CEMP-E/CECW-E
EI 01D010
1 September 1997
submitted to the Government be accompanied by a
CHAPTER 2
letter of transmittal which includes the following
BACKGROUND AND OBJECTIVES
statement: "To the best of my knowledge the
confidential nature of this estimate has been
2-1. Estimating Philosophy
maintained." This statement should be signed and
dated and maintained until the official markings have
Cost estimates should be prepared as though the
been removed.
Government were a prudent and well-equipped
contractor estimating the project. Therefore, all costs
c. All construction cost estimates, whether
which a prudent, experienced contractor would expect
prepared in-house or by contract, will be given an
to incur should be included in the cost estimate. This
independent review by government cost engineers.
philosophy prevails throughout the entire project
The estimate should be reviewed for the purpose of
cycle--from programming through completion of
confirming the validity of the assumptions and the
construction. Each estimate should be developed as
logic used in estimating the cost of construction tasks.
accurately as possible, in as much detail as can be
The review should always include a check of the
assumed, and be based upon the best information
quantities, unit prices, and arithmetic. It is important
available. This objective is to be maintained so that,
that the reviewer develop and use a uniform checklist
at all stages of the project design and during
procedure in the review process to better assure that
construction, the cost estimate will in all aspects
important considerations have not been overlooked
represent the "fair and reasonable" cost to the
(see checklist in appendix D).
Government. Directives for military, civil works, and
HTRW programs require cost engineers to use
2-3. Work Breakdown Structure (WBS)
automation. The complete Tri-Service Automated
Cost Engineering System (TRACES) automation
It is important that the format of all estimates be as
tools are discussed in appendix E.
consistent as possible. A WBS has been established
for this purpose. It is a hierarchical presentation of
2-2. Responsibility for Preparation and
the scope of work. The WBS provides a common,
Review
ordered hierarchy framework for summarizing
information and for quantitative reporting to
a. Preparation and review of construction cost
customers and management. The purpose of the
estimates through contract award is, by regulation,
WBS is to: (1) provide an organized manner of
the responsibility of the Cost Engineering Office. In
collecting project cost data in a standard format for
concert with this responsibility, the cost engineer
cost reporting and cost tracking; (2) provide a
must be accountable for the completeness, quality,
checklist for categorizing costs; and (3) provide a
and accuracy of the reasonableness of the cost
means to maintain historical cost data in a standard
estimate.
format. Separate unique WBS' have been developed
s
for civil works, military, and HTRW programs.
b. When it is necessary to contract services for
Each WBS is provided both in hard copy and
the preparation of quantities and/or cost estimates,
electronically within Microcomputer Aided Cost
such services will be provided by competent firms
Engineering System (MCACES). The appropriate
specializing in cost engineering. In all cases, the
WBS is to be used.
procedures and requirements of this manual will
apply. Other specific needs, submittal, and
2-4. Estimating Methodology
requirements should also be provided to insure a
complete understanding of the Corps cost engineering
a. Detail estimating methods are to be employed
requirements. These supplementary requirements
whenever adequate design information is known or
should be included as part of a comprehensive
can be reasonably assumed. Detail can be reasonably
contract scope of work. Architect-Engineer (A-E)
assumed for many projects from experience in past
contracts should provide that each final estimate
2-1
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