FAR 36.605—Government cost estimate for architect-engineer work.
Plain-English Summary
FAR 36.605 requires an independent Government cost estimate for architect-engineer (A-E) services before negotiations begin on any proposed A-E contract or contract modification expected to exceed the simplified acquisition threshold. It explains how that estimate must be developed: by a detailed analysis of the required work, as if the Government itself were preparing a proposal. The section also establishes strict controls on access to the estimate, limiting disclosure to Government personnel with a need to know. During negotiations, the contracting officer may disclose limited cost breakdown information for a specialized task when necessary to reach a fair and reasonable price, but the total Government estimate generally must remain undisclosed unless agency regulations allow otherwise. In practice, this section is meant to support sound price analysis, protect the integrity of negotiations, and prevent inadvertent disclosure of the Government’s target price for A-E work.
Key Rules
Independent estimate required
Before negotiations start, the Government must prepare an independent cost estimate for each proposed A-E contract or modification expected to exceed the simplified acquisition threshold. This estimate is a required input to the negotiation process, not an optional planning aid.
Detailed work analysis
The estimate must be based on a detailed analysis of the required work, as though the Government were preparing its own proposal. That means the estimate should reflect the actual scope, labor, effort, and other cost elements needed to perform the work.
Furnished to contracting officer
The completed estimate must be provided to the contracting officer before negotiations commence. This ensures the contracting officer has a Government baseline for evaluating the offeror’s proposed price or fee.
Need-to-know access only
Access to the Government estimate is restricted to Government personnel whose official duties require knowledge of it. The rule is designed to prevent unnecessary disclosure and preserve the integrity of the negotiation process.
Limited disclosure in negotiations
During negotiations, the contracting officer may disclose specialized task cost breakdown figures from the estimate if needed to reach a fair and reasonable price. Any disclosure must be limited to what is necessary for that purpose.
Total estimate generally protected
The overall amount of the Government estimate may not be disclosed unless agency regulations specifically permit it. This protects the Government’s bargaining position and reduces the risk that the estimate becomes a de facto price target.
Responsibilities
Agency
Ensure procedures and internal controls are in place to prepare, safeguard, and limit disclosure of Government cost estimates for A-E work, including any agency-specific rules that authorize disclosure of the total estimate.
Estimating personnel / technical staff
Prepare an independent Government estimate based on a detailed analysis of the required A-E work, using the scope and anticipated effort as if the Government were developing its own proposal.
Contracting Officer
Obtain the estimate before negotiations, use it as a basis for price analysis and negotiation strategy, and control any disclosure during negotiations so only necessary specialized task breakdown information is revealed.
Government personnel with need to know
Access the estimate only when official duties require it and maintain confidentiality consistent with the section and applicable agency rules.
Offeror / Architect-Engineer contractor
Provide a proposal for the A-E services and negotiate price or fee without entitlement to the Government’s full estimate, while responding to any limited, authorized disclosure made by the contracting officer.
Practical Implications
The estimate is a negotiation tool and a control point: if it is weak, outdated, or not tied to the actual scope, the contracting officer loses a reliable benchmark for determining fair and reasonable pricing.
Because the estimate must be prepared before negotiations, late or rushed estimating can delay procurement actions and weaken the Government’s position.
Contracting officers should be careful not to reveal the total estimate casually; even well-intended transparency can undermine negotiations and violate disclosure limits.
The limited exception for specialized task cost breakdowns is narrow. Only disclose what is necessary to resolve the specific pricing issue at hand, not the entire estimate or unrelated line items.
For contractors, the practical effect is that the Government may discuss certain task-level assumptions or cost elements, but the contractor should not expect access to the full Government target or internal pricing model.
Official Regulatory Text
(a) An independent Government estimate of the cost of architect-engineer services shall be prepared and furnished to the contracting officer before commencing negotiations for each proposed contract or contract modification expected to exceed the simplified acquisition threshold. The estimate shall be prepared on the basis of a detailed analysis of the required work as though the Government were submitting a proposal. (b) Access to information concerning the Government estimate shall be limited to Government personnel whose official duties require knowledge of the estimate. An exception to this rule may be made during contract negotiations to allow the contracting officer to identify a specialized task and disclose the associated cost breakdown figures in the Government estimate, but only to the extent deemed necessary to arrive at a fair and reasonable price. The overall amount of the Government’s estimate shall not be disclosed except as permitted by agency regulations.