Original Date: 09/15/1997
Revision Date: 01/18/2007

The Ammunition Equipment Directorate (AED) uses a combination spreadsheet/matrix to develop its cost estimates for project bids. Prior to using the Matrix Cost Estimating method, the AED would perform all calculations to prepare cost estimates submitted with project bid packages. The manually prepared estimates did not provide sufficient information to justify AED’s bids on large-scale contract items.

In 1995, the AED developed a Matrix Cost Estimating method using a commercial-off-the-shelf spreadsheet software package. This method allows AED to define each task that must be completed to comply with the customer’s request with the associated cost of completing the task. Details such as the type of skill and number of man-hours required, labor and material costs, and any associated travel or contractor costs are itemized for each task. This information is then summarized in a spreadsheet that is included in the bid package submitted to the customer making the request for AED’s services.

Because calculations are done automatically, the software spreadsheet package provides the AED the capability to prepare a cost estimate in two days versus the one week preparation time required when calculations were done by hand. The various fields in the spreadsheet can be modified to fit each customer’s requirements. Once the cost estimate is complete, this information is used to develop scheduling baselines and other project management tools, such as pert charts.

Using the Matrix Cost Estimating method provides the AED with a means of handling requests for bids and customer inquiries concerning pricing in a more timely and efficient manner.

For more information see the Point of Contact for this survey.