INSIGHT BY PROPRICER

‘Bulletproof’ pricing data can help new DoD procurement policy succeed

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Sometimes it seems like there are as many ideas on how to speed up federal procurement as there are federal procurement officials. One of the big ones to come out of the Defense Department recently is to have contracting officials negotiate options for a two-year follow-on contract using the same cost and pricing data that the department and industry first used to develop an initial proposal for the first year of the contract.

“This is a huge sea change for us,” Shay Assad, director of defense pricing and defense procurement and acquisition policy, said at the June 20 Government Contract Pricing Summit in Rockville, Maryland. “We’re telling our contracting officers, ‘Look, we want you to expand your horizons.’ … There’s an element of risk to this, both for the companies involved as well as the government. We’re going to take that single year data and we’re now going to … price two years out with that data. That means that we both have to feel comfortable that what’s being forecasted in where we’re going to end up.”

The big question is, how can contracting officials reach that level of comfort in their forecasts, especially with the amounts of money involved?

One way is to achieve absolute confidence in the data those proposals are based on. And the best way to do that is with PROPRICER.

PROPRICER allows agencies to obtain the data for a proposal in the exact same format as the contractor uses. That means agencies don’t have to recreate entire proposals to analyze them. They don’t have to go through Excel files, double check formulas and hunt for inaccurate numbers.

Right now, if agencies that don’t use PROPRICER want to see the contractor’s data laid out in a certain format, they have to ask the contractor to break it out for them. And if they want to compare two different proposals side-by-side, all that data has to be translated first into the same format.

“When the proposal comes in PROPRICER format, that part’s already done,” Michael Weaver, PROPRICER product innovation director, said. “They know the pricing forms or the pricing models used and can test that very quickly. And in a matter of minutes, they’re able to ensure that the data’s been entered in a way that is bulletproof.”

On top of that, the data builds on itself to increase accuracy over time. Because of the way the data is formatted and the granularity PROPRICER achieves, agencies can look at historical data to determine their accuracy, such as where rates and estimates started versus where they ended up. Then they can adjust current and future efforts accordingly.

“Over a longer period of time, as you keep putting more and more data into the system, you can make more and more use of that analytical side of things,” Weaver said. “Being able to compare your starting and end points, from the very first iteration of your proposal until the best and final offer, is critical. So all of the data is available, and all of the rates and inputs and estimates are always available, and always comparable to any of the other levels of effort or proposal efforts you want to submit. And so you really start to get a big picture of how accurate your estimating and pricing is. So that makes it easier for you to redo that effort down the road.”

PROPRICER makes that possible because it allows contractors to transfer every piece of data directly to the agencies in its most granular form. And that plays directly into another change the DoD is trying to make. Ellen Lord, DoD’s undersecretary for acquisition, technology and logistics, has previously told Congress the department wanted more flexibility in how much data it required from its contractors. With PROPRICER, that’s a moot point; DoD would literally have all the data used by the contractors.

And that also helps cut down the overall procurement time, something DoD is pushing for.

“What we’re not interested in doing is changing 400-500 days that it takes to do something to 475 days,” Assad said. “What we really want to get to is changing 400-500 days to 30.”

And having the amount of data PROPRICER provides helps to do just that, bypassing the need to recreate the proposal and verify all the data and formulas. Instead, agencies can just start working directly with the data, slicing and dicing it any way they see fit, breaking it out by fiscal year, calendar year, or however they want to look at it. Weaver said that can cut months off the process, depending on how big the proposal is.

“We see what the government is asking for, and we have the product to answer that,” said Holly DeHesa, marketing manager for PROPRICER.