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News | March 14, 2018

Agency offers new class to help provide enhanced indirect cost control support

By Tonya Johnson DCMA Public Affairs

The Technical Directorate senior leaders envisioned a class for engineers and other technical specialists to share and enhance their knowledge of indirect cost control, and in late February, that objective became a reality.

The pilot class of ENGR233 called Technical Support to Indirect Costs was offered to Defense Contract Management Agency employees from Feb. 26 to March 2. Registration is now open for the next two classes.

“This course is needed to assist engineers and technical specialists so they can acquire the knowledge, understanding and skills to perform technical support to indirect costs, also known as TSIs,” said Tony Labath, who is an engineer in the Technical Directorate.

“Indirect costs are those costs that a defense contractor incurs in performing their contracts with the government which cannot be directly allocated or applied to a cost objective or contract. Indirect costs comprise 55 percent of the Department of Defense acquisition dollar.”

According to Labath, indirect cost expenses can include shop material and tools, executive salaries, accounting, information technology, marketing, training, supplies, equipment, facilities and utilities, resulting in overhead costs and rates, and general and administrative expenses. “A TSI is focused on all available or planned resources at a single location such as a factory used to accomplish all of the government and commercial contracts during a given timeframe,” he added.

It is important for employees to understand how to analyze and write their TSIs to make sure the government gets a fair contract rate by accurately forecasting costs and also making sure contract proposals are correct and accurate.

Labath said the new course will help employees provide better support to their DCMA teammates and ultimately their customers.

“This course will allow DCMA employees to be more effective in communicating results and recommendations to divisional administrative contracting officers and corporate administrative contracting officers to allow them to negotiate a forward pricing rate agreement or issue a forward pricing rate recommendation,” he stated.

“The use of a forward pricing rate agreement or forward pricing rate recommendation allows DCMA customers to effectively negotiate future contracts with defense contractors by locking into the agreed upon indirect rates and thus satisfy the tenets of DoD’s Better Buying Power initiatives and the DCMA Strategic Plan.”

The employees who participated in the initial class were invited to attend based on their expertise.

“For this class, we had 15 students who were specifically invited because most of them are also subject matter experts, well versed in TSIs, to provide feedback and to flesh out the material,” said Labath. “This will allow us to improve the material and the delivery of instruction in future classes. As for future classes, the next two classes will be held later this year and will hold 20 students each.”

Although Labath came up with the idea for the course, there were other DCMA employees involved with the planning and design of the course. They also taught during the class.

In addition to Labath, Christina Payette, also an engineer in the Technical Directorate, designed this course. Other subject matter experts who helped design and teach the course included Kip Shepard, Ken Pedeleose, Julie Nesbit, José Ortiz, Stuart Harrow and Angelica Rogers.

“We selected these SMEs by requesting that each region provide us with some names and we then reached out to their management for their assistance,” said Labath. “Their management was eager to provide their names.”

Harrow, an industrial specialist in the Industrial Analysis Group based at DCMA Philadelphia, said he was glad to be an instructor for the inaugural class.

“Employees will find the course useful,” said Harrow. “These are important skills taught for engineers and other technical experts to better analyze TSIs. They can take the skills learned in the class and later act as a mentor to others once they return to their jobs.”

Dan Pleis, an industrial engineer at DCMA Bell Helicopter Fort Worth based in Texas, said he enjoyed attending the class. Pleis, who has been with DCMA for 14 years, is currently assigned to the Independent Cost Analysis Team at Bell Helicopter.

“I wanted to increase my knowledge of forward price rate proposals, particularly the independent research and development,” he said. “The highlight of the class was learning the impact of FPRPs on the cost of acquisition and just how complex these proposals are. The class has greatly expanded my knowledge and importance of FPRPs. Since the class was taught by SMEs who developed the course, attending the class provided contacts I could lean on in the future for assistance.”

Brandon Bennett, a DCMA Aircraft Integrated Maintenance Operations engineer based in St. Augustine, Florida, said the course would also help him with FPRPs.

“This class helped me because I now have a better understanding of what is expected from our analysis of a FPRP in a TSI and some clues to pick up on when doing analysis,” said Bennett, who has been with the agency nine years. 

“I also now have more tools, including a forecasting accuracy chart, to aid in my analysis. This course was truly a great course to interact with my fellow DCMA counterparts who are experiencing the same or similar issues, situations and questions that I had when performing TSIs. It was very refreshing and enlightening.”

Employees can register now for the next two ENGR 233 classes through the agency's Talent Management System (login required). The deadline is March 19 for the April 9-12 class, and June 8 for the July 9-12 class.

Besides ENGR233, employees can also take another engineering course related to technical pricing support called ENGR230, Technical Support to Negotiations.

“These classes are unique in the DCMA world in that these courses are being taught by DCMA engineering personnel to other DCMA personnel to replace the institutional knowledge that is being gradually lost due to retirements, transfers and departures of engineers and technical specialists who have provided this type of support in the past,” said Labath.

Contact Public Affairs

Defense Contract Management Agency
Attn:  DCMA - DCC Office of Strategic Communication
3901 A Avenue Building 10500 Fort Lee, VA 23801 

Media Relations:  804-873-8011
Email: dcma.lee.hq.mbx.DCMA-Public-Affairs@mail.mil
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