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Zag2009

IGCE Development

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Are there any issues/implications that could arise if prime contractor provides proposal details, including cost breakdowns details, to its Contracting Officer at their request to be used in development of the IGCE?  The timing of this request is prior to submittal of the proposal by the contractor.

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On 3/23/2017 at 4:44 PM, Zag2009 said:

 Are there any issues/implications that could arise if prime contractor provides proposal details, including cost breakdowns details, to its Contracting Officer at their request to be used in development of the IGCE?  The timing of this request is prior to submittal of the proposal by the contractor.

 If this estimate is for construction or design work (FAR 36.203 or 36.605), of course there are issues/implications that could arise from using your contractor's proposal costing details. I'm guessing that the information probably includes quantity of work takeoffs, too. 

The obvious issue is whether the government's estimate is being prepared "independently" from the contractor's proposal, as though the government were competing for the work. The implication is that it isn't being prepared independently. 

To me, that may signify a lack of understanding of what the work 'should' entail, in the agency's estimation, rather just adopting what the contractor 'says' it entails.

Having said that, if the estimate is for a claim, especially one involving impacts on unchanged quantities or scope of the works, it is sometimes impossible to develop a meaningful or useful, totally independent government cost estimate.

Sometimes, only the contractor can determine the actual scope of the effort or claimed impact.   In that event, I have used information from the contractor to perform my technical and cost analyses. For instance, there may be issues with entitlement, shared responsibility, allocability, allowability, reasonableness, etc. Then, I developed my own "estimates", as independently as possible for my pre-negotiation objectives. I documented how I developed my estimates. 

Nobody ever challenged or criticized my approach in those instances.

If they do, just tell them to prepare the government's estimate.  Then, you can use it or just acknowledge it during your development of the pre-negotiation objectives. 

 

 

 

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I think that one could trace back the concept of the requirement to independently prepare a government estimate for construction work 'in as much detail as though the government would compete for the work' to the time when the government had its own construction, maintenance, and repair crews.

For Civil Works, the Corps of Engineers had to justify, by law and by our regulations, that contracting out the work by sealed bidding was as economical as performing it with government forces. The government estimates for civil works didn't (and still don't) include an allowance for profit. The regulations allowed a margin of  10% over the government estimate to compare the cost of performing the work with government forces, plant and equipment to the cost of performance by contract.  The 10% is presumably an allowance for profit (and perhaps bonds?).

For military construction or for construction work for others, our IGE's include an allowance for profit, bonds, etc..

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