Appendix B - Cost Estimation Procedures.docx

Appendix B

Cost Estimation Procedures

a. Throughout the duration of the contract, only the following cost data items shall be utilized:

1) RSMeansTM Heavy Construction Cost Data (hardcopy, current year), bare costs localized to Columbus Mississippi Cost City Index (CCI).

2) RSMeansTM Heavy Construction Database (current year) with “RSMeansTM Online Construction Cost Estimator” system, (Automated Estimating System), bare costs localized to Columbus, Mississippi.

3) Open market: Non-Prepriced Items (NPIs)

b. The means of cost estimation shall be the most recent quarterly update of the “RSMeansTM Online Construction Cost Estimator” estimating system. Included in the contractor’s submitted proposal shall be one hard copy (detailed level report) and two electronic copies of the contractor’s “RSMeansTM Online Construction Cost Estimator” estimate. One electronic copy will be Microsoft Excel format and the other will be in Adobe Acrobat PDF format.

c. All cost estimates shall use the applicable divisions in the RSMeansTM Heavy Construction Cost Data book (based off the RSMeansTM 50 division breakout) and following Master_Format 2018.

d. All estimates from the contractor shall use assembly type line items when available in the RSMeansTM Heavy Construction Data. The contractor will not break out individual line items when an assembly line item is available that incorporates all applicable individual line items.

e. Each line item in the RSMeansTM Heavy Construction Cost Data book and in the “RSMeansTM Online Construction Cost Estimator” estimating software shall have unit prices localized / indexed to Columbus, MS.

f. The contractor shall use the notes section in the “RSMeansTM Online Construction Cost Estimator” to explain and justify the use of the line items and quantities in the contractor’s estimates.

g. When deciding on a line item that has a max, average, and min cost the average cost shall be used. If there is only a max and min cost, the negotiated quantity shall be equally split between the maximum and minimum line items. (i.e., if the negotiated quantity was 10, then 5 would be used under the max and 5 would be used on the min line items)

h. Each Task Order (TO) estimate shall use line item prices (bare costs, localized); from the RSMeansTM Heavy Construction Cost Data book or the “RSMeansTM Online Construction Cost Estimator” software system. These line item prices shall be multiplied by the quantities to be installed. Proposals and estimates shall be in the “unburdened” format, without overhead, profit, taxes, etc. For assembly type line items, the cost figures listed add 10% for profit so the contractor will divide the Material Total cost by (1.1) and the Installation Total cost by (1.1) within the assembly line item to establish a bare cost. The line item total is the sum of all line items in addition to any applicable NPIs. This line item total will be multiplied by the contractor’s coefficient for a subtotal. That subtotal will be further multiplied by the current MPC Tax rate. The final price will be the sum of the subtotal plus the MPC Tax. That final price will be the value of the TO issued to the contractor. This formula is depicted below this paragraph. There are no other multipliers or add-ons to the subtotal price. Each TO becomes a firm, fixed price contract and there will be no changes to price, quantities, or negotiated methods except as modified by the CO. Each estimate the contractor submits becomes the property of the Government. The contractor is encouraged to thoroughly investigate the requirements of each TO and include those costs into the estimate. Prior to negotiations, the Government will make reasonable effort to discover line items, which are missing from the contractor’s estimate. After TO award there will be no modifications to compensate the contractor for line items accidentally excluded. Conversely, there will be no modifications to extract items inadvertently left in the contract. The contractor shall not insert non-relevant or duplicate line items.

1) Line Item Total = RSMEANS Cost Data line items sum + all NPIs

2) Subtotal = Line Item Total x Coefficient

3) MPC Tax = Subtotal x 3.63%

4) Contractor Final Price to the Government = Subtotal + MPC Tax

i. Estimates shall include all pertinent line items for the project as described in the SOW, in project drawings and sketches, and at the site visit. Calculations used in preparing estimates for TOs shall be based on “net,” “in-place” quantities. Pre-priced line items are “in-place” requirements and inclusive of all work necessary to provide a complete, functional product. Additional quantities for waste, lap, shrinkage, expansion, compaction, damage due to delivery, etc., will not be allowed unless specifically stated in the RSMeansTM Heavy Construction Cost Data book and in the “RSMeansTM Online Construction Cost Estimator” estimating system as a component of the line item cost, (i.e. it is specifically stated in the aforementioned references to allow 5% waste for concrete ground pours).

j. The cost estimation procedures and RSMeansTM line items are used as a means for determination of a fair and reasonable price for the work described in the SOW. The contractor shall be responsible for completing all work required by the SOW, drawings, submittals, and other contract documents. The only instances in which funds will be added or removed after TO award will be government directed addition to or modification of existing work, differing site conditions, or liquidated damages.

k. Contingencies will be adjusted by access to new RSMeansTM Databases online. The offeror’s coefficient factor must account for all contractor costs. No allowance whatsoever will be made later for any other purpose. Coefficients will not be adjusted for the life of the contract.

Non-Prepriced Items (NPIs)

a. NPIs may be used either on items for which RSMeansTM Cost Data provides no pricing or on items directed herein.

b. NPI unit costs will require mutual agreement between Government and Contractor. The Contractor shall obtain three (3) quotes for materials, labor, and equipment costs from independent third-party sources (e.g., not the Contractor or a Subcontractor).

c. The quotes shall:

1) Be written

2) Bear the company letterhead

3) Be signed by a company director or de facto director

d. NPI items shall be at the bottom of a Cost Proposal, grouped together.

e. The Government and Contractor may agree that an NPI developed for one TO may be used for another TO.

f. The cost of dumpster rental, hauling and tipping fees shall be NPI. Dumpster NPIs must only receive two (2) quotes and the NPI cost only needs to be updated every 6 months; new NPI quotes for dumpsters are not necessarily required for each TO. The dumpster NPI is the only NPI where a quote can be provided by the Contractor or Subcontractor directly.

The Coefficient

a. The coefficient compensates the Contractor for his expenses in executing the elements of the SOW and of each Task Order.

b. The coefficient includes, but is not limited to, the following:

1) Personnel costs, including the Superintendent, Quality Control Manager, Health and Safety Manager, Administrative staff, Project Managers, Field Engineers, Laborers, Labor Burden, and any other expenses that will be common to all Task Orders

2) Costs of the office at CAFB

3) Local Overheads

4) Home Office Overheads

5) Profit

6) Subcontractor O&P, Subcontractor Markup, and all other costs related to subcontractors

7) Vehicle costs, travel, company vehicles

8) Insurance, bonds, taxes (including Social Security, unemployment, etc.)

9) Keeping project sites clean and orderly, to include keeping grass within worksites, staging areas, and storage areas mowed to match adjacent areas

10) Final project cleanup

11) Telephone service, Internet service, costs of making copies, costs of reproducing drawings, per diem, incidentals, lodging

12) Development and production of submittals, submittal logs, status and progress reports, progress schedules, real property reports, etc.

c. Items that are not compensated as part of the coefficient include, but are not limited to, the following:

1) MPC Tax

2) Traffic and work site signs, barricades, foreign object debris (FOD) barriers, cones, and flag persons

3) Portable toilet rental

4) Dumpsters, tipping fees, etc.

5) Mobilization / Demobilization

6) Surveying

7) Destructive and non-destructive testing required for quality assurance

d. There will be four (4) separate coefficients provided on the Bid Schedule:

1) A coefficient for standard working hours at Columbus AFB.

2) A coefficient for non-standard working hours at Columbus AFB (after standard working hours, nights, weekends, and holidays).

3) A coefficient for standard working hours at Shuqualak Auxiliary Field.

4) A coefficient for non-standard working hours at Shuqualak Auxiliary Field (after standard working hours, nights, weekends, and holidays).