Understanding Independent Government Cost Estimates
A public sector organization benefits greatly by appropriately preparing an independent government estimate (IGE) for facilities repair, renovation, maintenance, and new build projects. Their primary value lies in helping public sector organizations validate contractor proposals with respect to reasonableness and realism.
The process involves an owner or owner’s representative using a detailed scope of work about any repair, renovation, maintenance, or new build activity to develop a line-item construction cost estimate independent of contractor overhead and profit.
A reliable, defensible, and efficient method to build an IGE is to use a objective, current, locally researched unit price book (UPB). The UPB data should also use common terms and definitions and standardized data architecture (e.g. expanded CSI Masterformat.
The use of current locally researched information in lieu of “national average” cost data and location or economic factoring increases precision, as location or economic factoring has been demonstrated to introduce significant error.
Note: Contractors can follow the same type of process to validate subcontractor costs.