CON 217: Cost Analysis and Negotiation Techniques
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Classes &
Locations
Denver, CO  Washington, DC Denver, CO Vienna, VA Washington, DC
Course Details
- PRICE:
$1025.00
- LENGTH:
5 days
- FORMAT:
Graded pre-class assignment, Lecture, discussion, practical exercises, graded team case study, independent readings, and a final exam.
- LEVEL:
Intermediate
- FIELD OF STUDY:
Finance
- CPE CREDITS:
40
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This course builds on the basic pricing skills covered in the FAC-C and DAWIA Level I contracting curriculum. Students will learn and apply more advanced pricing methods and techniques in order to analyze a contractor’s proposal and develop government negotiation objectives. This course also introduces the concepts necessary for successful negotiations. Students will use computers to aid in analysis and will receive a copy of all software tools used in class.
Mandatory Prerequisites:
Pre-Class Assignment:
Students must complete reading assignments and a graded quiz before the first day of class. The reading assignments and quiz will be available online to students who have enrolled and made tuition payment arrangements.
Course Objectives:
After successful completion of this training course, the student will be able to:
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Determine when cost analysis should be used
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Identify how to use and apply contract audit results
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Determine the adequacy of a contractor’s estimating and accounting systems
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Calculate a cost objective for direct material, direct labor, other direct costs, indirect costs, facilities capital cost of money, and profit/fee
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Calculate a price/cost objective using simple regression analysis, improvement curve analysis, and statistics
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Identify the key elements of successful contract negotiations
Major Topics:
Definitions. Key cost analysis considerations. Cost allowability.
Recognizing the need for cost or pricing data or information other than cost or pricing data. Ensuring proper cost or pricing data certification. Subcontract pricing responsibilities.
Recognizing relevant material for cost analysis: related contract files and audit/technical reports, contractor system reviews, and industry cost estimating guides. Requesting and evaluating acquisition team assistance for technical and audit analyses.
Reviewing cost estimating systems: cost estimating methods, characteristics of an acceptable system, audit review, and indicators of system deficiencies and how to resolve them. Reviewing cost accounting systems: common cost accounting systems, characteristics of an acceptable system, audit review, preparing a position on adequacy, impact of inadequate cost accounting systems, discussing review with others, and resolving deficiencies.
Situations for use. Measuring central tendency and dispersion. Normal probability distribution and t-distribution. Measuring reliability. Using stratified sampling. Issues and concerns.
Situations for use. Developing and using a simple regression equation. Analyzing variation in the regression model. Measuring how well a regression equation fits data. Calculating and using a prediction interval. Identifying the need for other types of analysis. Issues and concerns.
Improvement curve theories. Situations for use. Analyzing improvement using unit curve theory and cumulative average theory. Fitting unit curves. Issues and concerns.
Identifying direct material costs. Analyzing summary material cost estimates, detailed quantity estimates, and unit cost estimates.
Identifying direct labor costs. Analyzing labor-hour and labor-rate estimates.
Identifying other direct costs. Concerns affecting other direct costs. Analyzing other direct cost estimates.
Importance and composition of indirect costs. Identifying pools and bases for rate development. Analyzing estimated rates. Indirect cost rates in contract forward pricing and contract billing. Determining final indirect costs.
Given a production scenario, students will formulate pricing positions for a prenegotiation memorandum that supports a fair and reasonable price decision.
Identifying and applying facilities capital cost of money factors.
Factors affecting profit/fee analysis. Using DoD weighted guidelines or the Department of Treasury structured approach to develop an objective.
Factors of a successful negotiation. Five phases of negotiation. Interest-based negotiation. Different reactions to negotiation.
ACE Recommendation:
November 2008 to present: In the lower division baccalaureate/associate degree category or upper division baccalaureate degree category, 2 semester hours in Statistics, Business Management, Procurement, Public Administration, or Purchasing.
Suggested Follow-on Resources:
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