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Gain Strategic Pricing Insights from ICAT Budgets

ICAT's Budget Development module gives Contractors key insights to support pricing for cost proposals.

Estimate expected indirect rates during the proposed contract's period of performance.

Contractors must be able to recover indirect costs by properly pricing their work. ICAT's Budget Module enables a detailed build-up of expected indirect costs and allocation bases so the Contractor can propose indirect rates that will be adequate for the recovery of indirect costs. Without a reasonable estimate of indirect rates for the period of performance of the contract, the Contractor risks pricing work at a level that is insufficient for the full recovery of its indirect costs.

Determine the impact of winning a new contract on indirect rates.

When a Contractor wins new work, the business base for allocating indirect costs expands, which pushes indirect rates lower. The ICAT Budget Module allows Contractors to segregate cost proposal data from cost data for the existing backlog. By toggling cost proposal data in and out of the budgeted indirect rates calculation, Contractors can quantify the impact that additional work will have on their indirect rates. With these insights, Contractors can make more competitive pricing decisions.

Calculate the weighted average base labor rate and fully-loaded labor rate.

Contractors may propose multiple positions in any particular labor category. The positions in a particular labor category may be staffed with employees of varying levels of experience and salary. ICAT's Budget Module provides a report showing the weighted average base labor rate and the cost build-up to the fully loaded labor rate for each labor category specified in the budget.

Provide a more accurate price proposal.

Export any report to Excel for deeper analysis of budget data, and include supporting budget data in the Cost Volume of a proposal.

What makes a proposal adequate?

DCAA provides guidance for small businesses on its website, www.dcaa.mil, in a presentation entitled Elements of an Adequate Proposal.  

In this presentation, DCAA emphasizes that straight-lining indirect rates for future periods with no supporting data or historical trends is not adequate to support a cost proposal. Inadequate data can draw more audit attention and delay contract negotiations.

How ICAT can help

ICAT’s Budget Development tool gives you key data to support your strategic planning and proposal pricing throughout the year. Don't rely on guess work and flat lined indirect rates. Build out proposal budgets, and toggle proposed work in/out of your overall budget to gain real insights. Contact us to learn more, or get started today with a free trial.  

Learn more. Watch a live webinar exploring ICAT's Budgeting Tool: