U.S. Department of Energy ADMIN CHANGE Washington, D.C. DOE G 413.3-21 Chg 1: 10-22-2015 SUBJECT: ADMINISTRATIVE CHANGE TO DOE G 413.3-21, COST ESTIMATING GUIDE 1. EXPLANATION OF CHANGES. These Administrative Changes are limited to changing the Office of Primary Interest (OPI) to the Office of Project Management Oversight and Assessments. 2. LOCATIONS OF CHANGES: Page Paragraph Changed To Title INITIATED BY: INITIATED BY: Office of Management Office of Project Management Oversight & Assessments NOT MEASUREMENT SENSITIVE DOE G 413.3-21 Approved 5-9-2011 Chg 1 (Admin Chg) 10-22-2015 Cost Estimating Guide [This Guide describes suggested non-mandatory approaches for meeting requirements. Guides are not requirements documents and are not to be construed as requirements in any audit or appraisal for compliance with the parent Policy, Order, Notice, or Manual.] U.S. Department of Energy Washington, D.C. 20585 AVAILABLE ONLINE AT: INITIATED BY: https://www.directives.doe.gov Office of Project Management Oversight & Assessments DOE G 413.3-21 i (and ii) 5-9-2011 FOREWORD This Department of Energy (DOE) Guide may be used by all DOE elements. This Guide provides uniform guidance and best practices that describe the methods and procedures that could be used in all programs and projects at DOE for preparing cost estimates. This guidance applies to all phases of the Department’s acquisition of capital asset life-cycle management activities. Life-cycle costs (LCCs) are the sum total of the direct, indirect, recurring, nonrecurring, and other costs incurred or estimated to be incurred in the design, development, production, operation, maintenance, support, and final disposition of a system over its anticipated useful life span. This includes costs from pre-operations through operations to the end of the project/program life-cycle, or to the end of the alternative. DOE programs may use alternate methodologies or tailored approaches more suitable to their types of projects and technologies. DOE Guides are not requirement documents and should not be construed as requirements. Guides are part of the DOE Directives Program and provide suggested ways of implementing Orders, Manuals, and other regulatory documents. DOE G 413.3-21 iii 5-9-2011 TABLE OF CONTENTS 1.0 PURPOSE ........................................................................................................................................................... 1 2.0 GUIDANCE OVERVIEW ................................................................................................................................ 1 2.1 Purpose of the Cost Estimate .........................................................................................................................3 2.2 Overview of the Cost Estimating Process Model ............................................................................................ 4 3.0 COST ESTIMATING INPUTS ........................................................................................................................ 4 3.1 Project/Program Requirements......................................................................................................................5 3.2 Documentation Requirements........................................................................................................................7 4.0 COST ESTIMATING CHARACTERISTICS AND CLASSIFICATIONS ...............................................12 4.1 Planning the Cost Estimates ........................................................................................................................12 4.2 Cost Estimate Classifications ........................................................................................................................ 13 4.3 Cost Estimate Ranges .................................................................................................................................... 17 5.0 COST ESTIMATING METHODS ................................................................................................................. 18 5.1 Detailed Estimating Method .......................................................................................................................... 18 5.2 Parametric Estimating Techniques ............................................................................................................... 19 5.3 Other Estimating Methods ...........................................................................................................................21 5.4 Methods of Estimating Other Life-Cycle Costs ............................................................................................. 25 6.0 COST ESTIMATING DEVELOPMENT PROCESS ..................................................................................26 6.1 Overview of the Cost Estimating Process................................................................................................26 6.2 Estimate Planning ................................................................................................................................... 30 6.3 Cost Estimate Inputs ................................................................................................................................ 31 6.4 Cost Estimate Production .............................................................................................................................. 34 6.5 Cost Estimate Review ............................................................................................................................... 59 6.6 Estimate Reconciliation................................................................................................................................ 60 6.7 Cost Estimate Documentation ....................................................................................................................... 60 6.8 Estimate Maintenance ................................................................................................................................... 66 7.0 COST ESTIMATING OUTPUTS .................................................................................................................. 67 7.1 Cost Estimate Interfaces ................................................................................................................................ 67 7.2 Estimate Presentations to Management ................................................................................................... 68 7.3 Baselines and Change Control ...................................................................................................................... 68 7.4 Analysis .................................................................................................................................................... 69 8.0 COST ESTIMATING EXPECTATIONS...................................................................................................... 69 iv DOE G 413.3-12 5-9-2011 8.1 Summary of Expectations .............................................................................................................................. 69 8.2 Lessons Learned ............................................................................................................................................ 70 8.3 Independent Cost Reviews ............................................................................................................................. 70 8.4 Independent Government Cost Estimates ...................................................................................................... 73 9.0 APPENDICES .................................................................................................................................................. 74 Appendix A: Acronyms .......................................................................................................................................... A-1 Appendix B: Definitions .......................................................................................................................................... B-1 Appendix C: Summary of Federal Requirements ............................................................................................... C-1 Appendix D: Summary of DOE Requirements .................................................................................................... D-1 Appendix E: Generic Review Criteria ................................................................................................................... E-1 Appendix F: Example of the Calculation and Use of Economic Escalation .......................................................F-1 Appendix G: Example of Life-Cycle Cost Analysis ............................................................................................. G-1 Appendix H: Cost Estimate Classifications (AACEI) ......................................................................................... H-1 Appendix I: Bibliography ........................................................................................................................................ I-1 Appendix J: Crosswalk to GAO-09-3SP ................................................................................................................ J-1 Appendix K: ICR and ICE Guidance .................................................................................................................. K-1 Appendix L: DOE Expectations for Quality Cost Estimates .............................................................................. L-1 DOE G