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Defective Pricing Actions

1.What action must you take before you can require an offeror to submit cost or pricing data to support an offer priced at $95,000?

2. Calculate the amount of the final price adjustment because of defective pricing. Labor was overpriced by $15,000. Material was under-priced by $10,000. No items have been delivered. How much should the price adjustment be?

Contract As Awarded:

Material $ 80,000
Material OH 5% $ 4,000

Labor $ 40,000
Labor OH 100% $ 40,000

Total Cost Input $164,000
G & A 10% $ 16,400
Total Cost $180,400

Profit 10% $ 18,040
Total Price $198,440

6. Calculate the amount of the final price adjustment because of defective pricing based on the following:
Contractor unintentionally overpriced their material costs by $75,000 and under-priced their direct manufacturing labor costs by $50,000. Overhead rates used to price the original contract are given below:
Material OH 15%
Engineering OH 75%
Manufacturing OH 124%
Lawn Maintenance OH 1.5%
G &

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ANSWERS

Question 1

You need to determine the eligibility of the bidder. That is if it has the financial and ...

Solution Summary

Defective pricing actions are examined.

$2.19