If you have questions or need help with a weighted guidelines profit analysis, please reach out to us directly at [email protected]!

Weighting: Technical vs. Management/Cost Risk

Technical Risk

Choose the item that best describes the current effort from a technical risk perspective.

NORMAL

ABOVE NORMAL: The contractor is either developing or applying advanced technologies; Items are being manufactured using specifications with stringent tolerance limits; Contract effort requires highly skilled personnel or the use of state-of-the-art machinery; Services and analytical efforts are extremely important to the Government and must be performed to exacting standards; The contractor's independent development and investment has reduced the Government's risk or cost; The contractor has accepted and accelerated delivery schedule to meet DoD requirements; The contractor has assumed additional risk through warranty provisions.

BELOW NORMAL: Contract is for off-the-shelf items; Requirements are relatively simple; Technology is not complex; Contract efforts do not require highly skilled personnel; Contract efforts are routine; Programs are mature; Contract is a follow-on or repetitive type acquisition.

SIGNIFICANTLY ABOVE NORMAL: Contract effort involves extremely complex, vital efforts to overcome difficult technical obstacles with require personnel with exceptional abilities, experience, and professional credentials; Contract effort requires development or initial production of a new item, particularly if performance or quality specifications are tight; Contract effort requires a high degree of development or production concurrency.

SIGNIFICANTLY BELOW NORMAL: Contract is for routine services; Contract is for production of simple items; Contract is for rote entry of Government furnished information; Contract is for simple operations with Government Furnished Property.

SPECIAL TECHNOLOGY INCENTIVE, MEDIUM: Reserved only for the most innovative efforts. Development or application of new technology fundamentally changes the characteristics of an existing product or system AND results in increased performance, reliability, or reduced costs. Also applied to products or systems containing significant advances over the products/systems they're replacing.

SPECIAL TECHNOLOGY INCENTIVE, LOW: See explanation below.

SPECIAL TECHNOLOGY INCENTIVE, HIGH: See explanation below.

Technical Risk Rationale

Provide an explanation if anything other than "Normal" was chosen.

Management & Cost Risk:

NORMAL

ABOVE NORMAL: The contractor's value-add is both considerable and reasonably difficult; Contract effort involves a high degree of integration or coordination; The contractor has a good record of past performance; The contractor has a substantial record of active participation in Federal socioeconomic programs; The contractor provides fully documented and reliable cost estimates; The contractor makes appropriate make-or-buy decisions; The contractor has a proven record of cost tracking and control.

BELOW NORMAL: The program is mature and many end item deliveries have been made; The contractor adds minimum value to an item; Contract effort is routine and requires minimal supervision; The contractor provides poor quality, untimely proposals; The contractor fails to provide an adequate analysis of subcontractor costs; The contractor does not cooperate in the evaluation and negotiation of the proposal; The contractor's cost estimating system is marginal; The contractor has made minimal effort to initiate cost reduction programs; The contractor's cost proposal is inadequate; The contractor has a record of cost overruns or other indication of unreliable cost estimates and lack of cost control; The contractor has a poor record of past performance.

SIGNIFICANTLY ABOVE NORMAL: Contract effort requires large scale integration of the most complex nature; Contract effort involves major international activities with significant management coordination (e.g., offsets with foreign vendors); Contract effort has critically important milestones.

SIGNIFICANTLY BELOW NORMAL: Reviews performed by the field contract administration offices disclose unsatisfactory management and internal control systems (e.g., quality assurance, property control, safety, security); Contract effort requires an unusually low degree of management involvement.

Management & Cost Risk Rationale

Provide an explanation if anything other than "Normal" was chosen.

Contract Risk

NORMAL

BELOW NORMAL: Very mature product line with extensive cost history; Relatively short-term contract; Contractual provisions that substantially reduce the contractor's risk; Incentive provisions that place a low degree of risk on the contractor; Performance-based payments totaling the maximum allowable amount(s) specified at FAR 32.1004(b)(2); A performance-based payment schedule that is routine with minimal risk

ABOVE NORMAL: There is minimal cost history; Long-term contract without provisions protecting the contractor, particularly when there is considerable economic uncertainty; Incentive provisions (e.g., cost and performance incentives) that place a high degree of risk on the contractor; An aggressive performance-based payment schedule that increases risk

Contract Risk Rationale

Provide an explanation if anything other than "Normal" was chosen.

PROGRESS PAYMENTS

Contract Duration

% Financed by Contractor

Profit due to Facilities Capital (typically requires Accounting assistance)

Have you calculated FCCOM in your proposal?

Yes

Cost Efficiency Factor

To the extent that the contractor can demonstrate cost reduction efforts that benefit the pending contract, profit may be increased directly to account for this. Additional details may be found at DFARS 215.404-71-5.

Cost Efficiency Factor Explanation:

Provide an explanation if a cost efficiency factor has been applied.

Calculated Profit:	0.000%
		Risk Category
Profit due to Technical Risk:	0.000%	NORMAL
Profit due to Management Risk:	0.000%	NORMAL
Profit due to Contract Risk:	0.000%	NORMAL
Profit due to Financing	0.000%
Profit due to Facilities Capital	0.000%
Cost Efficiency Factor	0.000%
Profit limitation:

Profit for CPFF contracts is limited to 10%, per FAR (15.404-4(a)(4)(A).

Profit for CPFF contracts on experimental, developmental, or research work is limited to 15%, per FAR (15.404-4(a)(4)(B).

Profit rate shown is intended to be applied to total cost, not including facilities capital cost of money (FCCOM). This tool is being provided by SpendLogic as a free service and is based upon the guidance set forth in the DFARS.

Send results to email