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September 9, 2006
I. EVALUATION OF OFFERS
This is a Performance Based Indefinite Delivery Indefinite Quantity (IDIQ) contract where the offerors were
required to propose a Concept of Operations with a Rough Order of Magnitude. The solicitation requested that the
offerors propose unique solutions to meet the Secure Border Initiative (SBI)net objectives. The maximum quantity
of supplies and services, which the Government may order during the life of the SBInet contract, is the full panoply
of supplies and services to provide six thousand miles of secure United States Border. The cost proposals did not
lend themselves to a conventional "Apples-to-Apples" comparison, since all offerors presented their costs using
different approaches and methodologies. Because each technical approach was unique, cost evaluation
consisted of some conventional price analysis as well as some tailored approaches. Reasonableness, realism and
risk were assessed based on offerors’ unique approaches to a solution.
All cost proposals were evaluated in accordance with Section M Factor 8 of the solicitation, which states:
The ROM and the basis of the estimate, with the work breakdown structure, will be evaluated for realism (i.e.,
consistency with the proposed concept of operations) and cost]price risk. Major discrepancies and disparities
between the ROM estimate and the offeror’s proposed concept of operations may adversely impact upon the
overall evaluation of the offeror’s proposal.
¯ The Program Management task proposal, the Tucson Sector task proposal, and the Offeror’s proposed task
order proposal will be evaluated for reasonableness, realism and price risk.
¯ Cost]Price Reasonableness
¯ Cost]Price Realism
¯ Cost]Price Risk
A. Evaluation Methodology~
The evaluation team utilized DCAA audit reports and the Technical/Cost evaluation report to determine cost,
reasonableness, realism and risk. The initial proposals were evaluated and clarifications, weaknesses and
deficiencies were identified and provided to the offerors to be addressed in their Final Proposal Revisions
(FPR). The FPRs were evaluated and used to determine the overall acceptability for the costs proposed as
detailed below.
The ROM was evaluated for price realism and price risk, and the Program Management Task cost proposal,
Tucson Sector Task cost proposal and the Offeror’s Proposed Task cost proposal were evaluated for cost
reasonableness, realism, and risk.
II PRICE ANALYSIS
An overview of the Concept of Operations (CONOPS) Rough Order of Magnitude (ROM) proposed by each
Offeror is displayed in the table below.
Grumman
(b)(3); (b)(4); (b)(5)
theon
For information regarding evaluation of the ROMs, see the individual costJprice analysis reports and the
Technical/Cost Analysis report. No adjustments have been made to the Price ROMs due to the lack of
consistency across the offerors’ proposals. The ROMs, and their associated basis of estimates (BOE) and
work breakdown structures (WBS), were evaluated for price realism. Price realism was assessed by
determining whether proposed prices were realistic for the work to be performed; reflected a clear
understanding of the requirements; and were consistent with the proposed concept of operations. Cost risk
was evaluated in terms of probability for cost growth associated with the type of task (e.g., cost-reimbursable,
firm-fixed-price, time-and-materials, etc) proposed by the offerror (in accordance with FAR Part 16).
The price risk for all of the offerors is considered to be at least moderate, due to the proposed extensive
use of cost reimbursement task orders which roll up to the ROM. Other price-related factors unique to the
individual proposal may affect the rating for each offeror.
(b) (4) and (b) (5)
1. BOEING- Price Risk: M(b) (4) and (b) (5)
(b)(4); (b)(5)
Cost or pricing data was required by the RFP. Exceptions allowed by FAR 15.403-1(b)) were not applicable,
nor were waivers considered (FAR 15.403-1(c)(4)). During the acquisition-planning phase, it was viewed that
price competition, in the traditional sense, was not ensured since proposals could be comprised of greatly
different solutions that entailed different labor skills, equipment, systems and services.
Cost analyses were performed to evaluate the cost reasonableness, realism, and risk associated with the
Program Management Task, the Tucson Sector Task, and the Offeror’s Proposed Task, as required in the
Source Selection Plan. Analysis included a DCAA review of the proposals for each Offeror. A further study of
the cost/price proposals was undertaken to analyze the consolidated technical, staffing, and cost and schedule
components of the proposed solution as completed (see "SBInet Proposals: Technical/Cost Analysis", dated
August 3, 2006).
The cost analyses presented below are described in general terms in a summary of costs among the five
Offerors, and in specific terms describing conclusions as to cost reasonableness, realism and risk. The
Government’s position is presented in tables below.
The Government used weighted guidelines to adjust the profit/fee for the original proposals. The adjustment
was not recalculated for the Final Proposal Revision (FPR) due to lack of sufficient detail in the FPR to do so.
The cost risk for all of the offerors is considered to be at least moderate for cost reimbursement task orders.
Other cost-related factors unique to the individual task may affect the rating for each offeror as well.
A. BOEING
1. Program Management Task (proposed as a Cost Plus Fixed FeelAward Fee Task)
Cost Element Boeing Original Boeing FPR DCAA and TechnicallCost GVT FPR
Proposal Report Recommendation Recommendation
Original Proposal
Materials
Pdme G&A
Basic Fee
Award Fee
Total,Profit I Fee
a(2) Cost Reasonableness Assessment, Final Proposal Revision (FPR): (b) (4) and (b) (5)
(b)(4); (b)(5)
b(1) Cost Realism Assessment, Original Proposal: (b) (4) and (b) (5)
(b)(4); (b)(5)
Tucson Sector Task (Proposed as a Cost Plus Fixed Fee/Incentive Fee Task)
Materials
Prime Overhead
Prime G&A
Subtotal Costs
(Less FCCOM & FEE) (b) (4) and (b) (5)
(b) (4) and (b) (5)
FCCOM
Basic ~e
Award Fee
Total Profit I Fee
a(2) Cost Reasonableness Assessment: Final Proposal Revision(b) (4) and (b) (5)
(b)(4); (b)(5)
b(1) Cost Realism Assessment, Original Proposal: (b) (4) and (b) (5)
(b)(4); (b)(5)
(b)(4); (b)(5)
b(2) Cost Realism Assessment, Final Proposal Revision:
(b)(4); (b)(5)
(b)(4); (b)(5)
Offeror’s Proposed Task
Cost Element Boeing Original Boeing FPR DCAA and Technical/Cost GVT FPR
Proposal Report Recommendations RecommenclaUon
Odginal Proposal
Materials
Prime Overhead
Prime G&A
(b) (4) and (b) (5)
Subtotal Costs
(Less FCCOM & FEE)
FCCOM
(b) (4) and (b) (5)
Basic Fee
Award Fee
Total Profit / Fee
(b) (4) and (b) (5)
a(1) Cost Reasonableness Assessment, Original Proposal: (b) (4) and (b) (5)
(b)(4); (b)(5)
a(2) Cost Reasonableness Assessment, Final Proposal Revision:(b) (4) and (b) (5)
(b)(4); (b)(5)
b(1) Cost Realism Assessment, Original Proposal: (b) (4) and (b) (5)
(b)(4); (b)(5)
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B. ERICSSON
1. Program Management Task (Proposed as a Cost Plus Fixed Fee/Award Fee Task)
Cost Element Ericsson Original Ericsson FPR DCAA and GVT FPR Recommendation
Proposal TechnicaUCost Report
Recommendation
Original Proposal
Matsdals
Prime
]!
Cost’ Element Ericsson Odglnal Edcsson FPR DCAA and Technical/Cost GVT FPR Recommendation
~~~~ P’ropoee, Report Recommendation
Odginal Proposal
Subcontracts
Prime Overhead
Prime G&A
Subtotal Costs
(Leas FCCOM & FEE)
FCCOM
Basic Fee
Award Fee
Total Profit I Fee
]2
a(2) Cost Reasonableness Assessment, Final Proposal Revision (b)(3); (b)(4); (b)(5)
(b)(3); (b)(4); (b)(5)
b(2) Cost Realism Assessment, Final Proposal Revision: (b)(3); (b)(4); (b)
(b)(3); (b)(4); (b)(5) (5)
c(2) Cost Risk Assessment, Final Proposal Revision (b)(3); (b)(4); (b)
(5)
(b)(3); (b)(4); (b)(5)
CO~t Element Ericsson Odginal Ericsson FPR DCAA and TechnicaUCost GVT FPR
Proposal Report Recommendations Recommendation
Original Proposal
Materials - Commercial
Pricing
Materials
IDWA
Subcontracts
Prime Overhead
Prime G&A
Subtotal Cost~
(Less FCCOM & FEE)
: FCCOM
Basic Fee
Award Fee
Total Profit I Fee
Subtotal
Less 25% Cost Share
]4
(b)(3); (b)
b(1) Cost Realism Assessment, Original Proposal: (4); (b)(5)
(b)(3); (b)(4); (b)(5)
C. LOCKHEED MARTIN
Cost Element Lockheed-Martin Lockheed Martin DCAA and Technical/Cost GVT FPR
Original Proposal FPR Report Recommendations Recommendation
Original Proposal
Total Profit/Fee
(b)(3); (b)(4);
c(1) Cost Risk Assessment, Original Proposal:(b)(5)
(b)(3); (b)(4); (b)(5)
Cost Element Lockheed-Martin Lockheed Martin DCAA and TechnicallCost G~rr FPR
Original Proposal FPR Report Recommendations Recommendation
Original Proposal
b(2) Cost Realism Assessment, Final Proposal Revision: (b)(3); (b)(4); (b)(5)
(b)(3); (b)(4); (b)(5)
Cost Element Lockheed-Martin Lockheed Martin DCAA and TechnicallCost GVT FPR Recommendation
Original Proposal FPR Report Recommendations
Original Proposal
Total
Investment
Total Cost
Fee Pool
(b)(3); (b)(4);
b(1) Cost Realism Assessment, Original Proposal: (b)(5)
(b)(3); (b)(4); (b)(5)
(b)(3); (b)(4);
c(1) Cost Risk Assessment, Original Proposal (b)(5)
(b)(3); (b)(4); (b)(5)
2O
D. NORTHROP GRUMMAN
2]
(b)(3); (b)
b(2) Cost Realism Assessment, Final Proposal Revision: (4); (b)(5)
(b)(3); (b)(4); (b)(5)
(b)(3); (b)
c(2) Cost Risk Assessment, Final Proposal Revision:(4); (b)(5)
(b)(3); (b)(4); (b)(5)
o Tucson Sector Task (Proposed as a Labor HourlFixed Unit Price for BOM and Cost
Reimbursable for ODCs Task - aka Time-and-Materials Task)
Cost Element Northrop-Grumman Northrop-Grumman DCAA and TechnicallCost GVT FPR Recommendation
Original Proposal FPR Report Recommendations
Original Proposal
Materials
Travel
Other Direct Costs
Subcontracts
Prime Overhead
Prime G&A
Subtotal Costs
(Less FEE)
Total Profit/Fee
22
(b)(3); (b)
b(2) Cost Realism Assessment, Final Proposal Revision:
(4); (b)(5)
(b)(3); (b)(4); (b)(5)
23
25
E. RAYTHEON
Cost Element Raytheon’s Original Raytheon’s FPR DCAA and TechnicallCost GVI" FPR
Proposal Recommendations Recommendation
Original Proposal
(b)(3);
c(1) Cost Risk Assessment, Original Proposal (b)(4);
(b)(3); (b)(4); (b)(5) (b)(5)
Materials
Equipment
Travel
Subcontracts
Overhead
Fringe
G&A
Cost of Money
Profit/Fee
Materials
Equipment
Travel
Subcontracts
Overhead
Fdnge
G&A
Cost of Money
Profit/Fee
a(2) Cost Reasonableness Assessment, Final Proposal Revision (b)(3); (b)(4); (b)(5)
(b)(3); (b)(4); (b)(5)
c(2) Cost Risk Assessment, Final Proposal Revision: (b)(3); (b)(4); (b)(5)
(b)(3); (b)(4); (b)(5)
3O
Date:
(b) (6)
RONALD B. ROSENBERG
Contracting Officer
Date:
(b) (6)
DEBORAH L. SMITH
Contracting Officer
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