Developing an Independent Government Cost Estimate
An independent Government cost estimate is encouraged for all projects, but is often required by the Contracting Officer depending upon the circumstances of the particular acquisition. The following step-by-step procedures may be used in developing cost estimates, though not all steps may be applicable to your project. If the Statement of Work has already been developed, several of these steps may already have been accomplished. Please note that this is an example primarily applicable to acquisitions of services and research & development - other acquisitions (such as for construction services) may require a different mix of cost elements. When all of the following information has been collected, a detailed cost estimate can be prepared.
- Divide the effort into identifiable tasks or logical steps.
- List the categories of labor that will be required in each task or step (e.g., clerical, engineer, research scientists, etc.). In a "level of effort" acquisition, it is necessary to identify, in as much detail as possible, the categories of expertise desired and the training and experience that will be required for each category. This will yield a more accurate estimate.
- Estimate the per-hour cost of each category of labor.
- Estimate the total number of hours for each labor category, by task.
- Multiply the number of hours in each category by the estimate of time required. This will yield the estimated direct labor costs.
- Estimate the amount and type of materials and supplies that will be required and the cost of each.
- Identify any other elements of direct cost that the acquisition may require, such as consultant services, computer rentals, etc., and estimate the cost of these.
- Estimate the travel requirements, if any. Identify the designation, the number of people involved, the length of each trip, and the total cost of this travel in terms of both transportation and per diem.
- If subcontracting is expected, identify the tasks to be subcontracted and estimate the cost.
- Estimate the amount of overhead that will be charged.
For a sample of how to develop an independent Government cost estimate, click here.