A reliable estimating system is essential to your ability to prepare competitive FAR 15 and RFP compliant government contract proposals with appropriate profit margins that properly reflect risk. Our company will serve as your accounting and government regulation compliance experts to ensure that your estimating system adheres to systems criteria recently implemented by the Department of Defense (DOD), and certain civilian agencies such as the Department of Energy (DOE) and National Aeronautics and Space Administration (NASA).
Our objective is to ensure that your company has a fully compliant estimating system that consistently produces sound estimates using appropriate source data and reliable estimating techniques. We can help ensure your estimating system provides estimates that result in sound management decisions and mitigate the risk of both defective pricing and withholdings from progress payments and contract billings for failing to comply with newly implemented regulations. DFARS regulations governing estimating system requirements have become more and more complex. To be acceptable, DFARS 252.215-7002 currently requires an estimating system to accomplish the following functions:
- Establish clear responsibility for preparation, review, and approval of cost estimates and budgets.
- Provide a written description of the organization and duties of the personnel responsible for preparing, reviewing, and approving cost estimates and budgets.
- Ensure that relevant personnel have sufficient training, experience, and guidance to perform estimating and budgeting tasks in accordance with the Contractor’s established procedures.
- Identify and document the sources of data and the estimating methods and rationale used in developing cost estimates and budgets.
- Provide for adequate supervision throughout the estimating and budgeting process.
- Provide for consistent application of estimating and budgeting techniques.
- Provide for detection and timely correction of errors.
- Protect against cost duplication and omissions.
- Provide for the use of historical experience, including historical vendor pricing data, where appropriate.
- Require use of appropriate analytical methods.
- Integrate data and information available from other management systems.
- Require management review, including verification of compliance with the company’s estimating and budgeting policies, procedures, and practices.
- Provide for internal review of, and accountability for, the acceptability of the estimating system, including the budgetary data supporting indirect cost estimates and comparisons of projected results to actual results, and an analysis of any differences.
- Provide procedures to update cost estimates and notify the Contracting Officer in a timely manner throughout the negotiation process.
- Provide procedures that ensure subcontract prices are reasonable based on a documented review and analysis provided with the prime proposal, when practicable.
- Provide estimating and budgeting practices that consistently generate sound proposals that are compliant with the provisions of the solicitation and are adequate to serve as a basis to reach a fair and reasonable price.
- Have an adequate system description, including policies, procedures, and estimating and budgeting practices, which comply with the Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement.
Proposed new rules designed to improve the efficiency and effectiveness of business system audits, if approved, may allow your company to self-certify the adequacy of its estimating system with an audit by an independent CPA, in lieu of DCAA, to test your estimating system for compliance with relevant systems criteria. Unfortunately, few independent CPA firms have the experience and expertise in government contracting to properly conduct such an audit in compliance with Generally Accepted Government Auditing Standards. Redstone Government Consulting has the unparalleled expertise, including over 160 years of senior level DCAA experience, needed to ensure your estimating system complies with DFARS 252.215-7002 and other FAR and DFARS regulatory requirements.
Some of the services we provide to meet your estimating system compliance needs include:
- Designing and/or implementing a new tailored estimating system, or updating the existing system for process improvements.
- Preparing written estimating system policies, procedures, and detailed staff instructions.
- Risk assessments and GAP analysis of your current estimating policies, procedures, and practices.
- Mock audits of your estimating system using procedures that mirror DCAA/DCMA procedures for evaluating estimating systems.
- Providing subject matter experts regarding estimating system regulatory compliance and GAGAS compliance to assist independent CPAs performing estimating system audits and internal auditors.
- Developing and implementing appropriate corrective action plans.
- Developing and delivering customized staff training.
- Responding to DCAA/Independent CPA audit findings and contracting officer inquiries.
- Advice and assistance to supplement, as needed, internal compliance department knowledge and expertise.
- Strategic planning assistance.