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36.203 - Government Estimate of Construction Costs

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In reference to FAR 36.203(a):

"An independent Government estimate of construction costs shall be prepared and furnished to the contracting officer at the earliest practicable time for each proposed contract and for each contract modification anticipated to exceed the simplified acquisition threshold."

There is debate in my office as to whether the "anticipated to exceed the SAT" applies only to the modification portion of the sentence or to both the proposed contract and modification portion.

Do we need an IGE for a small construction contract that is not anticipated to exceed the SAT?

Thanks

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In reference to FAR 36.203(a):

"An independent Government estimate of construction costs shall be prepared and furnished to the contracting officer at the earliest practicable time for each proposed contract and for each contract modification anticipated to exceed the simplified acquisition threshold."

There is debate in my office as to whether the "anticipated to exceed the SAT" applies only to the modification portion of the sentence or to both the proposed contract and modification portion.

Do we need an IGE for a small construction contract that is not anticipated to exceed the SAT?

Thanks

My interpretation is that the IGCE is required for each contract (regardless of the amount) and for each modification that exceeds $150K.

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I see grammatically how leo1102 came to his interpretation, but it would seem to put form over substance to have whether an IGE is required hinge on the contract vehicle used. I could find no language in any FAR Case, DAC or DCN to suggest that treating them differently was intended.

Certainly you need to know enough about your requirement to say that it is under the SAT, and to comply with FAR 36.204, but I'm not sure you need an estimate "prepared in as much detail as though the Government were competing for award."

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My interpretation was not based only on grammar. It is based on my own experience which is that regardless of of the contract vehicle used or of the estimated amount, a construction acquisition requires an IGCE and a construction modification over the SAT requires an IGCE.

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My post should have read, "I see grammatically how leo1102 could come to his interpretation." I didn't mean to speak for you. While past practice goes a long way in day-to-day survival, it isn't necessarily a good gauge of the minimum that a regulation requires, which I take to be the OP's question.

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Thanks. Perhaps Joel Hoffman will reply to this thread. I would be interested to see if my experience has been correct or not.

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In reference to FAR 36.203(a):

"An independent Government estimate of construction costs shall be prepared and furnished to the contracting officer at the earliest practicable time for each proposed contract and for each contract modification anticipated to exceed the simplified acquisition threshold."

There is debate in my office as to whether the "anticipated to exceed the SAT" applies only to the modification portion of the sentence or to both the proposed contract and modification portion.

Do we need an IGE for a small construction contract that is not anticipated to exceed the SAT?

Thanks

I don't know the current intent.

The way that the sentence seems to grammatically read appears to require an IGE for each contract and an IGE for each mod anticipated to exceed the SAT.

If the SAT limit applied to contracts, shouldn't it read as follows:

"An independent Government estimate of construction costs shall be prepared and furnished to the contracting officer at the earliest practicable time for each proposed contract and for each contract modification, anticipated to exceed the simplified acquisition threshold."

However, jm neglected to include the next sentence in the post: "The contracting officer may require an estimate when the cost of required work is not anticipated to exceed the simplified acquisition threshold."

Reading both sentences together appears to me to say that an estimate is only required for contracts anticipated to exceed the SAT, although the grammer might not be correct. The KO can require an estimate for contracts or mods, which are less than the SAT.

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Thanks, Joel.

I certainly agree that the second sentence is not inconsistent with a view that the threshold applies to a new contract, but I don't think it necessarily resolves the question. One could easily read the second sentence as only applying when a government estimate is not required, which is determined by reference to the first sentence. But if the argument provides a textual "hook" to allow someone to do what makes sense, great. I'm more interested in whether the circumstances between a new contract and a modification are reason enough to justify requiring a full blown government estimate for one but not the other. My starting position is they are not. [Edit: If the IGE is required without regard to dollar value for a new contract, could the motivation be that, because the government generally has more choice in who it should award a new contract (vis a modification), a more rigorous reasonableness analysis is appropriate? A full blown IGE would better support a more rigorous reasonableness analysis than a ROM estimate. Oh, the perils of looking for the reason in the rule...]

As I've said, I think the threshold applies to both, based on a functional, rather than grammatical, reading of the requirement. However, in the interest of full disclosure, Cedar Valley Corp.--Recon., B-256556, Dec. 12, 1994, 94-2 CPD ? 232, contains some language inconsistent with my view. It says, "This regulation provides that for all proposed construction contracts, an independent government estimate shall be prepared in as much detail as though the government were competing for award." However, the decision did not involve a contract under the threshold, the statement was made in the context where whether the regulation reached ALL contracts made no difference, so I don't think it is instructive.

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DAR 18-108.1(a) provided in part:

Except for two-step formal advertising under Section II, Part 5, and negotiation under Section III without detailed plans and specifications, an independent Government estimate of construction cost in as great detail as if the Government were competing for the award shall be prepared for the plans and specifications for each proposed contract and modifications thereto, affecting price, anticipated to cost $25,000 or more.

Accord, DAR 18-305.1(a).

Under the DAR, then, a threshold applied to a new contract. Maybe construction has changed too much for this to be persuasive, but I have my doubts.

If the FAR were intended to not apply a dollar threshold, that would represent a change, and I would expect (or at least hope) that if the change had been intended, it would have been more explicit. I'm not sure this is convincing, but it may be enough to tip the balance for some folks.

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Thanks, Joel.

I certainly agree that the second sentence is not inconsistent with a view that the threshold applies to a new contract, but I don't think it necessarily resolves the question. One could easily read the second sentence as only applying when a government estimate is not required, which is determined by reference to the first sentence. But if the argument provides a textual "hook" to allow someone to do what makes sense, great. I'm more interested in whether the circumstances between a new contract and a modification are reason enough to justify requiring a full blown government estimate for one but not the other. My starting position is they are not.

As I've said, I think the threshold applies to both, based on a functional, rather than grammatical, reading of the requirement. However, in the interest of full disclosure, Cedar Valley Corp.--Recon., B-256556, Dec. 12, 1994, 94-2 CPD ? 232, contains some language inconsistent with my view. It says, "This regulation provides that for all proposed construction contracts, an independent government estimate shall be prepared in as much detail as though the government were competing for award." However, the decision did not involve a contract under the threshold, the statement was made in the context where whether the regulation reached ALL contracts made no difference, so I don't think it is instructive.

I cant find the requirement in Title 10 of the US Code but I'm not a great researcher. It might be in Title 41. I'm TDY this week. I know that the old Corps of Engineers' Engineer Contract Instructions and DAR that pre-dated the FAR influenced the development of Part 36. But I dont have access to them today or to the 1984 wording of the FAR.

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In reference to FAR 36.203(a):

"An independent Government estimate of construction costs shall be prepared and furnished to the contracting officer at the earliest practicable time for each proposed contract and for each contract modification anticipated to exceed the simplified acquisition threshold."

There is debate in my office as to whether the "anticipated to exceed the SAT" applies only to the modification portion of the sentence or to both the proposed contract and modification portion.

Do we need an IGE for a small construction contract that is not anticipated to exceed the SAT?

Thanks

There's a rule of interpretation called the Last Antecedent Rule that courts sometimes apply when interpreting contracts, statutes, or regulations. Here's a definition of the rule from Nolo.com:

A doctrine of interpretation by which a court finds that qualifying words or phrases refer to the language immediately preceding the qualifier, unless common sense shows that it was meant to apply to something more distant or less obvious. For example, in the phrase "the commercial vehicular license shall not apply to boats, tractors, and trucks under three tons, " the qualifier "under three tons" applies only to trucks and not to boats or tractors.

If we were to apply the rule to the FAR language cited, then the correct interpretation would be that the qualifier "anticipated to exceed the simplified acquisition threshold" only applies to contract modifications.

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Excellent post, Don.

For readers looking for a more 'authoratative' source on the last-antecedent rule of construction than Nolo, it is discussed in 82 CJS Statutes s 443. It is, as Don made clear, just a rule of construction (or doctrine of interpretation). As an aid to construction, it can be overcome by other indicia of meaning. There is also a rule of construction that calls for interpretations that avoid unreasonable or absurd results. I'm not sure it is implicated here, but it might be.

The weight of the arguments may be against my position. I may be creating ambiguity where there is none. However, it is with the best of intentions. I hope that I've created enough "gray" that no one thinks the answer is so black and white that anyone who disagrees should be fired for their 'incompetence.' In any case, I would hope the low dollar value of the effort can be considered in deciding what level of detail is required to 'compete for award.'

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Guest carl r culham

Interesting conclusions and discussion.

I did only limited research but would suggest, as already noted or intended by previous posts, that it the specific requirement for when the IGE is required for either a modification or a proposed contract action will be dictated, in part, by a contract specialist, contracting officer and/or local policy. Example - see this reference - www.sam.usace.army.mil/cd/sad/DM1110-1-1/sadcd2sec6.doc

I would also suggest that a full look at FAR Parts 13, 15, 43 specifically and possibly other Parts will lend appropriate perspective to the requirement of FAR Part 36.203 as not all modifications and proposed contract award actions are equal whether above or below the SAT. Examples are what level of scrutiny of contract pricing is required (FAR Parts 43 and 15) and where only one response is received (FAR Part 13). The list would go on I am sure.

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