Even if you’ve been in the contracting business for some time, submitting your first proposal for a government contract is a different kind of challenge. There are very strict requirements for your proposal, and if you don’t meet them, it will be very quickly rejected. If you’re preparing to submit your first proposal—or you’re trying to figure out why your proposal was rejected—keep reading to learn the most common reasons for inadequate contractor proposals.

Significant Differences in Proposed Amounts and Supporting Documentation

The estimated amounts throughout your proposal should be backed by supporting documentation that justifies your proposed costs. For example, your proposal for material costs should be supported with documentation that demonstrates the materials you’ll be using do, in fact, cost close to the amount that you’re listing in your contract proposal. If your proposal is significantly higher or lower in any cost area, and your proposed amounts are not supported, your contract proposal will likely be rejected.

Variances between Prior Cost Data and Proposed Amounts

This is more likely to be an issue for returning government contractors rather than new ones, but it’s certainly one that experienced contractors should not overlooked. Yes, inflation certainly does happen, and the cost of materials can go up (especially recently). However, any time there are significant variances between prior buy actual cost data and proposed amounts, the government employee reviewing your proposal will have questions. You should get ahead of this issue and ensure that any significant increases in proposed amounts include supporting justification and explanation.

No Consolidated Bill of Material

When submitting a proposal to the government, an adequate Consolidated Bill of Material (CBOM) is required for estimating proposed materials and services. This is assuming, of course that the contract is not otherwise exempt from required certified cost or pricing data, which may occur. It’s important that you review the contract requirements in detail to determine if a CBOM is required for your proposal. If it is, and if you have not yet submitted a CBOM with a proposal before, be sure to reference FAR 15.408 Table 15-2 Section II.A to familiarize yourself with all the requirements for this particular portion of your proposal. If you do not include a CBOM, or if it is insufficient, your proposal will be rejected.

Rates Not Based on Contract Budget or Trend Data

When producing a government solicitation, these organizations conduct thorough research into cost trends to establish their budget for the contract. It’s vital that you do the same, and submit a proposal with rates that are based on the contract budget and in line with current pricing trends for your services. Of course, submitting a proposal significantly over budget is not a great idea for any client, whether it’s a government entity or not. However, aspiring government contractors should put in a little extra time to do the research and ensure that all rates—including labor, materials, indirect costs, etc.—are aligned with current trend data.

Inadequate Support for Subcontract Proposals

If you’re planning on using subcontractors to fulfill this government contract, you’ll need to provide an adequate subcontract proposal, as well as a thorough prime contractor cost or price analysis. All aspects of your subcontracting costs should be detailed just as thoroughly as your own costs. To put it another way, you cannot just list your direct costs paid to the contractor in your proposal; you will also need the details of materials, labor, etc., that go into the total cost for the subcontractor. If you do not provide enough support for your subcontractor costs, your contract proposal will be rejected.

Ensure Your Accounting System Is Adequate Too

It’s not just your proposals that have to meet extremely strict requirements if you hope to contract for the US government. Your accounting system must also be compliant with DCAA and FAR in order to stand up to an audit—and when you contract with the government, audits will occur on a regular basis. If you’re concerned that your current accounting method might be the reason you lose a government contract, contact Peter Witts CPA today.

We specialize in working with government contractors and providing DCAA- and FAR-compliant accounting services. We’ll ensure your accounting methods are up to snuff, so that when you land that first government contract, you’ll be able to pass your first DCAA audit with flying colors. Give us a call now to schedule your initial consultation with one of our accounting experts.