Quantcast Section 9. Cost Estimates

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SECTION 9. COST ESTIMATES
9.1 DEFINITIONS AND ABBREVIATIONS USED
1391:
(DD Form 1391) Project Documentation which provides information
regarding the intended Military Construction Project.
COR:
Change Order Request.
CWE:
(Current Working Estimate) The estimate of total project costs, which
includes the estimated construction cost and Government Supervision,
Inspection and Overhead (SIOH) charges.
Estimated Construction Cost.
ECC:
NAF:
Non-Appropriated Funds (or Funded).
Naval Construction Force ("SEABEES")
NCF:
Military Construction Project programmed funding amount appropriated by
PA:
Congress.
9.2 PURPOSE OF THE COST ESTIMATE
The basic reference for the preparation of cost estimates is Military Handbook (MIL-HDBK)
1010, "Cost Engineering: Policy and Procedures."
The Government Estimate is designated, and should be marked, as "FOR OFFICIAL USE
ONLY." After the official bid opening. when the Government Estimate is made known to the
public, the designation "FOR OFFICIAL USE ONLY" is removed. Therefore, access to the
Government Estimate shall be restricted to A-E and Government personnel whose official duties
require knowledge of the estimate.
The estimate provides an accurate cost assessment of the project. The objective of the estimate
is to identify the fair market price to accomplish the project, under normal competitive
conditions at the time of construction contract award.  The Final Cost Estimate should
approximate the lowest responsive bid, plus-or-minus 10%. A low bid falling outside of the
plus-or-minus 10% range triggers the requirement for a bid analysis to determine the reason for
the variance. If the A-E determines that the estimate needs revision, the A-E shall submit a
revised estimate.
The Government uses the cost estimate in the following ways:
a. As a standard against which the lowest responsive bid can be compared, to determine
whether the bid is reasonable and acceptable to the Government.
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