Cost Estimating

DoD Cost Estimating Guide

The DoD Cost Estimating Guide (v2.0), published January 2022, is an update to the guide previously published in January 2021. It provides the cost community with a DoD-level resource for a consistent and repeatable cost estimating process guide (not mandate) developed by the OSD Cost Assessment & Program Evaluation (CAPE). It was designed to be both a starting point for new cost estimators and an excellent resource for the experienced cost analyst.

DOD Cost Estimating Guide, V2.0, Jan 2022

Features of the DoD Cost Estimating Guide v2:

A guide centered around a generalized DoD Cost Estimating Process that provides a description and explanation of cost estimating basics
Applies to all types of cost analyses
Non-Component specific
Very limited use of “must” and “shall”
Uses consistent terminology in order to provide a clear foundation for new analysts
Consolidated lists of references and training resources
A link between DoD Policies and Component Guides
Statute/Policy references reflective of recent changes
A recommended reading list focused on cost estimating, acquisition, and weapon system commodities
Commodity-specific WBS/CES examples
Expanded information on Middle Tier of Acquisition programs
Expanded discussion of community tools, models, and resources
A new case study demonstrating the cost estimating process using a notional program

The iterative cost data analysis process always starts with policy, followed by defining the program. After collecting the associated documentation for a program, a base cost estimate is created. This is followed by documenting the methodology used for the base estimate. Then modeling the program and, eventually, providing initial analysis results. Upon review of the initial results and any necessary repetition of previous steps, starting with program definition, comes the final analysis results and documentation and then precedes the next program's cost data analysis.

Expected to evolve and be updated over time, the DoD Cost Estimating Guide was created in collaboration with the Air Force, Army, Navy, and Marine Corps cost communities, as well as Missile Defense Agency (MDA), National Reconnaissance Office (NRO), Naval Postgraduate School (NPS), Air Force Institute of Technology (AFIT), Defense Acquisition University (DAU), Government Accountability Office (GAO), and National Aeronautics & Space Administration (NASA).