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Title: Investigating the Relationship between the Independent Government Cost Estimate and Actual Contract Costs for Knowledge-Based Service Contracts
Authors: Nate Buck
Byron Wilson
Keywords: Independent Government Cost Estimate
Performance Variables
Actual Contract Costs
Issue Date: 9-May-2021
Publisher: Acquisition Research Program
Citation: Published--Unlimited Distribution
Series/Report no.: Student Poster;SYM-AM-21-193
Student Paper;NPS-CE-21-023
Abstract: The DoD remains on the Government Accountability Office’s (GAO) High-Risk List for contract management, and the DoD Inspector General (DoD IG) declared that DoD contract management is a top ten management challenge. One of the significant causes to acquisition program risks is cost overruns, which can be mitigated by establishing an accurate and reliable independent government cost estimate (IGCE). Although the IGCE provides a baseline for contract cost, many DoD acquisition professionals believe that the ICGE has little to no value in determining the actual contract cost. However, per the DoD’s Independent Government Cost Estimate Handbook for Services Acquisitions, the IGCE serves as the best estimate of a contract’s potential costs and is an essential factor in awarding and administering services contracts. Using multiple linear regression and correlation techniques, this study aimed to identify the relationship between IGCE and actual contract costs and how other procurement variables affect that relationship. One of the keys findings was IGCE has a strong relationship to and is a good predictor of actual contract costs. Additionally, this relationship is affected when additional explanatory variables are introduced to the model. Overall, this study deepened our understanding of the relationship between the ICGE and actual contract costs, providing insight into the need for accurate and reliable cost estimates for government contracting.
Description: Cost Estimation / Graduate Student Research
Appears in Collections:NPS Graduate Student Theses & Reports

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SYM-AM-21-193.pdfStudent Poster579.81 kBAdobe PDFView/Open
NPS-CE-21-023.pdfStudent Paper1.23 MBAdobe PDFView/Open

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