OT Cost Analysis

Overview

This skill produces should-cost estimates and price reasonableness analyses for OT agreements. Unlike FAR-based IGCEs that structure costs around contract type pricing mechanisms (wrap rates, burden multipliers, cost pools), OT cost analysis structures the estimate around milestones and cost-sharing arrangements. The performer proposes a price per milestone; the government's job is to determine whether that price is reasonable and how much of it the government pays vs. the performer.

Why this is one skill, not three: The existing IGCE builders (FFP, LH/T&M, CR) are split because each has a structurally different calculation engine -- FFP uses layered wrap rates, LH/T&M uses a single burden multiplier, CR uses cost pools plus three fee subtypes. OTs don't have that divergence. The pricing mechanism is consistently milestone-based: estimate should-cost per milestone, apply cost-sharing ratio, compare to proposed price. Fixed-price milestones vs. cost-type milestones change one column, not the engine. Cost-sharing is a ratio, not a multi-subtype fork.

Required L1 skills (must be installed):

1. BLS OEWS API -- market wage data for labor benchmarking
2. GSA CALC+ Ceiling Rates API -- market rate validation
3. GSA Per Diem Rates API -- federal travel rates

Required API keys (must be in user memory):

• BLS API key (v2) for BLS OEWS
• api.data.gov key for GSA Per Diem
• CALC+ requires no key

If a key is missing, prompt the user to register: BLS at https://data.bls.gov/registrationEngine/, api.data.gov at https://api.data.gov/signup/

Statutory basis: 10 USC 4021 (prototype project authority), 10 USC 4022 (OT authority, cost-sharing requirements, follow-on production). NOT FAR 15.404 -- OTs are outside the FAR. Price reasonableness for OTs is based on the agreements officer's judgment informed by market data, analogous pricing, and parametric analysis, not certified cost or pricing data.

Workflow Selection

Workflow A: Full OT Cost Analysis (Default)

User has a milestone table (from OT Project Description Builder or user-provided) and needs a complete should-cost estimate with cost-sharing and price reasonableness analysis. Execute Steps 1 through 9. Triggers: "build the OT cost analysis," "price this OT," "estimate costs for this prototype," "milestone cost estimate."

Pre-solicitation mode (Workflow A default when no performer price exists). When the user has no proposed price yet, this is pre-solicitation should-cost, the most common first-pass use case. Run Workflow A but skip the variance/reasonableness comparison steps. The workbook becomes a government internal budget estimate. Set the Proposed Price column to blank (not "TBD" text; use an empty cell with conditional variance formulas =IF(H[row]="","",H[row]-E[row]) so variance auto-populates when a price is later entered). State in methodology: "This is a pre-solicitation should-cost estimate; no performer price has been proposed. Variance formulas will activate when the Proposed Price column is populated." The Sheet 6 price reasonableness section becomes a "price reasonableness framework" rather than a determination.

Workflow A+: From Concept (No Milestone Table)

User has a prototype concept but no structured milestone table. Execute Step 0 (milestone decomposition) first, validate, then Steps 1-9. Triggers: "estimate costs for this prototype concept," "how much should this OT cost," or when the user provides a block of prototype description text rather than a milestone table.

Workflow B: Price Reasonableness Check

User has a performer's proposed price and wants to assess reasonableness against a should-cost estimate. Triggers: "is this OT price reasonable," "validate this proposed price," "check this prototype proposal," "price reasonableness for OT."

Workflow B steps:

1. Collect the performer's proposed price (total and/or per-milestone).
2. Run Steps 1-7 to build the government's independent should-cost estimate.
3. Compare proposed vs. should-cost per milestone and in total.
4. Position each milestone: below should-cost (aggressive), within 10% (competitive), 10-25% above (premium), above 25% (requires justification).
5. Produce the full workbook with emphasis on the price reasonableness memo (Sheet 6).

Information to Collect

Ask for everything in a single pass. Provide defaults where noted.

Required Inputs

Optional Inputs (Defaults Applied If Not Provided)

Cost-Sharing Guidance

Authority gate (check first). 10 USC 4022(d) cost-sharing paths apply ONLY to prototype OTs issued under 10 USC 4022. They do NOT apply to:

• 10 USC 4021 research OTs. No statutory cost-share trigger. Government funds 100% of allowable cost. State in methodology: "This agreement is issued under 10 USC 4021 research authority; 10 USC 4022(d) cost-sharing paths are statutorily inapplicable."
• 10 USC 4022(f) production follow-on OTs. The follow-on inherits the path determination from the predecessor prototype agreement (e.g., if the prototype used path (D) competition commitment, the follow-on satisfies that path without re-triggering cost-share). Government funds 100% of production.

For prototype OTs under 10 USC 4022, cost-sharing requirements depend on the 10 USC 4022(d) eligibility path:

"Significant participation" is not defined by statute. It is an agreements officer determination. Common thresholds: 33%+ of work, meaningful technical contribution (not just pass-through subcontracting).

If the user doesn't know the cost-sharing arrangement, ask the performer type and derive the requirement from the table above. Default to 1/3 performer cost share for traditional contractors without NDC/SB participation.

Constants Reference