The contractor's proposed manufacturing costs have drastically increased in proportion to what was previously Negotiated. The contractor refused to submit an adequate breakdown nor supporting documentation for the manufacturing costs. If I put the Negotiated Material Costs and the Negotiated Manufacturing Costs into DAU's Regression Template for the first 3 years of the contract, and the Government Objective Material Costs of the added part, the estimated Manufacturing costs to add just the one part are only $30. However, the contractor proposed $460 in Manufacturing costs to add just the one part; which exceeds the Year 4 Manufacturing costs for all the 17 parts of the entire unit. The R-Squared is 100% and the Probability Not Zero are 100%. That is because the element of cost breakdown was simply escalated for the out-years. However, the initial Material and Manufacturing elements were accepted as fair and reasonable for all 5 years. Can I use this estimated position for Manufacturing costs in my cost analysis report? A colleague of mine thought I can't use it because there is only one data point, which is the first year. (My colleague considers the other years to be bad data because each element was simply escalated by 3% for the out-years.) Additionally, my colleague suggested that only bone fide "actuals" should be used in the Regression template because the prior PCO may have done a bad job at Negotiating. (i.e. Just because these elements were previously determined to be fair and reasonable, doesn't mean they really are.) It should be noted that the IGCE estimate said that the new bottom line cost for the whole unit with the engineering change should only be 3% higher. I am afraid that if I just zero out the Manufacturing costs, that it will be accepted as proposed during Negotiations. However, if I compute a realistic estimate, it will be harder for the PCO to accept the Manufacturing costs as proposed.