CEMP-E/CECW-E
EI 01D010
1 September 1997
develop the cost as indicated above, even though the
3-6. Costs and Pricing
item may fall under this rule of thumb.
a. The cost for each task should be developed by
3-7. Cost Estimate Format and
summing the direct cost elements for labor,
equipment, and materials. The indirect costs and
Supporting Documentation
other markups associated with each task or work
item should be identified and are considered
All construction cost estimates are composed of
separately for the specific project.
contract costs and other allowable project costs
authorized by directives or regulations. The overall
b. The direct cost of construction tasks of minor
format of the cost estimate should be in accordance
overall cost significance and of a repetitive nature
with the appropriate WBS as described in chapter 2.
can normally be priced from any of those sources
The cost engineer should always remain mindful of
discussed above.
the documentation necessary to support the cost
estimate submission requirements specified for each
c. When using historical pricing, adjustments
phase of project development. Support
must be made for project location, work
documentation such as project narrative, bid
methodology, quantity of work, and other
schedule, plan of construction, backup data, and
dissimilarities which affect prices.
drawings and sketches are further discussed in
chapter 4.
d. Use of lump sum items is discouraged. If
lump sum items are used in the estimate they must
3-8. Civil Works Program Specific
have backup cost data relating to their tasks and
Requirements
source of the data.
The total project cost summary provides a summary
e. As a general rule of thumb, when a task
of project costs in accordance with ER 5-7-1, (FR).
extended direct cost is ,000 or more, or 5 percent
It relates the cost estimate and identified price level
of the total direct cost, whichever is less, detailed
date to the fully funded cost estimate by applying the
backup for the cost should be prepared or quotations
appropriate adjustments for inflation in accordance
obtained as pricing support to the cost estimate.
with the developed project schedule. A total project
cost summary shall be prepared in conjunction with
f. Applying the same rule of thumb, unit price
the preparation of cost estimates which support
bid items for Government estimates may be based on
major project milestones. Approval and signature by
suitable experienced bid prices or historical cost
the Chief, Cost Engineering, affirms that the
data, i.e., predetermined bid item does not exceed
construction feature costs are correct and that the
0,000, or 5 percent of the estimated total cost,
backup data provided for the nonconstruction
whichever is less. For cost estimates prepared
features (Lands and Damages; Planning,
during preliminary or planning phases, where design
Engineering and Design; and Construction
is limited or not available, predetermined unit prices
Management) have been included.
adjusted to current pricing level may be used by the
cost engineer. Use of experienced prices should
3-9. Military Program Specific
consider any necessary adjustments in prime
Requirements
contractor's profit or distributed costs appropriate to
the contract requirements. The cost engineer must
use extreme care and sound judgment when using
In addition to costs described in this chapter, the
predetermined unit costs. The basis for the unit
CWE for MILCON projects should include all other
costs should be well documented and included in the
costs authorized by directive to be charged to
supporting data of the estimate. Where a bid item
construction as funded cost. These costs include
consists mostly of equipment and labor costs, with
installation costs or installed equipment in place to
very little materials and supplies, it is advisable to
be furnished by the using service or other agency,
3-3
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