Welcome!

Electronic Business Proposal

Spreadsheets

Calculating and Structuring Your

Potential Costs
• Please help yourself to a
handout.
 ELECTRONIC
BUSINESS PROPOSAL
SPREADSHEETS
 Introductions
• Cindi L. Brown

Accountant, Special Reviews Branch

Division of Financial Advisory Services (DFAS),
Office of Contracts Management, OD, NIH
What can you expect today
from this training???
• Where to find the electronic spreadsheet.
• When to use the electronic spreadsheet.
• How to utilize the electronic spreadsheet
efficiently and effectively by:
- Understanding how the file is
designed.
- Understanding how to use it.
•Advantages and disadvantages
•Answers to your questions…anytime.
 Caveat
• There will always be more than one way to
create and modify spreadsheets, so do what
works for you. This spreadsheet is the
collaboration of 2 NIH accountants and 3
NIH contracting officials. We attempted to
keep it simple, yet effective. This
spreadsheet is designed to be modified.
 Where to find the
electronic file.
• DFAS Other Resources &Links
Electronic Contract Business Proposal
http://ocm.od.nih.gov/dfas/resources.htm

• NIH RFP Directory Home Page

http://www4.od.nih.gov/ocm/contracts/rfps/mainpage.htm
Forms, Formats, & Attachments
Business Proposal Cost Information
Cost Proposal (located at bottom of page)
filename = spshexcl (This file was created in
Excel.)
 When to use the electronic
spreadsheet.
• When the RFP requests you to submit an
electronic copy of your business proposal
(on diskette) in addition to the hard copies.

• To assist you in calculating and structuring

your proposal costs.
How to utilize the electronic
spreadsheet efficiently and
effectively by:

• Understanding how the

spreadsheet is designed.

• Understanding how to use it.

 Instruction Page

• This is the first worksheet of the file.

• It contains basic instructions for the

subsequent worksheets. If applicable,
specific instructions are included on the
individual worksheets to add
clarification or to emphasize a point. file
 Summary of Proposed Costs
• Totals from all cost elements are
automatically carried forward to this page.

• Set up for 7 periods.

• Start date of contract is in cell c5 and the

formulas automatically calculate 12 month
periods.
• Adjust the formulas for periods less than 12
months. file
 Indirect Costs
• Use the rate(s) in your negotiated agreement.

• If you do not have negotiated rates, you can

utilize the blank spreadsheet in this file for your
indirect rate proposal.

• If you have questions regarding how to calculate

indirect rates, please visit our internet address for
a simple example and definition:
http://www4.od.nih.gov/ocm/dfas/idcsubmission.htm
 Indirect Costs

• This spreadsheet demonstrates a 4 tier structure:

fringe benefits, overhead, G&A, and other rate.
file

• IMPORTANT:
IMPORTANT use the rate structure
that is applicable for your company.
 Indirect Costs

• Indirect rates are located on the Summary

sheet starting in cell B23.
file

• Starting in cell C23, check the formula to

ensure that a correct base is used.
 Direct Labor

What is your policy for

charging and recording time?
• Percent of Effort • Number of Hours
• Usually For-Profit entities.
• Usually for Universities and Non-profits.

• Current base salary /hourly rate

Column D
– Use current payroll document File
 Adjusted base salary Column E
4 components :
1. Annual salary/rate
2. Annual Increase Factor (cell E47)
3. Annual Increase Date (cell E50)
- What is your increase policy?
– Note: The formulas do not reference the direct work year
cell E47 or annual increase date cell E51.

4. Number of Months at Next Annual

Increase (cell E52) file
 Adjusted base salary
• Number of Months at Next Annual Increase
For example:

Start date of the contract = 6/1/99

Contractor increase date = 7/1/99
= 11 months at next annual increase.
(7/1/99 to 5/31/2000)
Insert 11 in cell E52. file
 Adjusted base salary Column E

• So the formula in the adjusted base salary

column, prorates the annual salary/rate
For example: $50,000 x 1/12 = $ 4,167
$50,000 x 1.03 x 11/12 = 47,208
$51,375

file
 Increases Prior to Start
Date!!!
• Modify the formula in the annual salary
column (D) file
For example………
• If the start date of the contract is 9/1/99 and the
increase date is 7/1/99, the formula would be
=round (($50,000 x 1.03),0).
• Then the number of months at next increase would be
3 and the increase date would be 7/1/2000.
 Direct Labor
• Make sure to manually change the number of
months columns if the periods are not 12
months. file

• The to- be-hired or to-be-named individuals

are not eligible for increases in the first year.

• Increases in subsequent years are effective the

first month. See formulas in column N.
 Direct Labor
• For individuals subject to the $125,900
ceiling:
– Override the formula in the adjusted salary
column by typing $125,900. AND
– Remove (1+E47) from the formulas in all
subsequent years. This is the cell reference for
annual escalation.
– The 1999 executive schedule is located:
http://www.opm.gov/oca/99tables/Execses/html/99excsc
h.htm file
 Fringe benefits
• Fringe benefit percents are entered
starting in column I for period 1 and
costs are calculated in column J. file

• Use your rate(s) from your negotiated

rate agreement.
 Fringe benefits
• If you do not have a negotiated fringe
benefit rate, you can use the fringe
benefit sheet to calculate a rate. File

• If you have questions regarding how to

calculate fringe benefit rates, please
visit our internet address:
http://www4.od.nih.gov/ocm/dfas/idcsubmission.htm
 Fringe Benefit Rates

• Generally internal accountants or

independent CPAs prepare indirect
rate proposals.
 Other Direct Costs
• Materials • Totals for these cost
• Travel elements are carried
• Equipment forward to the
Summary sheet.
• Consultants
• Other Direct Costs
• No escalation is built
• Patient Care Costs
into the formulas.
file
 Other Direct Costs
• Utilize source documents such as current paid
invoices, vendor quotes, or purchase orders to
support unit costs.

• Consult the appropriate technical personnel or

RFP for recommended number of units.
 Do a math check!

• On all cost elements.

• Check the formulas.
– Are they correct?
– Have they been overridden with a value?
– Are your worksheets linked?
• We are only human!!

1+1 = 3
 ADVANTAGES

• Eliminates a substantial amount of questions

to the contractor (ie. How did you come up
with that amount?)

• Saves time; that is, changes are

automatically recalculated and carried
forward to the summary page.
 ADVANTAGES
• Significantly reduces math errors.

• Easier to do a math check…just check

the formulas.

• Provides a detailed breakdown of cost

elements
Disadvantages, but not Obstacles
• The contractor overrides formulas and
inserts values. This destroys the ultimate
purpose of utilizing the electronic
spreadsheet; that is, the sheets are not
linked.
 SOLUTION
• Ask contractor to send you the version of
the file which contains formulas.
• Or
• Add formulas yourself.
• Or
• Cut and paste unit costs and # of units into a
blank file which has formulas.
 Disadvantages, but not
Obstacles

• Contractor protects sheets and

/or cells with a password!
 SOLUTION
• Call the contractor and ask for
the password.

• To unprotect in Excel: click on

tools, protections, unprotect, &
type in password.
Disadvantages, but not Obstacles
• Contractor uses
complex
formulas or uses
erroneous
formulas.
 SOLUTIONS
• Ask contractor to explain rationale behind
the formulas.

• OR

• Cut and paste unit costs into a blank

spreadsheet file and analyze differences.
Determine Financial Capability

• For Universities, Non-profits, and possibly For-

Profit entities...
– Review the A-133 audit reports for findings
regarding going concern
• For -Profits entities not subject to the A-133 Audit
requirements…
– Calculate ratios to determine liquidity
– Review financial statements
– Obtain line of credit information
– Review Dun & Bradstreet reports
 Accounting System Review
• Review the A-133 audit reports for findings
regarding possible system deficiencies

• If A-133 Audit report is not applicable…

– Contact cognizant audit agency for
comments regarding the adequacy of the
contractor’s accounting system
Questions?????