Sabermetrics Pricing

When you're responding to certain federal solicitations, you'll need to open your books—showing exactly how you arrived at your price. This detailed cost breakdown requirement, sometimes called "Sabermetrics Pricing" in procurement circles, asks bidders to itemize labour categories, hourly rates, materials, overhead percentages, and profit margins. It's how the government determines if your price makes sense and, later, how they adjust task authorization values when the scope changes.

How It Works

The requirement stems from Contracting Policy Notice 2022-2, which mandates detailed cost breakdowns for certain contracts. You'll typically see this in non-competitive procurements over $25,000, though contracting authorities at PSPC or DND may request it in competitive situations too when they need to establish price reasonableness. The Supply Manual addresses this in Chapter 3 on Procurement Methods and Chapter 10.10 on Contract Pricing Analysis, though you won't find "Sabermetrics Pricing" as an official term—it's more of a practitioner's shorthand that's caught on in the community.

Here's the thing: the government isn't just collecting data for fun. They're building a baseline. When you break down your senior consultant at $185/hour versus your junior analyst at $95/hour, showing 15% overhead and 8% profit, you're creating a framework for the entire contract relationship. If they later need to add tasks or reduce scope, they'll reference your original breakdown to calculate fair adjustments. Treasury Board policy, specifically Section 12.5.3, requires this analysis of cost elements—direct labour, overhead, profit—particularly in non-competitive scenarios where market forces aren't naturally establishing price reasonableness.

In practice, you'll submit a pricing table or spreadsheet alongside your bid. Labour categories need clear definitions (what distinguishes a Level 2 from a Level 3 engineer?). Materials should show unit costs. Overhead must be justified—you can't just pick 20% because it sounds reasonable. The government may challenge your assumptions, especially if your rates seem high compared to similar contracts or if your overhead percentage exceeds industry norms for your company size and sector. Be ready to defend your numbers.

Key Considerations

• Your breakdown becomes contractual. Once accepted, you can't later claim your overhead was actually 22% when you said 15%. This locks in your pricing structure for any task authorizations or amendments.

• Non-competitive contracts attract more scrutiny. If you're a sole-source provider, expect the contracting authority to dig into your numbers. They're required to justify the price under the Financial Administration Act, Section 30, and they take that responsibility seriously.

• Different departments have different thresholds. While $100,000 is the common trigger for formal bid evaluation under Treasury Board policy, some departments request detailed breakdowns at lower values, especially for professional services.

• Your competition might be your past self. Contracting officers often compare your current pricing to what you charged on previous contracts. Significant increases without explanation raise flags.

Related Terms

Price Reasonableness, Cost Reimbursement Contract, Task Authorization, Overhead Rate, Evaluation Criteria

Sources

• Contracting Policy Notice 2022-2: Contract Pricing

• Supply Manual - Chapter 3 and Chapter 10.10

• Treasury Board Contracting Policy - Section 12.5.3

Keep your backup documentation ready. If your bid includes $150/hour for technical writers, you should be able to produce salary data, benefits calculations, and overhead allocation methods if questioned. The contracting officer won't necessarily ask for it upfront, but having it on hand speeds things up considerably if they do.