CNRMC M-4700.1
22 Feb 13
II-5-11
SECTION 2. ADDITIONAL ESTIMATE CRITERIA FOR CONTRACT
MODIFICATIONS
1. Contractor Modifications
. For contract modifications,
including Master Agreement Job Order modifications and for
noncompetitive procurements, estimates must include allowances
for known conditions in the estimating environment. The scope
of the modification estimate must include consideration of
additions and deletions required by the change, the impact on
completed work by the change and the current status of materials
made obsolete by the change. The cost estimate must consider
the means of performing the work, the completion date and other
factors impacting on performance such as delay, disruption or
acceleration. These cost elements must be identified,
quantified and included in any cost estimate. In considering
the means of performance, due consideration must be given to the
contractor's normal operating procedures. The estimate should
be prepared based on the methods, procedures, facilities,
equipment and employees available to the contractor. In such a
sole source environment, it is unfair to the contractor to
negotiate changes on any basis other than those that impact on
the costs of performance by the contractor. Estimates for
changes must be prepared based on the way the contractor would
perform the work, considering current workload as well as
contractor inefficiencies and disruptions that may result from
the change. The estimate must also consider the timing of the
work to be done. Change work authorized early in availability
is less costly than change work authorized later. For example,
work in a propulsion space, authorized three weeks prior to a
Light-Off Examination by the Afloat Training Group could easily
be three to four times the cost of the same scope of work
authorized a week or two after the start of an availability.
2. Acceleration. Acceleration should be considered in
developing estimates for contract modifications that increase
the scope of work. Simply defined, acceleration is a speeding
up of the work in an attempt to complete performance earlier
than otherwise anticipated. Acceleration consists of such items
as increased manning, added shift work, overtime, rescheduling
of work force, new hires, new subcontracting, etc.
Acceleration, when required, must be considered in any estimate
for changed work in a job order. Acceleration costs will nearly
always be incurred when significant growth or new work is added
to a work package that is to be completed in the original
contract performance period. A contract is also "accelerated"
if the original performance period is decreased without an