Independent Government Cost Estimate (IGCE)

IGCE Templates and Worksheets:
 

1. IGCE template
2. General Services Administration (GSA) has tools that can assist with developing an IGCE at https://buy.gsa.gov/pricing
3. Amazon Web Services Simple Calculator
4. Microsoft Azure Pricing Calculator
5. Google Cloud Pricing Calculator

What is an Independent Government Cost Estimate (IGCE)?

The IGCE is a detailed cost estimate for acquiring cloud service licenses and labor. Each period of performance requires an IGCE (base award, and all option periods). It serves as the basis for reserving funds during acquisition planning; it provides the basis for comparing costs or prices proposed by offerors; and it serves as an objective basis for determining price reasonableness in cases in which only one offeror responds to a solicitation.
Along with the Statement of Work (SOW), the IGCE is an essential document shared between the DOI contracting officer and the purchasing agency. It is not expected that individuals assigned as CORs will be expert cost estimators but conducting thorough market research helps along with seeking access to individuals reasonably well trained in this discipline.

Common IGCE development methodologies

Development of the IGCE may be accomplished using one or a combination of methodologies identified and briefly explained below.

Historical Data

Often the proposed requirement is similar to a previously performed requirement. When this is the case, a review and analysis of historical data can be utilized to formulate the new IGCE. Ensure the present requirement is very similar to the previous requirement and adjust it to reflect any differences and/or learning curve efficiencies. All reasonably accessible sources are utilized to gain analogous information (e.g. earlier efforts anywhere within other organizations, other Government agencies, commercial efforts, etc.).

Industry Standards

For some types of labor (e.g. network engineer, software development, project manager etc.), industry standards have been developed for the approximate number of hours estimated as time and materials (T&M) or labor hours (LH) to support functions. These standards may be useful benchmarks from which to build the IGCE.

Typical IGCE cost elements

Each IGCE should address the below-listed cost elements if applicable. Along with each portion of the cost breakdown, there should be an explanation of the rationale used to formulate the estimate. For ease of evaluation and comparison, each task shall be listed in the order in which it appears in the body of the SOW.

• Materials/Licenses/Supplies
• Direct Labor
• Overhead
• Other Direct Costs
• Travel
• Subcontractors/Consultants
• Fee/Cost Reimbursement
• General and Administrative Fees

Tips for preparing the IGCE

• Use prior historical rates and information if applicable.
• Structure the IGCE to identify and address each subtask in the SOW.
• Include all cost elements for goods and services for each task/requirement.
• Include detailed breakdowns of estimates for material and travel.
• Indicate methodology used for estimating the level of effort required.
• Revise estimate when applicable based on new price/cost information and revised/new requirements.
• Conduct market research if needed, including attending vendor demonstrations.
• Do not share the IGCE with anyone outside the designated procurement team.
• Do not reveal information which may give any one organization an unfair competitive advantage.
• Consider unofficial vendor quotes to build the IGCE.
• Ensure official vendor quotes are directly submitted to a Contracting Officer / Authorized Purchasing Agent.
• Seek Contracting Officer / Authorizing Official guidance when unsure.

Labor Mix/Hours

The IGCE should clearly indicate the labor categories and associated hours at each level to perform each task identified in the Statement of Work. For ease of evaluation and comparison, each task shall be listed in the order in which it appears in the body of the SOW. In some cases where a particular task involves multiple functions; the preparer may want to further break down the IGCE according to these separate functions. If the SOW is broken down into subtasks, then there should be a separate analysis of each. One commonly overlooked consideration is in the area of overall management or direction. The preparer should include a reasonable number of hours for this function. The preparer of the IGCE should consider the skills required for task order accomplishments, not individuals. The Government is not bound to provide full-time employment for any Contractor employee. Show only the number of hours that will be productively utilized.

Subcontracting

For the purposes of developing the IGCE, the preparer should assume all work under the SOW will be done by the prime Contractor even if the preparer knows or assumes the Contractor will propose subcontracting a portion of the requirement. It is the Contractor's responsibility to identify and propose work which it intends to subcontract.

Travel

The IGCE should be consistent with travel requirements identified in the SOW. The IGCE should clearly indicate the anticipated destinations, number of trips, number of personnel involved with each trip, and trip duration. (NOTE: Travel time should be considered when calculating the trip duration, e.g. if the Contractor is required to travel on Sunday for a Monday to Friday trip, the trip would be six days, not five. And, travel hours should be included in compensable labor hour estimates). All rates utilized in the IGCE should be consistent with those specified in the federal Travel Regulations.

Other Direct Costs (ODC)

The IGCE should identify all estimated costs other than labor and travel as ODC cost elements. The preparer of the IGCE should not include any cost element, whether it be a material or ODC, for general or miscellaneous office supplies. Such supplies are part of the Contractor's normal business operations cost and should not be included as direct cost unless such supplies are unique to requirements.

Documentation Methodology

As part of the documentation submitted to support the IGCE, the preparer should indicate how the IGCE was developed. If historical data was used, the source of such data should be identified. If standards were applied, reference to those should be indicated. Or if, for example, a work breakdown using in-house experience at doing similar work is utilized, reference to the particular project or other similar reference should be shown with the IGCE. This reference is important, both as a record to be used for reference for future efforts, and as evidence of the realism of the IGCE so that it can be relied on by the contracting officer, if necessary.