Which item is best to exclude from a forward pricing rate proposal to DCMA?

Which item is best to exclude from a forward pricing rate proposal to DCMA?

• A. The base year labor rates.
• B. An option year of current work that is unfunded in next year's appropriation bill.
• C. Travel costs.
• D. Equipment depreciation.

Answer: (B)

Forward pricing rate proposals should reflect periods that will actually be funded and reimbursed. An option year that is unfunded in the next year's appropriation bill has no guaranteed funding, so including it would tie rates to a period that may not be reimbursed. That makes it the item to exclude. The other costs—base year labor rates, travel costs, and equipment depreciation—represent funded or recoverable elements of the cost structure and are appropriate to include in the forward pricing, since they impact the rates used to price work and allocate costs.

Forward pricing rate proposals should reflect periods that will actually be funded and reimbursed. An option year that is unfunded in the next year's appropriation bill has no guaranteed funding, so including it would tie rates to a period that may not be reimbursed. That makes it the item to exclude. The other costs—base year labor rates, travel costs, and equipment depreciation—represent funded or recoverable elements of the cost structure and are appropriate to include in the forward pricing, since they impact the rates used to price work and allocate costs.