.
· Development of Pre-negotiation Objectives with explicit emphasis on cost analysis techniques that can be considered in evaluating the proposed direct labor, materials, and ODCs.
· Proposed Documentation for a negotiated settlement with objective support.
· Any Assumptions, such as regulatory, statutory, or operating guidelines used to accomplish the given specifications, in your Paper.
· Appropriate writing mechanics, formatting, and sources.
Proposal Cost Summary Detail for the B1-RD ASC
Element Rate Proposed
Direct Material 3,300,000.00
Direct Labor 2,425,000.00
Other Direct Costs 78,950.00
Total Direct Costs 9,053,950.00
Labor Overhead 2,179,460.00
Material Overhead 10.00% 330,000.00
Subcontract Overhead 2.50% 81,250.00
Total Cost Input 11,644,660.00
G&A 8.00% 931,572.80
Total Cost 12,576,232.80
Profit 20.00% 2,515,246.56
Total Price 15,094,126.95
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