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    Descrete estimate?


    Answer

    The Contract Pricing Reference Guides (CPRG) Volume 2, Chapter 4, defines a cost estimating relationship (CER) as "a technique used to estimate a particular cost or price by using an established relationship with an independent variable. That CER may be mathematically simple in nature (e.g., a simple ratio) or it may involve a complex equation.
     
    Under "Issues and Concerns" it states "If an offeror uses a CER to propose an element of cost, it should be used in all similar proposals. Since the CER can be used to estimate the average value, some jobs should be expected to cost more and others less. With a valid CER, you assume the variances will be minor and will average out across all contracts. To use a CER in some cases and a discrete estimate in others destroys it usefulness by over or understating costs across all proposals (e.g., using the average unless a discrete estimate is lower/higher negates the averaging out of cost across all contracts and is clearly unfair to one of the contracting parties).
     
    Example: In some cases the contractor estimates engineering program support as 5% of the engineering hours from design, integration, and test. This would be an example of a CER. However, on one contract rather than using the 5% factor they instead estimate the hours based on expert opinion, a lower level build-up, or an analogy to a previous contract. This would be an example of a discreet estimate, and would represent inconsistency in the use of the CER.

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