W9_OAN_Company Estimate Process vs GAO Estimate Process

  1. Problem Definition

In this week blog posting, Author want to compare estimate process in Author’s company with Government Accountability Office (GAO). Author will use Likert Scale / Compensatory method to compare both process

  1. Development of Feasible Alternatives

To make estimate, there are 5 steps to follow for Author company. Those steps are :

  • Define the estimating elements
  • Find the OE element price data
  • Check the validity of price data
  • Make estimates using predefined format
  • Request approval from the competent authority

While GAO estimating process consist of 12 steps. Each steps are important to ensuring that high-quality estimates are meet the criteria. Figure 1 show GAO’s estimate process.

Figure 1: GAO’s Process Estimate

  1. Possible Solution

Base on both alternatives, Author will compare using the 12 steps GAO estimating process and using compensatory model. For compensatory model, Author will use Likert scale as shown at table 1.

Table 1: Likert Scale Criteria

After determine the likert scale and refer to 12 steps GAO estimate process, we can put each task with Likert value who meet with current condition of company in estimation process like on table 2.

Table 2: Company Estimating using Likert Value

  1. Selection Criteria

We will perform a checklist of each stage proposed by GAO approach in the estimation process. If there are gap from the checklist and potentially to be fixed, it will be recommended to management to improve the estimation process.

  1. Analysis and Comparison of the Alternatives

Based on the assessment of checklists in table 2, the authors calculate the average likert value and we will see which attributes meet the GAO requirements and which have not.

Table 3: Result of GAO vs Company Estimating Process

Refer to table-3, only step-1 or define estimate purpose and step 4 – Determining estimate structure which already meet with GAO, the other step (still remind to consider highly and very highly implemented.  Company need to consider GAO for a better and reliable estimating process, because 12 steps purposed by GAO as one of best practice in process estimation.

  1. Selection and Preferred Alternatives

Based on above assessment and analysis, company must consider unimplemented step for a better and reliable estimating process, because 12 steps purposed by GAO as one of best practice in process estimation.

  1. Performance Monitoring and the Post Evaluation of Result

Management should consider the use of GAO Estimating Process as part of the estimation stage process to avoid Over Budget and Behind Schedule Project and monitoring should be conducted during estimation process to ensure that all requirements are met.

 

Refrences

  1. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick. (2014). Engineering Economy 16th edition Chapter 14 page 559- 617, England: Pearson Education Limited.
  2. GAO (March 2009). GAO Cost Estimating and Assessment Guide, A Reliable Process for Developing Credible Cost Estimates pages 8-11.
    Retrieved from http://www.gao.gov/new.items/d093sp.pdf
  3. Module 08-1 Managing Cost Estimating & Budgeting
    Retrieved from http://www.planningplanet.com/guild/gpccar/introduction-to-managing-cost-estimating-budgeting
  4. W8_MFO_Benchmark of Company Cost Estimate Process vs GAO Process
    Retrieved from http://emeraldaace2017.com/2017/09/26/w8_mfo_-benchmark-of-company-cost-estimate-process-vs-gao-process/