Cost Consolidated BOM is the process of scanning the entire proposal bill of material and calculating the recurring and non-recurring costs for in-house manufactured or installed parts and supplier purchased materials, throughout the bill of material. The "Consolidated" part of this process refers to the concept of combining multiple production lots or purchases of the same part number occurring throughout the proposal into combined lots of larger quantities in order to benefit from supplier volume discounts and reduced impact of production lot set-up times.

To run Cost Consolidated BOM select menu option "Update and Cost Consolidated BOM" from the more toolbar button menu in the Bill of Material or Production & Procurement tab of your estimate, as shown below. Cost Consolidated BOM can be run in:

• Changes since mode - which only processes materials or part numbers which have been changed since the last time you ran Cost Consolidated BOM for this same estimate (runs faster), or
• All parts mode - which processes all materials across the entire proposal bill of material (more time).

There are a number of costing parameters or settings which control how Cost Consolidated BOM behaves, such as:

1. The costing run date which defaults from the ADVANCED TAB of your proposal. If your estimating source excludes expired documents then source documents in purchase history which expire prior to this date will be ignored
2. Phases or Sets to cost - by default both base (non-optional) and independent (optional) phases or sets are costed, with separate material cost estimates for base vs. optional phase/set quantities
   • You have the option to limit the costing to only a subset of optional phases, not all optional phases, plus the option by checking the box to the right to consolidate all the selected optional + inferred base phases into one set of material cost estimates
   • This option is hidden if the current proposal has no optional phases or sets
3. Alternative proposal to consolidate pricing quantities with, for example if you are confident you will win both this and the 'consolidate with' proposal at the same time, allowing you to buy materials in quantities spanning across both proposals together for even better volume price-breaks
   • You can also consolidate with specific phases or sets in the alternate proposal, or consolidate with other estimates within this current proposal
   • The cost estimate for the alternative proposal is not updated by this costing run. To re-calculate the costs for the alternative proposal taking into consideration the quantities required in this proposal you must open the basis of estimate for that proposal and re-cost it with this proposal
4. From and To dates for cost history, used to ensure that the same history is considered for subsequent costing runs during the preparation of your material cost estimates. Only cost source documents created between these two dates are considered. If you do not specify a "History up to" date then any new cost source documents are automatically considered, without having to do a sweep analysis
5. Limit historical cost sources (PO's, contracts, supplier quotations, production orders etc.) to your current company or segment
6. Whether to consider actual costs incurred to date on the contract or program you are estimating for. Some US Govt. and prime contractor long-term or undefinitized contract actions will start work before the costs for the entire program have been finalized, resulting in the need to continue estimating the costs for the program after work has started. This means that costs for work which has already been performed is better calculated on the basis of actual costs - the actual costs of purchase or production orders already in process or completed for the same contract or project/WBS in your SAP ERP system
   • Actuals costs are never quantity curved or escalated, but special charges are still considered
7. All of these costing run parameters can be optionally stored in a Costing Profile by clicking on "Save Defaults" button in the footer of the popup below, and recalled or used next time you run Costing by clicking on the "Set Defaults" button and selecting your desired Costing Profile from the menu.

By default, the same Costing Profile which you or a colleague used last on this same estimate will default, so that subsequent material costing runs are based on the same costing parameters.

There are also a number of more specialized costing parameters specific to purchased parts, which you can access by clicking on the Purchase History tab of the costing parameters popup, including:

1. Whether to cost purchased and subcontract parts at all (maybe different estimators manage purchased vs. production parts in your company)
2. Whether to include or exclude purchasing history records which were manually created in iPE
3. Whether to include or exclude expired quotations or contracts from this costing run
4. Whether to escalate purchase orders based on anticipated PO placement or commitment date
5. Whether to turn-off all quantity curving i.e. disable calculation of quantity adjustment factors
6. Which special charges to include or consider from procurement cost sources. Leave blank to include all special charge types.

There are also a number of more specialized costing parameters specific to in-house manufactured or installed parts, which you can access by clicking on the Production History tab of the costing parameters popup, including:

1. Whether to cost in-house produced parts at all (maybe different estimators manage purchased vs. production parts in your company)
2. What production order types (e.g. rework) should be excluded from consideration or calculation of hours per unit from production history
3. What production order operation control keys (again e.g. rework) should be excluded from consideration or calculation of hours per unit from production history

4. How to distribute labor for in-house production lead times for a single part number which span more than one month. Since iPE distributes costs based on individual lead-time offsets it is normally acceptable to record the labor costs for each in-house manufactured part in the month in which that part is needed or based on the cumulative lead-time offset down the proposal bill of material. However, for product or service codes which in-house times in excess of a month it is possible to distribute their labor fees across several months based on the options selected here, namely:

   • Distribute all labor into first month of lead time

   • Distribute all labor into last month of lead time (this is the default if nothing is selected)

   • Distribute labor based on historical confirmation distribution

   • Distribute all labor evenly across lead time

    

There are also several more advanced options which you can access by clicking on the Advanced Options tab. You should discuss each of these options with your implementation consultant before using them but they covered more advanced concepts such as:

1. How material costs may be distributed - based on lead time offsets or curved to an estimate-wide distribution, or based on the specific dates of the WBS or task assigned to the proposal BOM component.
2. Whether the escalation index should be defaulted from the product or service master (by commodity etc.) or overwritten to a different value perhaps only for specific countries.
3. Whether to include optional sets or phases in the "truth in negotiations act" (TINA) threshold for determining whether to send out requests for quotations to suppliers for certain parts. Optional sets should be included in the TINA or total supplier spend calculation if they are likely to be included.
4. When costs are adjusted on a previous proposal and negative values or quantities are input into the current proposal these can count as deductions or increases (absolute value) for TINA or total spend per supplier calculation purposes.
5. Whether to escalate on a full year basis instead of monthly calculations, if set-up this way for your company.
6. When you have a quota arrangement defined in your material master in SAP for certain %'s going to different suppliers, Cost Consolidated BOM will automatically split any requirements into multiple material cost estimates each for the % in the quota going to that supplier, multiplied by the total requirement quantity. Cost sources for each supplier are then considered separately. This means for example if you need 100 pieces of a part in this proposal and there is a 60% / 40% quota arrangement you will create two material cost estimates, one for 60 for supplier A and one for 40 for supplier B. The pricing quantities of 60 and 40 assume that you plan to actually split the purchasing for this contract between these two suppliers in approximately the same ratio's as the quota arrangement. If, on the other hand, while you are not yet sure which supplier you intend to purchase this part from, but you are pretty sure you plan to order all 100 pieces from one or other supplier and not split them, then you have the option to still compute the pricing for both supplier A and B but the pricing quantity used to get the best pricing volume discount would now be 100 for both supplier A and B. In other words, the cost estimates for both suppliers are now calculated on the assumption that you intend to procure all 100 pieces from either supplier A or B, and not split 60/40 between both suppliers.
7. Extended logging provides consultants and system administrators much more detailed logging of the costing run to investigate issues. It should only be checked on request from your support team.