Requirement of Estimating System
- 1. DFAR 252-215-7002 Estimating System (d) System requirements. (1) The Contractor shall disclose its estimating system to the Administrative Contracting Officer (ACO), in writing. If the Contractor wishes the Government to protect the information as privileged or confidential, the Contractor must mark the documents with the appropriate legends before submission. (2) An estimating system disclosure is acceptable when the Contractor has provided the ACO with documentation that— (i) Accurately describes those policies, procedures, and practices that the Contractor currently uses in preparing cost proposals; and (ii) Provides sufficient detail for the Government to reasonably make an informed judgment regarding the acceptability of the Contractor's estimating practices. (3) The Contractor shall— (i) Comply with its disclosed estimating system; and (ii) Disclose significant changes to the cost estimating system to the ACO on a timely basis. (4) The Contractor's estimating system shall provide for the use of appropriate source data, utilize sound estimating techniques and good judgment, maintain a consistent approach, and adhere to established policies and procedures. An acceptable estimating system shall accomplish the following functions: (i) Establish clear responsibility for preparation, review, and approval of cost estimates and budgets. (ii) Provide a written description of the organization and duties of the personnel responsible for preparing, reviewing, and approving cost estimates and budgets. (iii) Ensure that relevant personnel have sufficient training, experience, and guidance to perform estimating and budgeting tasks in accordance with the Contractor's established procedures. (iv) Identify and document the sources of data and the estimating methods and rationale used in developing cost estimates and budgets. (v) Provide for adequate supervision throughout the estimating and budgeting process. (vi) Provide for consistent application of estimating and budgeting techniques. (vii) Provide for detection and timely correction of errors. (viii) Protect against cost duplication and omissions. (ix) Provide for the use of historical experience, including historical vendor pricing information, where appropriate. (x) Require use of appropriate analytical methods. (xi) Integrate information available from other management systems. (xii) Require management review, including verification of compliance with the company's estimating and budgeting policies, procedures, and practices. (xiii) Provide for internal review of, and accountability for, the acceptability of the estimating system, including the budgetary data supporting indirect cost estimates and comparisons of projected results to actual results, and an analysis of any differences. (xiv) Provide procedures to update cost estimates and notify the Contracting Officer in a timely manner throughout the negotiation process. (xv) Provide procedures that ensure subcontract prices are reasonable based on a documented review and analysis provided with the prime proposal, when practicable.
- 2. (xvi) Provide estimating and budgeting practices that consistently generate sound proposals that are compliant with the provisions of the solicitation and are adequate to serve as a basis to reach a fair and reasonable price. (xvii) Have an adequate system description, including policies, procedures, and estimating and budgeting practices, that comply with the Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement.