Planning : The State Estimate

The State Estimate

The CM’s approach to the State Estimate of the value of the contracted work differs based on the value of the contracted work. In accordance with Department regulations, 21 CCR 1520.4, the CM develops a detailed estimate and a work schedule based on the scope of work. In addition, the CM seeks assistance from the Department project manager and functional units with specialized knowledge of the work components.

Keep the State Estimate confidential

The greatest cost of a consultant contract is the direct labor, including fringe benefits and overhead. Therefore, the State’s estimate is only as accurate as the estimate of the number of direct labor hours required for each project listed in the SOW.

State Estimate is also called
Workload Justification or Director's Estimate.

For A&E contracts, the workload to be contracted out is contained in district databases. The District decides which projects and tasks to contract out during a particular contract period of performance. The District then uses information in the workload databases to estimate the total number of hours required on each project listed on a particular contract. At this point, the District could use a cost-per-hour rate from an existing district A&E contract with a similar scope, or contact another district for its current cost per hour, to determine the total amount needed for the contract.

When creating an estimate for multi-year contracts,
remember to add a yearly escalation factor.

When preparing an amendment to an existing contract where more funds are required, create a similar estimate of funds needed to cover the additional work that will completed during the amendment period.

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