Cost Estimating

Independent Cost Estimate (ICE)

An Independent Cost Estimates (ICE) is a Life-Cycle Cost Estimate (LCCE) that is conducted independently of the Program Management Office (PMO) or defense agency by an outside organization.  It examines the full life-cycle cost (or Total Ownership Costs (TOC)) for a Major Defense Acquisition Program (MDAP) Acquisition Category (ACAT) I program. It’s required to be prepared or approved by the Director of Cost Assessment & Program Evaluation (DCAPE) before the approval to proceed into the Technology Maturation and Risk Reduction (TMRR) Phase, Engineering, Manufacturing and Development (EMD) Phase, and Production and Deployment (PD) Phase. The requirement is outlined in 10 U.S.C. 2334(a)(6)(A) and 2434) and prescribed in DoD Instruction 5000.02, “Operation of the Defense Acquisition System,” Table 2-1. [1]

The responsibility for the ICE for:

  • ACAT 1C: Service Cost Center or Defense Agency equivalent
  • ACAT 1D: Director of Cost Assessment & Program Evaluation (DCAPE)

ICE’s are also required in advance of certification following critical cost growth in major defense programs. In addition, an independent cost estimate may be conducted by the DCAPE for an ACAT ID program at any other time as directed by either the DCAPE or the Under Secretary of Defense (AT&L). [1]

DCAPE and the Secretary of the Military Department concerned are required by Congress to report certain elements of program cost risk for MDAP and Major Automated Information Systems (MAIS) programs. For such programs, DCAPE and the Secretary of the Military Department concerned (or the head of the Defense Agency concerned) must state the confidence level used in establishing a cost estimate, the rationale for selecting the confidence level, and ensure that the confidence level provides a high degree of confidence that the program can be completed without the need for significant adjustment to program budgets. [1]

The confidence level disclosure shall be included: [1]

Independent Cost Estimate (ICE) Statutory Requirements

DoD Instruction 5000.02 Section 2 in Enclosure 10 provides detailed instructions for Major Defense Acquisition Programs (MDAP), Major Automated Information System (MAIS) programs. The Milestone C requirement only applies when the milestone decision authorizes Low-Rate Initial Production (LRIP). The DCAPE will be the approval authority for Acquisition Category (ACAT) ID and IAM programs; the Component will approve ACAT IC programs following review by DCAPE. [2]

For ICE requirements for each Milestone Review, see the Milestone Requirements Matrix.

AcqLinks and References:

Updated: 7/28/2021

Rank: G4.1

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