CALENDAR YEAR

The twelve month period of time from January 1 through December 31. See also Fiscal Year.

CALIBRATION

The comparison of a measurement system or device of unverified accuracy to a measurement system or device of standard or known and greater accuracy to detect, correlate, report, correct, or eliminate by adjustment any variation or discrepancy in accuracy of the instrument or measuring devices being compared with the standard.

CALIBRATION TEST(S)

Tests to determine the Characteristics of a measuring device, Component, or Assembly and to determine if these characteristics are within specification.

CALL CONTRACT

A contractual arrangement wherein services or personnel are provided on an open Contract at the discretion and option of the buyer. Terms and conditions of the contract, which includes pricing and scheduling, are predetermined or the methodology for determining them is established. Call contracts are frequently used for the ordering of spare parts.

CALLOUT

A note or instruction on the face of a drawing that clearly designates, by arrow or description, the portion of the drawing to which it refers.

CANCELLATION

The unilateral decision of a customer not to continue Contract performance for subsequent fiscal years' requirements. See also Termination and Termination for Convenience.

CANCELLATION CEILING

The maximum amount that the Government will pay a Contractor upon Cancellation of a Contract. The Ceiling is a predetermined portion of the Contract Value, which the contractor would have recovered as a part of the unit price, had the contract been completed. A cancellation ceiling is generally established for all Multiyear Procurement contracts.

CANNIBALIZE

The act of removing serviceable parts from one item of equipment to install them on another item of equipment to restore the latter to a serviceable condition.

CAPABILITY

1) Capacity or ability. 2) A measure of an item's, or system's, ability to achieve mission objectives, given the item, or system, condition during the mission. See also Operational Capability.

CAPACITY ANALYSIS

An Analysis most frequently employed in a machine or process area to project the capacity for additional Business.

CAPITAL

1) The excess of Assets over Liabilities for an Accounting entity. 2) The expendable or revolving funds used to finance an enterprise or activity. 3) The Assets of an enterprise, especially capital property.

CAPITAL ASSETS

Assets of a permanent character having continuing value.

CAPITAL EQUIPMENT

Equipment with a Contractor owned title.

CAPITAL EXPENDITURE

An Expenditure made for the acquisition of, or addition and betterments to, Fixed Assets.

CAPSTONE TEST AND EVALUATION MASTER PLAN

A Test and Evaluation Master Plan which address the testing and evaluation of a defense system comprised of a collection of "stand alone" Component systems which function collectively to achieve the objectives of the defense system.

CASH

Coin, currency, money orders, checks, or other forms of exchange, on hand or on Deposit, subject to withdrawal on demand. The most liquid form of Assets.

CASH BASIS OF ACCOUNTING

A system of Accounting whereby: (a) Revenues are accounted for as collected; and, (b) Expenditures are accounted for as payments are made. See also Commitment Basis of Accounting.

CASH DISCOUNT

A reduction in the amount due on an Account, if the amount is paid for with Cash. See also Discount, Purchase Discount, and Trade Discount.

CASH FLOW

The difference in Cash between Accounts Receivable and Accounts Payable with adjustments made for delinquent Accounts and payment check processing.

CATASTROPHIC FAILURE

A sudden change in the operating Characteristic(s) of an item or material, which results in a complete lack of useful performance.

CAUSAL RELATIONSHIP

The relationship of cause and effect. The cause is the antecedent act or agency by which an effect is produced. The effect is the consequential result produced by its antecedent.

CEILING

1) The maximum amount the Government will pay on an Incentive Type Contract, the ceiling is usually expressed as a percentage of the contract Target Cost. 2) The amount of Independent Research and Development and/or Bidding and Proposal Expense recognized by negotiation with the Government as allowable during a given year for purposes of Contract Pricing and costing. 3) Any upper limit placed on resources.

CEILING PRICE

The maximum exposure of a customer in any Cost Sharing relationship. The Ceiling price is normally calculated as a percentage of Target Cost.

CERTIFICATE OF CONFORMANCE

A Contractor's written statement, when authorized by Contract, certifying that supplies or services comply with Contract Requirements.

CERTIFICATE OF COST AND PRICING DATA

Under Federal Acquisition Regulation (FAR), each Contractor is required to submit Cost or price Data and to certify that the data is current, accurate, and complete prior to the Award of most Contracts. Cost and Pricing Data certification is not required when the contract price is based on Adequate Competition, established catalog or market prices of Commercial Items sold to the general public, or when prices have been set by law or regulation.

CERTIFICATION

The confirmation by a Government Comptroller, in response to a request for a spending action, and prior to an official Commitment, that funds are available in the amount requested, in the correct fiscal year, and in the proper Appropriation.

CHAIRMAN'S PROGRAM ASSESSMENT (CPA)

A report which summarizes the views of the Chairman of the Joint Chiefs of Staff on the balance and capabilities of the Program Objective Memorandum (POM) force and the support levels to attain national security objectives. The CPA provides an assessment of the POM force to assist the Secretary of Defense in decisions on the Future Years Defense Program subsequent to receipt of the POMs.

CHANGE OF SCOPE

A customer directed change pertaining to deliverable items or Contract tasks. See also Scope Change and Contract Funding Change.

CHANGE ORDER

A unilateral written order to a Contractor to modify a contractual requirement within the scope of the Contract, pursuant to the changes clause contained in the contract.

CHARACTERISTIC(S)

1) A distinguishing feature or attribute. 2) A physical, chemical, visual, functional or any other identifiable property of an individual, product, or item. See also Functional Characteristics, Physical Characteristics, and Operational Characteristics.

CHARGE NUMBER

The sequence or series of digital and/or alphabetical code numbers designed for controlling and sorting Accounting information for Cost accumulation, reporting, and management use. The charge number also provides cost information in relation to contract Work Breakdown Structure and organizational identity.

CHART

A graph, tabular listing or display of Data used in presentations.

CHART OF ACCOUNTS

A list of Accounts systematically arranged, and applicable to a specific enterprise, giving account names and numbers, if any. A Chart of accounts, accompanied by descriptions of their use and of the general operation of the books of account, becomes a classification or manual of accounts, which is a leading feature of a system of accounts.

CHARTER

A document, issued by a governing authority, authorizing and outlining the organizational structure, rights, and responsibilities of an organization, group, or program. See Program Manager's Charter and Joint Program Manager's Charter.

CHECK ROUTINE

A routine or program designed to provide information about the operational condition of a Computer or computer controlled system. Generally a check routine is designed to give the operator of the system a high confidence level that the equipment is operating properly.

CHECKOUT

A sequence of functional, operational, and Calibration tests to determine the condition and status of a weapon system, or Element thereof.

CHOP

Concurrence acquired during coordination. See Sign Up To.

CIRCUIT ELEMENT(S)

Electrical, electronic, or mechanical piece parts not subject to disassembly without destruction of designed use, such as electronic tubes, resistors, capacitors, transformers, valves, etc.

CIVILIAN AGENCY ACQUISITION COUNCIL

One of two councils authorized to generate changes to the Federal Acquisition Regulation (FAR). See also Defense Acquisition Regulatory Council.

CLAIM

1) An assertion by one of the contracting parties seeking adjustment or interpretation of an existing Contract subject to the dispute clause on the contract. 2) The amount or making of such demand or assertion.

CLARIFICATION REQUEST (CR)

A request by the Government for additional clarifying information during a Source Selection. CRs are issued to bidders as part of the proposal Fact-finding process.

CLASS I CHANGE

An Out of Scope Change. See also Engineering Change, Class I.

CLASS II CHANGE

An In Scope Change. See also Engineering Change, Class II.

CLASSIFIED (OR CLASSIFICATION)

Term used to cover Data and information which falls into DoD Security Classification categories (Confidential, Restricted, Secret, and Top Secret)

CLIMATIC AREAS

Global areas requiring special considerations (performance parameters, support infrastructure, Cost, etc.) due to distinct or severe climatic environments. The four designated climatic areas for equipment considerations are: (a) temperate; (b) cold weather; (c) desert; and, (d) tropical.

CLOSURE

1) Contract Close Out. 2) The deactivation of a military installation or Facility. 3) The process of finalizing negotiations.

CODE AND UNIT TEST (CUT)

For Software, translating Design Specifications into Computer Software at the Component and/or unit levels, and verifying and validating the associated functionality incorporated at these levels. CUT is the first phase in the Software Development Cycle.

CO-DEVELOPMENT

Systems or subsystems cooperatively designed and developed in two or more countries. Shared responsibilities include Design and Engineering, and may be expanded to include Applied Research.

COEFFICIENT OF CORRELATION (r)

A measure of the relationship (Correlation) between two variables. The coefficient ranges from plus one when a perfect positive correlation exists (as X increases, Y increases linearly) to a negative one when there is a perfect negative correlation. A correlation coefficient of zero indicates no relationship between the variables. See Coefficient of Determination and Regression Analysis.

COEFFICIENT OF DETERMINATION (r2)

A measure used in Regression Analysis, r2 ranges from zero to one and is developed by dividing the variation in Y explained by the regression equation by the total variation in Y, e.g., r2 .89 means 89% of the total variation was explained by the regression equation.

COGNIZANT ACTIVITY

The activity assigned technical or management responsibility.

COLLATE

1) The grouping together of related items to provide a record of events and to facilitate further processing. 2) The organization of text, art work, and/or graphics into a document suitable for printing and/or distribution.

COMBINATION(S)

A group of things in which the order of arrangement is immaterial, as opposed to a Permutation in which arrangement is a distinguishing feature.

COMMAND MEDIA

Formal documents, including policy statements, directives, management guides, administrative procedures, operating procedures, office instructions, and organization Charts and bulletins.

COMMERCE BUSINESS DAILY (CBD)

A publication of the Department of Commerce in which the Government publicizes a synopsis of potential Contracts to notify interested vendors.

COMMERCIAL

1) Not Governmental. 2) Contracts between companies on nongovernmental Business, may also include contracts with foreign governments and agencies thereof.

COMMERCIAL ITEM (OR COMPONENT, OR PART)

1) A nondevelopmental item that has been produced for sale in the Commercial marketplace. 2) Any item, including supplies and services, of a class or kind that is: (a) regularly used for other than Government purposes; and, (b) sold or traded in the course of conducting normal Business operations. See also Standard Item.

COMMERCIAL SALE

A sale made by U.S. industry directly to a foreign buyer, not administered by the DoD and not involving Credit under the provisions of the Foreign Military Sales Act. See also Military Export Sales.

COMMITMENT(S)

1) A pledge. 2) A firm administrative reservation of funds, by a Government Comptroller, for future obligation, based upon firm procurement directives, orders, or requisitions. A commitment is made in response to a request for a spending action, and follows certification by the comptroller that funds are available in the amount requested, in the correct fiscal year, and in the proper Appropriation. 3) An offer or proposal to a customer, or a supplier, or acceptance of an offer from the customer, leading to the Execution of a Contractual Instrument or purchase order. 4) A Contract or other legal obligation for goods or services to be furnished.

COMMITMENT BASIS OF ACCOUNTING

The method of Accounting for the available balance of an Appropriation, fund, or Contract Authorization whereby Commitments are recorded in the Accounts as reductions of the available balance. See also Cash Basis of Accounting.

COMMODITY

1) Anything useful, or with Value. 2) A group or range of items which possess similar Characteristics, have similar applications, or are susceptible to similar supply management methods.

COMMON ITEM

1) An item of standard Design, application and specification normally procurable from several manufacturers or suppliers or available from only one manufacturer but with wide usage or of such Design that the multiple application is apparent. 2) Sometimes loosely used to denote any Consumable item except repair parts or other technical items. 3) Readily available Commercial Items. 4) Items used by two or more military services of similar manufacture or fabrication which may vary between the services as to color or shape (as vehicles or clothing). 5) Any part or Component which is required in the assembly of two or more complete End Items.

COMMON SERVICING

Any function performed by one military service in support of another military service for which reimbursement is not required from the service receiving the support.

COMMON SUPPORT EQUIPMENT (CSE)

1) Items required to support and maintain a system or portions of a system while not directly engaged in the performance of its mission, and which are presently in the DoD inventory for support of other systems. 2) Equipment, in general use and in the customer's inventory, required to support and maintain a particular type or category of equipment, weapons system, or other hardware. See also Support Equipment and Peculiar Support Equipment.

COMMONALITY

A quality which applies to materiel or systems possessing like and interchangeable Characteristics enabling each to be utilized or operated and maintained by personnel trained on the others without additional specialized training, and/or having interchangeable repair parts and/or Components; and applying to Consumable items interchangeably equivalent without adjustment.

COMPARABILITY ANALYSIS

An Examination of two or more systems and their relationships to discover similarity or differences.

COMPARATIVE COST ESTIMATING

Estimating the Cost of an item by comparing the job to be done (or portions of it) to all or parts of a previously completed job for which valid and comparable cost and technical information is available. This method of Cost Estimating can be applied to any level of work, detailed or summary, for estimating the cost producing Elements, or the cost itself. Generally, a proficient cost estimator cannot help but use this method to some extent, consciously or unconsciously, because experience and natural thought processes force this measurement or Appraisal. In comparative cost estimating, Complexity Factors or Ratios may be used and applied to the known costs or Cost Elements to create the Estimates, if enough information is available on the previously completed program to make a valid comparison of the new with the old program. See Cost Estimating Methods and Analogy Cost Estimate.

COMPATIBLE

1) Capable of living or performing in harmonious combination with others. 2) Capable of orderly, Efficient integration and operation with other Elements in a system.

COMPENSATED PERSONAL ABSENCE

Any absence from work for reasons such as illness, vacation, holidays, jury duty, military training or personal activities for which an employer pays compensation directly to an employee in accordance with a plan or the custom of the employer.

COMPETITION

1) An environment of varying dimensions relating to buysell relationships in which the buyer induces, stimulates or relies on conditions in the marketplace that cause independent sellers to contend for the Award of a Contract and/or the sale of the product. See Effective Competition. 2) For the Government, an Acquisition Strategy whereby more than one Contractor is sought to Bid on a service or function, and the winner is selected on the basis of criteria established by the activity for whom the work is to be performed. The law and DoD policy require maximum competition throughout the Acquisition Life Cycle. See also Full and Open Competition.

COMPETITIVE NEGOTIATION

A Negotiation for a competitive contract Award, where the Source Selection process: (a) is initiated by a Request for Proposals, which sets out the customer's (or buyer's) requirements and the Criteria for Evaluation of offers; (b) contemplates the submission of timely proposals by the maximum number of possible offerors; (c) usually provides for discussion and/or Fact-finding with those offerors found to be within the Competitive Range; and, (d) concludes with the Award of a Contract to the one offeror whose offer, price and other factors considered, is most advantageous to the customer (or the buyer.)

COMPETITIVE RANGE

A technique used in the Source Selection process to eliminate those offerors who do not meet minimum requirements. The competitive range is determined by the customer on the basis of technical, management, or price considerations and other salient factors. Unless excepted by circumstances prescribed by departmental or Agency regulations, the Contracting Officer must conduct written or oral discussions with all responsible offerors who submit proposals within the competitive range.

COMPILER

A Software system used as an automatic means of translating statements from problem oriented language to machine oriented language.

COMPLEXITY FACTOR

A judgment or experience Factor used to evaluate the degree of unknowns, difficulty of Design, or manufacturing processes anticipated for a new End Item as compared to a similar item. See Comparative Cost Estimating.

COMPONENT

1) An Element. 2) Any relatively simple part of a complex entity. 3) An Assembly or any combination or parts, subassemblies and assemblies mounted together normally capable of independent operation in a variety of situations. 4) A subsystem, assembly, subassembly or other major element of an End Item. 5) A Military department, or other Agency of the DoD. See DoD Components.

COMPONENT ACQUISITION EXECUTIVE (CAE)

A single official within a DoD Component who is responsible for all Acquisition functions within that Component. This includes Service Acquisition Executives for the Military Departments and Acquisition Executives in other DoD Components who have acquisition management responsibilities.

COMPOSITE

Made up of distinct Components or Elements.

COMPOSITE COST PER HOUR RATE

Total estimated direct hours divided into total estimated dollars.

COMPOSITE INFLATION INDEX

An Escalation index which combines the Compound Inflation Index with the effects of price level changes, by taking into account the historical outlay patterns of specific Appropriations. Composite indices are used to convert constant Base Year Dollars to current Then Year Dollars.

COMPOSITE LABOR RATE

The weighted Average labor rate by skill mix, percentage of effort, or time phasing of any group, organization, or project.

COMPOSITE RATE

A labor, overhead or other rate which has been weighted to account for a mix of different Elements.

COMPOUND INFLATION INDEX

An Escalation index which relates the price level for each fiscal year to a specific Base Year, which is assigned a value of 1.00.

COMPOUNDING

The process of increasing the future worth of a present value. An application of the principle that future worth is greater than present worth when viewed from the future, due to the payment of interest.

COMPTROLLER

The chief financial manager for an activity.

COMPUTER

1) Any device or machine which computes. 2) More commonly, an electronic machine that performs high-speed mathematical or logical calculations, or assembles, stores, correlates, or otherwise processes information derived from coded Data in accordance with a predetermined program.

COMPUTER PROGRAM

A sequence of instructions (and sometimes Data), which cause a Computer to perform the functions prescribed by the instructions. The instructions may be directly loadable machine language, or higher level languages, which require interpretation, assembling, or compiling prior to being directly usable by the computer. See also Software.

COMPUTER RESOURCES

The totality of Computer hardware, firmware, software, personnel, documentation, supplies, services, and support services applied to a given effort.

COMPUTER RESOURCES LIFE CYCLE MANAGEMENT PLAN (CRLCMP)

A primary program management document that describes the Development, acquisition, test, and support plans for Computer Resources integral to, or used in, direct support of systems.

CONCEPT EXPLORATION AND DEFINITION (CE/D)

The initial phase of the system Acquisition Life Cycle, which begins at Mission Need Determination. During this phase, the Acquisition Strategy is developed, system alternatives are proposed and examined, and system program requirements are expanded to support subsequent phases. See Concept Definition Phase.

CONCURRENCY

An Acquisition Strategy which combines or overlaps different phases of the Acquisition Life Cycle, or which combines Development Test and Evaluation with Operational Test and Evaluation.

CONCURRENT BUDGET RESOLUTION (CBR)

A resolution passed by both Houses of Congress, but not requiring the signature of the President, setting forth, reaffirming, or revising the congressional Budget for a fiscal year. The CBR establishes funding Ceilings for each of the Appropriation bills, and must be adopted before legislation providing new Budget Authority, new spending authority, new Credit authority or changes in revenues or the public Debt limit is considered.

CONCURRENT ENGINEERING

A systematic approach to the integrated, concurrent Design of products and their related processes, including manufacture and support. This approach is intended to cause designers, from the beginning, to consider all Elements (such as Cost, schedule and performance) of the system Life Cycle from requirements Development through Disposal.

CONFIGURATION

1) The arrangement of the parts or Elements of something. 2) A collection of an item's descriptive and governing Characteristics, which can be expressed: (a) in functional terms (i.e., what performance the item is expected to achieve); and, (b) in physical terms (i.e., what the item should look like and consist of when it is built). 3) The functional and/or Physical Characteristics of hardware or software, as set forth in technical documentation. 4) The complete technical description required to fabricate, test, accept, operate, maintain and logistically support systems and equipment.

CONFIGURATION CONTROL

The systematic Evaluation, coordination, approval or disapproval, and implementation of all approved changes in the Configuration of a Configuration Item after formal establishment of its Configuration Identification.

CONFIGURATION CONTROL BOARD (CCB)

A board composed of representatives from program or project functional areas such as Engineering, Configuration Management, procurement, production, test and logistic support, training activities, and using and supporting organizations. This board approves or disapproves proposed change requests with each member recording his organization's official position as regards the CCB Chairman's decision. The program manager is normally the board chairman and makes the final decision on all changes unless otherwise directed by command policy. The board issues a directive to implement its decision.

CONFIGURATION IDENTIFICATION

The process of establishing and describing the Contract Baselines, and the identification of Configuration Items. See Configuration, Allocated Configuration Identification, and Functional Configuration Identification.

CONFIGURATION ITEM (CI)

1) An aggregation of hardware, firmware, or Computer Software or any of their Discrete portions, which satisfies an end use function and is designated by the Government for separate Configuration Management. Configuration items may vary widely in complexity, size, and type, from an aircraft, electronic, or ship system to a test meter or round of ammunition. 2) Any item required for logistic support and designated for separate procurement.

CONFIGURATION MANAGEMENT

Technical and administrative direction and surveillance actions taken to: (a) identify and document the functional and Physical Characteristics of a Configuration Item; (b) Control changes to those Characteristics; and, (c) record and report Configuration change processing and implementation status.

CONFIGURATION MANAGEMENT PLAN

The document which describes the Configuration Management organization, the procedures to be used to implement Configuration management, and the individuals responsible for each particular phase of configuration management.

CONFIGURATION MANAGER

1) The person responsible for the establishment and maintenance of all Configuration Control procedures for an item or program and for the administrative processing/tracking of all change proposals for the item or program. 2) That individual assigned the responsibility and delegated the authority for management of an item's Configuration within a Contractor's management structure. See Configuration Management.

CONFIGURATION STATUS ACCOUNTING

1) The recording and reporting of the information that is needed to manage Configuration effectively, including a listing of the approved Configuration Identification, the status of proposed changes to configuration, and the implementation status of approved changes. 2) The act of reporting and documenting changes made to systems or equipment subsequent to the establishment of a Baseline configuration in order to maintain a configuration status.

CONSTANT (YEAR) DOLLARS

A method of relating dollars in several years by removing the effects of inflation and showing all dollars at the value they would have in a selected Base Year. Constant dollar series are derived by dividing Current Year Dollar estimates by appropriate price indices, a process generally known as deflating. The result is a time series as it would presumably exist if prices were the same throughout as in the base year - in other words, as if the dollar had constant purchasing power. Any changes in such a series would reflect only changes in the real (physical) volume of output. Constant dollar figures are commonly used for gross national product and its Components.

CONSTRAINT(S)

1) Restrictions or boundaries impacting overall Capability, priority and resources. 2) Limitations of any kind that need to be considered in the planning, programming, scheduling, implementing, or evaluating of programs or systems.

CONSTRUCTION CONTRACT

Any Contract for the construction, alteration or repair of buildings, bridges, roads, or other kinds of Real Property. It does not include any contract for the manufacturing, producing, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, missiles, or other kinds of personal property.

CONSTRUCTIVE CHANGE

1) A Contract change made without formal written authority. 2) During contract performance, an oral or written act or admission by the Contracting Officer or other authorized customer official, which is of such a nature that it is construed to have the same effect as a written Change Order.

CONSULTANT(S)

Independently employed professionals that provide technical manufacturing, legal, financial, administrative, or management advice, research, studies, and recommendations to the Government, Contractors, private industry, or individuals.

CONSULTATION SERVICES

The procurement of personal services from individuals such as independent Contractors, or Consultants, as distinguished from procurement of such services under an employer employee relationship.

CONSUMABLE(S)

1) Administrative or housekeeping items, general purpose hardware, common tools, or any item not specifically identified as controlled equipage or spare parts. 2) Material which after issue from stock is consumed in use or which, while having continuing life, becomes incorporated in other property, thus losing its identity.

CONSUMER PRICE INDEX (CPI)

A measure of change over time in buying power of the dollar, derived by comparing the price of like items during different time periods. The CPI is published by the Bureau of Labor Statistics.

CONSUMPTION

1) The act or process of using up, expending, or destroying. 2) The use of consumer goods.

CONSUMPTION RATE

The actual or estimated quantity of an item consumed or expended during a given time interval, expressed in quantity by the most appropriate unit of measurement.

CONSUMPTIONTYPE ITEMS

Those items which are either consumed in use or which lose their original identity during periods of use by incorporation into or attachment upon another Assembly. See also Consumables.

CONTAMINATE

1) To make impure by contact or mixture. 2) See Nuclear, Biological, and Chemical Contamination.

CONTINGENCY

1) A fortuitous or possible event. 2) Resources set aside or planned to cover such an event. See Contingency Fund. 3) An allowance or amount added to an Estimate to cover a possible future event or condition arising from presently known or unknown causes, the Cost outcome of which is indeterminable at a present time.

CONTINGENCY ANALYSIS

Repetition of an Analysis with different qualitative Assumptions(e.g., how well will equipment perform on different terrain, or in a different type of conflict, etc.). See Contingency.

CONTINGENCY FUND

Money set aside to provide for unforeseen Expenditures, or for anticipated expenditures of an uncertain amount. See Contingency.

CONTINGENCY TESTING

Additional testing required to support a decision to commit added resources to a program, when significant test objectives have not been met during planning tests. See Contingency.

CONTINGENT LIABILITY

1) A possible but not certain liability, dependent upon some uncertain future event. 2) In Government contracting, contingent liability is represented largely by Contract repricing and quantity variance clauses. 3) In Business, it includes liability under a guarantee, or the endorsement of a negotiable instrument, etc.

CONTINUED PORTION OF CONTRACT

That portion of a partially terminated Contract which is not already completed at the effective date of Termination, and which the Contractor must continue to perform. See also Partial Termination.

CONTINUING APPROPRIATION

Also known as a noyear Appropriation, these appropriations provide funds for completing long-range projects, and the funds appropriated remain available for Obligation and Expenditure until the projects are completed and/or the funds are expended. Normally continuing appropriations are established for long term construction projects and procurement of complex investment items.

CONTINUING RESOLUTION AUTHORITY (CRA)

Legislation enacted by Congress to provide Budget Authority for specific ongoing activities in cases where the regular fiscal year Appropriation has not been exacted by the beginning of the fiscal year. A CRA usually specifies a maximum rate at which the Agency may incur Obligations, based on the rate of the prior year, the President's Budget request, or an appropriation bill passed by either or both Houses of the Congress. Normally, new programs cannot be started under a CRA, and the CRA is only established for a designated period of time.

CONTINUOUS AUDIT

Audits performed continuously or at intervals during the fiscal period, the purpose being to uncover and correct undesirable practices and errors before the end of the year as well as to relieve the auditor's workload thereafter.

CONTRACT

1) An agreement, enforceable by law, between two or more competent parties, to do or not to do something not prohibited by law, for a legal consideration. 2) Any type of agreement or order for the procurement of supplies and services. Contracts may provide for the issuance of job orders, task orders or task letters thereunder, Letter Contracts, and purchase orders. They may also includes Amendments, modifications, and supplemental agreements to the basic contract. See Contract Types.

CONTRACT ACTION

Any action resulting in a Contract or the modification of a contract.

CONTRACT ADMINISTRATION

All the activities associated with the performance of a Contract from Award to Contract Closeout.

CONTRACT ADMINISTRATOR

1) The individual duly authorized by the appropriate Agency or contractor to administer a Contract. See also Contracting Officer. 2) A professional employee of a company whose function is the administration of contracts.

CONTRACT AMENDMENT

A Contract Modification which is accomplished by the mutual action of the involved parties. See also Supplemental Agreement.

CONTRACT AUDIT

The Evaluation of the accuracy and propriety of Contractors' and subcontractors' policies, systems, and controls through the Examination (usually on a selective basis) of books, Accounts, basic records, and operations logs. The examination usually includes the responsibility for providing advice to Procurement personnel on these matters, on the financial ability of contractor(s) to perform, and on contractual provisions of a financial nature.

CONTRACT AUTHORIZATION

A statutory Authorization under which Contracts or other obligations may be entered into prior to an Appropriation for the payment of such Obligations.

CONTRACT BOND

A guarantee, backed by Cash or other security, of the faithful performance and fulfillment of all the undertakings, covenants, terms, conditions, and agreements contained in a Contract. The Bond may include a guarantee of the payment of all labor and material bills incident thereto. These two guarantees may be written separately, the first as a Performance Bond, and the second as a Payment Bond.

CONTRACT BUDGET BASE(LINE)

The negotiated contract Cost, plus the Estimated Cost for authorized changes which have not yet been priced. The Baseline is the sum of original direct and indirect contract Budgets, Management Reserves, and original budgets for authorized changes. For authorized but unpriced work, interim budgets are used in the Contract budget baseline until actual budgets can be prepared.

CONTRACT CEILING

A value established in a Contract beyond which the Government has no obligation to pay.

CONTRACT CHANGE AUTHORIZATION (CCA)

A document used by the Government to provide coverage for contract change or to issue other instructions pertaining to the Contract. A CCA provides interim coverage only, and is eventually replaced by a formal definitive contract change document such as a Supplemental Agreement.

CONTRACT CHANGE NOTIFICATION (CCN)

1) A formal Authorization by the Contracting Officer for a change or variance to an existing Contract. 2) A unilateral written order signed by a contracting officer, directing changes in a contract as authorized by the changes clause of the particular contract.

CONTRACT CHANGE PROPOSAL (CCP)

A formal priced Proposal used to propose changes to the scope of work of a Contract. A CCP, which is differentiated from an Engineering Change Proposal (ECP) by the fact that it does not affect specifications, requirements, or Baselines, may utilize or have an effect upon End Items of operationally configured equipment, but may not propose changes that will affect the physical, functional, performance, maintenance, or logistics Characteristics of the weapon system as contracted for Acceptance and delivery. Examples of contract change covered by CCPs include: program redirection, rescheduling, or changes to Data such as drawings, documentation, or Contract Data Requirements Lists.

CONTRACT CLOSE OUT COST(S)

The Costs associated with the orderly close out of a Contract. Close out costs may include those Costs Incurred for disposition or scrap of material and equipment, transfer of Data and documentation for storage, and/or Facilities deactivation, etc.

CONTRACT COST ANALYSIS

The review and Analysis of a Contractor's Cost or price Data to determine whether it is an accurate Estimate of what the Contract should cost, assuming Economy and Efficiency. See Cost Analysis and Cost and Pricing Data.

CONTRACT DATA REQUIREMENTS LIST (CDRL)

A Contract document used to order or "Buy" and require the delivery of all Data and documentation required by the Government or other customer. The CDRL tells the Contractor what data to deliver, in what format, when and how the data will be accepted, the number of copies required, and where to look for additional instructions.

CONTRACT DEFINITION PHASE

1) Also known as the Concept Definition Phase, a funded effort, normally by two or more competing Contractors, to establish specifications, to select technical approaches, to identify high-risk areas, and to make Cost and production-time Estimates for developing weapons systems or equipment. 2) The phase during which preliminary Design and Engineering are verified or accomplished, and firm Contract and management planning are performed. See Concept Exploration and Definition.

CONTRACT DEFINITION PHASE (CDP) CONTRACTS

Contracts, initiated and Awarded by the Government, which cover Government funded research and proposal activity from the point of the tentative decision to procure a specific hardware item, up to, but not including, the selection of a single Contractor and the Award of a Development contract.

CONTRACT END ITEM (CEI)

A deliverable Facility, system, or piece of equipment which is formally accepted by the Government, in accordance with the requirements in the CEI Detail Specification. The CEI is the prime level of Assembly for management Control and accountability, for provisioning spares and for preparing technical manuals. See also End Item.

CONTRACT(OR) FIELD SERVICES (CFS)

A part of Contractor Engineering and Technical Services (CETS). CFS are those Engineering and technical services provided to DoD personnel, onsite at defense locations, by trained and qualified engineers and technicians who are employed by Commercial or industrial companies. CFS personnel must possess specialized knowledge, experience, and skills, or have access to information covering the installation, operation, and maintenance of DoD weapons equipment systems. CFS may include: (a) Contractor services to provide onsite semi-formal classroom, formal, and informal on-the-job technical training of maintenance and operations personnel in their normal work areas; or, (b) technical advice and guidance to maintenance and operations personnel and organizations, on an as needed basis.

CONTRACT FUNDING CHANGE

A change to a Contract that affects the Cost and/or funding of that contract, contract funding changes are categorized as: (a) Scope Changes; or, (b) Price Changes. There are four types of Scope change: (i) Engineering or Task Change; (ii) Quantity change; (iii) Support (i.e., spares, Ancillary Equipment, warranty, etc.) change; and, (iv) Schedule change, and five types of Price change: (i) Unpredictable change (Act of God, etc.); (ii) Economic change (inflation, Escalation); (iii) Estimating change (Estimate refinement); (iv) Contract performance incentive change; and, (v) Contract Cost Overrun (or underrun) change.

CONTRACT FUNDS STATUS REPORT (CFSR)

One of the standard forms implemented under Cost/Schedule Control Systems Criteria, the CFSR is a quarterly report provided by Contractors to DoD Program Managers to assist in updating or forecasting Contract funds requirements, planning and decision making on funding changes, and developing funds requirements and Budget Estimates. The CFSR provides information on the contractor's actual and projected Obligations and Expenditures for the contract.

CONTRACT LINE ITEM (NUMBER) (CLIN)

A Contract instrument used to: (a) administer and Control contracts; (b) authorize time limit or content limit portions of a contract; (c) administer funds and Appropriations on a contract; (d) procure options for additional quantities or services; and, (e) pay Contractors for work performed in a contract. Contract line items usually have a numerical designator (i.e., 0001, 0002, 0003, etc.) with subline items being identified by numerical/alpha designators (0001AA, AB, AC, etc.).

CONTRACT MODIFICATION

Any written alteration in the Specification, delivery point, rate of delivery, Contract period, Price, quantity, or other contract provisions of an existing contract, whether accomplished by unilateral action, in accordance with a contract provision, or by mutual action of the parties to the contract. Modifications include bilateral actions such as Supplemental Agreements and Amendments, and unilateral actions such as Change Orders, notices of Termination, notices of the exercise of a contract Option, and change in payment office or administrative responsibility.

CONTRACT OVERRUN

The amount by which the estimated final Cost exceeds the contract Target Cost. See Overrun.

CONTRACT(OR) PLANT SERVICES (CPS)

A part of Contractor Engineering and Technical Services (CETS). CPS includes those services provided to Government personnel in the plants and Facilities of the manufacturer of military equipment or Components, by trained and qualified engineers and technicians employed by the manufacturer. The specialized skills, knowledge, experience, and Technical Data of the manufacturer are contracted for by DoD, for the purposes of acquiring system and Component knowledge, and training and training aid programs.

CONTRACT PRICE ANALYSIS

1) The Examination and Evaluation of a prospective Price, without the evaluation of separate Cost Elements. 2) The Tracking of a Cost Proposal from price summary to Supporting Data, and the proper application of rates and Factors.

CONTRACT PRICE BASELINE

The final detailed Cost Estimate accepted for the purpose of definitizing a Contract, and for providing a Price base (normally by Work Breakdown Structure Element) for tracking Contract changes.

CONTRACT PRICING

A series of actions used to obtain, evaluate, assess, verify, and adjust Cost or pricing information, and to record the steps taken to ascertain that prices agreed to have been determined to be fair and reasonable.

CONTRACT PRICING PROPOSAL

1) The instrument required of an offeror for the submission or identification of Cost and Pricing Data. 2) The part or section of a Cost Proposal that provides Cost summaries and traceability to lower levels of supporting Data. 3) A DD Form 1411, the general purpose standard format, by which an offeror submits a proposed price to the Government.

CONTRACT PRICING SUMMARY

Summary Costs or prices displayed on specific Government forms, Contractor formats, special Request For Proposal formats, and Contract forms.

CONTRACT REQUIREMENT(S)

In addition to specified performance requirements, Contract requirements include those defined in the Statement of Work, the Contract Data Requirements List, the contract Terms and Conditions, and the Specifications, standards and related documents.

CONTRACT SETTLEMENT

1) An adjustment of a contract Termination Claim, either by mutual agreement or by unilateral action by the contracting Agency pursuant to regulations and Contract terms. 2) Any settlement of a contractual dispute.

CONTRACT TECHNICAL SERVICES (CTS)

Services contracted for by the customer with a manufacturer, or Commercial concern, for the purpose of indoctrinating and training personnel about new and complex equipment introduced into the inventory, or for advising and instructing personnel in techniques used to install, engineer, maintain, supply, and operate systems and complex equipment, when skills within the customer organization or Agency are inadequate or not yet completely operational. See also Interim Contractor Support.

CONTRACT TERMINATION

1) The Cancellation of all, or a portion, of a Contract. 2) In DoD Procurement, the cancellation in whole or in part, of the work under a Prime Contract, or a Subcontract thereunder, for the convenience of, or at the option of, the Government. See Termination and Termination for Convenience.

CONTRACT TYPE

The specific pricing arrangement employed for the performance of work under a Contract, examples include Fixed Price, Incentive Type, Cost Type, and Cost Reimbursement contracts.

CONTRACT UNDERRUN

The amount by which the estimated final Cost is less than the contract Target Cost. See Underrun.

CONTRACT VALUE

The sum of the prices negotiated or proposed for a Contract.

CONTRACTING OFFICER (CO)

A person with the authority to enter into, administer, or terminate Contracts, and make related Determinations and Findings. The term includes any authorized representatives of the CO, acting within the limits of their authority. A CO whose primary responsibility is to enter into contracts is a Procuring Contracting Officer; one whose primary responsibility is to administer contracts is an Administrative Contracting Officer; and, one whose primary responsibility is to terminate contracts and/or settle terminated contracts is a Termination Contracting Officer. A single contracting officer may be responsible for duties in any or all of these areas.

CONTRACTOR

1) Anyone who provides goods or services, based on the terms of a Contract. 2) An entity in private industry which enters into contracts with the Government to provide goods or services.

CONTRACTOR ACQUIRED PROPERTY

All items of tangible Property procured, or otherwise furnished, by a Contractor in performance of a Contract, whether or not the Government has title by the terms of the contract, or exercises its contractual right to take title.

CONTRACTOR COST DATA REPORTING (CCDR)

One of the standard forms implemented under Cost/Schedule Control Systems Criteria (C/SCSC), the CCDR is a series of Cost reports designed to collect actual and projected costs of Acquisition Programs for DoD Cost Analysis use. The CCDR allows the collection of detailed contractor Cost Data, which can be used in the Development of Feasibility Studies, Parametric Cost Estimating, and other cost analysis functions.

CONTRACTOR ENGINEERING AND TECHNICAL SERVICES (CETS)

Those Services performed by Commercial or industrial companies which provide advice, instruction, and training in the installation, operation, and/or maintenance of DoD systems and equipment to Government personnel. These services include transmitting the knowledge necessary to develop the technical skills required for installing, maintaining, and operating such equipment in a high state of military readiness. CETS consists of: (a) CPS, Contract Plant Services; (b) CFS, Contract Field Services; and, (c) FSR, Field Service Representative.

CONTRACTOR FURNISHED EQUIPMENT (CFE)

Standard Items of hardware, equipment, and other standard production or Commercial Items furnished by a Prime Contractor as part of a larger Assembly or system.

CONTRACTOR FURNISHED PROPERTY (CFP)

Property, other than Government furnished and contractor acquired property, used by the Contractor in the performance of a Contract.

CONTRACTOR-OWNED, CONTRACTOR-OPERATED (CO-CO)

A manufacturing Facility owned and operated by a private Contractor, performing a service, under Contract, for the Government.

CONTRACTOR PERFORMANCE REPORTING

All methods of requiring periodic accounting and reporting by Contractor on the performance under Contract. See Cost/Schedule Control Systems Criteria.

CONTRACTOR SUPPORT

An arrangement whereby a Contractor furnishes required material and maintenance of an End Item or system, pending the assumption of supply support by the Government. See Interim Contractor Support and Contract Technical Services.

CONTRACTUAL DATA REQUIREMENT

A requirement, identified in a solicitation, and imposed in a Contract or order, that addresses any aspect of Data. See Contract Data Requirements List.

CONTRACTUAL INSTRUMENT

1) A written Contract, or modifications thereto. 2) A portion of a contract, such as a Contract Line Item, provision, or attachment.

CONTROL

1) To direct, or exercise a regulating influence over. 2) To verify or regulate by systematic comparison. 3) The act of: (a) planning, scheduling, and authorizing work on a product or project; (b) observing and analyzing progress of the work against the plan; and, (c) replanning, rescheduling, and recosting, which may be required to maintain the planned progress of the work to completion.

CONTROLLED ITEM

Any item of material over which proper authority exercises close supervision of distribution, issue, and use because of its scarce, costly, highly technical, Classified, or hazardous nature.

COORDINATES

The two Elements of reference for any point on a grid Chart. One element, the Abscissa (or X), is measured by horizontal distance from a vertical perpendicular axis, while the other element, the Ordinate (or Y), is measured by vertical distance from a horizontal Baseline. Abscissas to the right of the vertical axis are positive and ordinates above the horizontal baseline are positive. The point of intersection of the axis, called the Point of Origin, has the value zero for both abscissa and ordinate. Generally, Curves relating to Estimating and economic statistics are confined to one quadrant with both abscissas and ordinates positive.

CO-PRODUCTION

The Production of a defense system in two or more countries, co-production involves the transfer of production technology and complex or sensitive subsystem Components from one country to another. See also Dual Production.

CORRECTION

Any and all actions necessary to satisfy any and all deficiencies.

CORRELATION

A statistical technique used to determine the degree to which Variables are related or associated. Correlation does not prove or disprove a Causal Relationship. See Serial Correlation.

COST

1) The monetary value of an item. 2) An amount paid, or required in payment, for a purchase. 3) A loss or penalty.

COST ACCOUNT

A management Control point at which Actual Costs can be accumulated and compared to budgeted Costs for work performed and scheduled. A cost account is a natural control point for cost and schedule planning and control, since it represents the work assigned to one responsible organizational element on one Contract Work Breakdown Structure Element.

COST ANALYSIS

1) The Analysis of Cost. 2) The accumulation and analysis of Actual Costs, statistical Data, and other information on current and completed Contracts or groups of contracts or programs. Cost analysis also includes the manipulation of Cost Data, comparisons and analyses of these data, and cost extrapolations of data for future projections of cost. 3) In DoD Procurement organizations, cost analysis is the review and Evaluation of a contractor's Cost and Pricing Data, and of the judgmental factors applied in projecting from the data to Estimated Costs, in order to form an opinion on the degree to which the Contractor's proposed costs represent what the performance of the contract should cost, assuming reasonable Economy and Efficiency.

COST ANALYSIS IMPROVEMENT GROUP (CAIG)

A DoD organization, which advises the Defense Acquisition Board on matters concerning the estimation, Analysis, review, and presentation of the Cost of future weapon systems. The CAIG also develops common Cost Estimating procedures for DoD.

COST AND OPERATIONAL EFFECTIVENESS ANALYSIS (COEA)

An Analysis of the Costs and Operational Effectiveness of alternative materiel systems to meet Mission Needs.

COST AND PRICING DATA

The Data used by a Contractor to respond to a Request For Proposal from the Government. The Truth-in-Negotiations Act requires bidding contractors to certify that their Data is complete, current, and accurate as of the date the contractor and the Government agreed on a price.

COST AVOIDANCE

An action taken in the immediate time frame that will decrease Costs in the future. For example, an Engineering improvement that increases the Mean Time Between Failures, and, therefore, decreases operating support Costs would constitute a cost avoidance action. In cost avoidance, it is possible for the avoidance action to incur higher costs in the immediate time frame, as long as net total Life Cycle Costs are lowered. The amount of cost avoidance is the difference between the two Estimated Cost patterns (one before the action and the one after) for the item or system. See also Cost Savings.

COST-BASED BUDGET

A Budget based on the Cost of goods and services to be received, during a given period, whether paid for before the end of the period or not. Not to be confused with an Expenditure-Based Budget, which is based on the cost of goods and services received and actually paid for.

COST BENEFIT

A Benefit to cost Ratio, which is a function of equivalent benefits and equivalent Costs. See Cost Benefit Analysis.

COST BENEFIT ANALYSIS

1) A technique for assessing the range of Costs and Benefits associated with a given option, usually to determine Feasibility. 2) A criterion for comparing programs and alternatives, when benefits can be valued in terms of dollars or costs. Cost Benefit analysis is useful in the search for an optimal program mix, which produces the greatest number of benefits over costs. See Benefit Cost Analysis.

COST BREAKDOWN STRUCTURE

A system for subdividing a program into: (a) system Elements and sub-elements; (b) functions and subfunctions; and, (c) Cost Categories, to provide for more effective management and Control of the program.

COST CAP

The maximum total dollar amount the DoD is willing to commit for acquiring a given Capability. A Cost cap consists of program Acquisition Costs only, and is maintained in constant dollars.

COST CATEGORIES

1) Cost Elements. 2) Appropriations.

COST CENTER

1) An administrative unit, or responsibility center, selected for the purpose of identifying and controlling Costs. The unit has managerial responsibility, usually consists of a related grouping of methods and Facilities, and is made up of Elements having common cost Characteristics. 2) The basic unit of Control in cost Accounting.

COST CONTRACT

1) A Contract which provides for payment to the Contractor of Allowable Costs, incurred in performance of the contract, to the extent prescribed in the contract. 2) A Cost Reimbursement contract, under which the contractor receives no fee. See Contract Type.

COST CONTROL

The application of procedures which result in the early illumination of potential changes in resource requirements, and in the timely surveillance of the usage of funds, to permit action that will keep Costs within a predetermined range.

COST DATA

The term given to cost Statistics or Historical Cost records which usually have not been analyzed and organized.

COST DISALLOWANCE

Costs which the Contractor considers Allowable Costs, but which are specifically not accepted for Reimbursement by a customer or the Government.

COST DRIVER

Those Characteristics of a system or item which have a major effect on the system's or item's Cost.

COST EFFECTIVENESS

1) The measure of the Benefits to be derived from a system or item, with Cost as the primary, or one of the primary, measures. 2) A measure of the Operational Capability added by a system, as a function of its Life Cycle Cost.

COST EFFECTIVENESS ANALYSIS

A method for examining alternative means of accomplishing a desired objective or mission for the purpose of selecting the alternative which will provide the greatest Effectiveness for the Cost. See Benefit Cost Analysis.

COST ELEMENT

An identifiable function, or a common group of functions, which have been established as a separate entity for the purpose of Estimating, collecting, controlling, and reporting contract Costs. Cost Elements often include Functional Area groupings (i.e., Engineering, manufacturing, test, etc.), Acquisition Phase categories (i.e., Development, production, operating and support, etc.), or types of cost (i.e., labor, material, overhead, etc.). See also Cost Categories.

COST ESTIMATE

1) A judgment or opinion regarding the Cost of an object, Commodity, or service. 2) The product of a Cost Estimating procedure, which specifies the expected dollar cost required to perform a stipulated task, or to acquire a specific item. A cost Estimate may constitute a single value or a range of values. 3) A calculation of the total resources (labor hours, material costs), travel, Computer costs and other costs, including appropriate rates and Factors, which are required to accomplish a Contract, task, or work item.

COST ESTIMATE TYPES

Cost Estimates are grouped into four general categories: (a) Planning Estimates, often referred to as Rough Order of Magnitude or Ball Park Estimates, which are intended to grossly approximate the value of a given task or program. Planning Cost estimates are of a low confidence level, since they are based upon loosely defined program ground rules, plans, definition, and Data with respect to scoping the overall schedules, statement of work, equipment lists, and delivery requirements. Because of this, a significant risk allowance is usually added to planning Estimates for undefined work and other unknowns. Planning estimates are generally required early in the program definition Cycle for the purpose of go-no go decisions. The amount of Estimating detail is minimal, and normally only a top dollar value is provided. Planning estimates are submitted for information purposes only and do not represent a formal Commitment. (b) Budget Estimates, which are normally required for funding, fiscal planning, or procurement decisions. Budget estimates are often derived through the use of preliminary functional organization estimates and gross parameters, and are based upon substantially well defined data and ground rules, but require additional definition before a firm price can be quoted. An allowance for undefined work and unknowns is generally added to budget estimates. Budget estimates denote pricing accuracies that are superior to planning estimates, but still do not represent a firm commitment. (c) Firm Cost Estimates, which are used in Cost Proposals intended to be a binding obligation on a company. These estimates are based on well defined plans and data, and are usually in response to a customer firm request for Business that has a near term go-ahead. Firm estimates require the submission of the greatest amount of substantiating detail, and the preparation of an extensive backup package, to support contractual Fact-finding and negotiations. (D) Not To Exceed (NTE), or Not Less Than (NLT), Estimates, which are commitments from a Contractor as to the maximum amount (or minimum Credit) required to accomplish (or delete) a specific task, item, or procurement. NTE/NLT estimates are prepared from planning, Budget, or firm estimate information. The amount of Contingency or NTE/NLT allowance added is strictly an estimator or management judgment factor.

COST ESTIMATING

1) The art of approximating the probable Cost or value of something, based on information available at the time. 2) The art of predetermining the lowest realistic cost and price of an item or activity which assure a normal profit. See Cost Estimating Methods and Cost Estimating Process.

COST ESTIMATING METHODS (OR METHODOLOGIES)

Cost Estimates are developed through a variety Estimating methodologies, which may be applied individually, or in combination, depending on the information and resources available to the Cost estimator. Each of the methods requires an Analysis of the total job, and a definition of the work to be performed in some detail. See Cost Estimating, Estimating Methodology, and specific methodologies and types of Estimates, such as Detailed, Empirical, Comparative, Analogy, Parametric, Statistical, Standard, Round Table, Expert Opinion, Grass Roots, and Extrapolation from Actual Costs.

COST ESTIMATING PROCESS

The process of developing a Cost Estimate can be divided into the following basic steps: (a) Step 1, Define and plan the work to be done in as much detail as possible. This step includes determining the purpose, scope, and time Constraints for the Estimate, establishing an Estimating team, and analyzing the details of the work to be done, and the kinds and quantities of materials, parts, and equipment required. (b) Step 2, Identify the Cost Elements or Cost generating Functional Areas (i.e., Engineering, manufacturing, procurement, etc.) which will be required to do the work defined in Step 1. (c) Step 3, Schedule by time the work and effort defined and identified in Steps 1 and 2. (d) Step 4, Select appropriate Cost Estimating Methodologies for each cost Element, and estimate the man hours, material costs, and other cost generating variables, as well as the elapsed time required to perform each detail of the work. (e) Step 5, Estimate the costing rates and Factors for the work to be done. (f) Step 6, Apply the costing rates and factors to the individual cost elements to establish total costs. (g) Step 7, Evaluate the costs estimated so far. This step includes the application of alternative, secondary methodologies to Cost Drivers, preparation of an independent cost estimate, if desired, making any adjustments to the estimate that are required, or requested resulting from the review and Analysis, and the application of desired profit and other Cost Factors and prorations or additions, to establish the final cost estimate. (h) Step 8, Present the estimate to management for submittal to the customer. (i) Step 9, Finish documenting the rationale, methodology, and supporting information utilized for the estimate; and, (j) Step 10, Support source selection, negotiation, Fact-finding, and/or Audits, and update the estimate, as required. Although these steps are numbered sequentially, in reality, the process is iterative, and individual steps often occur out of sequence or repeatedly throughout the estimating process. For instance, for an estimate to be useful and realistic, the estimator must involve and apprise management throughout the process, and not wait to present the estimate as a complete, final package.

COST ESTIMATING RELATIONSHIPS (CER)

1) A mathematical expression defining Cost as the dependent Variable to one or more independent cost driving variables. The relationship may utilize costtocost variables, such as manufacturing hours to quality assurance hours, or manufacturing hours to expendable material such as rivets, primer, or sealant, or costtononcost variables, such as manufacturing hours to weight, or Engineering hours to the number of engineering drawings. 2) A mathematical equation defining cost as a function of one or more technical parameters, such as performance or operating Characteristics. 3) A Factor that quantitatively equates the affects of a specified parametric value with cost or effort.

COST ESTIMATING UNCERTAINTY

A condition where resultant Actual Cost varies from Cost Estimates, due to the inherent deficiencies in Cost Estimating procedures, rather than to changes in the item or system being estimated.

COST FACTOR

1) A Cost Estimating Relationship (CER), in which Cost is directly proportional to a single independent variable. 2) A brief arithmetic expression wherein cost is determined by the application of a Factor, such as a percentage of labor or material, etc.

COST GENERATOR

A term used in system Cost Estimates to cover a large group of agencies, Contractors, or armed services, etc., involved with generating the Costs associated with the system.

COST GROWTH

The net change in an estimated or Actual Cost amount, over a Base figure previously established. The base must be relatable to a program, project, or Contract, and be clearly identifiable with respect to source, approval authority, specific items included, specific Assumptions made, the date and amount.

COST INCURRED

1) A Cost identified through the use of the Accrual Method of Accounting. 2) The cost of Direct Labor, Direct Materials, and direct services identified with, and necessary for, the performance of a Contract, and the cost of properly allocated and allowable indirect charges, all already completed and paid for by the Contractor.

COST INPUT

A portion of an Estimate received from a supporting functional organization or division.

COST MANAGEMENT SYSTEM

A system which proposes that an estimated planned value can be placed on items of work to be performed and once that work is completed, that same planned value can be considered to be earned. See also Cost/Schedule Control Systems Criteria.

COST MODEL

1) A compilation of Cost estimating logic that aggregates Cost Estimating details into a total Cost Estimate. 2) An ordered arrangement of Data, Assumptions, and equations that permits translation of physical resources or Characteristics into costs. Cost models generally: (a) consist of a set of equations, logic, programs, and input formats to specify the problem; (b) allow for the input of program information, including both system description data and Estimating Relationships; and, (c) produce an output format.

COST OBJECTIVE

An Objective within a functional, organizational subdivision, Contract, or other work unit, for which Cost Data are desired, and for which provision is made to accumulate and measure the Cost of processes, products, jobs, and capitalized projects, etc.

COST OVERRUN

1) The amount by which a Contractor exceeds either the estimated contract Cost, or the final limitation (Ceiling) of his Contract. 2) The amount by which Actual Costs exceed expected or budgeted cost. See also Contract Overrun.

COST PERFORMANCE REPORT (CPR)

One of the standard forms implemented under Cost/Schedule Control Systems Criteria (C/SCSC), the CPR provides the Program Manager with the Cost and schedule status of the program, the impact of any cost or schedule problems identified, an outline of program trends, and a basis for a detailed Analysis of the financial health of the Contract. The CPR consists of five formats (all, or some, of which may be applied to a particular contract), which detail the cost and work planned and realized, by Work Breakdown Structure Element and by Functional Area, the program Baseline, a forecast of Manpower loading, and a narrative discussion of program and/or contract problems and issues.

COST PROPOSAL

A submission by a potential Contractor, for the purpose of planning, or to be used for definitive negotiation, indicating the Cost to the procuring Agency or buyer for the conduct of a specified extent of work. The Proposal includes an amount of cost supporting detail commensurate with the purpose, coverage, and other Characteristics of the proposal. The proposal may or may not be in response to a Request for Proposal.

COST REIMBURSEMENT

A family of pricing arrangements that provide for payment of allowable, allocable, and reasonable Costs incurred in the performance of a Contract, to the extent that such costs are prescribed or permitted by the contract. See Reimbursable and Cost Reimbursement Contracts.

COST REIMBURSEMENT CONTRACT

A Contract Type which provides for payment to the Contractor of Allowable Costs incurred in the performance of the Contract, to the extent prescribed in the contract.

COST RISK

An Assumption of possible monetary loss in light of the complexity or unknown nature of the job or work to be done. One of the Elements to be considered in the negotiation of a fair and reasonable price, as well as in determining the type of Contract under which performance will occur. See Risk Analysis.

COST SAVINGS

An action that will result in a smaller than projected level of Costs to achieve a specific Objective. Cost savings are usually related to Incentive Type Contracts, where the Contractorand Government share in any difference in cost below the estimated Target Cost incurred by the contractor to achieve the objective of the Contract. It differs from Cost Avoidance, in that a cost target has been set from which the amount of savings can be measured. In cost avoidance, the amount is determined as the difference between two estimated cost patterns.

COST/SCHEDULE CONTROL SYSTEM CRITERIA (C/SCSC)

A set of DoD requirements, containing features that a Contractor's management Control systems must have validated to qualify for bidding on selected military program acquisitions. C/SCSC include integrating Cost, schedule, and technical performance measurements using the Work Breakdown Structure (WBS), Accrual Accounting, methods to facilitate the Analysis of Variances from planned activities, and a means for Estimating the cost of the Contract at completion. The C/SCSC do not require any Data to be reported to the Government, but do provide formats for the standardization of and access to data needed to evaluate a program and to Contractor performance during the life of the contract.

COST/SCHEDULE STATUS REPORT (C/SSR)

One of the standard forms implemented under Cost/Schedule Control Systems Criteria (C/SCSC), the C/SSR was designed to fill the needs of programs too small for the application of a Cost Performance Report (CPR). The C/SSR provides contract Cost and performance Data at a summary level, using similar terms and reporting formats as full C/SCSC reports; however, it is not applied to Contracts requiring full C/SCSC compliance.

COST SENSITIVITY

1) A measure of how Costs vary with changes in program or item Characteristics. 2) A condition which exists when the amount of costs vary greatly with a small variation or change in program or End Item characteristics. See Sensitivity.

COST SHARING

An arrangement under which the Costs for a program are shared by the two parties (Government and Contractor, or contractor and subcontractor) concerned.

COST SHARING CONTRACT

A Cost Reimbursement Contract under which the Contractor receives no fee, or only a small basic fee, and is reimbursed only for an agreed portion of the Target Cost based on Cost performance.

COST SUBSTANTIATION

The documentation used to support a Cost Estimate. See Substantiation.

COST TRACK(ING)

1) A step by step record of the revisions and updates of proposed Costs from the original submittal of a Baseline estimate to the final agreement on costs. 2) A historical record of selected cost information (estimated or actual), with written Analysis which explains variance among cost entries. 3) The flow of Cost Data from the summary total to the detailed Supporting Data. 4) Establishing and maintaining permanent records of successive Cost Estimates, together with the reasons for changes or variances in those cost Estimates.

COST TYPE CONTRACT

A Contract which provides for payment to the Contractorof Allowable Costs in the performance of the contract, to the extent prescribed in the contract. See Cost Contract and Cost Reimbursement Contract.

COST UNDERRUN

1) The amount by which actual contract Cost is less than either the estimated Contract cost, or the final limitation (Ceiling) of the contract. 2) The amount by which Actual Costs are less than expected or budgeted cost. See also Contract Underrun.

COST VALIDATION

1) An Examination or Cost Analysis to determine the validity and accuracy of a Cost Estimate and its computation. 2) A test of a Cost estimate to confirm that it is sound, wellgrounded on Cost Estimating Methods, and founded on fact, or capable of being justified, supported, and defended. 3) A test of the accuracy, accounting, or development of the resource Data used to substantiate or derive a cost Estimate.

COST VARIANCE

1) A Cost Overrun or Cost Underrun. 2) The Deviations from the Baseline plan, as determined by a comparison of the Actual Costs (Actual Cost of Work Performed) with the Earned Value (Budgeted Cost of Work Performed). Cost variance are generally identified separately for Development, Procurement, and construction, and are also classified, by cause, according to the following categories: (a) Quantity change; (b) Engineering Change; (c) Support change; (d) Schedule change; (e) Economic change; (f) Estimating change; (g) Unpredictable change; (h) Contract performance incentives; and, (i) Contract cost overrun (or underrun).

COST VERIFICATION

The process of checking a Cost Estimate for mathematical accuracy and proper Cost Tracking.

COULD COST

A technique designed to achieve the best quality and price for goods purchased, based on what a program "could cost" if both the Government and Contractor eliminated all non-value-added work done or required by either party.

CRADLE TO GRAVE

A term (also known as Womb to Tomb) used to describe anything covering the entire Acquisition Life Cycle of a system or program.

CREDIT

1) Any Bookkeeping entry in recording a transaction, the effect of which, is to decrease an Asset or expense account, or increase either a Liability, Capital, or Revenue account. 2) The act of making such an entry. 3) Having a balance that represents a liability. 4) A memo, or an invoice, used in dealings with customers or suppliers. 5) An Estimating allowance made for deleting tasks, equipment, or items from the proposal or Contract. See Debit.

CRITERIA FOR EVALUATION

In the Source Selection process, the standards against which Evaluations are performed. The criteria and measures used should capture or embrace as closely as possible the purposes sought. See also Evaluation Criteria.

CRITICAL ACTIVITIES

Those program management, material, Engineering, test, manufacturing, and quality assurance activities that experience has shown must be subject to formal procedures and discipline to assure that programs and products will be successful and profitable.

CRITICAL DESIGN REVIEW (CDR)

A review conducted to: (a) determine that the detailed Design satisfies the performance and Engineering requirements of the Development Specification; (b) establish detailed design Compatibility among the item and other items of equipment, Facilities, Computer Programs, and personnel; (c) assess producibility and risk areas; and, (d) review the preliminary product specifications.

CRITICAL INTELLIGENCE PARAMETER (CIP)

A threat Capability or Threshold established by the Program Manager, changes to which, could critically impact on Effectiveness and Survivability of the proposed system.

CRITICAL ISSUES

Those aspects of a system's Capability, either operational, technical, or other, that must be questioned before a system's overall Suitability can be known, and which are of primary importance to the Milestone Decision Authority, in reaching a decision to allow the system to advance into the next phase of the Acquisition Life Cycle.

CRITICAL ITEM

Those items: (a) where Failure affects safety; (b) where failure will prevent Mission accomplishment; (c) which require special handling; (d) which have long lead time, are in short supply, or are expected to be in short supply for an extended period; (e) which are expensive; or, (f) which impose high maintenance loads. Special criteria must be established for the identification, Control, and handling of critical items, from Design through final Acceptance.

CRITICAL MATERIAL

1) Those supplies and equipment vital to the support of operations, which owing to various causes are both not available in sufficient quantity to meet existing requirements, and not anticipated to be available in sufficient quantity to meet future or planned requirements. 2) Material that has been classified as being essential to the U.S. Economy. There are approximately 40 minerals in this category. The U.S. is more than 50 percent dependent on foreign sources for over half of these.

CRITICAL OPERATIONAL ISSUE

A key operational Effectiveness or Suitability issue that must be examined in Operational Test and Evaluation, to determine the system's Capability to perform its Mission.

CRITICAL PATH

The path on a scheduled logic network which has been found by Analysis to be the most critical (schedulewise) toward completion of the final objective.

CRITICAL PATH METHOD(OLOGY)

A logical, analytical, networkbased scheduling tool that demonstrates the schedule paths and Constraints toward accomplishment of specified objectives and evaluates the allowable and expected time spans for the activities contained therein. Activities, which, when delayed, have an impact on the total project schedule, are critical and said to be on the Critical Path. See PERT.

CROSS-CHARGE

A charge for labor, or designated task effort, performed by an employee working in his normally assigned work area, but doing work authorized by another division or labor group.

CROSS-SERVICING

That function performed by one military service, in support of another military service, for which Reimbursement is required from the service receiving support.

CUMULATIVE

1) Increasing by successive additions. 2) The summation of current values to cumulative totals by time periods. 3) The addition of succeeding unit values to the total.

CUMULATIVE AVERAGE COST

The Cost per unit in hours or money that results when the summation of the costs for the units produced is divided by the units produced.

CUMULATIVE AVERAGE CURVE

A logarithmic Chart of cumulative Average values, plotted at the last unit of each Cumulative quantity.

CUMULATIVE TO DATE

The total items produced, labor hours, Expenses, Actuals, or Costs recorded to a specific date.

CURRENT

1) Belonging to the time now passing, or in progress. 2) A term used in Cost Estimating to indicate the amounts of Expenditures or funding for specific time periods (months, quarters, years), versus Cumulative amounts. 3) Individual time period values that, when added, become cumulative values. 4) Amounts expressed in terms of a current economic year. See Current Year Dollars.

CURRENT ESTIMATE

An Acquisition Program estimate which represents the trade-offs among Cost, schedule, and performance made by the Program Manager, as well as changes in the program external to the Program Manager (e.g., by Congressional action). Acquisition Program Baseline breaches occur when the current Estimate falls outside one or more acquisition program baseline Thresholds.

CURRENT (FUNDING) LEVEL

The amounts provided or required by law as a result of permanent Appropriations, advance appropriations, existing entitlement authority, and previous year outlays from discretionary appropriations. Credit authority provided by any of these laws is also considered to be part of the current level, as are direct loans that result from defaults on guaranteed loans.

CURRENT SERVICES

An Estimate provided each year by the Office of Management and Budget, of the Budget Authority and Outlays that would be needed during the Fiscal Year to continue federal programs at their current levels. These estimates reflect the anticipated Cost of continuing these programs at their present spending levels, without any policy changes, that is, ignoring all new presidential and congressional initiatives that have not yet been enacted into law.

CURRENT (FISCAL) YEAR

The Fiscal Year in progress. See also Budget Year.

CURRENT YEAR DOLLARS

Dollars that include the effects of inflation or Escalation, and/or reflect the price levels expected to prevail during the year at issue.

CURVE

A graphic presentation that shows the relation between two sets of numbers by means of a line or curve connecting the two respective sets of numbers. Ordinarily the axes of reference for the Coordinates are perpendicular to each other and scaled arithematically. However, a spherical projection is possible (as a map with latitude and longitude), or one axis or both axes may be scaled logarithmically.

CYCLE

1) A single complete Execution of a periodically repeated sequence of events. 2) The time required to complete a predetermined number of article(s) of production. 3) The Budget Cycle. See also Life Cycle.