1.1.  Introduction

1.1.1.  An Independent Government Estimate (IGE) is an unbiased cost estimate based upon the specifications and without the influence of potential contractor's marketing effort or input. In the Air Force construction environment, the IGE is generally prepared by either the government's own design engineer or estimator, or by the Architectural & Engineering firm that prepared the design.

1.1.2.  FAR 36.203 requires preparation of an IGE when the anticipated total contract or modification is $100,000 or more. At the discretion of the contracting officer, an IGE may be required for actions less than $100,000. Waiver of this requirement however, does not relieve the contracting officer of the responsibility to determine price reasonableness. FAR 36.203 further requires that the IGE be prepared in as much detail as though the Government were competing for award. The purpose of a construction IGE is three-fold:

1.1.2.1.  It is the basis for budgeting and reserving funds for the contract;

1.1.2.2.  It is the basis for comparing costs or prices proposed by offeror(s); and,

1.1.2.3.  It is the basis for determining price reasonableness when only one proposal is received.

1.1.3.  The key to development of a good cost estimate is to approach it from a prospective contractor's viewpoint. This means the estimate should include (1) the direct costs incident to the construction; (2) an allowance for indirect or overhead costs; and (3) an allowance for a reasonable amount of profit.

1.1.4.  Once the IGE is developed, CE and the CO ensure that the cost estimate is fully funded.