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Local Assistance Procedures Manual EXHIBIT 10-H Sample Cost Proposal Consultant EXHIBIT 10-H SAMPLE COST PROPOSAL (EXAMPLE #1) Page 2 of 2 ACTUAL COST-PI.Us-FIXER FEE OR LUMP SUM (FIRM Finn PRICE) CONTRACTS (SAMPLE CALCULATIONS FOR ANTICIPATED SALARY INCREASES) Contract Date 1. Calculate Average Hourly Rate for 1st year of the contract (Direct Labor Subtotal divided by total hours) Direct Labor Total Hours per Avg 5 Year Subtotal per Cost Cost Proposal Hourly Contract Proposal Rate Duration $250,000.00 5000 = $50.00 Year 1 Avg Hourly Rate 2. Calculate hourly rate for all years (Increase the Average Hourly Rate for a year by proposed escalation %) 4. Calculate Total Costs including Escalation (Multiply Average Hourly Rate by the number of hours) Avg Hourly Rate Year Proposed Escalation Year 1 $50.00 * 1000 Year 1 $50.00 + 2% _ $51.00 Year 2 Avg Hourly Rate Year 2 $51.00 + 2% _ $52.02 Year 3 Avg Hourly Rate Year 3 $52.02 + 2% _ $53.06 Year 4 Avg Hourly Rate Year 4 $53.06 + 2% _ $54.12 Year 5 Avg Hourly Rate 3. Calculate estimated hours per year (Multiply estimate % each year by total. hours) Estimated % Completed Total Hours per Cost Total Hours per Each Year Proposal Year Year 1 20.0% * 5000 = 1000 Estimated Hours Year 1 Year 2 40.0% * 5000 — 2000 Estimated Hours Year 2 Year 3 15.0% * 5000 = 750 Estimated Hours Year 3 Year 4 15.0% * 5000 = 750 Estimated Hours Year 4 Year 5 10.0% * 5000 = 500 Estimated Hours Year 5 Total 100% Total = 5000 4. Calculate Total Costs including Escalation (Multiply Average Hourly Rate by the number of hours) Cost per Avg Hourly Rate Estimated hours Year (calculated above) (calculated above) Year 1 $50.00 * 1000 Year $51.00 * 2000 Year $52.02 * 750 Year $53.06 * 750 Year 5 $54.12 * 500 — $257,871.10 Total Direct Labor Cost with Escalation _ $250,000.00 Direct Labor Subtotal before Escalation = Estimated total of Direct Labor Salary $7,871.10 Increase Cost per Year _ $50,000.00 Estimated Hours Year 1 _ $102,000.00 Estimated Hours Year 2 _ $39,015.00 Estimated Hours Year 3 _ $39,795.30 Estimated Hours Year 4 _ $27,060.80 Estimated Hours Year 5 — $257,871.10 _ $250,000.00 = Transfer to Page 1 $7,871.10 NOTES; • This is not the only way to estimate salary increases. Other methods will be accepted if they clearly indicate the % increase, the # of years of the contract, and a breakdown of the labor to be performed each year. • An estimation that is based on direct labor multiplied by salary increase % multiplied by the # of years is not acceptable. (i.e. $250,000 x 2% x 5 yrs = $25,000 is not an acceptable methodology) • This assumes that one year will be worked at the rate on the cost proposal before salary increases are granted. Page 2 of 5 LPP 15-01 January 14, 2015