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

• Document Type: CREST
• Collection: General CIA Records
• 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
• Publication Date: November 8, 1965
• Content Type: MEMO

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
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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
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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
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WILLIAM F . EDW~-BARDS
Auditor General Representative (APL
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