Independent Government Cost Estimate(IGCE)
The government's internal estimate of what a procurement should cost, used to evaluate the reasonableness of contractor proposals.
Overview
An Independent Government Cost Estimate (IGCE) is the government's own estimate of the expected cost of a contract, prepared before proposals are received. It serves as a benchmark for evaluating whether contractor pricing is fair and reasonable. The IGCE is developed independently of contractor input and is typically not shared with offerors.
Why It Matters in GovCon
While you never see the IGCE, it directly influences whether your proposal is considered fairly priced. If your bid is significantly higher or lower than the IGCE, it may trigger additional scrutiny — too high and you look uncompetitive; too low and the government may question whether you understand the requirements.
Key Details
- Preparation: Developed by the requiring activity (the program office requesting the procurement) based on market research, historical data, and engineering estimates.
- Confidential: The IGCE is a government-internal document and is not disclosed to offerors.
- Uses: Budgeting, evaluating price reasonableness, determining the appropriate contract type, and establishing negotiation positions.
- Accuracy: A well-prepared IGCE reflects realistic labor rates, material costs, overhead, and profit margins for the industry.
Related Terms
- Price Reasonableness
- Market Research
- Cost Plus Fixed Fee (CPFF)
- Best Value
More Finance Terms
A guarantee submitted with a bid that ensures the bidder will enter into a contract if selected and provide required performance and payment bonds.
The projected cost to finish remaining work on a contract or project based on current status.
Overhead costs that support the overall organization rather than direct contract performance.
Costs that cannot be traced to a single contract but are allocated across projects via indirect rates.
The total cost of owning, operating, maintaining, and disposing of a system or product over its entire useful life.
Costs that can be identified specifically with a contract or project but are not labor or materials — such as travel, subcontracts, or specialized services.
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