Business

How to Build a Solid Basis of Estimate (BOE) for Your Next Government Proposal

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Ugh, So I Need to Create a BOE!

If you’re a veteran-owned business competing for federal contracts, you’ve likely heard the term Basis of Estimate (BOE). Whether it’s your first bid or your hundredth, building a compliant and convincing BOE can be the difference between a winning proposal and a missed opportunity. This guide will walk you through how to create a BOE that’s FAR-compliant, persuasive, and grounded in reality—just like the missions we completed while in uniform.

What Is a BOE and Why Does It Matter?

A Basis of Estimate is more than just a cost spreadsheet—it’s the narrative backbone of your pricing strategy. It explains the why and how behind your cost estimates. A well-written BOE builds trust with contracting officers and evaluators by showing that your price is realistic, reasonable, and based on sound assumptions.

Under FAR Part 15, especially in competitive negotiated procurements, agencies are required to evaluate cost realism. That means your BOE isn’t just paperwork—it’s a strategic tool to prove you know the mission and can execute it responsibly.

Step 1: Understand the Purpose

Before diving into numbers, get clear on why you’re writing the BOE. Its main objective is to justify your proposed costs by linking them to specific tasks, timelines, and personnel. Think of it as your operational plan in financial form.

Ask yourself:

  • What are the key tasks in the Performance Work Statement (PWS)?
  • What resources will it take to execute each one?
  • How long will each task take?
  • Who will do the work?

Every dollar should be traceable to a requirement.

Step 2: Develop a Draft Executive Summary

Start with a high-level snapshot. Use this section to reinforce your value proposition—what makes your firm the right choice. Highlight relevant past performance, your team’s qualifications, and any differentiators such as SDVOSB or 8(a) certifications, technical expertise, or innovative solutions.

Sample:

A2 Federal, Inc. presents a low-risk, technically sound, and cost-effective solution for [Contract Name]. Our approach is rooted in proven methodologies, veteran-led leadership, and a commitment to mission success. Our pricing is grounded in real-world labor rates, historical data, and rigorous task analysis in accordance with FAR guidelines.

Step 3: Identify Key Elements

Break down each task and clearly document:

  • What the task is
  • Why it’s required
  • Who will perform the work (by labor category)
  • Start and stop dates
  • Location and dependencies

Use this to create a Work Breakdown Structure (WBS) and assign estimated hours to each element. This becomes the foundation for pricing labor, materials, and other direct costs.

Example:

TaskLabor CategoryStart DateEnd DateHours
Deploy Cybersecurity ToolkitInfo Sec Analyst10/01/202512/15/2025320

Step 4: Justify Your Estimates

Evaluators want to see how you arrived at your numbers. Don’t just plug in labor rates—show your math. Justify each estimate using:

  • Historical data from similar contracts
  • Industry benchmarks (e.g., GSA rates)
  • Quotes for material costs
  • Internal labor rate build-ups (base wage + fringe + OH + G&A)

If you include travel, explain why it’s necessary. If you include subcontractors, identify them and describe their scope of work.

We based our labor rates on current average salaries for cleared personnel in the Colorado Springs market. Our indirect rates align with our latest DCAA-approved accounting practices.

Step 5: Follow FAR Part 15 Guidelines

FAR 15.404-1 requires a detailed rationale for all cost elements. That means your BOE must be:

  • Complete – covers all requirements
  • Consistent – aligns with your technical volume and pricing sheets
  • Credible – rooted in data and logic
  • Compliant – meets all solicitation instructions

Use the solicitation’s Section L and M to guide what must be included. Missing details—even if your price is competitive—can lead to a deficiency.

Final Thoughts: The BOE as a Strategic Asset

The best proposals aren’t just compliant—they’re convincing. A strong BOE shows that you understand the mission, respect taxpayer dollars, and are prepared to execute with discipline and precision.

Remember: the BOE is your chance to narrate your cost story. Make it as compelling and credible as the rest of your proposal.

With Love and Respect,

Gary

Download a BOE Template Here: https://veteran-business.com/wp-content/uploads/2025/06/boe_template.docx

How to Join a Team without Selling Your Soul to the Devil (Subcontracting to a Prime)

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As a new launched business as a Federal Contractor (I’m assuming you’ve set up your company and and are registered in SAM and have a DUNS number; see my previous blog: http://wp.me/p4xkC1-Q), your primary tasks as a company are three fold: 1) generate revenue, 2) earn a profit, and 3) develop past performance.  These task are derived from winning work.  As I have written in the past, there are two ways to work as a federal contractor — as a Prime contractor or a subcontractor.

A excellent path to finding a prime is to join the Service Disabled Veteran Owned Business Council (https://sdvosb-council.org/)  The council provides an avenue to network with Prime contractors for potential teaming opportunities. It also host networking events with larger primes looking to team with small businesses.  Remember that many federal contracts have set-aside contracting goals.  This is a huge benefit to 8a, SDVOSB, SDB, WOSB, and other set-aside categories.

Make sure you have developed your core capabilities statement; the capabilities statement is your written “elevator speech.”  Potential prime contractors and US Government entities review core capability statements when looking for small businesses.

Below is an example of of core capability statement used by Whetstone Security Group, Inc. (www.whetstonesecurity.com)

wsg corporate capabilities 201312040-0001

Prime contractors are looking for set-aside partners they can depend upon.  Make sure as you market your company you always deliver on promises and conduct your business with integrity.  At the end of the day, everything whether in business or personal life is about relationships.  Make sure that you and your business’ reputation is stellar and become know for doing what you say.

Once you have joined a team you will most likely be provided  a Non-disclosure agreement (NDA) and teaming agreement (TA) to sign.  See my previous blog and TA’s, NDA’s, and SubK’s. (http://wp.me/p4xkC1-4m).  Review the TA closely to ensure your company is signing up for a mutually beneficial agreement.  It might be a good idea to engage a Contract Specialist to help you navigate the NDA, TA, and Subcontract process.  The primary take away is to ask for guaranteed work share.  Work share is usually provide in percentages, such as have 20 percent work share.  This means that your company will have 20 percent of the available work on an awarded contract.

Be transparent, operate with integrity, and demonstrate how your company will add value as a prime contractor’s teammate.  You have to put yourself out there and engage with other people, associations, and prime contractors to be known.  Remember, hundreds of people before you have done the same thing — you can do this!

As always, take action each and everyday to drive your business forward and grow as an individual.

With Love and Respect,

Gary

First Things First

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Hi All –

As is usual for all of us, finding a balance between self, family, and my pursuits has been a struggle.  The realization I’ve made is that the balance between choices that provide depth and meaning to my life and necessary daily tasks is more like a seesaw than a balanced scale.  Depending on the hour or week or month, I tend to pay more attention to one aspect of my life than the other…and it’s ok.

I believe that intuitively (when our lives are focused on our self actualization), we will place our attention where it needs to be — self, family, work.  It doesn’t need to be an equal balance; we make choices on what is important and those weighted factors tip the seesaw one way or the other…and sways from one area to the other in constant realignment.

What should drive everything we do is our focus on what brings us the most satisfaction, joy, and peace regardless of where we tend to be focusing our attention on at the moment.  If we are not feeling satisfied, joyful or peaceful, then it doesn’t matter what we are focusing and spending time on.

So as we pursue our business interests there may be times when we are distracted or believe we are not in balance with ourselves or our friends and family, but this is not an excuse not to push forward as soon as you can.  My mantra remains:  “Take Action Every Day!”

The other thing to keep in mind is that we will not do everything we want to do. Period.  We simply need to focus on those things which ultimately brings us satisfaction, joy, and peace in our work and private lives.  Because at the end of the day,  it’s all part of the same thing.

With Love and Respect,

Gary

What Counts in Business and Life?

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What is truly important?

Most of us would agree some things are at the top of the list: family, friends, health, and financial stability might be some things that come to mind.  Along with these, I believe that self development is a life-long necessity to have a truly  amazing life.  Why do we often do things, and why do we oftentimes not do things although they could change our lives for the worse or better? For the most part, it may simply be habit, learned behavior, and social conditioning.

I’ve been trying to be more conscious of my total experience — my thoughts, emotions, physical being, and etc. — aware and living in the present moment. When I practice awareness, I find I am more centered and can observe that voice in my head that is constantly jumping from the past to the future, judging, analyzing, criticizing and comparing; I find that all these things are simply that – the voice in my head which is often associated with a subtle and underlying fear.

The more I pay attention, the less meaning and weight these random thoughts and emotions hold sway over me. How I view myself and the world around me are determined more by my internal values and beliefs and less so by outside factors. This allows me to avoid wasting my mental energy on useless biological chatter. There may have been a time in our distant past that this constant analysis keep us safe, but for me, it is no longer useful.

So what does all of this have to do with starting a business? In is my belief that the more in touch we are with ourselves and what we actually want out of life, the better we are at doing things that serve us well, not only mentally, but financially. By being focusing on what is truly important in life and business, we are more productive and can better balance family and work.

Some common results of paying attention and relegating internal chatter to the trash bin:

1. We solidly know our vision and set goals
2. We are better at making critical decision
3. We come up with more ideas
4. We desire to surround ourselves with like-minded people
5. We complain less and demonstrate more gratitude
6. We take better care of ourselves emotionally, physically, and spiritually and as a result take better care of others
7. We abandon the emotional roller coaster
8. Passion begins to grow

This doesn’t mean that you are suddenly this enlightened being no longer bothered by the pettiness of mere mortals. We all grapple with finding balance and meaning in our daily lives, but by being aware and spending 15 to 20 minutes daily to reflect on and examine my thoughts, my world has become fuller and more satisfying. I hope it help you also in both life and business.

Here’s to being aware enough to know what is truly important

With Love and Respect,

Gary