Is Fccom Included In Cost Analysis?

What is the single most important decision the contracting officer must make to mitigate cost risk?

The correct answer is (d) Selection of contract type.

If the contract has a fixed price, there is a better chance that the cost of the contract will….

What are weighted guidelines?

The weighted guidelines define a structure for profit/fee analysis that includes designated ranges for objective values as well as norm values that you may tailor to fit the circumstances of your specific acquisition.

Which are the two most preferred price analysis techniques?

Comparison of proposed prices received in response to the solicitation and comparison of proposed prices to historical prices paid. Comparison of proposed prices with independent government cost estimates and use of parametric estimating methods.

What is an important driver to a successful negotiation?

Thorough preparation is the most important prerequisite to effective negotiation. Neither experience, bargaining skill, nor persuasion on the part of the negotiator can compensate for the absence of preparation.

What is cost of money in government contracts?

Cost of Money is a method of reimbursing for that opportunity cost (thus the term “imputed cost” is used to describe cost of money). The requirements for Facilities Capital Cost of Money are contained in Cost Accounting Standards 414 and 417.

What is money cost?

Cost of money refers to the average interest rate at which you are able to borrow money. Think of the cost of money as the rent you have to pay for using someone else’s money. … The short answer is that your cost of money is the weighted average of your borrowing and deposit interest rates.

What is Fccom?

To estimate facilities capital cost of money (FCCOM), the contracting officer shall use DD Form 1861, Contract Facilities Capital Cost of Money, after evaluating the contractor’s cost proposal, establishing cost of money factors, and developing a prenegotiation cost objective.

Is the national average mortgage rate used in calculating Fccom?

The national average mortgage rate is used in calculating Facilities Capital Cost of Money (FCCOM).

How is facilities capital cost of money applied to contract pricing?

Under government acquisition regulations, the cost of money for facilities capital is an allowable imputed indirect cost used for pricing government contracts. … A contractor borrowing money to purchase facilities, will pay unallowable interest on the borrowed funds.

Is the total value of this raw material allocable to one contract?

Is the total value of this raw material allocable to one contract? (a) Yes, due to the efficiency gained by procuring all the materials at one time.

What contract type puts the most risk on the contractor?

1. Fixed Price. The most common type of contract is the fixed price contract, also known as the lump sum or stipulated sum contract. Fixed price contracts carry more risk to contractors than owners.

Which of the following is an indirect cost pool?

Indirect cost pool expenditures typically include: Administrative salaries and fringe benefits associated with overall financial and organizational administration; Operation and maintenance costs for facilities and equipment; and, Payroll and procurement services.

How is Fccm calculated?

The FCCM, a weighting factor for the assumed costs, is essential to the calculation but is the result of a similar but separate previous calculation. … Divide the result from step 2 by the Treasury rate. For example, with a Treasury rate of 5 percent, divide $1,000,000 by 0.05 to obtain a total FCCM of $20,000,000.

What is the most common base for calculating the general and administrative overhead rate?

The G&A rate allocation base most commonly used is Total Cost Input (all direct cost plus overhead). Other G&A allocation bases are Value Added and Single Element.

What is the preferred method for determining if a proposed cost is reasonable?

If an independent estimate of the item has been prepared and no other method or information is available, a price can be compared to the estimate and if it compares favorably, this can be a basis to find a price fair and reasonable. The estimate, however, must be independent.