Proposal Writing Training Budget and Cost Proposal Writing 2

Question 1

What is the purpose of cost narrative in a proposal?

Accepted Answer

To explain and justify each cost element so evaluators understand how costs were derived

Answer

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?

Accepted Answer

FAR Part 31

Answer

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?

Accepted Answer

Demonstrating how your solution prevents the client from incurring costs they would otherwise face

Answer

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)?

Accepted Answer

It ensures each labor category is justified by specific tasks, making the budget traceable and defensible

Answer

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?

Accepted Answer

Research-based pricing that positions your offer competitively while remaining profitable

Answer

PTW analysis uses competitive intelligence and cost modeling to determine a price range that wins the contract while preserving profitability.

Proposal Writing Training Practice Test