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IPT Pricing (Demand Level)

IPT Pricing (Demand Level) For more information, see the DCMC INTEGRATED PRODUCT TEAM (IPT) PRICING GUIDEBOOK http://www.dcmc.hq.dla.mil/onebook/6.0/6.6/IPTpricingguidebk.htm IPT Pricing Normally used on sole-source, major weapon system acquisitions The PCO/PM normally:

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IPT Pricing (Demand Level)

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  1. IPT Pricing(Demand Level) For more information, see the DCMC INTEGRATED PRODUCT TEAM (IPT) PRICING GUIDEBOOK http://www.dcmc.hq.dla.mil/onebook/6.0/6.6/IPTpricingguidebk.htm

  2. IPT Pricing • Normally used on sole-source, major weapon system acquisitions • The PCO/PM normally: • Makes the decision to use IPT Pricing • Decides the makeup of the IPT Pricing team • Is the IPT Pricing team leader • Also used to negotiate Forward Pricing Rate Agreements (FPRAs)

  3. IPT Pricing • A concurrent approach to contract pricing. • Designed to expedite contract award: • Replaces the traditional pricing and negotiation process with a team-based approach • Uses communication between the contracting parties during solicitation and proposal development to resolve issues up front • Origin in the best practices of the military services. The following are some of the Service names for IPT Pricing: • Alpha Acquisition, Massive Concurrency, One Pass, Sole-Source Paradigm, Shoulder-to-Shoulder, Review-Discuss-Concur

  4. IPT Pricing Major Steps 1. Advance acquisition planning 2. Draft model contract and issue solicitation letter 3. Define the technical approach 4. Discussions of individual cost elements 5. Complete roll up of all costs sheets and final model contract 6. Contractor’s "Official Offer” 7. Negotiations 8. Confirm total package, sign and award

  5. Define the Technical Approach & Discussions of Individual Cost Elements • Participate in the requirements reconciliation process: • Identifying tasks and assumptions • Scrubbing of the strawman scope and specification • Formulating a work breakdown structure • Developing a rough cut cost and schedule • Agreeing on pricing and evaluation methodology • Developing the various price elements • Cost and technical detail are jointly developed • The team adjusts the model contract to lower cost and risk by scrubbing the government's strawman requirements, agreeing on a pricing approach, etc • In effect, implements another important initiative - Cost As an Independent Variable (CAIV): adjusting performance/risk to reduce cost

  6. Lessons Learned • Document ideas considered and rejected, and why—for the record • This will avoid any second guessing after-the-fact • Integrate key functional teams at each step. • There’s no such thing as "just technical" or "just contracting”

  7. IPT Pricing(Demand Level) • DCMC Engineering Role • Participate in the requirements reconciliation process • Help formulate a work breakdown structure and initial cost and schedule estimates • Help identify pricing and evaluation methodologies • Participate in performance, cost, and risk tradeoffs

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