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BUS 501 Assignment 1: The Independent Government Cost Estimate and the Statement of Work

Evaluate the importance of the IGCE

The Independent Government Cost Estimate (IGCE) is said to be the predicted cost of goods supplied and services offered to the federal government. It is vital in promoting contracting in the government (Compton, Page 19). Total amount of money that the contractor will spend during the contracting business will be included in the IGCE. The costs will be divided into two, direct costs and the indirect costs. Labor which is a direct cost is comprised of the salaries paid to the workers either on an annual or on an hourly basis. Performance costs small benefits, overhead costs, journey costs, gas costs and administrative costs are all supposed to be shown on the list as IGCE. All contract files should possess this document. (State, 14 FAH-2 H-351).

A chance of underestimating or overestimating costs in IGCE does exist because here, the product costs and supply costs are estimated. Because of this mistakes do occur during their preparation. Audit reports do reveal that there are a lot of contracts containing cost estimates that have not been finished yet and are insufficient. (Compton, Page 19). A list of all market survey prices is enough for prediction of commonly used materials readily present in the market. The following talk will now deliberate on the price estimation of the services and which price catalogue is vital especially if they cannot be easily found in the market.

There are three main uses of cost prediction. To store up money during the process of acquiring the contract, during the process of preparing for the contract and to be used as a measure of comparing product prices put forward by possible sellers and to see which price is affordable and reasonable enough and which seller agrees to our proposed price (Compton, Pages 19-20) They are good in prioritizing which projects to fund and in predicting amount of money to be indicated in the yearly budgets. The overall purpose is to come up with a properly drafted IGCE that will be a good bargain for the government. The meaning of this is that efficiency in costs will be observed as affordable contracts are prepared and awarded.

Examine the reasons for confidentiality of the IGCE. Propose two (2) actions that should be taken in order to maintain the confidentiality of the IGCE.

For fair, complete and revealed competition of the contractors, there must be confidentiality for the IGCE. Also the contractors are not supposed to find out the exact amount of money to be accepted by the government. In addition, protecting the IGCE is quite vital. Nothing can make the proposed sellers get accessibility if the government has not yet received all the proposals. At all costs, people who are not involved in acquiring and the contractors should be prevented from accessing the IGCE. It would be foolish if the guys involved in coming up of the documents before the award of the contract are allowed to have access to the contract (Compton, 21) If the IGCE confidentiality is well maintained, confident and private information will not be let out. In case the IGCE has been let out, the Contracting Officer should, with power, cancel the acquiring process. After lack of fair competition is established among vendor, the process is them cancelled by the CO (Compton, Page 21)

Responsibility of handling IGCE should be placed upon a few people. This maintains its confidentiality. Instances where interests conflict should be avoided at all costs if the Contracting Officers desire for a good amount of trust derived from the public. Having clear or unclear monetary interest by the CORs in firms which they are conducting monitoring should be revealed to supervisors so that the supervisor may know what to do. (DOD COR Handbook, Page 16) CO or the project manager is the only people supposed to be in charge. Storing and restrictive marking of the IGCE should also be done properly. For this to be successful, we need lockable safes,drawers,cabinets or rooms found in an area which is quite secure and only allowed to the managing team in charge of acquiring. Employees not part of the discussion should not be involved in the discussion process. Even expected bidders. Through this few people know what is going on. If the information leaks, two people are suspected. Non-disclosure agreement and markings are sufficient in helping the CO ensure IGCE confidentiality. Furthermore, there is a requirement that members of the acquisition team sign the non-disclosure agreement. This information binds them that they will be penalized and held responsible incase sensitive information leaks.

Create a detailed cost estimate Officer whocontracts Julian Sullivan Performance Timeframe February 1 st 2016 untilApril 15 th 2017 Project Description : Install CCTVcameras on allthe major high ways Costs above( Overhead) Categorized direct labor Days Rates/Day Men at theFore 4000 $100 400000 Iron workers 5000 $50 250000 Engineers 3200 $20 64000 Information technology specialists 3300 $30 99000 Supervisors 100 $225 22500 Total Direct Labor $835,500 Trace benefits Combined in direct labor Direct Material Costs

Camera parts Antennas Supporting materials 45000 75000 125000 Total Material Costs $245,000 Other Direct Cost Journeys Deliberationcosts Other costs $50000 $75000 $35000 TOTAL DIRECT COSTS $405000 Salary andadministration costs $60000 Income $200000 TOTAL CONTRACT COST $1.1M

Evaluate the types of statements of work in regard to compatibility with this contract. For contract purposes, work statements are undervalued. Core features of the contract are included therein. It is not easy to come up with a nice Work Statement. . (ICN, 2012) They, (statements) exist within three criteria, its function, its performance and its design. Function criteria elucidate the place of getting the supplies and permits sellers to find out the best way to finish the work. (Compton, Page 49) Performance criteria are same as the initial Statement of Work, but it leaves room for one to be flexible during the process of meeting the needs of the contract. Aims and purposes are clearly written down and the needed results influence the stating of the technical and schedule needs, however, it does not explicitly define how work is to be done. (Compton, Page 50). Design criteria examine the design needs, physical features for the architectural, engineering, construction and commercial based contracts. It says how much work is to be done and using which materials. (Compton, p. 51).

Determine the most appropriate type of statement of work for this contract. Support your position.

For buying construction of fifty two towers fitted with cameras plus radars we have to make use of the performance criteria statement of work. This is because all the features which are important in the performance of the contract including the requirements for acquiring are present in the work and there is no big, inaccurate statement. It includes the qualities of superb performance e.g. measurability, needs such as high standards, surveillance and performance. With it, the purchaser is given more room to perform with flexibility. By using it, the focus is shifted from the procedure to the results. If the project lasts about ten years, great amounts of money in training and maintaining of the project will be saved, and the contractor will pay for shoddy work, and unneeded work will not be carried out. With this, innovation is promoted and government does not regulate too much.


Compton, P. B. (2010). Federal Acquisition: Key Issues and Guidance. Vienna, VA:

Management Concepts, Inc.

Feldman, S. W., & Keyes, W. N. (2011). Government Contracts in a Nutshell (5th Edition). St. Paul, MN: Thomson Reuters.

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