What is the Independent Cost Estimate (ICE) Analysis method?

An Independent Cost Estimate (FAR 15.404-1(b)(2)(v)) is a bottoms-up estimate of a price based on known data. This should be an unbiased estimate free from any influence from the potential supplier/subcontractor whose proposal you're analyzing.   

Common mistakes found in an ICE analysis may include:

• Technical evaluation stating a quoted effort is "reasonable, based on experience"

• Missing Basis of Estimates (BoE)

• The analysis only speaks to variance criteria (differences) rather than including what criteria are accepted (similarities).

Although a formal formatted Independent Cost Estimate (ICE) is not currently supported in SpendLogic, you can follow these steps to perform your analysis:

1.  SERVICES:  If your estimate includes Labor, add a Services line  and perform a labor rate analysis.  You will need to know some basic information which should come from your internal program/technical point of contact such as:

     a.  Labor Categories needed

     b.  Level of Expertise for these labor categories (Education, Experience, etc.)

     c.  Number of hours needed for each labor category

2.  MATERIAL:  If your estimate includes Material, add a Part .  Search for "Direct Material" as your Part Number.  If it does not appear, select +Click to Create a New Part from the dropdown and enter a description of the direct material you are analyzing.   NOTE: You can also create ODC (Other Direct Cost) as a "Part" for this purpose which would be a new Line Item. 

ANALYSIS METHOD HINT:  Generally, the analysis method you will choose is Market Comparables but the methodology could be something else depending on your particular situation.

3.  TRAVEL:  If your estimate also includes travel, add a Travel line and perform a travel analysis.  

4.  If your Purchase Order is something other than Fixed Price (FFP), the tool will add lines for G&A and Fee as appropriate.

5.  Set up the proposed side of the analysis using the data provided.

6.  As stated above under Services, contact your technical/program focal point and request a technical evaluation for labor categories, labor hours, travel, materials, and ODCs as appropriate.  

7.  Buyers may have to conduct some market research for materials/ODCs while labor and travel are performed in their respective modules.

8.  FEE/PROFIT:  Conduct a Weighted Guidelines Analysis for YOUR position on fee.  

Once all of your proposed elements have been analyzed, you are done. 

If you need help with SERVICE, MATERIAL, TRAVEL, or FEE/PROFIT, click on Help & Resources at the top and search using these key words to find a number of videos and articles which will provide you with additional guidance.

If you experience any issues, you can always reach out to us at [e-mail].