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 P-141, Change 2
May 1996
PART F:
COST ESTIMATES
1. GUIDANCE: Detailed guidance on the
Breakdown Structure (WBS) Systems
Descriptions. All construction cost estimates
preparation of Construction Cost Estimates is
for projects with an Estimated Construction
contained in SODIV-TG-1010, "Technical
Cost (ECC) over $100,000 require that the
Guidance for Cost Engineering" (formerly
estimate
be
prepared
using
the
SOUTHDIV 01190). Cost Estimates shall
SOUTHNAVFAC provided "SUCCESS
conform to the specific instructions contained
ESTIMATING
AND
COST
therein. Submittals made for review which does
MANAGEMENT SYSTEM" computer
not conform to this guide will be returned
unreviewed for compliance.
program. The A/E is required to run the
estimate on his computer equipment using the
2. OBJECTIVE: The objective of the Cost
SUCCESS program and to provide hard copies
Engineer is to develop an estimate to reflect the
of the estimates with each submittal. With the
lowest possible price at which the project can be
final estimate a floppy disk containing the
awarded. The lowest possible price is defined as
complete estimate shall be submitted. To obtain
a copy of the SUCCESS program and price file,
the lowest price at which a responsible
Contractor is willing and able to perform the
the A/E must have a current contract with
work defined by the contract documents. This
SOUTHNAVFACENGCOM and sign a
requires precise pricing, experienced judgment
licensing agreement. Contact should be made
and accurate assessment of market conditions.
with the PM prior to each submission to
"Fattening" of the estimate in either pricing or
reconfirm programmed construction costs for the
quantities to be safe will be avoided. It is
contract. Where the A/E estimate exceeds 90%
expected that the final estimate will approximate
of
programmed
construction
costs,
the low responsive bid within + or - 10%.
recommendations for cost reductions or
Estimates that exceed + or - 15% of the low
proposed bid items should be provided. With
responsive bid will require an immediate post-bid
each submittal the A/E shall provide a brief
analysis by the A/E to determine the reason for
narrative explanation for the rationale that went
the variance. A written explanation listing
into the preparation of the Government Estimate.
specific areas of difference between the
The rationale shall explain the basis of the
Government estimate and the bidding
estimate and shall address all factors that have a
contractors shall be provided to the Cost
significant impact on the estimate and the various
Engineering Division not later than seven
sources of cost data used in the estimate.
calendar days following notification that a post-
4. SUBMISSION REQUIREMENTS:
bid analysis is necessary. The response shall
include an award/reject recommendation based
A. BUDGET ESTIMATE SUBMISSION:
on the findings with full rationale to support the
recommendation. The bidders for the contract
should not be contacted by the A/E during the
post-bid analysis.
3. GENERAL REQUIREMENTS:
All
estimates shall be formatted using the Work
DELIVERABLES
11-7
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