1270+HO+Week+2+Integrating+Case+Participant+Guide.pdf - CON...

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1CON 270Intermediate Cost and Price AnalysisWeek 2 Integrating CaseSTUDENT VERSION
2Con 270Week Two Integrating CaseYou are a contract specialist responsible for the production buy of the MobileExplosive Detection Device (MEDD,) a new type of hand-held Silicon nanowiredevice to be used for the trace detection of multiple types of explosives;specifically Trinitrotoluene (TNT), Pentaerythritol tetranitrate (PETN) andResearch Department Formula X (RDX).Your acquisition team is currentlyworking on the development of an overall acquisition planning strategy inanticipation of preparing the solicitation.The R&D effort was a complete success and resulted in the development of 8prototype detectors.In addition, the government secured all the pertinent datarights necessary to move in to production. The design of the detectors themselvesis relatively straight forward and the science involved is such that the team feelsconfident that there are several adequate sources available to produce thedetectors.But despite the team’s confidence that this will be a competitive acquisition,there is concern about how much risk is involved, especially in the area of cost,with this first production buy.The PM is interested in what the team willrecommend as an appropriate contract type given the desire to incentivize costcontrol and perhaps some level of performance.The assignment follows.
3ASSIGNMENT PART 1THREE POINT ROLL-UP1.Your team will begin by developing a spreadsheet that contains estimatedLow, Objective, and High position (3-point roll-up) given the informationbelow.2.Reference the Table below for direct labor hourly rates and the indirectrate estimates:a.The hourly rates for engineering and manufacturing labor represent acomposite rate based on a statistical sampling of the most recentrates paid within the industry.The data was normalized toincorporate those labor categories that the team expects would bemost representative of the workforce involved in producing theMEDD.b.All indirect rate estimates are based on a statistical analysis ofmultiple companies with experience similar to this type ofmanufacturing and engineering effort.Knowing that the actual ratesproposed by individual contractors will vary, it was decided that thefollowing indirect rates would be used in this analysis in order toensure consistency in determining the appropriate risk assessmentfor selecting contract type.The resultant values identified in thetable below represent the median rates resulting from the team’sstatistical analysis.HourlyRateIndirectRateMaterial5.00%Engineering$34.00125.00%Manufacturing(Fabrication andAssembly/QC)$21.00185.00%G&A (TCI)8.00%
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Term
Summer
Professor
NoProfessor
Tags
Statistics, Government, Cost Accounting, government Industrial Engineer

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