Pricing, Cost and Contract Types
Who carries the risk under each contract type, how price is evaluated, and what makes a cost reasonable.
Lessons
- Describe firm-fixed-price, cost-reimbursement and time-and-materials contracts.
- Say who carries cost risk in each.
- Know when competition alone establishes price reasonableness.
- Apply the prudent-person test to a cost.
- Build a loaded rate from a direct rate.
- Explain each pool to an auditor.
- Bound a competitive price from past awards.
- Avoid buying in below cost.
- Know what an adequate accounting system must do.
- Prepare for a pre-award survey.
- Price to the ordering procedures.
- Price an order from your contract rates, knowing the agency may ask for a reduction.