Quantcast Pricing Requirements

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TOLERABLE
MADR
DEFECTS/
%
MONTH
WORK REQUIREMENT
POPULATION UNITS
2%
10
Each
500
Housing Maintenance
Service call completed
within specified time
2
Each
2.6 % say
75
Change of occupancy
3%
within specified time
1.4 % say
Plot days 15
1050
Lawn Maintenance
2%
50 plots x
21 work days
Guard
0.0 %
0
Guard Services
345,600
minutes
Guard on duty
8 gates X 30 workdays
X 24 hr/day X
60 minutes x hr.
Stops
0.4 % say
40
10,500
Bus Service
1%
On time within
specified limits
Population is total
number of stops
in a month
It should be noted that the higher the population, the lower the MADR
required to keep potential complaints within tolerable levels. For
instance, if in the first example (garbage collection) a MADR of 5% was
specified, there would have been a potential for 195 customer complaints per
month -- a clearly unacceptable number of complaints. There has been a
tendency in the past to automatically specify a MADR of 5 to 10 percent.
Such high MADRs are rarely justified and endanger the effective use of MADR
as a measure of the contractor's quality control.
MADR does not control the level of performance at which deductions are taken
for nonperformance or unsatisfactory work. Deductions are taken for all
defects, with allowance for rework where appropriate, even if the MADR is
not exceeded.
3-340 Pricing Requirements.  An estimate is prepared of the cost of the
contract to the Government. This estimate includes all contractor furnished
labor, equipment, and materials together with allowances for the
contractor's overhead and profit and corresponds to the Government's
estimate of the bid amount of the successful contractor. The estimate is
referred to as the Independent Government Estimate (IGE). In the course of
developing the IGE, the estimated cost of each contract requirement shown on
the EPRS is determined. In the examples given below, the prices have been
calculated on a monthly basis. However, they can also be summarized in a
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