Proposal Adequacy Checklist Clarification of the term "Discrete" in Cost Estimating Relationships

Started by BTR2562 · Aug 29, 2022 · 3 replies

  1. B

    BTR2562

    Aug 29, 2022 · 3y ago

    Original post

    In the DFARS 252.215-7009 Proposal Adequacy Checklist, the question is asked for Reference 9. FAR 15.408 Table 15-2, Section II, Paragraph A or B - "Does the proposal explain the basis of all cost estimating relationships (labor hours or material) proposed on other than a discrete basis? 

    What does it mean proposed on other than a "discrete" basis?

  2. D

    Don Mansfield

    Aug 29, 2022 · 3y ago

    I found the following in the Contract Pricing Reference Guide (Volume 2, 4.5):

    Quote

    • Is the CER used consistently?

    If an offeror uses a CER to propose an element of cost, it should be used in all similar proposals. Since the CER can be used to estimate the average value, some jobs should be expected to cost more and others less. With a valid CER, you assume the variances will be minor and will average out across all contracts. To use a CER in some cases and a discrete estimate in others destroys it usefulness by over or understating costs across all proposals (e.g., using the average unless a discrete estimate is lower/higher negates the averaging out of cost across all contracts and is clearly unfair to one of the contracting parties).

    This implies that you can either use a CER or make a discrete estimate (not both). This makes me think the question on the checklist is poorly worded. I think "other than discrete" means that you used a CER.

  3. B

    BTR2562

    Aug 29, 2022 · 3y ago

    Thanks for explaining; this totally makes sense and I agree the wording used in the "checklist" is not the best for the question.

  4. V

    Vern Edwards

    Aug 29, 2022 · 3y ago

    A discrete cost estimate is an engineering estimate of a specific cost, like materials or labor. Such discrete estimates are assembled into a total cost estimate.

    An "other than discrete cost estimate" would be a parametric estimate, which is obtained from an equation based on a cost estimating relationship (CER), in which some cost is a function of some independent independent variable like weight or size. If the estimate is based on a CER, the offeror should identify the independent variable, the cost function, and the derivation of the function.

    At least, that's what I think it means.

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