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Independent Cost Estimate (ICE)

ABUS 038

DAU GLOSSARY DEFINITION

An independent estimate for a Major Defense Acquisition Program (MDAP) or Major Automated Information System (MAIS). The term “independent” refers to both organizational and analytic independence. Organizational independence means that the cost estimate is prepared by an entity not within any organization that would unduly influence the estimate. Analytic independence means that the cost estimate is free of any bias or preconceived notions about the program's most likely cost. The estimate covers the entire life cycle of the program and includes sunk costs; Research, Development, Test and Evaluation (RDT&E) costs; procurement; military construction; military pay; and operations and maintenance costs. The Director, Cost Assessment and Program Evaluation (DCAPE) conducts ICEs and cost analyses for MDAPs. The ICE is also known as the “Will Cost” Estimate.

General Information

Not all acquisition programs are required to have both a program office estimate and an independent cost estimate. The size of the program determines who is responsible for conducting the ICE. In general, the Director of Cost Analysis and Program Evaluation (DCAPE) is the principal official for independent cost estimation and cost analysis, ensuring that the cost estimation and cost analysis processes of the DoD provide accurate information and realistic estimates of cost for the acquisition programs of the DoD. The DCAPE is specifically charged with preparing an ICE for all major defense acquisition programs (MDAPs) and major subprograms. 

An ICE is required for any program that is

  1. Following the Major Capabilities Acquisition pathway and is a major defense acquisition program (MDAP) or major subprogram.  
  2. Following the Rapid Prototyping pathway and is likely to exceed Acquisition Category (ACAT) I levels.
  3. Following the Rapid Fielding pathway and is likely to exceed ACAT I or II levels.
  4. Following the Defense Business System pathway for any program at DCAPE’s discretion.
  5. Following the Services pathway for any program at DCAPE’s discretion.
  6. Following the Software pathway and is likely to exceed ACAT I or II levels..

For MDAPs for which DCAPE does not develop an ICE, the ICE supporting a milestone review decision is provided to the MDA by the applicable Service Cost Agency (SCA) or defense agency equivalent following review and concurrence by DCAPE.

ICE is required:

  • In advance of any Milestone A certification pursuant to Section 2366a of Title 10, U.S.C., or Milestone B certification pursuant to Section 2366b of Title 10, U.S.C.
  • In advance of any decision to enter low-rate initial production (LRIP) or full-rate production (FRP).
  • In advance of any certification for critical Nunn-McCurdy breaches under Section 2433a of Title 10, U.S.C.
  • At any other time considered appropriate by the DCAPE or upon the request of the Under Secretary of Defense for Acquisition and Sustainment (USD(A&S)) or the milestone decision authority (MDA).