1F. SOW Attachment 6 - A-E Requirements for Cost Estimates.pdf

A-E Requirements for Cost Estimates Prepared by: AFCEC/COSC

2 April 2022

1. Tasks:

1.1. The A-E shall develop a project construction cost estimate with the following minimum characteristics:

1.1.1. The estimate shall utilize the most current Department of Defense (DOD) cost data (Cost

Book) by preparing the estimate in current versions of either Parametric Cost Engineering

System Software (PACES) or Micro-Computer Aided Cost Estimating System 2nd

Generation (MII) software in accordance with UFC-3-740-05.

1.1.2. The estimate shall be developed by experienced personnel. Specifically, the lead estimator shall have a minimum of 5 years’ experience estimating government construction.

1.1.3. Consistent with Air Force policy and business rules, the estimate shall be developed with a methodology (minimum parametric) and estimate class that is suitable for the respective design maturity as determined from Association for the Advancement of Cost Engineering

International (AACEI) Recommended Practice 56R-08. Per Air Force policy, a design must reach 35% maturity before considered an AACEI Class 3 estimate.

1.1.4. The estimate shall be well-documented. All estimator assumptions, notes, and quantity calculations shall be documented within the software note fields, a Basis-of-Estimate

(BOE) document, backup sheets, or a combination of methods.

1.1.5. In accordance with UFC-3-740-05, the estimate shall be formatted with the Uniformat II

Work Breakdown Structure (WBS) for military projects as provided in the PACES and MII software.

1.1.6. The estimate shall accurately capture all project features associated with the respective design. The A-E shall demonstrate quantity validity and estimate traceability by documenting or recording quantity calculations in quantity backup sheets, separate estimator notes, within the estimating software notes fields or a combination of methods.

1.1.7. Per UFC 3-740-05, A-E shall utilize allowances and/or design contingencies to cover construction cost increases due to design incompleteness, detail changes, alternative design changes, and associated costing inaccuracy. Design contingencies will normally decrease, as design information becomes known. Usage of all assumptions, allowances and/or design contingencies should shall be fully documented and justified within the BOE or estimate software note fields.

1.1.8. The A-E shall tailor the estimate to the specific geographic location. If utilizing PACES, the

A-E shall apply the appropriate Area Cost Factor (ACF), as required by UFC-3-701-01. If utilizing MII, the AE shall utilize project area specific labor and equipment libraries.

1.1.9. The A-E shall inflate DOD cost data (labor, equipment, and material) to current year value.

Additionally, the AE shall escalate project pricing to mid-point of construction by applying the Military Construction Program (MCP) Index. The index is based on forecasts of anticipated escalation for the future fiscal years issued by the Comptroller of the

Department of Defense. The MCP index is updated annually and available through UFC 3-

701-01 Table 4-2 for the current year. Usage and calculations of inflationary/escalatory factors shall be documented in the BOE and/or software notes.

1.1.10. The A-E shall adjust or account for DOD data productivity rate changes, if appropriate, to job site specific requirements. Requirements such as, safeguards, security, safety, confined space, double handling of materials, and other constructability issues shall be calculated. The derivation of productivity factors shall be well documented and justified within the BOE and/or software notes.

1.1.11. The A-E shall fully document within the BOE or software notes all cost elements that differ from the utilized Cost Book.

1.1.12. The estimate shall be prepared utilizing current acquisition strategy or assumed strategy with the estimate and associated documentation clearly identifying prime and subcontract tiers to facilitate compounding calculations. Additionally the A-E shall apply indirect costs

(markups) as appropriate and fully document the basis of each in the BOE or software notes fields. Examples of markups to consider are, but not limited to:

1.1.12.1. Direct Cost Markups – Productivity, Overtime, Sales Tax, Misc, Payroll Tax, Workman’s Comp, Inflation (to current year)

1.1.12.2. Subcontractor Markups – Job Office Overhead (JOOH), Home Office Overhead

(HOOH), Profit, Bond, Excise, Miscellaneous

1.1.12.3. Prime Contractor Markups – JOOH, HOOH, Profit, Bond, Excise Tax, Miscellaneous

1.1.12.4. Project Markups – Escalation (project mid-point), Design Contingency, Construction Contingency (Program Specific), Supervision, Inspection and

Overhead (SIOH), Miscellaneous, Special (such as Gross Receipts Tax)

1.2. In accordance with Air Force policy and business rules, the A-E shall develop a Basis of Estimate

(BOE) narrative report. The BOE is a document, developed by the estimating team, which describes how an estimate is prepared and defines information used in support of development. The BOE shall provide traceability of underlying estimate characteristics and provide enough detail to enable an independent, proficient cost engineer to recreate the estimate using only the details provided.

1.2.1. The AE may utilize the BOE template developed and maintained by the Air Force Civil

Engineering Center (AFCEC). The most current version will be provided by the government and can be found at the below link.

https://usaf.dps.mil/teams/10758/CEIPRegions/Shared%20Documents/Forms/AllItems.as px?InitialTabId=Ribbon%2ERead&VisibilityContext=WSSTabPersistence

1.2.2. The AE may utilize the estimating software note fields to document many of the BOE requirements. If PACES or MII notes fields are utilized, then the AE may simply reference them in the BOE document. The AE shall provide a detailed report “with notes” extracted from the software (.pdf format) to facilitate BOE informational review to individuals without software access.

1.3. This estimate is subject to review, validation, and certification by an appointed independent Air

Force Cost Engineering Reviewer/Approver (R/A) prior to leadership approval of the baseline

Programmed Amount (PA). The A-E shall respond and reconcile all R/A comments in writing. If the A-E concurs with the comments, the R/A recommendations shall be incorporated into the estimate by the A-E, including supporting documentation, then re-submitted for back-check. If the A-E non-concurs with R/A comments, then the A-E shall provide written response detailing https://usaf.dps.mil/teams/10758/CEIPRegions/Shared%20Documents/Forms/AllItems.aspx?InitialTabId=Ribbon%2ERead&VisibilityContext=WSSTabPersistence https://usaf.dps.mil/teams/10758/CEIPRegions/Shared%20Documents/Forms/AllItems.aspx?InitialTabId=Ribbon%2ERead&VisibilityContext=WSSTabPersistence the reason for non-concurrence. If requested by the A-E, the installation will facilitate a meeting with R/A to discuss estimate comments to aid in timely reconciliation.

2. Deliverables:

2.1. The A-E shall submit native estimate file for PACES (.paces) or MII (.mlp)

2.2. The A-E shall submit Basis of Estimate (BOE) narrative as described in 1.2 above

2.3. The A-E shall submit summary level estimate report from software to assist installation with populating the DD Form 1391 (.pdf format).

2.4. The AE shall submit detailed estimate report with notes from software (.pdf format).

2.5. The AE shall submit all estimator backup to include takeoff sheets, backup calculations, quotations and any other information that demonstrates traceability, defensibility, and reasonableness of the estimate. The documents may be attached to the BOE or bundled separately.

2.6. Contractor shall allow 14 calendar days for AFCEC to review. Contractor will provide responses and revisions 7 days after receipt of AFCEC Review/comments.

3. Applicable References:

3.1. UFC 3-701-01 – DoD Facilities Pricing Guide

3.2. UFC 3-730-01 – Programming Cost Estimates for Military Construction

3.3. UFC 3-740-05 – Handbook: Construction Cost Estimating

3.4. AACEI 56R-08 – Cost Estimate Classification System – As Applied in Engineering, Procurement, and Construction for the Building and General Construction Industries.

3.5. AACEI 34R-05 – Basis of Estimate