Independent Cost Estimating Contingency Analyzer (ICECAN)

Prepared by:

USDOE/IT Corporation

Prepared for:

Public purchase

Application:

Financial analysis:
Environmental impact analysis:	---
Waste management/P2:
Environmental cost listing/database:	---
Cost estimation:	---
Alternative product/process comparison:	---

Determining cost contingencies. Cost contingencies due to environment-related variables could also be analyzed.

Elements of control:

Cost control	---
Resource control	---
Estimating control	---
Schedule control	---
Scope control	---
Risk control	---

The system only passively controls risk (although it can assist in dynamic control).

Development date and updates:

~1983. The program is not periodically updated. It was updated to run using QBASIC and no longer runs on BASICA or GWBASIC.

Public availability:

Available

Purpose and current use:

A cost-estimating contingency model developed for the DOE. Typically used at the end of a remedial design phase. The system is being used in DOE and by various DOE contractors.

Cost information:

The program is free.

System requirements:

IBM PC running under DOS 2.0 with a minimum of 64K RAM and at least one disk drive.

Software summary

Size and complexity of projects:

Limited by the maximum number of variables (approx. 20) and distributions(4) that can be defined.

Other compatible systems offered:

None (although IT Corporation has developed other software tools for DOE).

Nonquantifiable information:

None

ICEAN produces a frequency distribution of total costs based on severa lrandom cost variables. The cost variables can be fixed, normal, discrete, or step-regular.

Life-cycle stages covered

Raw material acquisition	---
Manufacturing stage	---
Use/reuse/maintenance	---
Recycle/waste management	---

Type of costs considered

Conventional
Potentially hidden	---
Contingent	---
External	---

The system has been developed for considering conventional costs alone, but users can analyze other costs by using the proper variables and relationships.

Method of cost estimation

The system uses the Monte Carlo method to compute random variables for the total cost function. The total cost function is normally simply the sum of the random cost variables. The mean of the sampled value of the cost function can be used as a reasonable cost estimate. However, the main purpose of the program is to estimate contingencies. Users can determine the probability of project overrun as a function of various contingency percentages. The model results are displayed in the form of a frequency distribution report and a contingency report.

Generation of financial indicators

Net present value (NPV)	---
Payback period	---
Internal rate of return (IRR)	---
Benefits cost ratio	---
Other	---

Ability to include environmental costs

User friendliness and flexibility

Software options are accessed through a main menu. Options on this menu allow users to enter, edit, store, load, and delete files containing cost variable data. The software allows users to create one file for each estimate. Estimate processing time can range from a few minutes to over an hour depending on the number of random values (iterations) taken. Environmental costs can also be analyzed using the proper variables and relationships.

User-support

The user's manual describes the operation of the ICEAN program with regard to data entry, editing and filing, user options, and reports generated. Since ICEAN is not a commercial program, user support will be limited to responses to minor queries and information requests.

Limitations

Users do not have a wide choice of distributions by which to describe the cost variables. The ICEAN program is only as accurate as the description of variables provided by users. The distributions of critical cost variables must be carefully analyzed and require good estimating judgment. While items such as spent dollars and firm commitments are fixed values, items such as direct labor and equipment may be prone to a high degree of risk.

Basis for evaluation:

Based on profile prepared in WEC (1992). Additional information was obtained through communications with IT Corp. in March 1995.

Contact information:

Not a commercial package. Available to private industry through request from DOE (usually DOE contractors)

W.E. Gallagher/Susan Watson

IT Corp. (formerly PEI Associates Inc.)

4425 West Airport Freeway, Suite 350

Irving, TX 76062

214-570-2000

214-258-0399 (FAX)

Juan Castro

US Department of Energy

202-586-9706

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