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I have a question regarding Independent Government Estimates.  The USACE Acquisition Instruction states that Independent Government estimates must be made prior to receipt of Contractor proposals, and without considering contractor proposals in the IGE development.  Can an agency adjust the Government estimate after receipt of proposals, and after those proposals are shared with the IGE developers in order to be closer to the Government estimate, and a KO use that revised estimate to be in compliance with the statutory 15% on military construction projects?

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I don't know much about military construction.

But generally, the purpose of an IGCE is to select clauses/provisions and determine approval thresholds, right?  If so, there is no need to revise it after proposals are received.  Once you have proposals, you are no longer in the realm of estimates as you have real offers and real numbers, especially if you have adequate price competition.

 

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20 hours ago, Contracting_guy777 said:

Can an agency adjust the Government estimate after receipt of proposals, and after those proposals are shared with the IGE developers in order to be closer to the Government estimate, and a KO use that revised estimate to be in compliance with the statutory 15% on military construction projects?

Do you mean USACE Acquisition Instruction 36.205-101 Cost Limitations – Military Construction Contracts.(a) Award of a contract for military construction shall be approved by the District/Center Commander when the lowest qualifying bid/proposal exceeds the Government's estimate by more than 15%. The estimate shall include an allowance for contractor profit?

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On 9/11/2020 at 6:19 PM, Contracting_guy777 said:

I have a question regarding Independent Government Estimates.  The USACE Acquisition Instruction states that Independent Government estimates must be made prior to receipt of Contractor proposals, and without considering contractor proposals in the IGE development.  Can an agency adjust the Government estimate after receipt of proposals, and after those proposals are shared with the IGE developers in order to be closer to the Government estimate, and a KO use that revised estimate to be in compliance with the statutory 15% on military construction projects?

So

1.  Are you referring to a competitive negotiated acquisition ? 

2. If so, what information are you sharing? Bottom line and contract line item pricing? Breakdowns of proposal prices? Bottom line and CLIN price information alone would likely be of little use for an estimator to justify revising a government estimate.

The ER’s for cost engineering/cost estimating and the Engineer Contract Instructions ECI allow for revisions subsequent to conferences or negotiations.

If you obtain price breakdowns from proposers in a competitive Negotiated acquisition for price evaluation and then discover relevant information or errors or omissions in the government’s estimate, I think you can revise the estimate before or in lieu of conducting discussions if you decide that discussions are not necessary. We sometimes did it before conducting discussions (Competitive negotiated acquisitions) during preparation of pre-negotiation objectives.

Procedures: We originally asked for price breakdowns for design-build and construction source selections, with the proposals. However we quickly discovered that prices were all over the place. The industry didn’t mind providing breakdowns but suggested that the info would be more meaningful and easier to provide if we gave them a few days to compile it because they were receiving and refining pricing Up to the last minute before submitting it.

So, with the industry input we  changed the requirement to provide the price breakdowns within three working days of the proposal due date for proposals. The data was much more useful.

We later switched to reserve the right to request breakdowns because it wasn’t always necessary to conduct price discussions or to bargain.

We provided a format In the RFP that was comparable with the IGE Format for quicker and easier Industry prep and for our price evaluation. It was relatively easy to focus on pricing areas where individual proposals varied significantly from each other and/or from the IGE.

It is relatively quick and easy for proposers to provide meaningful info if we provided the format for required or possibly required breakdowns In the RFP.

The info was useful for us to focus on differences and the underlying reasons therefore for discussions. We were able to resolve pricing or even scope uncertainties. And often, we discovered weaknesses, errors or uneconomical design criteria in the RFP. 

ECI 36.203-102 “Revision of Government Estimate.
When the Government estimate is changed during or subsequent to conferences or negotiation, the basis for the revision or changes in price or prices shall be fully explained and documented in the POM, price negotiation memorandum (PNM), and/or appropriate SSDD.”

My above comments are for competitive negotiations. Obviously sole source price negotiations allow for adjustment of the government estimate if necessary or appropriate both before, during or after negotiations following USACE procedures. 

Edited by joel hoffman
Updated to provide more procedural information.
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I’m guessing that the timing and nature of the question is due to the year end rush.

I would strongly advise you to ask for or reserve the right to ask for price breakdown information and provide the format with the solicitation for at least all fourth quarter construction and design-build source selections. 

We didn’t ask for deep detail. We generally broke down the job by major features and trades into overall labor, overall materials, overall equipment, and overall subcontracts, and overall markup for  job overhead and other indirects, G&A, profit and bonds, etc. If there were multiple CLINS, we would organize by CLIN. It generally matched the format of the IGE at the summary level per CLIN.  The proposers could track and organize or cross-reference their costs that way.

This was a topic that I taught in the USACE Design-Build PROSPECT Course for 19 years. 

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By the way, I am very familiar with IGE’s, prepared either by Govt cost engineers or A/E firms that “conveniently” fit within the Programmed Amount or available project funding. Of course, Estimates for performance based design-build projects using best value with contract price cost limitations will usually align with the CWE,  100% PA or other prescribed funding limitations. 

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