You have spent the last 2 months analyzing a proposal to convert existing distance learning (DL) courseware into
the new Learning Content Management System (LCMS). It is anticipated that this effort will take at least 2 years to complete, if there aren't any major problems during conversion.
You had hoped to receive a couple of responses to the solicitation. However, you only received 1 proposal, from the LCMS developer. Over the years, the DL courses were developed by multiple vendors using various development tools. It is this variation in background coding that is likely the reason for only receiving one offer.
Since you only received the 1 offer, you did request cost and pricing data from the contractor.
You used the DCAA audit of the contractor's proposal and a technical team review when developing your pre-negotiation objective; however, you relied heavily on the contractor's cost and pricing data.
You finally reached an agreement with the contractor and awarded a FFP contract for $1.3 million.
During contract performance you developed a friendship with several of the contractor personnel assigned to this effort. You and Sally, one of the programmers, really hit it off. During a friendly chat, Sally mentioned that she was in the market for a better paying job, "It isn't easy making ends meet on $41,000 a year in the D.C. area." This comment struck a chord and you starting thinking back on your original analysis of the contractor's proposal. If you remembered correctly, the amount used during negotiation with contractor was more than $41,000 a year for a programmer. You checked your price negotiation memorandum and found that the contractor's proposal and your pre-negotiation objective were based on a programmer salary of $54,000 a year.