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Proposals,  Negotiations, Audits: a review of the requirements, process, negotiations, audits and an analysis of the latest developments in the use of Forward Pricing Rate Agreements (FPRAs), Forward Pricing Rate Recommendations (FPRRs) and Formula Pricing Agreements (FPAs) in government contracting

An FPRA is a written agreement between the Government and a contractor.  The Government will enter into an agreement with a contractor who has a significant volume of pricing activities with the Government.  An FPRA can be an efficient way to establish rates as baselines for pricing all contracts, modifications, and other contractual actions that will be performed during the period covered by the agreement.  With an FPRA in place, the contractor and the Government save the time required to develop new estimates for bidding on new work during the agreement period. 

Both the Government and the contractor have the responsibility to determine if any conditions change that affect the validity of the agreement, rates, and estimates. 

Contractors should note that all FPRAs and/or FPAs (Formula Pricing Agreements) submissions must be prepared and supported with cost or pricing data that are accurate, current, and complete. 

In addition, FPRAs must include the specific terms and conditions covering the expiration, application, and data requirements for the systematic monitoring of rates to ensure their validity. 

In any price proposal, contractors must specifically describe the FPRAs, if any, to which the rates apply.  Contractors must also identify the latest cost or pricing data already submitted in accordance with the agreement. 

The purpose of this workshop is to: 
• Review the advantages and requirements to consider in FPRAs and FPAs
• Outline the basic process in the preparation, negotiation and audit of FPRAs and FPAs
• Analyze the latest developments and initiatives in the use of FPRAs, FPRRs, and FPAs
• Identify and explain the applicable FAR and DFARS rules, regulations and contract  terms and conditions
• Review the audit procedures applicable to FPRAs
• Explain the rights, responsibilities and remedies available to both the Government and the contractor in FPRAs and FPAs

Dates and Locations

This course will be scheduled soon. Please enter your information below to receive a notification when the class is scheduled.

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9:00 AM - 4:00 PM


Forward Pricing Rate Agreements (FPRAs)
Forward Pricing Rate Recommendations (FPRRs) and
Formula Pricing Agreements (FPAs)

1. Role of Rates in Government Contracts
a. Contract types
b. Pricing
c. Costing
d. Billing

2.  The Rules, Regulations, and Guidance
a. FAR (Federal Acquisition Regulation)
b. DFARS (Defense Federal Acquisition Regulation Supplement)
c. TINA (Truth In Negotiations Act)
d. CAS (Cost Accounting Standards)
e. DCAM (Defense Contract Audit Manual)
f. DoD

3. Business System Requirements
a. Coverage
b. Estimating systems

4. Accounting Systems/Contract Clauses

5. Responsibilities and Initiatives
a. Contractor
b. CO (Contracting Officer)
c. ACO (Administrative Contracting Officer)
d. PNM (Price Negotiation Memorandum)

6. Role of Cost Principles and CAS
a. Allowable Costs
b. Cost Allocation

7. Role and Requirements of The Truth in Negotiations Act, Requirements of Public Law 87-653, and Implementing Regulations
a. Applicabiilty
b. Certified Cost or Pricing Data
c. “Price Reduction” Clause
d. Exemptions and Exceptions
e. Government Audit Rights
f. Contractor Submission of Data
g. Defining Cost or Pricing Data
h. Data Submission Requirements
i. Certifications
j. Subcontractor Data

8. Development of Negotiation Objectives
a. Government
b. Contractor
c. Role of the ACO
d. Preparation of the PNM
e. Forwarding the PNM and FPRA to contract auditors

9. The Rate Process
a. Organization Responsibilities, Reviews and Sign-offs
b. Budgets
c. Data Sources
d. Basis of Estimate

10. Updates:  Preparing Estimates
a. Manufacturing vs. Service Contracts
b. Direct Material Costs
c. Direct Labor Costs
d. Indirect Costs

11. Costs:  Implications of Cost Changes on Agreement Rates
a. Labor
b. Indirect Costs
c. Material Obsolescence and usage
d. Spare Parts Provisioning
e. Material Handling

12. Costs:  Business Changes Potentially Affecting FPRAs
a. Changes in Business Volume
b. Changes in Market Conditions Affecting Material or Labor Costs
c. Savings Accruing from Cost Reduction Programs
d. Changes in Manufacturing Processes
e. Changes in the Treatment of Direct and Indirect Costs

13. Rate Audits
a. Proposals-FPRA
b. Incurred Costs
c. Materiality of Bases, Pools, and Rates
d. Adequacy of Internal Controls
e. Results of Prior Audits
f. Differences Between Forecasted and Actual Rates
g. Changes in the Contractor Organization
h. Mix of Government and Commercial Business
i. Types of Contracts
j. Board of Directors’ Minutes
k. Estimating Practices
l. Disclosed CAS Practices
m. Projected Business Volume
n. Rate Data
o. Rate Computations

14. To FPRA or Not
a. Life With an FPRA
b. Life Without an FPRA
c. Future Cost Uncertainty
d. Open CAS issues
e. Open FAR Cost Allowability Issues
f. Contingencies

Summary and Questions/Discussion

Jean Labadini
Jean Labadini has 40 years of experience in Government contracting, 35 of which were spent with the Defense Contract Management Agency (DCMA) – retiring as the Director of the CPSR Group.  
Professional Experience: Jean has spent her post retirement years supporting defense contractors in need of her expertise in purchasing systems pre and post CPSR, and as an instructor for the Federal Publications CPSR Course.   In her role as Director of the CPSR Group with the DCMA, Jean led the group of Procurement Analysts in performing their mission to review contractor purchasing systems. Jean personally participated in reviews; developed and provided training to each of the CPSR Hub sites; drafted a Guide to Planning and Conducting CPSRs, and DCMA Work Instructions associated with Advance Notification and Consent. Jean has also served as an Administrative Contracting Officer (ACO), a Divisional Administrative Contracting Officer (DACO), and a Systems Administrative Contracting Officer (SACO).
Jean maintains expert level knowledge in acquisition regulations (FAR, DFARS) and is knowledgeable in Cost Accounting Standards (CAS). She has extensive experience in contract negotiations and in conducting business system adequacy determinations. Jean is well versed in DCMA tools (MOCAS, SDW, CAFU) and has performed cradle to grave contract management - from contract receipt/review to contract closeout. Jean has administered contract financing provisions associated with progress payments and public vouchers.
John Van Meter
John Van Meter has over 30 years of experience in government contracting.  John brings a unique perspective of industry and consulting experience to contract compliance, internal control and business process development engagements. John’s experience includes cost accounting, pricing, internal auditing and subcontract management.  John also is an accomplished speaker and trainer within the government contracting industry.

Professional Experience: John spent much of his career with KPMG, where he was responsible for managing the firm's Government Contractor Advisory Services practice delivering professional services to premier clients worldwide. He led advisory projects providing federal contract compliance, regulatory compliance including Sarbanes-Oxley 404 internal control assistance, business system implementation and internal audit outsource services. Before that, John had cost accounting, pricing, internal auditing and subcontract management positions with Northrop Aircraft and the Garrett Engine Company.
John is a frequent speaker for industry and professional associations (e.g., Association of Government Accountants, Government Contractor Training Institute Inc., Federal Publications Seminars and National Contract Management Association). He has developed and is currently a presenter of the Federal Publications Seminars Contractor Purchasing System Reviews (CPSR) and Internal Control Practices for Federal Contractors courses. 

John is also a primary trainer for the Government Contractor Training Institute (GCTII) in La Jolla, CA and has developed and delivers courses on DoD Business Systems Compliance, Fundamentals of Government Contracts, Cost Accounting Standards and others.  In addition, he has served as an author for numerous publications.
William Keating

William J. Keating has over 35 years of consulting experience, and is a government contracts expert with a strong background in accounting, business systems and compliance advisory for aerospace and defense clients, and other government contractors.

Bill’s areas of expertise include Federal Acquisition Regulation (FAR), Federal Agency FAR Supplements, Office of Management and Budget (OMB) Super Circular, Cost Accounting Standards (CAS), and Federal Supply Schedules. He has advised organizations on government audits, business systems compliance, claims preparation, contract disputes and investigations. 

Professional Experience:
Bill serves various business sectors, including aerospace and defense, information technology, construction and engineering services, nonprofit organizations, and other industrial and service industries.  Bill provides support for U.S. government contract and grant issues, as well as accounting and auditing matters. Bill has experience with international clientele in Europe and Asia. He has led several, large-scale compliance and operational process improvement projects focused on the special requirements of government contracting, such as: contract cost accounting and reporting, billing, procurement, pricing and estimating.

Earlier in his career, Bill was the Managing Partner of the Government Contractor Advisory Services practice at KPMG. He also served as a senior executive of Government Contracts practices at other international accounting firms including PricewaterhouseCoopers (PwC). He has worked in industry at a major defense systems integrator. Bill began his career in the Federal government in the Defense Contract Audit Agency and the Inspector General's Office of the General Services Administration.

Certificates of Completion are provided to all seminar participants who attend Federal Publications Seminars courses following the event, upon request.
All Federal Publications Seminars courses meet the course requirements of the National Contract Management Association’s certification programs. We are a proud Education Partner of the NCMA.
Federal Publications Seminars is part of West Professional Development, which is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website:
This Program is eligible for: 13.0 (CPE) hours of credit
Program Level: Basics
Program Prerequisite: None
Advance Preparation: None
Method: Group-Live
Defense Acquisition Workforce members must acquire 80 Continuous Learning Points (CLP) every two years from the date of entry into the acquisition workforce for as long as the member remains in an acquisition position per DoD Instruction 5000.66. We will provide you with documentation of points awarded for completing the event.
This Program is eligible for: 11.0 (CLP) hours of credit
States have widely varying regulations regarding MCLE credit. LegalEdcenter is an approved provider in AL, AK, AR, CA, GA, IL, ME, MO, MS, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, PA, RI, SC, TN, TX, UT, VA, VI, VT, WA, WI, and WV. Credit may be applied for in other jurisdictions on request and in accordance with state MCLE rules.
** Please note that because some states are changing their policy on CLE reporting, you will need to fill out the request for credit from Federal Publications Seminars within 10 business days, or we may not be able to issue credits for the program.
This Program is eligible for: 11.0 (60 minutes), 13.0 (50 minutes)
Basic or fundamental subject matter is covered. Courses are geared to general knowledge or can be taken as a refresher.
Specific topics or issues within a topic area are covered. Students should be familiar with terms of art and general concepts concerning the course topic.
Workshops and class discussions cover specific subject matter in-depth, and participation is strongly encouraged. Attendees should have at least 2-3 years' experience in the area of study.
Courses build upon students' knowledge and experience, and cover complex issues within the subject matter. Should have 4-5 years' mastery of subject for in-depth analysis.
Masters-level programs designed for professionals with 5+ years' experience. Courses cover in-depth and technical analysis on specific subjects and updates on current issues.
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Forward Pricing Rate Agreement
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