EVALUATION REVIEW OF ECP-I UNDER CONTRACT AF33(657)-12846 AIRBORNE INSTRUMENTS LABORATORY DEER PARK, NEW YORK

Document Type: 
Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP72B00464R000400090026-5
Release Decision: 
RIFPUB
Original Classification: 
K
Document Page Count: 
5
Document Creation Date: 
December 22, 2016
Document Release Date: 
December 13, 2010
Sequence Number: 
26
Case Number: 
Publication Date: 
November 8, 1965
Content Type: 
MEMO
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PDF icon CIA-RDP72B00464R000400090026-5.pdf192.95 KB
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Approved For Release 2011/01/28: CIA-RDP72B00464R000400090026-5 DEPARTMENT OF THE AIR FORCE HEADQUARTERS UNITED STATES AIR FORCE WASHINGTON 25, D.C. REPLY TO ATTN OF: osA-429~w-65 #1715 REPLY T0: Audit Liaison Office P, 0. Box 8155 S. W. Station Washington, D. C. 8 November 1865 SUBJECT: Evaluation Review of ECP-1 under Contract AF 33(657)-12846 (r-/~ - 7.3zZ~ Airborne Instruments Laboratory _ Deer Park, New York TO Contracting Officer REF AIL Proposal ECP #1940-1, dated 22 October 1965 1. A review has been made, to the extent deemed necessary, of the contractor's cost proposal for an EMR Test Module. This review consisted of an examination of the underlying data in support of the propased labor rates, overhead rates, material pricing, travel and other direct costs, The direct labor hours, material requirements, the necessity for the proposed travel and overtime hours, are referred for evaluation by technical personnel. 2. A summary of the contractor's proposal by element of cost and the auditor's recommendations are as follows: Per Contractor's Proposal Direct Labor - Engineering ~ 7,124 Direct Labor - Manufacturing 6,767 Engineering Burden 104?0 7,409 Manufacturing Burden 74~fo 5,008 Raw and Purchased Material 4,000 Travel and subsistance 832 Overtime Premium 513 Packaging and shipping 275 Subtotal 31,92 G & A 7.5?0 2 395 Total Cost 3 ,323 Fee requested 8?~0 2 ~6 Total Proposal 37 0 9 Auditor's Recommended Ref Reduction Notes 705 84 b 7$9 Approved For Release 2011/01/28: CIA-RDP72B00464R000400090026-5 Approved For Release 2011/01/28: CIA-RDP72B00464R000400090026-5 Ref. Notes: a. Direct Labor: The hourly labor rates used to extend the estimated labor hours are considered acceptable for the purposes of this report only. A comparison was made of the proposed composite rates used in each labor class, with the actual incurred to date rates on the 1g41~1g42 program, since performance of the subject effort will be performed by the same department. This comparison ascertained the reasonableness of the proposed hourly rates. Attached as Exhibit A, is the contractor's break- down of the direct labor hours by class of labor and effort, which is offered as a guide for evaluating the estimated labor hours. b. Burdens and G & A The auditor questions the contractor's proposed burden and G & A rates, Since effort under the subject ESP will be performed during the calendar year 1865, it is the opinion that the bid rates should fairly reflect the contractor's experience. A review of the contractor's book rates for the nine months ended 30 September 1865 indicated that the proposed burden and G & A rates may be excessive. Therefore, the auditor suggests the following recommendations for a reduction in rates and costs to reflect anticipated year-end rates. Engineering Manufacturing Burden Burden G&A Rates Per Contractor's Proposal 1040 74/ 7.50 Rates Per Auditor 1020 71/ 7 . ~+?~ Per cent of Rates Questioned 20 30 .l Burden Base Per Proposal 7 124 6 767 R 31 g28 ate Questioned 2 0 3 0 1a Cost Questioned Based on 143 203 32 Rate Reduction Burden Base Costs Questioned G & A Questioned @ 7, 4?~0 Total G & A Questioned 32 + $52) 705 52 84 Approved For Release 2011/01/28: CIA-RDP72B00464R000400090026-5 Approved For Release 2011/01/28: CIA-RDP72B00464R000400090026-5 c. Raw and Purchased Materials 1j The contractor's proposed purchased parts were verified to a'~ender quotes and prior buys of like items. The excentions and additions of the bill of materials were verified. No exceptions were noted, but the applicability of the proposed purchased parts to the procured equipment and the frequency of use should be evaluated by technical personnel. The cost questioned of $359 represents the auditor's exception to a 10?~o shrinkage factor applied to the total estimated costs of the raw and purchased materials. The contractor has no historical data to support this percentage. d. Travel and Subsistance The contractor proposed two three-day trips to the West Coast @ $416 or $832. The costs represent .round-trip tourist air fare of $305, subsistance at $35 per day and $6 for travel to the airport. The auditor considers the costs acceptable, but recommends for further consideration of technical representative the necessity for the two trips. The contractor's estimate for overtime premium is based on application of a 10~f factor applied to the total estimated hours for labor classes VI, VII, VIII, and IX, and priced at one half of the hourly rate for these classes. The necessity of the overtime hours are referred to for further consideration of a technical representative. -The following represents the contractor's computation of overtime premium costs; Labor Class Hourly Rate Total Estimated Hours, Per Proposal 0. T. Premium Hours lo?fo of Estimated Hours 0. T. Premium Rate z of Hourly Rate Total Overtime Premium Per Pro osal p VI $3.70 $ 550 55 $1.85 $102 VII 3.27 1520 150 1.63 245 VIII 2.80 1060 110 1.40 154 IX 2.33 80 10 1.17 12 f. Packaging and Shipping No exceptions noted. g. Fee The contractor has requested a fee based on 8?fo of the Approved For Release 2011/01/28: CIA-RDP72B00464R000400090026-5 Approved For Release 2011/01/28 :CIA-RDP72B00464R000400090026-5 WILLIAM F . EDW~-BARDS Auditor General Representative (APL Approved For Release 2011/01/28 :CIA-RDP72B00464R000400090026-5 Approved For Release 2011/01/28 :CIA-RDP72B00464R000400090026-5 ~. ,. .v4w+~+Mwt~ .. r r.y,,,.,,y.v , ~..w~-,....~i. M rnco.air--~~w. SC.II ~ DULE , 01'' D:f:1tLC;~1' '~I30R I"IOURS 8 ~tx~,ctwx~e ~~r,~. 100 .. X04 , . ~ szi~t.. ~;4 - ~ _ ~ .. ~,~ 8a. , ~'lov~net~-r~ ~,pp , ~~3~t~cLt.~"b7~$.t~~ N'av ~m~tlatici~i . ' .100 8? laO tln 3~tg.. . stag X04 ~~ ~o 160 40 ~~~.tus ~ ~riv~r ~ t3utputi X10 4a ~ 20 . 60 ~ 100 ws.ra~ ~ r~abx~ 8o z.OO ~~ ~~, A~~c~;. ~~ , m,,~ ,E``~, lei Sri ~~0 ~~ 80 Tota'1 Haurs } 650 X60 4b0 1294 920 Admt~a- ~-.'~jrp~ rep~rt~ e~c~ Px^~c~td. ~' ~ ~ .: ,~ ~~t~. ~. den l~'2 mk. ' CFO hx'a., ~0 hxr,~. Approved For Release 2011/01/28 :CIA-RDP72B00464R000400090026-5 lOt~