Interested in becoming a cost preparer? Here’s what you need to know.

No question about it, given USAID's investments in working with new partners, there is an ever-increasing need for cost preparers, both in-house and freelance. So if you’ve been toying with the idea of becoming a cost preparer, now is a great time to jump into the deep end.

When most people think about cost proposals, they think of Excel, huge workbooks with dozens of tabs, and mystifying links and formulas. While Excel is obviously an important element to cost proposal preparation, there’s a lot more to being a cost preparer than just having a command of Excel. In fact, one could argue that Excel mastery isn’t even the most important part of developing a cost proposal. Many companies have their own templates with links and formulas already in place, making the Excel part of cost preparation a breeze, with low risk for human error. There are also countless online forums and tutorials that you can find in a simple Google search to help you develop complex and fancy formulas. I have been preparing cost proposals for years and I still find myself scrolling Excel forums to find new ways of using Excel functions to reduce room for error in my budgets. So while having an advanced understanding of Excel will certainly help you begin your cost proposal career, it’s not a requirement to start.

The greatest challenge in cost proposal preparation is figuring out what to actually put into those templates.

The greatest challenge in cost proposal preparation is figuring out what to actually put into those templates. As a cost preparer, I’ll often hear “non-cost” folks indicate that developing a proposal budget is a complete mystery to them or that they just wouldn’t even know where to start. Fair enough – cost proposals seem daunting before you know how to approach them.

Here’s the thing, though: as the cost preparer, you aren't expected to know where to start. That’s because a complete, realistic and accurate cost proposal is almost entirely dependent on the information your proposal team gives you. Your partnership with the rest of the proposal team will be your guide.

Technical assumptions are the meat of the proposal budget. A cost proposal must complement the technical proposal. So of course you can’t be expected to know where to start until your team gives you these assumptions. And as you are not a technical expert or the person developing the technical strategy, you cannot be expected to come up with staff titles, travel plans, or technical activities without getting that information from your team. Once you start gathering this information from your teammates, developing your budget will suddenly no longer seem so enigmatic. Your job is to convert org charts, workplans, and technical approaches into your spreadsheets.

At this point, you might be asking, but what about budget narratives? They’re so long and detailed. How am I supposed to know what to write?

As with the budget itself, much of what goes into the narrative comes from the technical. The purpose of the budget narrative is to explain your budget to USAID and to let them know why you’re budgeting what you are, and why everything budgeted is necessary to complete the work, as well as allowable per the regulations. So as you begin gathering your technical inputs, you’ll find that explaining those assumptions will become pretty straightforward.

Ah, but I mentioned regulations! That’s a scary word, I know. Compliance can be daunting. In fact, I would recommend that if you’re looking to become a cost preparer, you get familiar with some key concepts, such as “allowability”, “allocability” and “reasonableness”. You’ll also want to know how to use the Department of State Standardized Regulations (DSSR) if your company offerors allowances and differentials to expatriate personnel.

By no means will your first cost proposal be a walk in the park. But becoming a credible cost preparer is not as scary a prospect as you might think. Our 4-part Fundamentals of USAID Cost Proposals course reveals a logical and attainable approach to preparing your cost proposal, including where and how to gather cost-critical information; developing pricing strategies and best value analyses; and an overview of commonly referenced regulations that you’ll need to know. I'm the lead instructor, and I share my best tips and tricks that I've assembeled over nearly 20 years preparing USAID cost proposals.

Looking for more of an overview of the entire proposal process and how cost preparation fits into the big picture? Business Development 101 provides just that, including a deep dive on the regulations you’ll need to know to begin your cost preparer career.