Cost Proposal Development & Support
Accurate, Defensible Pricing Built to Withstand Federal Scrutiny
Win Federal Contracts with Confidence and Compliance
When bidding on federal opportunities, your cost proposal is more than a pricing document—it’s a compliance and credibility test. Agencies like the DoD, DOE, NIH, and NASA expect proposals that not only meet the technical requirements of the solicitation but also demonstrate financial discipline under FAR Part 15 and Cost Accounting Standards (CAS).
At Peter Witts CPA PC, we help contractors build complete, defensible, and audit-ready cost proposals that satisfy agency reviewers and strengthen your competitive position. From developing compliant rate structures to assembling certified cost or pricing data, our team ensures your submission can withstand any level of audit or negotiation.
Why Federal Cost Proposals Require Specialized Expertise
Unlike commercial pricing, government proposals must follow a structured, regulated framework under FAR 15.403–15.408. Each component—from your labor buildup to indirect rate projection—must be transparent, justified, and internally consistent.
A compliant cost proposal must:
- Include certified cost or pricing data when required (typically for awards > $2 million, per the Truthful Cost or Pricing Data statute).
- Follow the FAR Table 15-2 format for cost and pricing data submission.
- Reflect current, accurate, and complete cost estimates.
- Align with approved accounting and indirect rate structures.
- Withstand pre-award audits from DCAA or agency pricing analysts.
Comprehensive Cost Proposal Support
Our services cover the full lifecycle of federal pricing—from initial model design to post-award rate negotiations.
Proposal Preparation & Pricing Models
We build customized pricing models tailored to contract type, funding structure, and agency expectations:
- Labor category buildup using current approved rates and escalation factors.
- Detailed fringe, overhead, G&A, and fee computations based on your indirect cost pools.
- Material, subcontract, and travel estimates with documentation of vendor quotes.
- Application of cost-of-money factors, where applicable under CAS 414.
- Scenario analysis for T&M, cost-reimbursable, or fixed-price submissions.
Our pricing workbooks are built for audit traceability—linking every dollar to your accounting records and cost history.
Narrative Development & Cost Justification
Agencies require detailed explanations of your cost methodology, assumptions, and indirect rate applications. We develop narrative sections that demonstrate both compliance and reasonableness, including:
- Cost volume narratives explaining estimating methods and rate composition.
- Disclosure of cost assumptions and escalation methodologies.
- Subcontractor cost inclusion, flowdown, and verification of pricing data.
- Supporting exhibits and crosswalks between narrative and pricing files.
These narratives help reviewers understand—and approve—your pricing logic without confusion or delay.
Forward Pricing & Indirect Rate Forecasting
An effective proposal depends on indirect rates that are realistic and supportable. Our team:
- Prepares forward pricing rate forecasts (FPRFs) consistent with historical cost behavior.
- Supports negotiation and documentation for Forward Pricing Rate Agreements (FPRAs).
- Models multiple rate scenarios to evaluate competitiveness and profitability.
- Validates rate calculations against your accounting system and historical incurred costs.
We ensure your proposed rates are both competitive and compliant, avoiding questioned costs and setting a foundation for smooth post-award billing.
Compliance Check & Adequacy Review
Before submission, we perform a rigorous proposal adequacy review aligned with the DCAA Proposal Adequacy Checklist (DLAM 15.403) and FAR Part 15 requirements. Our review includes:
- Verification of all required cost elements and supporting schedules.
- Tie-out testing between cost model, narrative, and supporting data.
- Validation of rate applications and fee computations.
- Review for consistency between proposal data and accounting system structure.
This ensures your proposal is submission-ready, audit-defensible, and responsive to every item in the solicitation.
We empower our clients to grow with confidence by delivering high-quality, customized financial services that meet the exacting standards of the DCAA, NIH, DOE, and other federal agencies.
Frequently Asked Questions
What is “government contract accounting,” and how is it different from regular accounting?
Government contract accounting involves following specific federal rules, standards, and compliance requirements (e.g. cost allowability, audit readiness, indirect rates, DCAA standards). Unlike general accounting, your financial systems need to withstand audits, cost proposals, and strict oversight. We structure your accounting and reporting so you stay compliant and reduce risk.Do I need to worry about DCAA audit compliance?
If you hold or are bidding on U.S. federal contracts (especially cost-reimbursable, time & materials, or fixed price with cost elements), the Defense Contract Audit Agency (DCAA) may audit your accounting systems. We can help you build or review systems so you pass audits when they arrive.Can you help with indirect cost rates, cost proposals, and incurred cost submissions?
Yes — we support designing indirect cost rate structures, preparing cost proposals, and submitting incurred cost reports. These are critical tasks in government contracting, and we ensure your supporting records align with regulatory expectations.How much experience do you have in the federal contracting space?
Peter Witts CPA PC has over 36 years of experience in government contract accounting, including first-hand DCAA knowledge. We’ve worked with clients across DoD, NIH, DOE, and other agencies, helping them navigate the compliance landscape.What kind of businesses or projects do you work with?
We work primarily with companies engaged in federal contracts or grants (especially research, development, support services). If your business isn’t in that space, we’ll help you determine whether our services are the right fit or recommend alternatives.How do I get started with you?
You can schedule a free consultation via our website. During that call we’ll explore your current standing, challenges, and needs, and map out how we might support you. (Then we’ll formalize scope, pricing, and next steps.)What should I provide for an initial assessment?
Financial statements, accounting policies, prior audits (if any), contracts and grant agreements, cost accounting structure, payroll records, indirect cost allocations, and any compliance documents. We’ll review what you have, identify gaps, and propose next steps.How often will we interact / how do you deliver services?
That depends on the scope. For outsourced accounting, we could work on a monthly or quarterly basis. For compliance or audits, we may engage more intensively. We'll agree up front on communication frequency, deliverables, and review cycles.What are your fees or how is billing handled?
Our fees are fixed monthly fees and depend on the complexity and scope of your work — number of contracts, volume of accounting entries, compliance risk, etc. We’ll provide a proposal after our initial assessment. We only work on an hourly basis for audit support services for audits relating to government contracts or grants conducted by government agencies or outside CPA firms.What if my business is outside of your specialization—can you still help?
At Peter Witts CPA PC, we focus exclusively on our core strength: federal contract and grant compliance. We serve businesses operating within the government contracts and grants space, offering specialized outsourced accounting and tax services tailored to the unique requirements of this industry. This is our sole focus — we don’t try to be everything to everyone. Our expertise is deep, not broad, and it’s dedicated to helping government contractors navigate complex compliance and maximize their opportunities.What happens if there's a federal audit or examination?
We support audit responses, documentation requests, and work with your team to ensure you respond properly. Because we build systems with compliance in mind, we aim to minimize surprises and help you maintain defensible records.How do you keep up with changing federal regulations and compliance standards?
We continuously monitor federal regulatory updates (DCAA rules, OMB circulars, FAR/DFARS, audit guidelines) so our clients’ accounting systems remain in alignment with best practices and compliance requirements.
