A Work Breakdown Structure as Aspect in Management of Projects - Assignment Example

? Assignment 4: Proposal Preparation Plan Work Breakdown Structure A Work Breakdown Structure (WBS) is very important aspect in management of projects. The WBS allows for the breakdown of the project’s deliverables into smaller and more detailed pieces hence making the project management process easier. The following paper will provide a WBS based on a proposed project in Assignment 3 for the provision of services in maintenance, repair and rebuilding of equipment for the federal government. In addition to the preparation of the WBS, this paper will discuss the importance of the WBS and the best approach to creating a comprehensive work breakdown structure. Cost analysis is a very important in winning government contracts. Winning a bid contract means capturing a new opportunity and making profits for the company. The key to winning these bids is having the lowest cost estimates but high enough to satisfy the contract requirements and also make profits. Moreover, the government is interested on how the bidder arrived at the proposed estimates. Therefore the cost information to be presented for the bid must have its basis substantiated since it will have an impact on the outcome of the selection process. A low bid cost estimates is not necessarily automatic that one will be awarded the contract but sometimes the government may award contracts to either lower-priced and less qualified offerors or a more qualified and higher-priced bidder. (Criss, 2006, p.234) Most bidders do make a lot of mistakes in preparation of the bid proposals that undermine the evaluation of the cost proposals. Some of these include not being responsive to RFP instructions, inadequate definition and description of the building blocks of the cost approach and failure to provide logical conclusions and illustration that would make the estimates realistic and reasonable. Other fatal mistakes include not following instructions to complete costing forms as provided for the RFP, not showing the associated CLIN (Contract Line Item Number) for each WBS, failure to separately report prime indirect rates and break out hardware and software requirements. Finally, assuming that cost summaries are adequately substantiated, failure to accurately define what work is or not included in the task descriptions, referencing to inexistence paragraphs, classifying materials as commercial off-the-shelf (COTS) or a non-development item (NDI) when extensive modifications are required and not providing negotiated rates and trace between calendar years and the rates used in the proposals are also some of the mistakes normally associated with bid proposals. (Osborne, 2011, p.275) Therefore with these mistakes associates with cost estimates on the WBS, the government has provided recommendations in the quest to ensure preparation of an adequate cost proposal. These include the bidder demonstrating that they have enough understanding of the contract requirements and risks associated, supporting the bid documents with facts, analysis and enough substantiation of data in order to verify that the approach is realistic and reasonable, providing a clear and concessive cost estimate justifications and understanding the evaluation criteria used by the tendering committee in order to be aware on the areas to put more emphasis on. The bidder should also ensure traceability between the bill of material and WBS or WBS and CLIN or WBS and Statement of Work, ensure the technical and cost proposals are consistent, show support for any proposed improvements to historical data and also substantiation of the cost estimates. All these recommendations are the ingredients to winning these federal contracts. (Parvey, 2010, p.434) Many variables are considered when deciding on the cost strategy i.e. the cost estimates. It’s important that one understands the different contract types and the rationale for each. This is important since the risk reward rationale is different for each type and need to be factored in the final decision on cost and profit approach. Also, how the government determines evaluated price differs for different contract types i.e. government expects that the amount of profit bid to reflect how much risk the contractor is assuming. The type and amount of information requested in the cost volume are closely tied to the contract type and therefore effort is required to collect and report cost after contract award is also directly related to the contract type. (Seyfarth, 2006, p.344) The three major cost elements that are important in arriving a bid price for federal contracts include direct costs, indirect costs and profits or fee. Direct costs include salaries of the people who are involved in the execution of the contract, the costs of raw materials and equipment for the project. Others expenses include costs travelling expenses, leasing or renting equipment and cost of acquiring of special services. Indirect costs include those that are not charged directly to the contract i.e. overhead and general administrative costs e.g. employee benefits, payroll taxes, salaries and benefits etc. Indirect costs are expressed in percentages and are added to the direct costs to compute the total costs. (Roth, 2002, p.323). Therefore in preparation of cost estimates, it is necessary to prepare a cost volume which comprises of the cost estimates and a cost narrative. A cost narrative involves filling out customer required pricing forms and organizing the cost volume as stated in Section L of the instructions in the proposal outline. Therefore the first step in preparing initial cost estimates is to prepare a work breakdown structure (WBS). This is a hierarchical division of the work effort into manageable parts and will be based on a Price to Win Cost Approach (PTW) for the purpose of these assignment. This is an approach where one determines beforehand what they estimate the required winning price will be. This approach requires rigorous research on what the competitors’ estimates will be in order to beat them. Therefore, initial costs are adjusted wherever necessary in order to arrive at the price to win. The following is a WBS based on a PTW approach on contract for provision and the Maintenance of Peculiar Support Equipment (PSE) for the Navy Department Aircrafts’. (Osborne, 2011, p.283) A WBS based on PTW WBS and Category Price ($) 1.0 Peculiar Support Equipment 1.1 Peculiar Support Equipment items 1,813,672 .00 1.1.1. A 1/4 Female QD 20.00 1.1.2. A Caster Bed Pallet Trailer 31,200.00 1.1.3. Maintenance of the E-2T aircraft components 461,000 1.1.4. A Flush Pin 25.00 1.1.5. Holding Fixture base Component 40.00 1.1.6. A Ratchet Indexing Fixture 34.00 1.1.7. Wrenches 33.00 1.1.8. A Bearing Remover 30.00 1.1.9. Adapters 30.00 1.1.10. A filling Plate 38.00 1.1.11. SEF1 Pressing Fixture 25.00 1.1.12. Stacking Fixture 34.00 1.1.13. Test Fixture Integrated Ser 45.00 1.1.14. Bearing Staking Fixture 57.00 1.1.15. A Bearing Staking Fixture 56.00 1.1.16. Torque Wrench 34.00 1.1.17. Stacking Fixture 45.00 1.1.18. Drill 45.00 1.1.19. Other Systems 678,972.00 1.1.20. Systems Integration 657,000.00 1.1.19.1. Requirement Analysis 112,000.00 1.1.19.2 Tests 345,000.00 1.1.19.3. Data Management 200,000.00 1.1.21. Program management 123,000.00 1.1.22. Deployment 323,000.00 1.2 Contractor Logistics Support 1,399,000.00 1.2.1 Training System Support Centre 455,000.00 1.2.2 Logistics support package 344,000.00 1.2.3 Equipment Maintenance 600,000.00 1.3 Program Data 4,315, 672.00 Strategies prevent unethical practices and promote compliance with federal guidelines  Due to ever decreasing of the government’s workforce, body of knowledge and increasing award of federal projects to contractors, the question that arises is; does it ensure that rules and regulations are enforced and compliance is upheld among contractors of all sizes in regard to federal guidelines? More government functions are being contracted out to private contractors because of the shrinking of the government’s workforce. Therefore the best way to ensure that these private contractors comply with ethical rules and regulation is by closely monitoring to ensure that they are meeting the goals and objectives the government has set out for them to achieve. If contractors are to be held accountable, they will ensure that they have a corporate culture that fosters ethical conduct, and to establish both a code of ethics and a proper compliance program. For publicly held contractors and others, it will require them to incorporate the rules of PIA (Privacy Impact Assessment) and FAR Part 3 into their existing ethics policies and compliance programs. This will ensure that ethical practices in federal contracting are followed by all the stakeholders. (Criss, 2006, p.287) Additionally, there should be emphasis for the contractors to be aware of the fact that there is more to a compliance program than just following the rules. There should be an understanding of the basis under which contracts are executed and an acceptance of a set of behaviors. The acceptance of these behaviors indicate that each individual involved with the contract has made a personal commitment to do the right thing and not tolerate the behaviors of others who do not. This is important since compliance programs that solely point to their audit efforts and rely on the number of findings accumulated are not successful or effective programs. Therefore senior managers of these contracting companies need to be made to understand that individuals make choices based on their corporate culture. If ethics are not an integral part of that culture, then no compliance program will ever be successful. (Parvey, 2010, p.357) Most importantly, government officials need to be held accountable for not enforcing the rules and regulations. The government needs to ensure that it has a corporate culture that fosters ethical conduct. If favoritism continue to be widespread, lack of oversight and efficiency will remain an issue, thus preserving unethical business practices and promoting unfair competition. There needs to be more oversight over government procurement officials to ensure that the rules of FAR Part 3 and PIA are being properly applied. Additionally, the government procurement officials should be forced to undergo training and renew their certifications on a periodical basis. This certification process can be done electronically through an intranet and can be maintained in the contracting official’s personnel file. (Roth, 2002, p.434) Finally, mores rules and regulations may not be the answer to ensuring unethical practice are prevented. This is because more rules will just make the system more complex and difficult to understand. However, if the rule of ensuring that the government procurement officials are held accountable for their actions, and will also ensure full and open competition, then issues of unethical practices will not occur. Ground Rules and Assumptions The preparation of cost estimates is based on limited information hence need to consider other constraints that make the estimation possible. These estimates are in form of assumptions the guide the scope of estimation and establish ground rules from which the estimates will be built from. Therefore since the cost estimates consist of many unknowns, there is need for a series of statements that help in defining the conditions the estimates will be based on and these are what referred to as ground rules and assumptions. Ground rules represent set of standards that guides and help in minimizing conflicts in definitions whereas assumptions represents judgments about past, present or future in the absence of ground rules. All these will be important in estimating the costs. (Osborne, 2011, p.293) The ground rules and assumptions used in establishing the work breakdown structure include both testing, cost, schedule, technical and operation. For instance, the equipment will have to pass ground qualifications for it to be allowed for use. The delivery and installation of the equipment must be completed in 1 years’ time from date of contract award. Also, there will be only one contractor for the works throughout the year and the cost estimates will use 10% of the reserves. Finally, any foreign assets used in the realization of the contacts will be assumed to be registered for use within the jurisdiction and the one unit will required for delivery for each item in the WBS. References Aaker, D. A. (2001). Developing business strategies, sixth edition (6th ed.). New York: John Wiley & Sons. Criss, R. (2006). Contract Management. Contract Compliance for Government Contractors (pp. 14-20,). New York: Addison and Wesley. Osborne, S. R. (2011). Winning government business gaining the competitive advantage with effective proposals (2nd ed.). Vienna, VA: Management Concepts. Parvey, M., & Alston, D. (2010). The definitive guide to government contracts everything you need to apply for and win federal and GSA schedule contracts. Franklin Lakes, NJ: Career Press. Roth, B. (2002). Request for proposal: a guide to effective RFP development. Boston, MA: Addison-Wesley. Seyfarth, S. L. (2006). The Government Contract Compliance (4th ed.). Minnesota: Thompson/West. Read More