Proposal Writing Training Budget and Cost Proposal Writing 2 — Questions and Answers
Question 1: What is the purpose of cost narrative in a proposal?
- To replace the cost spreadsheet
- To explain and justify each cost element so evaluators understand how costs were derived (Correct answer)
- To repeat the technical approach
- To list all past invoices
Correct answer: To explain and justify each cost element so evaluators understand how costs were derived
The cost narrative provides the rationale behind each budget line, giving evaluators confidence that costs are reasonable and well-supported.
Question 2: Which document typically governs allowable costs on a US federal contract?
- FAR Part 31 (Correct answer)
- FAR Part 15
- FAR Part 52
- OMB Circular A-110
Correct answer: FAR Part 31
FAR Part 31 (Contract Cost Principles and Procedures) defines which costs are allowable, allocable, and reasonable on federal contracts.
Question 3: What is 'cost avoidance' as a proposal benefit?
- Reducing your bid price to win
- Demonstrating how your solution prevents the client from incurring costs they would otherwise face (Correct answer)
- Avoiding certain cost categories
- Eliminating subcontractors to cut expenses
Correct answer: Demonstrating how your solution prevents the client from incurring costs they would otherwise face
Cost avoidance shows the client that your solution prevents future costs, strengthening the value proposition beyond just the contract price.
Question 4: Why is it important to tie labor categories to the work breakdown structure (WBS)?
- It satisfies an administrative requirement only
- It ensures each labor category is justified by specific tasks, making the budget traceable and defensible (Correct answer)
- It reduces total labor costs
- It eliminates the need for a cost narrative
Correct answer: It ensures each labor category is justified by specific tasks, making the budget traceable and defensible
Linking labor categories to WBS tasks proves that staffing levels and costs are driven by actual project requirements, not arbitrary estimates.
Question 5: What does 'price to win' (PTW) mean in proposal strategy?
- Always submitting the absolute lowest price
- Research-based pricing that positions your offer competitively while remaining profitable (Correct answer)
- Matching the competitor's price exactly
- Setting price after contract award
Correct answer: Research-based pricing that positions your offer competitively while remaining profitable
PTW analysis uses competitive intelligence and cost modeling to determine a price range that wins the contract while preserving profitability.
Question 6: What is a subcontractor flow-down in a proposal budget?
- A payment schedule for subcontractors
- The requirement that prime contract terms and conditions apply to subcontractors (Correct answer)
- A chart showing subcontractor reporting lines
- A list of subcontractor past performances
Correct answer: The requirement that prime contract terms and conditions apply to subcontractors
Flow-down clauses ensure that regulatory and contractual requirements from the prime contract are passed to subcontractors, maintaining compliance.
Proposal Writing Training Budget and Cost Proposal Writing 2
What is the purpose of cost narrative in a proposal?