INNOVATIONS: Pricing Innovation—Century-Old Cost-Basing Doesn’t Work
Tracking labor and materials makes sense for assembly line work, but the 21st Century is defined by knowledge work found in software, data, and product design.
With budgets tightening, and proposal teams being asked to do more with less, the pricing component of a proposal has become more important.Holly Dehesa & Michael Weaver, CM Magazine
Why do contract management professionals talk about cost and pricing so much?
One of the main responsibilities of contract managers is to determine fair and reasonable pricing when negotiating new contracts and contract modifications. It’s a fundamental requirement for government contracting, so it's important for professionals in the field to be familiar with common cost and price analysis techniques.
Cost analysis and price analysis are two techniques for determining a price that is fair to both sides and may take into account a variety of market, performance, quality, contractual, and regulatory factors.
Tracking labor and materials makes sense for assembly line work, but the 21st Century is defined by knowledge work found in software, data, and product design.
This analysis of effective market research will help to better “protest-proof” your procurement.
Are cost and price analyses just more bureaucratic red tape, or are they persuasive negotiation tools?