AEI for Installation Support
Thursday, 17 October 1996
(1) Scope. The cost engineer is required to ensure that the proper scope is reflected in all
the estimates, that the scope and work classification described in the DA Form 4283 or the DD
Form 1391 (if applicable to the type of project) is accurately reflected in the final cost estimate.
Deviations from funds available should be reconciled with the project scope prior to advertizing
or negotiating. Deviations should be reported to the design team leader who will then coordinate
with the project manager. See ER 5-7-1 (FR), for the relationship between the project manager
and design and engineering elements of the design agency.
(2) Funds Available or Program Amount (PA). Cost engineers are required to know the
amount of funds available for the project they are estimating; whether a budget estimate was
prepared, or a DD Form 1391 with a PA, or an O&M project with a funding line. Projects with
costs above funding limitations or PA cannot be either advertized or negotiated. The Government
estimate should remain within funding limitations.
(3) Unit Cost. Unit costs within the body of the estimate should reflect the type of
estimate being prepared. JOC type contracts should reflect unit costs found in the negotiated
contract. Where cost data are not available through previously negotiated or in place contracts,
the procedures developed in EM 1110-1-1300, should be closely followed in developing unit
costs. Final costs should reflect all burdens required by a prudent contractor in the normal
accomplishment of his or her work (e.g., profit and overhead).
b. Required Adjustments. Design agencies should look at how cost estimating will be
affected by the Installation Support approach, and adjust their internal procedures and methods to
reduce estimating time and costs without reducing quality or compromising the Government
estimate. The cost engineer must use the most appropriate tools and the simplest methods for
preparing an estimate. From spread sheets to TRACES parametric, to MCACES, the estimator
must select the methodology that will provide the best product in a timely and economical
manner. "DO NOT DO BUSINESS AS USUAL." The MCACES/TRACES cost estimating
method should not be excluded nor is it a mandatory requirement for use in Installation Support
type contracts. Use as appropriate!
(1) A simple informal estimate is required for a small project with an amount of less than
0,000 (using Federal Acquisition Computer Network (FACNET), which can be issued under a
Purchase Request and Commitment (PRC) or other Simplified Acquisition Procedures (SAP).
The purpose of the estimate is to evaluate the contractor's bid in terms of reasonableness.
(2) A Government Estimate (a signed formal estimate) is required for projects with
construction costs exceeding 0,000. It can be issued under an Invitation for Bid (IF) or
Request for Proposal (RFP).