Services Pre PNM Assignment

Handout (Version 4)

INTERMEDIATE CONTRACT PRICING (CON 204)

Services Scenario Cover Sheet

This case scenario covers the following course objectives:

Terminal Learning Objective 4. Given a services scenario, applicable references, mathematical techniques, and resources, formulate cost or pricing positions for a pre-price negotiatiation memorandum (pre-PNM) that supports a fair and reasonable price decision.

Enabling Learning Objective 1: Identify Cost Plus Incentive Fee (CPIF) elements.

Enabling Learning Objective 2: Calculate incentive factors such as share ratios, range of incentive effectiveness, target cost, fee limits, and final contract price.

Enabling Learning Objective 3: Recognize issues and factors to consider in making equitable adjustments.

Enabling Learning Objective 4: Given a statement of work change, determine the contract price adjustment.

Introduction: You are a contract specialist in the services branch of a contracting office. You are responsible for contracting various services supporting two regionally located bases, to include services in support of the two base computer centers. You will conduct the cost/price analysis supporting the award of a follow-on regional computer center support contract. Your director of contracting has requested that you provide your pre-PNM presentation tomorrow afternoon instead of next week. You will provide a copy of your pre-PNM and any presentation material.

Information Gathering: You already have the proposal, technical review, and DCAA input. Time to finish the cost/price analysis, the pre-negotiation memo, and presentation material. If you need additional information, ask the instructor. State the person you are asking the question of (contractor, auditor, etc.) and the exact question.

Grading: Individuals will be graded on pre-PNM memo content, and presentation findings.

CON204 – Services Case #1

Regional Computer Centers Support Contract

BACKGROUND: You are a contract specialist in the services branch of a contracting office responsible for supporting two regionally located military bases. The workload of the services branch continues to increase as more and more base/post/station support services are contracted out. You are responsible for not only awarding all new service contracts (obtained primarily competitively), but also for all changes/modifications to those contracts. Recently you have been working a sole source follow-on contract which will provide support for the two local base computer centers. A competitive follow-on is already being planned for award in late 2001 which will require support of the new DoD standard base computer support system.

The base computer centers have 10-15 year old computer systems supporting their respective base operations. Four years ago, McGhee Systems won the regional computer support contract (Cost Plus Fixed Fee). Performance under the last option will be completed in two months. You issued a synopsis in the Commerce Business Daily announcing that an RFP would be issued for the FINAL three years of support, maintenance and enhancements of the existing computer systems (basic plus two one year options). Only one response was received; it was from the incumbent, McGhee Systems. You were aware, based on market research and input from both base computer systems centers, that many computer support companies no longer support these old computer systems. There is better opportunity to make more money supporting new systems and there are very few people these days with the skills needed to maintain the old systems.

Contractor support has been satisfactory. They are responsive and overall system downtime at both bases has been less than two percent over the past year. However, Government technical personnel complain that the contractor seem's over-staffed and doesn't seem to be taking opportunities to control costs. You discuss with the Government team how a CPIF contract can be used to motivate contractor cost control and efficiency. Everyone agrees that the time is right to switch to a CPIF contract. The RFP requires that the contractor 1) Provide a full spectrum of computer analyst services with ON-SITE support Monday - Friday (0800-1700) and ON-CALL analyst services for off-duty hours; 2) 24 x 7 on-site system administration and computer support/operators; and 3) Support attainment of a less than 2% overall system downtime performance goal.

Again, it is time to finish your cost/price analysis, the pre-negotiation memo, and the presentation. If more information is needed, ask the instructor. State the person you are asking the question of (contractor, auditor, etc) and exactly what you want. Your contracting organization is responsible for contract administration.

Attachment 1

Proposal

From: McGhee Computer Systems

Subject: Proposal in for Support of Regional Base Computer Centers

To: McChord AFB/Contracting Officer

We appreciate the opportunity to submit this proposal for continuing our regional support of computer center operations at both Fogleman Air Force Base and Ryan Air Force Base. We recognize the challenge of supporting the maintenance/operation of the various aging systems and are fully committed to continuation of the less than 2% experienced downtime of the systems.

We believe our proposal is fully responsive to the RFP. Supporting detail for the following is provided on the attached spreadsheet. Estimates and calculations to include rates, factors, and hours, are documented in the electronic proposal spreadsheet submitted in response to your RFP request to maximize use of paperless, electronic media to submit proposals. We have submitted an electronic copy of the proposal by email (encoded) to you and the DCAA for their review.

1. Labor.

The labor categories and hours proposed are based on the current labor types, mix, and hours used on the current CPFF contract supporting both base computer centers. The RFP requires that we:

1) Provide a full spectrum of computer analyst services with on-site support Monday - Friday (0800-1700) and on-call analyst services for off-duty hours, and

2) 24 x 7 on-site system administration and computer support/operators.

3) Support attainment of a less than 2% overall system downtime performance goal.

Labor rates are based on actual rates escalated per DRI escalation for automated data processing personnel plus .5%. Additional escalation is based on our experience with attracting and retaining qualified computer professionals to work on these aging computer systems. All rates except the Systems Administrator are subject to the Services Contract Act Department of Labor Wage Determinations. All rates exceed DOL minimum rates. It is an extremely competitive labor market.

A. Labor. On-Site Support. See attached spreadsheet.

- Applications Systems Analyst II (1999, 2000, 2001)

2080hrs/yr x 2 persons x 2 sites = 8320 hrs.

- Programmer Analyst II (1999, 2000, 2001)

2080hrs/yr x 2 persons x 2 sites = 8320 hrs.

- Database Analyst II (1999, 2000, 2001)

2080hrs/yr x 2 persons x 2 sites = 8320 hrs.

- Computer Support/Operations II (1999, 2000, 2001)

(2080hrs/yr + (16hrs x 52wks)) x 2 persons x 2 sites x 3 shifts=34,944 hrs.

- Systems Administration (1999, 2000, 2001)

(2080hrs/yr + (16 hrs x 52 wks)) x 1 person x 2 sites x 3 shifts= 17,472 hrs/yr

Note: 2080 hrs/yr based on 40 hours per week x 52 weeks

Technical Input: The labor for on-site support is "business as usual;" the same labor types and quantities used to perform under the current contract. The approach treats the on-site labor as a fixed cost to provide minimum on-site support. Our requirement is to have on-site support, not specifically that we have two of each analyst. We have discussed with the contractor the idea of better using the analysts, perhaps by cutting back to one on-site for each analyst labor category and having one floating back and forth as needed. However, given the ongoing disagreement on anticipated stable or increasing breakdowns/failures (see discussion under on-call support), we do not believe this issue should be forced at the negotiations. The best approach will be to ensure best use of the incentive type contract proposed by the contracting office. We need to strongly encourage and motivate the contractor to continue excellent support coverage AND to control costs.

We take no exception to the contractor's contention that it is hard to find and retain personnel with the skills required to support these systems.

We recommend that the Government objective be based on use of the proposed labor except for database analysts. We are certain that the workload for database analyst support has decreased significantly. We haven't created any new significant databases in three years and the current database structures and uses are very stable.

Auditor: DCAA verified 1998 labor categories/rates currently used/paid under existing contract. DCAA recommends escalation at DRI/ADP.

Thoughts and Comments from the Instructor:

1. In doing market research to assess the labor market and wage/salary trends for computer/information technology support, you noticed that support is increasingly being provided on a remote basis (vice on-site), thanks to improving technology. Being on-site to provide support is not as important as it used to be. How could you use that information?

2. What sources could you go to conduct this market research on the labor market?

3. DCAA recommended use of DRI escalation. The contractor proposes using DRI plus .5% due to the tight labor market. What would you do to resolve the DCAA recommendation and the proposed addition of .5% escalation?

B. Labor. On-Call Support. See attached spreadsheet.

On-call labor is proposed as overtime for analysts employed Monday - Friday (0800-1700). Estimated per month on-call hours are based on an expected significant increase in computer system breakdowns due to the continued aging of the computer systems. Proposed labor rates are based on an overtime premium factor of 1.5 (industry standard) applied to the base wage rates.

Example of hours and rate calculations.

HOURS - Applications Systems Analyst II hours (1999) = 12 months x two sites x 30 hrs/month = 720 hours per year

OVERTIME RATE - Applications Systems Analyst II rate (1999) = 1999 base rate x 1.5 overtime factor = $38.10

Proposed/Est'd ON-CALL HOURS/Month
	1999	2000	2001
	Basic	Option1	Option2
Applics Sys Anal II	30	35	40
Progr Analyst II	35	40	45
Database Anal/Prog II	30	35	40

Technical Input: In contrast to the on-site labor, on-call labor is the variable part of the total labor required to support the computer centers. Whereas the on-site personnel are "at work" whether or not a computer system has failed, the on-call labor is used only if someone needs to be called in to get a system running again. Government technical personnel at the computer centers disagree with the contractor regarding the likelihood that the aging computer systems at each base will breakdown/fail significantly more over the next three years. The technical folks contend that past enhancements have solved most of the problems that have caused past, recurring breakdowns. Your technical personnel expect continuation of the current breakdown/failure rates. They recommend the following estimate of on-call overtime hours be used for developing the Government estimate.

Objective/Est'd ON-CALL HOURS/Month
	1999	2000	2001
	Basic	Option1	Option2
Applics Sys Anal II	15	15	20
Progr Analyst II	10	10	15
Database Anal/Prog II	10	10	15

Auditor: DCAA verified 1998 labor categories/rates, and overtime factor currently used/paid under existing contract. DCAA recommends escalation at DRI/ADP.

Thoughts and Comments from the Instructor:

1. What quantitative analysis methods could you suggest to better assess whether there will be an increasing occurrence of failures?

2. What is the turnover rate for support personnel? If it is high, is learning starting all over again with new personnel? Why the high turnover? Is the contractor paying competitive wages/salaries? If there is high turnover and you negotiate "hard" to minimize the number of personnel, how could this impact performance risk?

3. In what ways could we use DCAA support for our analysis? What are examples of specific requests for this information? What is an example of a request that would be too general? [DCAA verified labor rates of current employees supporting the current contract, escalation, and the overtime factor used. They could have provided input on labor turnover.

4. Why does introducing incentives on cost performance make sense in this situation?

5. What are the possibilities if we stated the requirement only in terms of the 2% downtime goal? Would the contractor have more freedom in how support was accomplished?

6. Would performance incentives be more or less motivating if requirements were restated this way? How could award fee be used? FPIF?

7. Discuss the possibility of endangering performance by overemphasizing cost control through incentives.

2. Fringe. Proposed rate of $1.47 per labor hour (excluding overtime hours) exceeds Department of Labor minimum for this labor area.

Auditor: DCAA reviewed the proposed per labor hour fringe cost and took no exception.

Thoughts and Comments from the Instructor:

1. What costs are typically included in fringe?

2. What is one reason that fringe would specifically be identified in the proposal, as opposed to just being included as part of the overhead?

3. Where could you find out what the Dept of Labor minimum wages and fringe are for in your area?

4. Discuss why contracting officer involvement in fringe issues differs significantly based on whether contract administration has been delegated to DCMC or not.

5. Where could you go in the Deskbook to get information on fringe costs? Allowability policy? Calculating an indirect cost? DCAA guidance?

6. What are the implications of whether this contract is CAS covered or not?

7. If the company experienced a significant decline in its business base and workforce, how might this impact its cost of fringe benefits per labor hour?

3. Overhead. Proposed overhead rates based on inclusion of allowable costs in indirect pools consistent with FAR Cost Accounting Standards and Cost Principles. McGhee Systems anticipates a substantial reduction in its business base in 2000 and 2001. Many companies have switched to new computer systems which we do not support. The significant loss of business is reflected in the increased overhead rates for 2000 and 2001.

1999 35%

2000 50%

2001 50%

Note: Base is labor dollars less overtime labor dollars.

Auditor: DCAA reviewed the proposed overhead rates and takes exception to 3% of the proposed overhead rates proposed for 2000 and 2001. DCAA used McGhee System's weighted average (rather than the proposed simple average) of the range of potential business sales estimates.

Thoughts and Comments from the Instructor:

1. What costs are typically included in overhead?

2. Discuss common indirect cost rate misunderstanding; i.e., assessing a rate as too high or too low without understanding the composition and costs included in its pool and base.

3. Discuss why contracting officer involvement in indirect cost issues differs significantly based on whether contract administration has been delegated to DCMC or not.

4. Where could you go in the Deskbook to get information on indirect costs? Allowability policy? Calculating an indirect cost? DCAA guidance?

5. What are the implications of whether this contract is CAS covered or not?

6. If a company is doing business predominantly with Government and its Government business is declining, what would likely happen to its overhead rate?

4. Material/Parts.

- For Scheduled Maintenance. Types and quantities derived from specific maintenance tasks/standards identified in system maintenance manuals. Costs for 1999 based on current quotes or catalog prices (reflecting standard negotiation decrements and expected discounts). Costs for 2000 and 2001 based on DRI indices (electronic components) application to materials/parts required for planned maintenance.

- For Unscheduled Maintenance/Repair. Estimate based on 1998 actuals (types and quantities of material used) and expected 30% increase in breakdowns based on age of systems.

- For Minor System Enhancements. Estimate based on 1998 actuals (types and quantities) and expected 40% growth due to increase in required minor enhancements.

- Miscellaneous Material/Parts. Based on 1998 actuals and expected 10% annual growth in required miscellaneous materials.

Note: Estimated cost of unscheduled, minor enhancement, and miscellaneous materials/parts based on using DRI indices for electronic components.

Material Growth Factors - Proposed
	1999	2000	2001
Unscheduled	1.30	1.30	1.30
Minor Enhancements	1.40	1.40	1.40
Miscellaneous	1.10	1.10	1.10

Technical Input: The proposed materials for scheduled maintenance on the various computer systems match the suggested materials required for maintenance identified in the respective technical manuals. All other proposed material is based on use of a materials growth factor. McGhee Systems estimates that material requirements will significantly increase for unscheduled maintenance and minor system enhancements. Again, we disagree with McGhee Systems that there will be a significant increase in the occurrence of system breakdowns/failures. We believe that past enhancements have stablized the requirement for unexpected maintenance.

The following summarizes the proposed and recommended growth factors for materials supporting unscheduled maintenance, minor system enhancements, and miscellaneous use:

Material Growth Factors - Proposed
	1999	2000	2001
Unscheduled	1.30	1.30	1.30
Minor Enhancements	1.40	1.40	1.40
Miscellaneous	1.10	1.10	1.10

Material Growth Factors - Govt Objective
	1999	2000	2001
Unscheduled	1.00	1.05	1.10
Minor Enhancements	1.00	1.00	0.25
Miscellaneous	1.05	1.05	1.05

Auditor: McGhee Systems proposed escalation of material costs using DRI escalation for electronic components. DCAA takes no exception to the proposed escalation.

DRI Escalation/ADP

-3.00%

-3.00%

-1.20%

5. G&A. 15%/1999; 25%/2000; 25%/2001. Base is total cost.

Auditor: DCAA reviewed the proposed overhead rates and takes exception to 2% of the proposed overhead rates proposed for 2000 and 2001. DCAA used McGhee System's weighted average (rather than the proposed simple average) of the range of potential business sales estimates.

Thoughts and Comments from the Instructor:

1. What costs are typically included in G&A?

6. Target Fee. 11% fee (of target cost).

Instructor/Contracting Officer/Buyer: Assume that the agency structured method used was the Weighted Guidelines. CON104 provided instruction on use of Weighted Guidelines. For this case, assume that the calculated amount of fee equated to 9% of objective target cost. No cost of money was proposed. Students will use the pessimistic and optimistic cost to calculate minimum and maximum fees for this case.

Thoughts and Comments from the Instructor:

1. Why is it very likely that a service oriented company would not propose Facilities Capital Cost of Money?

2. Discuss how the Weighted Guidelines could be used to develop a minimum and maximum fee; and how with share ratios pessimistic and optimistic costs could be calculated.

3. Discuss how the minimum and maximum fee could be calculated given share ratios and optimistic/pessimistic costs.

4. Discuss how the dollar amount of potential share (over or under) must be enough to provide effective incentive.

7. CPIF Share Ratios. 90/10 Over 70/30 Under

Due to the age of these systems, it is very possible that we might experience a significant increase in the occurrence of system breakdowns (out of our control) over the next three years. The systems are very old. Therefore, we believe a 10% contractor over target share is appropriate. As we continue our excellent performance we will also strive to control costs. We believe that a 30% contractor under target is appropriate.

Technical input. See discussion under on-call labor regarding anticipated computer system breakdowns/failures. We believe the government objective should be based on share ratio's that equally motivate contractor cost control whether over or under target cost. We recommend an 80/20 over/under share ratio.

Thoughts and Comments from the Instructor:

1. It may be worthwhile to review the difference between the proposed 90/10 and 70/30 ratios. Why does it make sense that the contractor would propose 90/10 given its anticipation of future breakdowns?

2. Prompt clarifying discussion on why the most likely causes of over target costs are a significant factor in determining the over target share.

3. Ask what yourself questions you would raise as the contracting rep on an IPT doing an acquisition strategy planning session.

4. Discuss where to go on Desktop for guidance/policy on incentive contracts.

8. Optimistic/Pessimistic Cost

Based on our assessment of probable performance outcomes, we believe the range of possible cost outcomes ranges from approximately 84% to 110% of target cost.

Instructor/Contracting Officer/Technical input. We believe the range of incentive effectiveness is between 84% and 115% of the Government objective target cost.

Thoughts and Comments from the Instructor:

1. Ask what type of contract the CPIF effectively becomes once incurred costs hit pessimistic cost.

2. Ask yourself what questions you would raise as the contracting rep on an IPT doing an acquisition strategy planning session.

3. Discuss where to go on Desktop for guidance/policy on incentive contracts.

ATTACHMENT 2

10 August 1998

Memorandum for the Negotiation Team

From: Base Computer Center Engineering

Subject: Technical Evaluation of McGhee Systems Proposal

We have reviewed the McGhee Systems proposal and provide the following comments:

General comments: We believe there will not be a significant increase in experienced computer system breakdowns/failures over the next three years. Our experience has been that the rate of system breakdowns/failures has leveled off over the past two years. However, we do believe that there are significant opportunities for improving cost control both for labor and material. We believe that the range between pessimistic and optimistic costs is between (approximately) 84% and 115% of target cost (as calculated per our input on labor and material).

Labor:

The labor for "on-site support" is "business as usual;" the same labor types and quantities used to perform under the current contract. The McGhee Systems approach treats the on-site labor as a fixed cost to provide minimum on-site support. Our requirement is to have on-site support, not specifically that we have two of each analyst. We have discussed with the contractor the idea of better using the analysts, perhaps by cutting back to one on-site for each analyst labor category and having one floating back and forth as needed. Through our market research we also note that ten percent of computer support is now provided remotely. There appears to be ample opportunity for McGhee Systems to provide support in a more cost effective manner. They are concerned about being able to continue the less than two percent downtime that we have experienced should the old systems start frequently breaking down. We can't argue that the possibility exists AND we definitely don't want to jeopardize performance.

Therefore, we recommend that the Government objective be based on use of the proposed labor except for database analysts. We are certain that the workload for database analyst support has decreased significantly. We haven't created any new significant databases in three years and the current database structures and uses are very stable. We recommend the Government objective be based on use of one database analyst at each site with one floater.

We take no exception to the contractor's contention that it is hard to find and retain personnel with the skills required to support these systems.

Again, we agree with the strategy to use the incentive contract approach. We believe this approach will allow us to get both the continued satisfactory support AND motivate the contractor to control costs.

In contrast to the on-site labor, "on-call labor" is the variable part of the total labor required to support the computer centers. Whereas the on-site personnel are "at work" whether or not there is a computer system problem, the on-call labor is used only if someone needs to be called during off-hours to resolve a problem.

The contractor's proposed on-call hours reflect their concern that we could easily experience a significant increase in computer system failures.

We contend that past enhancements have solved most of the problems that have caused past, recurring breakdowns. We expect continuation of the current breakdown/failure rates. We recommend the following estimate of on-call overtime hours be used for developing the Government estimate.

Objective/Est'd ON-CALL HOURS/Month
	1999	2000	2001
	Basic	Option1	Option2
Applics Sys Anal II	15	15	20
Progr Analyst II	10	10	15
Database Anal/Prog II	10	10	15

Material:

The proposed materials for SCHEDULED maintenance on the various computer systems are based on materials required for scheduled maintenance identified in the respective system technical manuals.

All OTHER proposed material is based on use of a materials growth factor. McGhee Systems estimates that material requirements will significantly increase for unscheduled maintenance, minor system enhancements, and miscellaneous support. Again, we disagree with McGhee Systems that there will be a significant increase in the occurrence of system breakdowns/failures. We believe that past enhancements have stablized the requirement for unexpected maintenance.

The following summarizes the proposed and recommended growth factors for materials supporting unscheduled maintenance, minor system enhancements, and miscellaneous use:

Material Growth Factors - Proposed
	1999	2000	2001
Unscheduled	1.30	1.30	1.30
Minor Enhancements	1.40	1.40	1.40
Miscellaneous	1.10	1.10	1.10

Material Growth Factors - Govt Objective
	1999	2000	2001
Unscheduled	1.00	1.05	1.10
Minor Enhancements	1.00	1.00	0.25
Miscellaneous	1.05	1.05	1.05

Gary Louden

System Management Section

System Technology Branch

Attachment 3

DCAA Input (received via email):

Labor:

DCAA verified 1998 labor categories/rate, and overtime factor currently paid under the existing contract. DCAA has verified the proposed escalation as being per current DRI escalation for automated data processing support personnel. DCAA did not have time to assess the proposed additional escalation justified based on tight labor market conditions. Proposed overtime factor of 1.5 is per industry standard. All rates are above DOL Service Contract Act minimums.

Material:

McGhee Systems proposed escalation of material costs using DRI escalation for electronic components. DCAA takes no exception to the proposed escalation (which is negative due to deflation occurring and projected to occur for computer electronic components).

Fringe:

DCAA reviewed the proposed per labor hour fringe cost and took no exception.

Overhead:

DCAA reviewed the proposed overhead rates and takes exception to 3% of the proposed overhead rates proposed for 2000 and 2001. We reviewed their internal analysis of business base projections; both basis and calculations. Many of their existing contracts will be completed and they project a dramatic decline in follow-on work. DCAA recommendation is based on using contractor's most likely business base estimate from its range of estimates.

G&A:

DCAA reviewed the proposed G&A rate and takes exception to 2% of the proposed overhead rates proposed for 2000 and 2001. See comments under overhead.

Sincerely,

DCAA Auditor

Assignment 1

Develop and present the Government objective to management (instructor and class). Turn in the pre-PNM, with supporting spreadsheet, and any presentation material to the instructor. The pre-PNM must identify all incentive elements of the anticipated CPIF contract.

Assignment 2

Y2K Testing and BRAC! Three months after contract award, DoD mandates Y2K testing of all computer systems be accomplished within the next four months. In addition, both computer center operations are to be combined at Fogleman AFB and the combination completed by Jan 2001! The contracting officer notifies McGhee Systems in writing to start support of the Y2K testing immediately. The contracting officer sends a separate letter notifying McGhee Systems to submit a combined proposal for both the added Y2K effort and for combining and continuing computer center support. McGhee Systems submits the equitable adjustment proposal. Your technical folks have alerted you that since contract award the contractor has reduced its staff….and that it has not impacted performance a bit! You look at the contractor's proposal. Regarding the combination of computer centers, they are proposing simply adding the staffs because the work will double when combined. They are also proposing that since we just negotiated a fair and reasonable price, we can just use the recent proposal (skill mix and quantities and rates) as a basis for negotiation. Identify and discuss two primary issues that you will pursue in your analysis.

Assignment 3

The contract is complete. Final CPIF Price. Using your CPIF Target Cost/Fee and incentive elements from Assignment 1 (assume the equitable adjustment never occurred), what is the final CPIF price if McGhee Systems experienced final incurred cost of $700,000 under target cost.

McGhee Systems Proposal/Objective

OPTION 2-Proposed/2001

Hours

2000 Rate

Esc

2001 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$26.85

1.056

$28.35

$235,895

Progr Analyst II

8,320

$28.02

1.056

$29.59

$246,216

Database Anal/Prog II

8,320

$17.71

1.056

$18.70

$155,593

Computer Spt/Ops II

34,944

$31.19

1.056

$32.94

$1,151,098

Systems Administrator

17,472

$39.68

1.056

$41.91

$732,194

On-call Support

Applics Sys Anal II

960

$42.53

$40,828

Progr Analyst II

1,080

$44.39

$47,941

Database Anal/Prog II

960

$28.05

$26,930

Total labor

80,376

$2,636,695

Fringe

$1.47

$113,743

Labor Overhead

50%

$1,260,498

Material

scheduled

0.930

$204,514

unscheduled

1.284

$245,082

minor enhancements

1.383

$76,525

misc

1.087

$9,898

Total Material

$536,020

G&A

25%

$1,136,739

Target Cost

$5,683,696

Target Fee

11%

$625,207

Target Price Option 2

$6,308,902

Minimum Fee

$568,370

Maximum Fee

$898,024

Optimistic Cost

$4,774,304

Pessimistic Cost

$6,252,065

Contractor Share % Over

10%

Contractor Share % Under

30%

PROPOSED

BASIC-Proposed/1999

Hours

Total

On-Site Support

Hours

1998 Rate

Esc

1999 Rate

Total

Applics Sys Anal II

8,320

$24.05

1.056

$25.40

$211,339

Progr Analyst II

8,320

$25.11

1.056

$26.51

$220,586

Database Anal/Prog II

8,320

$15.87

1.056

$16.75

$139,396

Computer Spt/Ops II

34,944

$27.95

1.056

$29.51

$1,031,273

Systems Administrator

17,472

$35.55

1.056

$37.54

$655,975

On-call Support

Hours

1999 Rate

Total

Applics Sys Anal II

720

$38.10

$27,433

Progr Analyst II

840

$39.77

$33,406

Database Anal/Prog II

720

$25.13

$18,095

Total labor

79,656

$2,337,503

Fringe

$1.47

$113,743

Overhead

35%

$790,499

Material

scheduled

$200,000

unscheduled

1.261

$151,320

minor enhancements

1.358

$40,740

misc

1.067

$8,536

Total Material

$400,596

G&A

15%

$546,351

Target Cost

$4,188,692

Target Fee

11%

$460,756

Target Price Basic

$4,649,448

Minimum Fee

$418,869

Maximum Fee

$661,813

Optimistic Cost

$3,518,501

Pessimistic Cost

$4,607,561

Contractor Share % Over

10%

Contractor Share % Under

30%

OPTION 1-Proposed/2000

Hours

1999 Rate

Esc

2000 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$25.40

1.057

$26.85

$223,386

Progr Analyst II

8,320

$26.51

1.057

$28.02

$233,159

Database Anal/Prog II

8,320

$16.75

1.057

$17.71

$147,342

Computer Spt/Ops II

34,944

$29.51

1.057

$31.19

$1,090,055

Systems Administrator

17,472

$37.54

1.057

$39.68

$693,366

On-call Support

Applics Sys Anal II

840

$40.27

$33,830

Progr Analyst II

960

$42.04

$40,354

Database Anal/Prog II

840

$26.56

$22,314

Total labor

80,016

$2,483,806

Fringe

$1.47

$113,743

Overhead

50%

$1,193,654

Material

scheduled

0.941

$225,816

unscheduled

1.261

$190,815

minor enhancements

1.358

$55,325

misc

1.067

$9,108

Total Material

$481,063

G&A

25%

$1,068,066

Target Cost

$5,340,332

Target Fee

11%

$587,437

Target Price Option 1

$5,927,768

Minimum Fee

$534,033

Maximum Fee

$843,772

Optimistic Cost

$4,485,879

Pessimistic Cost

$5,874,365

Contractor Share % Over

10%

Contractor Share % Under

30%

McGhee Systems Proposal

Services Case

As of 29 Jun 99

Proposed vs Objective

PROPOSED

OBJECTIVE

Be prepared to explain variances over 10% in your presentation

TOTAL Target Cost

$15,212,720

$13,820,942

FAR Part 37 Service Contracting

TOTAL Target Fee

$1,673,399

$1,243,885

FAR 22.10 Service Contract Act of 1965

TOTAL Target Price

$16,886,119

$15,064,827

FAR 22.103-5 Basic Labor Policies/Contract Clauses

Minimum Fee

$1,521,272

$829,257

FAR 52.222-41 SCA of 1965

Maximum Fee

$2,403,610

$1,686,155

Total Optimistic Cost

$12,778,685

$11,609,591

Total Pessimistic Cost

$16,733,992

$15,894,084

1999

1999

2000

2000

2001

2001

Proposed

Objective

Proposed

Objective

Proposed

Objective

BASIC

BASIC

Variance

OPTION 1

OPTION 1

Variance

OPTION 2

OPTION 2

Variance

On-Site Support

Applics Sys Anal II

$211,339

$211,339

0%

$223,386

$223,386

0%

$235,895

$235,895

0%

Progr Analyst II

$220,586

$220,586

0%

$233,159

$233,159

0%

$246,216

$246,216

0%

Database Anal/Prog II

$139,396

$69,698

50%

$147,342

$73,671

50%

$155,593

$77,796

50%

Computer Spt/Ops II

$1,031,273

$1,031,273

0%

$1,090,055

$1,090,055

0%

$1,151,098

$1,151,098

0%

Systems Administrator

$655,975

$655,975

0%

$693,366

$693,366

0%

$732,194

$732,194

0%

On-call Support

Applics Sys Anal II

$27,433

$13,717

50%

$33,830

$14,499

57%

$40,828

$20,414

50%

Progr Analyst II

$33,406

$9,545

71%

$40,354

$10,089

75%

$47,941

$15,980

67%

Database Anal/Prog II

$18,095

$6,032

67%

$22,314

$6,375

71%

$26,930

$10,099

63%

Total labor

$2,337,503

$2,218,164

5%

$2,483,806

$2,344,599

6%

$2,636,695

$2,489,693

6%

Fringe

$113,743

$107,628

5%

$113,743

$107,628

5%

$113,743

$107,628

5%

Labor Overhead

$790,499

$766,105

3%

$1,193,654

$1,087,409

9%

$1,260,498

$1,148,304

9%

Material

scheduled

$200,000

$200,000

0%

$225,816

$225,816

0%

$204,514

$204,514

0%

unscheduled

$151,320

$116,400

23%

$190,815

$118,553

38%

$245,082

$128,844

47%

minor enhancements

$40,740

$29,100

29%

$55,325

$28,227

49%

$76,525

$6,972

91%

misc

$8,536

$8,148

5%

$9,108

$8,299

9%

$9,898

$8,609

13%

Total Material

$400,596

$353,648

12%

$481,063

$380,895

21%

$536,020

$348,939

35%

G&A

$546,351

$516,832

5%

$1,068,066

$901,722

16%

$1,136,739

$941,750

17%

Target Cost

$4,188,692

$3,962,376

5%

$5,340,332

$4,822,253

10%

$5,683,696

$5,036,313

11%

Target Fee

$460,756

$356,614

23%

$587,437

$434,003

26%

$625,207

$453,268

28%

Target Price

$4,649,448

$4,318,990

7%

$5,927,768

$5,256,256

11%

$6,308,902

$5,489,582

13%

Minimum Fee

$418,869

$237,743

43%

$534,033

$289,335

46%

$568,370

$302,179

47%

Maximum Fee

$661,813

$483,410

27%

$843,772

$588,315

30%

$898,024

$614,430

32%

Optimistic Cost

$3,518,501

$3,328,396

5%

$4,485,879

$4,050,693

10%

$4,774,304

$4,230,503

11%

Pessimistic Cost

$4,607,561

$4,556,732

1%

$5,874,365

$5,545,591

6%

$6,252,065

$5,791,760

7%

Contractor Share % Over

10%

20%

10%

20%

10%

20%

Contractor Share % Under

30%

20%

30%

20%

30%

20%

Opt Cost Under Target

84%

84%

84%

84%

84%

84%

Pess Cost Over Target

110%

115%

110%

115%

110%

115%

OBJECTIVE

Escalated

BASIC-Objective/1999

Hours

1998 Rate

Esc

1999 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$24.05

1.056

$25.40

$211,339

Progr Analyst II

8,320

$25.11

1.056

$26.51

$220,586

Database Anal/Prog II

4,160

$15.87

1.056

$16.75

$69,698

Computer Spt/Ops II

34,944

$27.95

1.056

$29.51

$1,031,273

Objective/Est'd ON-CALL HOURS/Month

Systems Administrator

17,472

$35.55

1.056

$37.54

$655,975

1999

2000

2001

On-call Support

Basic

Option1

Option2

Applics Sys Anal II

360

$38.10

$13,717

Applics Sys Anal II

15

15

20

Progr Analyst II

240

$39.77

$9,545

Progr Analyst II

10

10

15

Database Anal/Prog II

240

$25.13

$6,032

Database Anal/Prog II

10

10

15

Total labor

74,056

$2,218,164

Fringe

$1.47

$107,628

Labor Overhead

35%

$766,105

Material

scheduled

$200,000

unscheduled

0.970

$116,400

minor enhancements

0.970

$29,100

misc

1.019

$8,148

Total Material

$353,648

G&A

15%

$516,832

Target Cost

$3,962,376

Overrun

Underrun

Target Fee

9%

$356,614

Min/Pess

Max/Opt

Target Price Basic

$4,318,990

Target Fee

$356,614

$356,614

Minimum Fee

$237,743

Adjustment

-$118,871

$126,796

Maximum Fee

$483,410

Final Fee

$237,743

$483,410

Optimistic Cost

$3,328,396

% of Target

6%

12%

Pessimistic Cost

$4,556,732

Range

Range

Contractor Share % Over

20%

84%

115%

Contractor Share % Under

20%

OBJECTIVE

Escalated

OPTION 1-Proposed/2000

Hours

1999 Rate

Esc

2000 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$25.40

1.057

$26.85

$223,386

Progr Analyst II

8,320

$26.51

1.057

$28.02

$233,159

Database Anal/Prog II

4,160

$16.75

1.057

$17.71

$73,671

Computer Spt/Ops II

34,944

$29.51

1.057

$31.19

$1,090,055

Objective/Est'd ON-CALL HOURS/Month

Systems Administrator

17,472

$37.54

1.057

$39.68

$693,366

1999

2000

2001

On-call Support

Basic

Option1

Option2

Applics Sys Anal II

360

$40.27

$14,499

Applics Sys Anal II

15

15

20

Progr Analyst II

240

$42.04

$10,089

Progr Analyst II

10

10

15

Database Anal/Prog II

240

$26.56

$6,375

Database Anal/Prog II

10

10

15

Total labor

74,056

$2,344,599

Fringe

$1.47

$107,628

Labor Overhead

47%

$1,087,409

Material

scheduled

0.941

$225,816

unscheduled

1.019

$118,553

minor enhancements

0.970

$28,227

misc

1.019

$8,299

Total Material

$380,895

G&A

23%

$901,722

Target Cost

$4,822,253

Overrun

Underrun

Target Fee

9%

$434,003

Min/Pess

Max/Opt

Target Price Option 1

$5,256,256

Target Fee

$434,003

$434,003

Minimum Fee

$289,335

Adjustment

-$144,668

$154,312

Maximum Fee

$588,315

Final Fee

$289,335

$588,315

Optimistic Cost

$4,050,693

% of Target

6%

12%

Pessimistic Cost

$5,545,591

Range

Range

Contractor Share % Over

20%

84%

115%

Contractor Share % Under

20%

OBJECTIVE

Escalated

OPTION 2-Objective/2001

Hours

2000 Rate

Esc

2001 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$26.85

1.056

$28.35

$235,895

Progr Analyst II

8,320

$28.02

1.056

$29.59

$246,216

Database Anal/Prog II

4,160

$17.71

1.056

$18.70

$77,796

Computer Spt/Ops II

34,944

$31.19

1.056

$32.94

$1,151,098

Objective/Est'd ON-CALL HOURS/Month

Systems Administrator

17,472

$39.68

1.056

$41.91

$732,194

1999

2000

2001

On-call Support

Basic

Option1

Option2

Applics Sys Anal II

480

$42.53

$20,414

Applics Sys Anal II

15

15

20

Progr Analyst II

360

$44.39

$15,980

Progr Analyst II

10

10

15

Database Anal/Prog II

360

$28.05

$10,099

Database Anal/Prog II

10

10

15

Total labor

74,416

$2,489,693

Fringe

$1.47

$107,628

Labor Overhead

47%

$1,148,304

Material

scheduled

0.930

$204,514

unscheduled

1.087

$128,844

minor enhancements

0.247

$6,972

misc

1.037

$8,609

Total Material

$348,939

G&A

23%

$941,750

Target Cost

$5,036,313

Overrun

Underrun

Target Fee

9%

$453,268

Min/Pess

Max/Opt

Target Price Option 2

$5,489,582

Target Fee

$453,268

$453,268

Minimum Fee

$302,179

Adjustment

-$151,089

$161,162

Maximum Fee

$614,430

Final Fee

$302,179

$614,430

Optimistic Cost

$4,230,503

% of Target

6%

12%

Pessimistic Cost

$5,791,760

Range

Range

Contractor Share % Over

20%

84%

115%

Contractor Share % Under

20%

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PROPOSED

BASIC-Proposed/1999

Hours

Total

On-Site Support

Hours

1998 Rate

Esc

1999 Rate

Total

Applics Sys Anal II

8,320

$24.05

1.056

$25.40

$211,339

Progr Analyst II

8,320

$25.11

1.056

$26.51

$220,586

Database Anal/Prog II

8,320

$15.87

1.056

$16.75

$139,396

Computer Spt/Ops II

34,944

$27.95

1.056

$29.51

$1,031,273

Systems Administrator

17,472

$35.55

1.056

$37.54

$655,975

On-call Support

Hours

1999 Rate

Total

Applics Sys Anal II

720

$38.10

$27,433

Progr Analyst II

840

$39.77

$33,406

Database Anal/Prog II

720

$25.13

$18,095

Total labor

79,656

$2,337,503

Fringe

$1.47

$113,743

Overhead

35%

$790,499

Material

scheduled

$200,000

unscheduled

1.261

$151,320

minor enhancements

1.358

$40,740

misc

1.067

$8,536

Total Material

$400,596

G&A

15%

$546,351

Target Cost

$4,188,692

Target Fee

11%

$460,756

Target Price Basic

$4,649,448

Minimum Fee

$418,869

Maximum Fee

$661,813

Optimistic Cost

$3,518,501

Pessimistic Cost

$4,607,561

Contractor Share % Over

10%

Contractor Share % Under

30%

OPTION 1-Proposed/2000

Hours

1999 Rate

Esc

2000 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$25.40

1.057

$26.85

$223,386

Progr Analyst II

8,320

$26.51

1.057

$28.02

$233,159

Database Anal/Prog II

8,320

$16.75

1.057

$17.71

$147,342

Computer Spt/Ops II

34,944

$29.51

1.057

$31.19

$1,090,055

Systems Administrator

17,472

$37.54

1.057

$39.68

$693,366

On-call Support

Applics Sys Anal II

840

$40.27

$33,830

Progr Analyst II

960

$42.04

$40,354

Database Anal/Prog II

840

$26.56

$22,314

Total labor

80,016

$2,483,806

Fringe

$1.47

$113,743

Overhead

50%

$1,193,654

Material

scheduled

0.941

$225,816

unscheduled

1.261

$190,815

minor enhancements

1.358

$55,325

misc

1.067

$9,108

Total Material

$481,063

G&A

25%

$1,068,066

Target Cost

$5,340,332

Target Fee

11%

$587,437

Target Price Option 1

$5,927,768

Minimum Fee

$534,033

Maximum Fee

$843,772

Optimistic Cost

$4,485,879

Pessimistic Cost

$5,874,365

Contractor Share % Over

10%

Contractor Share % Under

30%

OPTION 2-Proposed/2001

Hours

2000 Rate

Esc

2001 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$26.85

1.056

$28.35

$235,895

Progr Analyst II

8,320

$28.02

1.056

$29.59

$246,216

Database Anal/Prog II

8,320

$17.71

1.056

$18.70

$155,593

Computer Spt/Ops II

34,944

$31.19

1.056

$32.94

$1,151,098

Systems Administrator

17,472

$39.68

1.056

$41.91

$732,194

On-call Support

Applics Sys Anal II

960

$42.53

$40,828

Progr Analyst II

1,080

$44.39

$47,941

Database Anal/Prog II

960

$28.05

$26,930

Total labor

80,376

$2,636,695

Fringe

$1.47

$113,743

Labor Overhead

50%

$1,260,498

Material

scheduled

0.930

$204,514

unscheduled

1.284

$245,082

minor enhancements

1.383

$76,525

misc

1.087

$9,898

Total Material

$536,020

G&A

25%

$1,136,739

Target Cost

$5,683,696

Target Fee

11%

$625,207

Target Price Option 2

$6,308,902

Minimum Fee

$568,370

Maximum Fee

$898,024

Optimistic Cost

$4,774,304

Pessimistic Cost

$6,252,065

Contractor Share % Over

10%

Contractor Share % Under

30%

Services Case

As of 29 Jun 99

Proposed vs Objective

PROPOSED

OBJECTIVE

Be prepared to explain variances over 10% in your presentation

TOTAL Target Cost

$15,212,720

$13,820,942

FAR Part 37 Service Contracting

TOTAL Target Fee

$1,673,399

$1,243,885

FAR 22.10 Service Contract Act of 1965

TOTAL Target Price

$16,886,119

$15,064,827

FAR 22.103-5 Basic Labor Policies/Contract Clauses

Minimum Fee

$1,521,272

$829,257

FAR 52.222-41 SCA of 1965

Maximum Fee

$2,403,610

$1,686,155

Total Optimistic Cost

$12,778,685

$11,609,591

Total Pessimistic Cost

$16,733,992

$15,894,084

1999

1999

2000

2000

2001

2001

Proposed

Objective

Proposed

Objective

Proposed

Objective

BASIC

BASIC

Variance

OPTION 1

OPTION 1

Variance

OPTION 2

OPTION 2

Variance

On-Site Support

Applics Sys Anal II

$211,339

$211,339

0%

$223,386

$223,386

0%

$235,895

$235,895

0%

Progr Analyst II

$220,586

$220,586

0%

$233,159

$233,159

0%

$246,216

$246,216

0%

Database Anal/Prog II

$139,396

$69,698

50%

$147,342

$73,671

50%

$155,593

$77,796

50%

Computer Spt/Ops II

$1,031,273

$1,031,273

0%

$1,090,055

$1,090,055

0%

$1,151,098

$1,151,098

0%

Systems Administrator

$655,975

$655,975

0%

$693,366

$693,366

0%

$732,194

$732,194

0%

On-call Support

Applics Sys Anal II

$27,433

$13,717

50%

$33,830

$14,499

57%

$40,828

$20,414

50%

Progr Analyst II

$33,406

$9,545

71%

$40,354

$10,089

75%

$47,941

$15,980

67%

Database Anal/Prog II

$18,095

$6,032

67%

$22,314

$6,375

71%

$26,930

$10,099

63%

Total labor

$2,337,503

$2,218,164

5%

$2,483,806

$2,344,599

6%

$2,636,695

$2,489,693

6%

Fringe

$113,743

$107,628

5%

$113,743

$107,628

5%

$113,743

$107,628

5%

Labor Overhead

$790,499

$766,105

3%

$1,193,654

$1,087,409

9%

$1,260,498

$1,148,304

9%

Material

scheduled

$200,000

$200,000

0%

$225,816

$225,816

0%

$204,514

$204,514

0%

unscheduled

$151,320

$116,400

23%

$190,815

$118,553

38%

$245,082

$128,844

47%

minor enhancements

$40,740

$29,100

29%

$55,325

$28,227

49%

$76,525

$6,972

91%

misc

$8,536

$8,148

5%

$9,108

$8,299

9%

$9,898

$8,609

13%

Total Material

$400,596

$353,648

12%

$481,063

$380,895

21%

$536,020

$348,939

35%

G&A

$546,351

$516,832

5%

$1,068,066

$901,722

16%

$1,136,739

$941,750

17%

Target Cost

$4,188,692

$3,962,376

5%

$5,340,332

$4,822,253

10%

$5,683,696

$5,036,313

11%

Target Fee

$460,756

$356,614

23%

$587,437

$434,003

26%

$625,207

$453,268

28%

Target Price

$4,649,448

$4,318,990

7%

$5,927,768

$5,256,256

11%

$6,308,902

$5,489,582

13%

Minimum Fee

$418,869

$237,743

43%

$534,033

$289,335

46%

$568,370

$302,179

47%

Maximum Fee

$661,813

$483,410

27%

$843,772

$588,315

30%

$898,024

$614,430

32%

Optimistic Cost

$3,518,501

$3,328,396

5%

$4,485,879

$4,050,693

10%

$4,774,304

$4,230,503

11%

Pessimistic Cost

$4,607,561

$4,556,732

1%

$5,874,365

$5,545,591

6%

$6,252,065

$5,791,760

7%

Contractor Share % Over

10%

20%

10%

20%

10%

20%

Contractor Share % Under

30%

20%

30%

20%

30%

20%

Opt Cost Under Target

84%

84%

84%

84%

84%

84%

Pess Cost Over Target

110%

115%

110%

115%

110%

115%

OBJECTIVE

Escalated

BASIC-Objective/1999

Hours

1998 Rate

Esc

1999 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$24.05

1.056

$25.40

$211,339

Progr Analyst II

8,320

$25.11

1.056

$26.51

$220,586

Database Anal/Prog II

4,160

$15.87

1.056

$16.75

$69,698

Computer Spt/Ops II

34,944

$27.95

1.056

$29.51

$1,031,273

Objective/Est'd ON-CALL HOURS/Month

Systems Administrator

17,472

$35.55

1.056

$37.54

$655,975

1999

2000

2001

On-call Support

Basic

Option1

Option2

Applics Sys Anal II

360

$38.10

$13,717

Applics Sys Anal II

15

15

20

Progr Analyst II

240

$39.77

$9,545

Progr Analyst II

10

10

15

Database Anal/Prog II

240

$25.13

$6,032

Database Anal/Prog II

10

10

15

Total labor

74,056

$2,218,164

Fringe

$1.47

$107,628

Labor Overhead

35%

$766,105

Material

scheduled

$200,000

unscheduled

0.970

$116,400

minor enhancements

0.970

$29,100

misc

1.019

$8,148

Total Material

$353,648

G&A

15%

$516,832

Target Cost

$3,962,376

Overrun

Underrun

Target Fee

9%

$356,614

Min/Pess

Max/Opt

Target Price Basic

$4,318,990

Target Fee

$356,614

$356,614

Minimum Fee

$237,743

Adjustment

-$118,871

$126,796

Maximum Fee

$483,410

Final Fee

$237,743

$483,410

Optimistic Cost

$3,328,396

% of Target

6%

12%

Pessimistic Cost

$4,556,732

Range

Range

Contractor Share % Over

20%

84%

115%

Contractor Share % Under

20%

OBJECTIVE

Escalated

OPTION 1-Proposed/2000

Hours

1999 Rate

Esc

2000 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$25.40

1.057

$26.85

$223,386

Progr Analyst II

8,320

$26.51

1.057

$28.02

$233,159

Database Anal/Prog II

4,160

$16.75

1.057

$17.71

$73,671

Computer Spt/Ops II

34,944

$29.51

1.057

$31.19

$1,090,055

Objective/Est'd ON-CALL HOURS/Month

Systems Administrator

17,472

$37.54

1.057

$39.68

$693,366

1999

2000

2001

On-call Support

Basic

Option1

Option2

Applics Sys Anal II

360

$40.27

$14,499

Applics Sys Anal II

15

15

20

Progr Analyst II

240

$42.04

$10,089

Progr Analyst II

10

10

15

Database Anal/Prog II

240

$26.56

$6,375

Database Anal/Prog II

10

10

15

Total labor

74,056

$2,344,599

Fringe

$1.47

$107,628

Labor Overhead

47%

$1,087,409

Material

scheduled

0.941

$225,816

unscheduled

1.019

$118,553

minor enhancements

0.970

$28,227

misc

1.019

$8,299

Total Material

$380,895

G&A

23%

$901,722

Target Cost

$4,822,253

Overrun

Underrun

Target Fee

9%

$434,003

Min/Pess

Max/Opt

Target Price Option 1

$5,256,256

Target Fee

$434,003

$434,003

Minimum Fee

$289,335

Adjustment

-$144,668

$154,312

Maximum Fee

$588,315

Final Fee

$289,335

$588,315

Optimistic Cost

$4,050,693

% of Target

6%

12%

Pessimistic Cost

$5,545,591

Range

Range

Contractor Share % Over

20%

84%

115%

Contractor Share % Under

20%

OBJECTIVE

Escalated

OPTION 2-Objective/2001

Hours

2000 Rate

Esc

2001 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$26.85

1.056

$28.35

$235,895

Progr Analyst II

8,320

$28.02

1.056

$29.59

$246,216

Database Anal/Prog II

4,160

$17.71

1.056

$18.70

$77,796

Computer Spt/Ops II

34,944

$31.19

1.056

$32.94

$1,151,098

Objective/Est'd ON-CALL HOURS/Month

Systems Administrator

17,472

$39.68

1.056

$41.91

$732,194

1999

2000

2001

On-call Support

Basic

Option1

Option2

Applics Sys Anal II

480

$42.53

$20,414

Applics Sys Anal II

15

15

20

Progr Analyst II

360

$44.39

$15,980

Progr Analyst II

10

10

15

Database Anal/Prog II

360

$28.05

$10,099

Database Anal/Prog II

10

10

15

Total labor

74,416

$2,489,693

Fringe

$1.47

$107,628

Labor Overhead

47%

$1,148,304

Material

scheduled

0.930

$204,514

unscheduled

1.087

$128,844

minor enhancements

0.247

$6,972

misc

1.037

$8,609

Total Material

$348,939

G&A

23%

$941,750

Target Cost

$5,036,313

Overrun

Underrun

Target Fee

9%

$453,268

Min/Pess

Max/Opt

Target Price Option 2

$5,489,582

Target Fee

$453,268

$453,268

Minimum Fee

$302,179

Adjustment

-$151,089

$161,162

Maximum Fee

$614,430

Final Fee

$302,179

$614,430

Optimistic Cost

$4,230,503

% of Target

6%

12%

Pessimistic Cost

$5,791,760

Range

Range

Contractor Share % Over

20%

84%

115%

Contractor Share % Under

20%