Ot Cost Analysis

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

| Input | Description | Example | |-------|-------------|---------| | Milestone table | Milestone IDs, descriptions, durations, deliverables, TRL | From OT Project Description Builder or user | | Performer proposed price | Total and/or per-milestone | $2.4M total, or $300K/M1, $500K/M2, etc. | | Performer type | NDC, traditional, small business, consortium | NDC startup | | Performance location | City/state or metro area | San Diego, CA | | Period of performance | Total and per-milestone/phase | 24 months total |

Optional Inputs (Defaults Applied If Not Provided)

| Input | Default | Notes | |-------|---------|-------| | Cost-sharing ratio | 1/3 performer for traditional; 0% for NDC/SB | Per 10 USC 4022(d) path | | Cost-sharing type | Cash | Cash or in-kind | | Burden multiplier | 2.0x | For labor benchmarking; market context, not binding | | Escalation rate | 2.5%/yr | Applied across milestone periods | | Consortium management fee | 5% | Only if consortium-brokered | | Travel destinations | None | City/state per destination | | Travel frequency | None | Trips/year per destination | | Travel duration | None | Nights per trip | | Materials/hardware BOM | None | Categories and estimated costs per milestone | | Labor categories | Derived from milestone scope | SOC codes for benchmarking | | Staffing per milestone | Derived from scope and duration | FTEs or level of effort | | FY for per diem | Current federal FY | Oct-Sep cycle | | Milestone payment type | Fixed-price | Fixed-price, cost-type, or mixed | | Analogous OT pricing | None | Prior OT awards for similar prototypes |

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:

| Performer Type | Cost-Share Required? | Typical Arrangement | |---------------|---------------------|---------------------| | NDC (significant participation) | No | Government funds 100% | | Small business (significant participation) | No | Government funds 100% | | Traditional + NDC team | No (NDC participation satisfies) | Government funds 100% | | Traditional, sole (no NDC/SB) | Yes, per 4022(d)(1)(C) | 1/3 performer typical | | Traditional (competition commitment) | No, per 4022(d)(1)(D) | Government funds 100% but must compete follow-on |

"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

| Constant | Value | Source | |----------|-------|--------| | Standard work year | 2,080 hours | 40 hrs x 52 weeks; converts annual wages to hourly | | Default productive hours | 1,880 hours/year | 2,080 minus holidays and avg leave | | Default burden multiplier | 2.0x | Mid-range; for benchmarking only | | Low scenario burden | 1.8x | Lower bound | | High scenario burden | 2.2x | Upper bound | | Default escalation rate | 2.5% annually | Standard federal assumption | | BLS wage cap (annual) | $239,200 | May 2024 OEWS reporting ceiling | | BLS wage cap (hourly) | $115.00 | May 2024 OEWS reporting ceiling | | OEWS data year | 2024 | May 2024 estimates | | GSA mileage rate | $0.70/mile | CY2025 GSA POV rate | | First/last day M&IE | 75% of full day | FTR 301-11.101 | | Default cost share (traditional) | 33% performer | Common OT practice per 4022(d)(1)(C) | | Default consortium fee | 5% | Typical consortium management fee |

Orchestration Sequence

Step 0: Milestone Decomposition (Workflow A+ Only)

Converts an unstructured prototype concept into a milestone table suitable for cost analysis.

Process:

1. Sufficiency check. Scan for: prototype objective, technology area, TRL indicators, schedule, deliverables, performer information. Flag anything missing. Hard stop if prototype objective is absent.

1. Performer location gate. Labor benchmarking is entirely location-driven. If the user has not stated a performer location (MSA, city/state, or "national"), ASK before proceeding. If the user says "unknown performer" or "location TBD," either pick one defensible default based on the scope (e.g., Huntsville for Army ground systems, Arlington for DC-area software, Dayton for AFRL-adjacent) AND FLAG THE CHOICE, or default to "national" scope and note that metro adjustment may change rates 15-30%. Do not silently infer.

1. TRL mapping (inline reference; do not depend on other skills being loaded):

| TRL | Description | Typical phase | |-----|-------------|---------------| | 1-2 | Basic principles / concept formulated | Research OT (4021) | | 3 | Analytical and experimental proof of concept | Early prototype | | 4 | Component validation in lab | Prototype: design/build | | 5 | Component validation in relevant environment | Prototype: build/test | | 6 | System demo in relevant environment | Prototype: test/demo | | 7 | System prototype demo in operational environment | Late prototype / pre-production | | 8-9 | System complete and qualified / proven in operational use | Production (4022(f)) |

1. Milestone derivation (inline heuristic):

• TRL 2 → 3: theoretical refinement, initial experimentation
• TRL 3 → 4: PDR, detailed design, benchtop validation
• TRL 4 → 5: prototype build, component test, subsystem integration
• TRL 5 → 6: system integration, relevant-environment demo
• TRL 6 → 7: operational-environment demo, production readiness review
• TRL 7 → 9: production (LRIP lots, first-article qual, full-rate production)

1. Present milestone table for user validation:

Milestone | Phase | Description                  | Est. Duration | TRL In/Out | Payment Type
M1        | 1     | Preliminary Design Review    | 3 months      | 3/4        | Fixed
M2        | 2     | Prototype Build Complete     | 4 months      | 4/5        | Fixed
M3        | 3     | System Demonstration         | 3 months      | 5/6        | Fixed

1. User validation gate. Confirm before proceeding to Step 1.

Step 1: Validate Milestone Structure

Before costing, verify the milestone table is internally consistent:

• TRL progression has no gaps (each milestone's exit TRL equals the next milestone's entry TRL or is within the same phase)
• Total duration of milestones sums to within 10% of stated total PoP (if not, apply the Step 6 duration-vs-PoP reconciliation rule)
• Each milestone has at least one deliverable
• Each milestone has a payment type (fixed or cost-type) tagged in the Payment Type column
• No single milestone exceeds 40% of total estimated value. If any does, recommend splitting into two milestones (one pre-gate, one post-gate). If the user declines the split, flag as intentional front-loading in methodology and require a written basis in the agreement file.

Flag any issues for user resolution before proceeding.

Step 2: Labor Benchmarking

Use the BLS OEWS API skill. OT labor benchmarking serves a different purpose than FAR IGCE labor pricing. In a FAR IGCE, BLS wages are the basis for the government's cost estimate. In an OT cost analysis, BLS wages provide market context for evaluating whether the performer's proposed staffing costs are reasonable. The government is not setting rates; it is checking whether proposed rates are within market range.

Step 2a: Map labor categories to SOC codes. Use the expanded mapping table below. If the milestone table includes labor categories, map those. If not, infer from milestone scope.

Common role to SOC mapping (inline reference; do not assume the IGCE Builder skills are loaded):

| Role family | SOC | Notes | |-------------|-----|-------| | Systems engineer | 17-2199 | Engineers, all other | | Software developer | 15-1252 | | | Software QA / test | 15-1253 | | | Mechanical engineer | 17-2141 | | | Electrical engineer | 17-2071 | | | Aerospace engineer | 17-2011 | | | Materials engineer | 17-2131 | | | Industrial engineer | 17-2112 | | | Electronics engineer | 17-2072 | | | Program manager | 13-1082 | | | Principal investigator (industrial) | 15-1221 or 15-2051 | Research scientist; use 15-2051 for data/ML-centric PI | | Autonomy / ML / RL engineer | 15-2051 | Data Scientist is the closest SOC proxy; document in methodology | | Robotics / mechatronics engineer | 17-2199 | Engineers, all other; no dedicated SOC | | Acoustics / sonar engineer | 17-2199 | Engineers, all other | | Cybersecurity engineer | 15-1212 | Information Security Analyst | | Manufacturing engineer (production OTs) | 17-2112 | Industrial Engineer | | Quality engineer (production OTs) | 17-2112 | Industrial Engineer (QA specialty) | | Production technician | 17-3029 | Engineering technicians, other | | Test engineer | 17-2199 or 17-3029 | Engineer vs technician level | | Logistics manager (production OTs) | 13-1081 | | | Academic / FFRDC / UARC performers: | | Use the academic branch below | | Senior research scientist (PI) | 19-1021 or 25-1032 | Biological/physical scientist, or postsecondary engineering teacher for university-affiliated PIs | | Postdoctoral researcher | 19-1099 | Life, physical, and social scientists, all other | | Graduate research assistant | Not a BLS SOC | University institutional rate applies (tuition remission + stipend); typically $55-75/hr loaded; do NOT derive from BLS 25-9044 teaching assistant wages, which understate actual billing rate | | Lab technician | 17-3023 | Electrical and electronics engineering technicians |

For AI/autonomy/robotics roles not in BLS, document the proxy choice in methodology and note that defense-specialty premiums may push actual rates 20-30% above BLS medians (consider P75 as practical floor).

Milestone-type to labor inference (use when user provides only milestone descriptions):

| Milestone type | Typical labor | |----------------|---------------| | Design phase | Systems engineer, software architect, mechanical engineer | | Build / fabrication | Software developer, hardware engineer, technician | | Component or lab test | Test engineer, QA analyst, data analyst | | Integration | Systems integrator, middleware engineer, DevOps | | Demonstration | Test engineer, systems engineer + travel team | | Project oversight | Program manager, principal investigator | | Production LRIP (4022(f)) | Manufacturing engineer, quality engineer, production technician, test engineer, logistics manager | | Research (4021) | PI, postdoc, grad RA, lab technician |

Step 2b: Pull BLS wages. For each labor category, query BLS OEWS at the performance location. Use metro-level prefix (OEUM) when available. If the MSA returns no data (small me

…

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: 1102tools
• Source: 1102tools/federal-contracting-skills
• License: MIT
• Homepage: https://1102tools.com

Install and usage instructions live in the source repository linked above.