29. Estimating System Integration

Comment: A respondent expressed concern that integrating business systems without clear benefit is costly, disruptive, and an allowable cost. The respondent recommended that the estimating system language be changed to eliminate the requirement to integrate the contractor's estimating system with the contractor's related management systems.

Response: An effective estimating system must gather and process information from other business systems outside the traditional estimating departmental functions. For example, a soundly functioning estimating department will find it necessary to obtain information about historical purchases from the accounting system to help form reliable estimates of prospective direct material purchases. System integration promotes consistency and prevents individual departments within a company from generating output without consideration of information available in other related business systems. Fair and reasonable estimates for future work must be reflective of the contractor organization as a whole, which requires a level of integration. An estimating system that is disconnected to the other contractor business systems is a reflection of poor internal controls.