Proposal pricing is key to winning government contracts and executing them with maximum profitability. This webinar focuses on the completeness of direct costs and the accuracy of indirect rates. We'll discuss three types of budgets, their relationship to indirect rates, and how they affect each other. We'll share our three-step process for preparing budgets and explain when budgets and indirect rates must be updated as part of the proposal process. Our goal is to ensure you achieve total cost recovery and maximize profitability on your government contracts and we'll share our free budget template. Learning Objectives List three kinds of budgets. Describe three steps for preparing budgets. Explain how budgets are related to indirect rates. Identify when to update indirect rates as part of the proposal process.

1. Copyright © 2014-2022 Left Brain Professionals Inc.
We Know Government
Contract Accounting

2. Copyright © 2014-2022 Left Brain Professionals Inc.
Budgets, Indirect
Rates, & Proposals

3. Who We Are
Left Brain Professionals is a boutique accounting firm that serves
government contractors. We specialize in accounting systems and
strategic services.

4. Copyright © 2014-2022 Left Brain Professionals Inc.
Our Practice Areas
ACCOUNTING SYSTEMS
• Accounting System Design &
Implementation
• Monthly Support Packages
STRATEGIC SERVICES
• DCAA Audit Support
• CFO & Controller Services

5. Our Team
Robert E. Jones
Principal GovCon Accounting
Advisor
CPA, CPCM, NCMA Fellow
Steven Bressler
GovCon Accounting
Associate
Steve@LeftBrainPro.com
Robert@LeftBrainPro.com
Copyright © 2014-2022 Left Brain Professionals Inc.

6. Learning
Objectives
Copyright © 2014-2022 Left Brain Professionals Inc.
• List three kinds of budgets.
• Describe three steps for preparing
budgets.
• Explain how budgets are related to
indirect rates.
• Identify when to update indirect rates
as part of the proposal process.

7. Copyright © 2014-2022 Left Brain Professionals Inc.
Background
Check out our previous webinars:
Fundamentals of Indirect Rates
Advanced Indirect Rates
Developing Your First Cost and
Price Proposal

8. Time
for a
Poll

9. Copyright © 2014-2022 Left Brain Professionals Inc.
3 Kinds of Budgets
Enterprise
Project
Proposal

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3 Kinds of Budgets
1. Enterprise
• Corporate budget for the entire
organization
• Includes direct and indirect costs
What we find:
• No enterprise budgets
• Late budgets
• Simply reusing last year's numbers

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3 Kinds of Budgets
2. Project
• Project budget focused on direct
costs
What we find:
• Projects are not time-phased
• No consideration for overtime
• Missing direct costs

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3 Kinds of Budgets
3. Proposal
• Project-based budget for a proposal
that includes direct and indirect costs
• Enterprise budget and rates are
adjusted for significant proposals

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3 Kinds of Budgets
What we find:
• Backing into a total price instead of cost
rollup
• Missing or insufficient basis of estimate
(BoE)
• Using old rates
• Indirect rates not updated for significant
proposals
Clients call because they cannot support their
costs or rates during an audit.

14. Time
for a
Poll

15. Copyright © 2014-2022 Left Brain Professionals Inc.
3 Steps for Prep Budgets
1. Top Down
• Revenue focused - identify direct
costs necessary to support revenue
• Backlog +
• Weighted probability of outstanding
proposals +
• Other work

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3 Steps for Prep Budgets
2. Bottom Up
• Primarily indirect costs
• Fixed costs
• Historical in nature with known
changes

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3 Steps for Prep Budgets
3. Hybrid
• Merging the first two
• Looking for gaps
• Evaluating indirect cost investments

18. Copyright © 2014-2022 Left Brain Professionals Inc.
Budgets & Indirect Rates
• Enterprise budgets result in proposal
and interim/provisional billing rates
• Proposal budgets result in indirect
rates for that specific proposal

19. Copyright © 2014-2022 Left Brain Professionals Inc.
Budgets & Indirect Rates
• Enterprise budgets (indirect rates)
need revised (don't change the
baseline) for:
• Winning or losing a major contract
• Other budget issues that cannot be
resolved internally

20. Time
for a
Poll

21. Copyright © 2014-2022 Left Brain Professionals Inc.
Update Rates for Proposal
We cannot stress the importance of this
topic enough
Winning a significant contract (>20% of
revenue) will have a significant impact
on rates
Define significant for your organization!

22. Copyright © 2014-2022 Left Brain Professionals Inc.
Update Rates for Proposal
Remember that direct costs drive all
other rates
Need to propose with "what-if" rates
then adjust enterprise budget and other
interim/provisional billing rates as
necessary

23. Copyright © 2014-2022 Left Brain Professionals Inc.
Our Budget Template
What we're looking for:
• Summary invoiced amounts for
inception-to-date reporting
• Invoice details (hours and rates by
labor category) for T&M contracts
• Public voucher numbers and details

24. Copyright © 2014-2022 Left Brain Professionals Inc.
Looking Forward
1. Prepare budgets in September
2. Approve budgets in October
3. Submit new billing rates in November
4. Use new billing rates in January

25. Copyright © 2014-2022 Left Brain Professionals Inc.
Download Template
Budget Template for Government
Contracts - Left Brain Pros

26. Time
for a
Poll

27. Copyright © 2014-2022 Left Brain Professionals Inc.

28. Connect
with us
Download the presentation
Left Brain
Professionals Inc.
@LeftBrainPro
Email us
Support@LeftBrainPro.com
@LeftBrainPro
Left Brain Pro
LeftBrainPro
www.LeftBrainPro.com/presentations

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