252.215-7002 — Cost Estimating System Requirements.

DFARS 252.215-7002 — Cost Estimating System Requirements.. This clause is part of the Defense Federal Acquisition Regulation Supplement and applies specifically to Department of Defense contracts.

252.215-7002 Cost Estimating System Requirements. As prescribed in 215.408(1), use the following clause: Cost Estimating System Requirements (Jan 2025) (a) Definitions. Acceptable estimating system means an estimating system that complies with the system criteria in paragraph (d) of this clause, and provides for a system that— (1) Is maintained, reliable, and consistently applied; (2) Produces verifiable, supportable, documented, and timely cost estimates that are an acceptable basis for negotiation of fair and reasonable prices; (3) Is consistent with and integrated with the Contractor's related management systems; and (4) Is subject to applicable financial control systems. Estimating system means the Contractor's policies, procedures, and practices for budgeting and planning controls, and generating estimates of costs and other data included in proposals submitted to customers in the expectation of receiving contract awards. Estimating system includes the Contractor's— (1) Organizational structure; (2) Established lines of authority, duties, and responsibilities; (3) Internal controls and managerial reviews; (4) Flow of work, coordination, and communication; and (5) Budgeting, planning, estimating methods, techniques, accumulation of historical costs, and other analyses used to generate cost estimates. Material weakness means a deficiency or combination of deficiencies in the internal control over information in contractor business systems, such that there is a reasonable possibility that a material misstatement of such information will not be prevented, or detected and corrected, on a timely basis. A reasonable possibility exists when the likelihood of an event occurring is— (1) Probable; or (2) More than remote but less than likely (section 806 of Pub. L. 116-283). (b) General. The Contractor shall establish, maintain, and comply with an acceptable estimating system. (c) Applicability. Paragraphs (d) and (e) of this clause apply if the Contractor is a large busi

• The Contractor shall establish, maintain, and comply with an acceptable estimating system.
• Paragraphs (d) and (e) of this clause apply if the Contractor is a large business and either— (1) In its fiscal year preceding award of this contract, received Department of Defense (DoD) prime contracts or subcontracts, totaling $50 million or more for which certified cost or pricing data were required; or (2) In its fiscal year preceding award of this contract— (i) Received DoD prime contracts or subcontracts totaling $10 million or more (but less than $50 million) for which certified cost or pricing data were required; and (ii) Was notified, in writing, by the Contracting Officer that paragraphs (d) and (e) of this clause apply.
• (1) The Contractor shall disclose its estimating system to the Administrative Contracting Officer (ACO), in writing.
• If the Contractor wishes the Government to protect the data and information as privileged or confidential, the Contractor must mark the documents with the appropriate legends before submission.
• (3) The Contractor shall— (i) Comply with its disclosed estimating system; and (ii) Disclose significant changes to the cost estimating system to the ACO on a timely basis.
• (4) The Contractor's estimating system shall provide for the use of appropriate source data, utilize sound estimating techniques and good judgment, maintain a consistent approach, and adhere to established policies and procedures.
• An acceptable estimating system shall accomplish the following functions: (i) Establish clear responsibility for preparation, review, and approval of cost estimates and budgets.
• (x) Require use of appropriate analytical methods.
• (xii) Require management review, including verification of compliance with the company's estimating and budgeting policies, procedures, and practices.
• (2) The Contractor shall respond within 30 days to a written initial determination from the Contracting Officer that identifies material weaknesses in the Contractor's estimating system.
• If the Contractor disagrees with the initial determination, the Contractor shall state, in writing, its rationale for disagreeing.
• (f) If the Contractor receives the Contracting Officer's final determination of material weaknesses, the Contractor shall, within 45 days of receipt of the final determination, either correct the material weaknesses or submit an acceptable corrective action plan showing milestones and actions to eliminate the material weaknesses.