CLC056 Analyzing Contract Costs lesson 7 - Analyzing Direct Material Costs | 2022 LATEST UPDATE

CLC056 Analyzing Contract Costs
lesson 7 - Analyzing Direct Material Costs RESOURCES I PR INT I HELP

Introduction

Welcome to Analyzing Direct Materials Costs !

You might be wondering, "How will the
information in this lesson help me in my job as a
contract specialist?"

Direct material costs often account for more
than half of the total contract cost. As a
contract specialist you will need to determine
how to develop a pre- nego tiation objective that
results in a reasonable position on the direct
materials cost element.
I
This lesson presents information about the
different types of material costs. You will also
learn about three kinds of estimates :

• Summary level
• Detailed quantity
• unit cost




...... I Poge 1of37 I ....
Back Next

,Long Description

Binder with spine text that reads: Analyzing Direct Material Cost. A sticky note on the front of the binder
that reads: Contract specialists need to analyze direct materials cost when developing a pre-negotiation
objective.

,CLC056 Analyzing Contract Costs
lesson 7 - Analyzing Direct Material Costs RESOURCES I PRI NT I HELP

Obj ectives

At the end of this lesson, you will be able to:

• I dentify the different types of material
costs

• Determine the appropria teness o f the
offeror's cost estimating methodology
• Detennine the fairness and reasonableness
of summary level cost estimates

• Establish the fairness and reasonableness of
detailed quantity estimates

• Evaluate the reasonableness of unit cost
estimates

Sound good? All right, let's ge t started .




..... I Page 2of37 I .....
Back Next

, CLC056 Analyzing Contract Costs
lesson 7 - Analyzing Direct Material Costs I
PR INT
1
HELP
RESOURCES

Overview - Direct Material Costs Flowchart

The process for analyzing direct material costs
is shown in the flowchart to the right. ' rde...tlf!:J t>l~eet
J
Matenal Costs Fo~
This flowchart shows why you need to know the A"'lll!:JSLs
different types of material costs and how to use
summary level cost estimates, detailed quantity
estimates, and unit cost estimates . The
,I/
S~.<mmii~!:J s"'"""""~!:J o~
flowchart is available in the Contract Pricing t>etalled 6stl....ate t>ett led
Reference Guide {CPRG), Volume 3, Chapter 6.

Do not worry i f this flowchart does not make v AI'I.Rl!:j:Z:t
sense now. It will by the end of this module! A""" L!:J:z:e t>etalled Ga<a.-.tLt!:J
s ...........~~~!:J Cost 6stL....Ates
6sti....Ates ,J,

A""Al!:j:Z:t w-.lt
Cost ssti....ate
RtG09""LZt
subeo...rrAet Prlcol...g I/
' Respo...slbLLlties I"
J/
A~t Tllt~t MO~t

"'',e? MAtt~laL Costs?
J, -r.o
Q;oTo t>l~ect Lllb~ .!2
...... I Poge3of37 I .....
Back Next