36.203
Government estimate of construction costs
An independent, detailed Government estimate is required for most construction contracts and must be tightly controlled to ensure fair pricing and procurement integrity.
Overview
FAR 36.203 requires that an independent Government estimate of construction costs be prepared for each proposed construction contract and for any contract modification expected to exceed the simplified acquisition threshold. This estimate must be detailed and treated as if the Government were a competitor for the award. For two-step sealed bidding, the estimate is prepared once requirements are finalized. Access to the estimate is strictly limited to authorized Government personnel, with limited exceptions during negotiations for disclosing specific cost breakdowns. The total estimate amount can only be disclosed as allowed by agency regulations.
Key Rules
- Preparation of Independent Estimate
- An independent estimate must be prepared for each construction contract and significant modification, with detail equivalent to a competitive bid.
- Timing and Detail
- The estimate should be furnished to the contracting officer as early as possible and must be detailed.
- Two-Step Sealed Bidding
- For two-step sealed bids, the estimate is prepared after requirements are finalized.
- Confidentiality of Estimate
- Access is restricted to those with a need to know; limited disclosure is allowed during negotiations for specific tasks, but not the total estimate unless agency regulations permit.
Responsibilities
- Contracting Officers: Ensure timely receipt and appropriate use of the independent estimate; control access and disclosure per regulations.
- Contractors: Must not seek or use Government estimates except as disclosed during negotiations.
- Agencies: Maintain procedures for estimate preparation, access, and disclosure.
Practical Implications
- Ensures fair and reasonable pricing by providing a benchmark for evaluation.
- Protects the integrity of the procurement process by limiting access to sensitive cost information.
- Failure to comply can result in compromised negotiations or protest risk.