General Policies and Procedures
Examples of Assessment Criteria Yes No
1. Does the contractor have adequate estimating policies and procedures that address proper implementation of
parametric techniques?
2. Do the established policies and procedures contain guidance for:
• Appropriate use of parametric techniques?
• Performing internal reviews to assess compliance with estimating policies and procedures, as well as consistency in estimating practices?
• Complying with relevant Government procurement laws and regulations?
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Data Collection and Analysis
Examples of Assessment Criteria Yes No
1. Has the contractor established a process for collecting and analyzing relevant cost and noncost (e.g., technical
information) data on a periodic basis?
2. Does the contractor use a consistent format (e.g., work breakdown structure) for collecting cost and noncost data?
3. Is data accumulated in a manner consistent with the contractor’s estimating practices?
4. Does the contractor identify and examine any data anomalies?
Special Considerations Related to Cost Estimating Relationships (CERs)
Examples of Assessment Criteria Yes No
1. Does the contractor demonstrate the ability to establish valid CERs that are reliable and credible predictors of cost?
2. Does the contractor’s procedures for implementing valid CERs include:
• Ensuring data relationships are logical? o Various alternatives (i.e., cost drivers) are
considered
o Cost drivers selected are good predictors of cost • Ensuring databases are credible?
o Data are current, accurate, and complete
o Data are appropriately analyzed and normalized o Any adjustments are logical, reasonable, and
verifiable
• Demonstration that the data relationships are strong? o Analytical tests are used to evaluate strengths • Evidence that non-quantitative information was also
considered?
o Materiality of cost being estimated o Quality of alternate estimating techniques
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Examples of Assessment Criteria Yes No
3. Does the contractor maintain documentation that includes mathematical formulas; independent and dependent variables; statistical analysis results (or other analytical test results if appropriate); and other data used to demonstrate the CERs validity?
4. Are updating policies and procedures established that contain guidance related to:
• Identifying significant data outside the normal update schedule for analysis, to determine if an out-of-period update is needed?
• Identifying and incorporating savings associated with new ways of doing business (e.g., technology
changes, single process initiatives, software process improvements)?
5. Are monitoring processes established to ensure CERs remain reliable predictors?
6. Are procedures in place to ensure that CERs are used appropriately in proposals?
7. When Forward Pricing Rate Agreements (FPRAs) are established do they contain definitions of all variables; tracking requirements; and appropriate applications for the CERs?
Special Considerations Related To Commercial Parametric Models
Examples of Assessment Criteria Yes No
1. Are estimating policies and procedures established that contain:
• Brief description of the commercial model(s) used? • Guidelines for the calibration process?
• Identification of the model’s significant cost drivers and input parameters?
2. Is the commercial model calibrated in accordance with policies and procedures, and does it include:
• Use of historical data to the extent practical?
• Demonstration that the data used in calibration were properly analyzed, normalized, and mapped?
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Examples of Assessment Criteria Yes No
description of key inputs; input parameter values and associated rationale; calibration assumptions; results of interviews (e.g., names of people interviewed, dates, information obtained); cost history; and calibration results?
3. Are adjustments made to the parameter values justified with appropriate assumptions and rationale?
4. Is the model updated consistently with policies and procedures, and does it reflect:
• Cut-off dates negotiated with the Contracting Officer for ongoing programs (if applicable)?
• Adjustments for the effects of any significant events that may impact the estimate?
5. Is the model validated to ensure it is a good predictor of costs?
6. Are on-going monitoring processes established to maintain the reliability of the model to be a good predictor of costs?
7. Are information system security controls established to maintain the integrity of the system?
Special Considerations Related to Company Developed Models
Examples of Assessment Criteria Yes No
1. Did the contractor perform a cost-benefit analysis prior to implementing the company-developed model?
2. Does the contractor demonstrate compliance with the applicable criteria described in the CERs category (above) and/or the commercial models category (above)?
3. Have information system controls been established to monitor systems development and maintenance activities? 4. Has the model been thoroughly tested to ensure it
produces the expected results?
5. Does the contractor develop and maintain documentation regarding the system description that includes information on the processing performed by the model; data processed by the model; reports generated by the model; and user instructions (including parameter values)?
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Examples of Assessment Criteria Yes No
6. If the company-developed model is complex, were people experienced with systems engineering and/or software engineering used to implement it?
Other Considerations:
Examples of Assessment Criteria Yes No
1. Did the company perform adequate cost-benefit analyses prior to implementing parametric estimating techniques? 2. Does the company compare its parametric estimates to
prior actual costs or independent estimates to analyze significant differences?
3. Do the parametric estimators:
• Receive proper training on the techniques being used? • Have relevant experience?
• Receive guidance regularly from their supervisors?