Sentinel Audit II:  Status of the Federal Bureau of Investigation’s Case Management System (Redacted)

Audit Report 07-03
December 2006
Office of the Inspector General

Appendix 4
Cost Estimating Methodologies Used in the
Independent Government Cost Estimate

The Independent Government Cost Estimate methodology involves the use of six cost estimating techniques, detailed below. The method chosen to estimate each element of the project was based on the availability of technical and cost data.

Parametric Modeling - The parametric technique uses a compilation of historical data to formulate functional relationships (or models). These relationships are then used to predict the cost of the new system. The costs for custom-developed software were estimated using a commercial parametric modeling tool, CostXpert. Cost Estimating Relationships are a form of parametric estimation, but are separately defined for clarification.

Cost Estimating Relationships – Cost Estimating Relationships are factors that are applied against the known costs of a portion of the system under consideration to estimate the costs of an unknown portion of the system.

Analogy - Analogy estimation involves drawing parallels between the system under consideration and other systems for which technical and cost information is known.

Engineering Assessment - The engineering or "bottom-up" technique aggregates a cost estimate from resource estimates made at the lowest level possible. Often the estimate is compiled by determining the unit cost of each system component, multiplying by the quantity, and aggregating the results to product total system costs.

Vendor Quote - The vendor quote technique consists of gathering cost information directly from specific vendors, contract vehicles, and catalog resources.

Historical - The historical technique consists of using relevant past cost data from similar items to estimate the cost of the current item.

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