Creating the Basis of Estimate

Even though I have created the Compliance Matrix and I know where the bid should be in the way of dollars I really need to create the Basis of Estimate (BOE).

This BOE should stand up to a Audit (Google DCAA) so now let's look at the basic elements that are required.

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Start with a new spreadsheet file that has no baggage (meaning calculations already in use from a past project).

Create a worksheet in this spread sheet to capture all the worksheets you will create as a "Cost Roll Up".

The next step is to create worksheets for labor hours, materials, supplies, vehicles or fleet, and other direct costs. Last create a workload worksheet that will help you validate all the hours and needs for labor, equipment, material, and all those worksheets you just created. This article will address format later for each worksheet.

I find that if labor cost is 69% to 75% of your cost (it should be) that using this as a basis to then use the hours of work for labor and management for each cost line item - this often allows you to create the percentage of the sum of all cost line items in man hours.

This Blog article will be updated periodically since there are still paragraphs of teaching to present in how the Basis of Estimate is executed.