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How does one make an IGCE for a SOO, which has no PWS?


govt2310

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How does one make an IGCE for a Statement of Objectives (SOO)?  The way it works is, the offeror's proposal is the proposed PWS.  So the government agency doesn't write the PWS and post it with the solicitation.  If that is the case, how can the agency make an IGCE?

 

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Guest Vern Edwards

Are you literally looking for a discussion of the estimating method, or are you just seeking support for your belief that the requirement for an IGCE doesn't make sense in connection with a SOO?

You asked "How," and I'll tell you now that the answer depends in large measure on the nature of the agency's objectives and the detail in which they are described. It is possible to develop an IGCE in connection with a SOO, but I have no intention of writing at length about it. You need to know something about types of cost estimates and the techniques used to develop each type. If you had that knowledge you wouldn't have asked the question, unless the question was purely rhetorical.

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20 hours ago, Vern Edwards said:

Are you literally looking for a discussion of the estimating method, or are you just seeking support for your belief that the requirement for an IGCE doesn't make sense in connection with a SOO?

 

You are right, Vern.  I guess I am just seeking support for my belief that the requirement for an IGCE doesn't make sense in connetion with a SOO.  If the SOO consists of say, 2 pages of broadly-written bullet points, most phrased to require the offeror to "propose a solution for" various issues the agency is having, without knowing more, I don't see how a useful, credible IGCE could be created.

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Guest Vern Edwards
49 minutes ago, govt2310 said:

I guess I am just seeking support for my belief that the requirement for an IGCE doesn't make sense in connetion with a SOO.

That's simplistic. There are few human activities that are entirely new or unique. It is likely that if you want something done someone else has wanted it done and has had it done some way or another, and so there are ways for you to develop a range of cost expectations that is good enough for at least preliminary budgeting.

Have you read an introductory book about cost estimating, such as Rodney Stewart's Cost Estimating or Mislick and Nussbaum's Cost Estimation: Methods and Tools, or taken a class in cost estimates and methods? If not, then why do you believe that the requirement for an IGCE doesn't make sense in connection with a SOO? Do you know enough to develop a sound belief in that regard?

I'd think twice about arguing that you cannot develop an informative range estimate for the work because you have only a SOO.

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Vern's absolutely right - consider an analogous situation many people face when constructing a new home.  A person can estimate a budget based on "objectives" (# of bedrooms, square footage, etc.) without the "specifications" that will then be created after sitting down with a professional architect.  Moreover, the manner in which those "objectives" are met can even be constrained by the original estimate to prevent to work's cost from spiraling out of control.

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Rapid Development by Steve McConnell offers a lot about cost estimating including build-to-budget concepts. When preparing a SOO, one possibility for generating an IGCE --if you are flexible about your requirement's processes, methods of execution, or characteristics-- is controlling cost by “building-to-budget".

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1 hour ago, Jamaal Valentine said:

Rapid Development by Steve McConnell offers a lot about cost estimating including build to budget. When preparing a SOO, one possibility for generating an IGCE --if you are flexible about your requirement's processes, methods of execution, or characteristics-- is controlling cost by “building-to-budget".

Jamaal, if by  “building-to-budget", you mean that the government provides the budget and states that the proposers should provide a Performance Work Statement at that price, I believe that it is not in conformance with 10 U.S.C. § 2305(a)(3)(ii) (2006) and FAR 15.304 ( c ) (1),  that every solicitation for competitive proposals (the FAR uses the term "source selection) shall include cost or price to the Federal Government as an evaluation factor that must be considered in the evaluation of proposals.

 

EDIT:  After I posted my response. govt2310's post above didn't show up until until I refreshed my screen.

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Joel:

The budget amount is merely a price or cost cap: a not-to-exceed amount. Potential offerors, in a competitive procurement or sole source, are free to price whatever amount they like and have it evaluated in accordance with the solicitation.

It's similar to the disclosure of magnitude in construction or opening bid price for reverse auctions. I see no conflict  with anything you have noted.

Note: Competitive proposals was not necessarily the scenario in the original poster's post.

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Jamaal, I don't have a problem with a cost ceiling as long as it is clear that proposers don't have to use the entire budget and that price is also a factor if there is competition.

it would seem that if the OP concerns a sole source, then the government should be able to use the offered PWS to develop an IGE and can independently evaluate the PWS and agree or consider more effective technical alternatives and cost alternatives  

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4 minutes ago, joel hoffman said:

Jamaal, I don't have a problem with a cost ceiling as long as it is clear that proposers don't have to use the entire budget and that price is also a factor if there is competition.

it would seem that if the OP concerns a sole source, then the government should be able to use the offered PWS to develop an IGE and can independently evaluate the PWS and agree or consider more effective technical alternatives and cost alternatives  

I think the takeaway is, there are at least a few ways to make an IGCE for a Statement of Objectives (SOO).

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22 hours ago, Jamaal Valentine said:

Joel:

...Note: Competitive proposals was not necessarily the scenario in the original poster's post.

Jamaal, I'm not sure if you were referring to my reference to Part 15.  However, both Parts 12 and 13 require price to be a consideration in commercial and simplified acquisition of proposals - competitive or not*.  We already discussed one way that the Gov't can develop an IGCE for a sole source proposal  The OP did specifically mention the word "proposal",  And I think that  10 U.S.C. § 2305(a)(3)(ii) applies to competitive commercial acquisitions that involve proposals. 

*For example,see FAR 12.209, 13.106-3,

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Joel:

I was refering to your introduction of competition.

If I remember correctly, I thought you were highlighting that price or cost is to be used as a discriminating evaluation factor during competition...the OP's question or my response was not predicated on competition. Nonetheless, what I posted works for competitive or non-competitive actions.

Yes, price will always be considered --in order to determine price fair and reasonableness-- but when contracting in a sole source environment, the request for proposals should be tailored to remove unnecessary information and requirements; e.g., evaluation criteria.

Your statement below was good enough for me and captured the basic concept.

On Friday, August 26, 2016 at 1:45 AM, joel hoffman said:

Jamaal, I don't have a problem with a cost ceiling as long as it is clear that proposers don't have to use the entire budget and that price is also a factor if there is competition.

 

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3 hours ago, Jamaal Valentine said:

Joel:

I was refering to your introduction of competition.

If I remember correctly, I thought you were highlighting that price or cost is to be used as a discriminating evaluation factor during competition...the OP's question or my response was not predicated on competition. Nonetheless, what I posted works for competitive or non-competitive actions.

Yes, price will always be considered --in order to determine price fair and reasonableness-- but when contracting in a sole source environment, the request for proposals should be tailored to remove unnecessary information and requirements; e.g., evaluation criteria.

Your statement below was good enough for me and captured the basic concept.

 

Ok, thanks, Jamaal.  Yes, I'd probably provide a budget parameter for a proposer to stay within in developing a PWS, whether sole source or competitive.

Similarly, for a performance based design-build acquisition we would provide a "contract cost limitation" (CCL) so that the proposer(s) know the boundary to be able to develop a design and construction proposal. It's similar to providing the budget limit to the designer in an A-E contract.

The goal is to obtain/provide the full scope and balance the level of quality and amenities against the available budget and the stated quality criteria.

In a competition,  if a high quality, full scope facility could be provided under the CCL, the competition and the relative importance of price will keep the offered price realistic. I have seen D-B contracts awarded many millions of dollars below the CCL. 

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Guest Vern Edwards
2 hours ago, joel hoffman said:

Yes, I'd probably provide a budget parameter for a proposer to stay within in developing a PWS, whether sole source or competitive.

A "budget parameter"? "Parameter"?

According to Bryan Garner in Garner's Modern American Usage, 3d ed., p. 608: "Techical contexts aside, this jargonistic vogue word is not used by those with a heightened sensitivity to language... t is a mush word... Although it abounds in [American English], it doesn't occur in the best writing."

What is the technical context of "budget parameter"? Is the parameter one number or two? If only one, how will the proposer stay "within" it?

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Well the FAR committee and probably Congress used it here. See 36.302 for budget parameter. In this case it would describe  an upper limit and whether it is an absolute or a goal. 

EDIT: it doesn't have to be one number but is, in this context. The term is included in 10 U.S.C. 2305a. I assume that it is also used in  41 U.S.C. 3309. 

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The DB industry and the FAR 36 committees drafted the legislation. I'd ask my lawyer who was the Chair,  but she died. 

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Guest Vern Edwards

Well, the fact that the FAR councils used parameter in FAR 36.302 just confirms what Garner said, "It doesn't occur in the best writing."

Don't let them drag you down.

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They didn't drag me down. I used the official statutory and regulatory term.  I'm working a volleyball tournament this weekend and don't have time to write what usually takes 5-10 minutes of discussion about the subject during a class, acquisition planning/strategy, etc. We use and refer to "parameters" often in design and construction : e.g.,   upper limits, lower limits, min/max., X/Y, X/Y/Z coordinates, etc. 

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Guest Vern Edwards

I'm glad you're at the volleyball tournament. This subject doesn't deserve five to ten minutes. A budget is not a parameter in any sense of the word.

I hope it's beach volleyball.

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