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Federal Procurement

Identify Ground Rules and Assumptions

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Identify Ground Rules and Assumptions

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Why does Step 5: Identify Ground Rules and Assumptions matter?

Document the ground rules, assumptions, and constraints that define the boundaries and conditions under which the estimate is valid. Ground rules are facts or directives (e.g., base year dollars, inflation rates), while assumptions fill knowledge gaps when facts are unavailable. Clear documentation of both is essential for estimate transparency and credibility.

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Key Activities

  • 1.Define the base year, then-year, and constant-year dollar conventions
  • 2.Specify inflation indices and rates (OSD Comptroller, OMB, or negotiated)
  • 3.Document schedule assumptions including start dates and production rates
  • 4.List technical assumptions about performance, weight, power, and complexity
  • 5.Identify programmatic constraints (budget caps, competition strategy, contract type)

Deliverables

Ground rules and assumptions documentInflation and escalation rate tablesSchedule assumption summary

Common Pitfalls

  • !Burying critical assumptions in footnotes rather than highlighting them
  • !Using optimistic assumptions without sensitivity analysis
  • !Failing to update assumptions as the program matures

Adjacent Steps

Define Program CharacteristicsStep 3Determine the Estimating Structure (WBS)Step 4Obtain DataStep 6Develop the Point EstimateStep 7

All Other Steps

Define the Estimate's PurposeStep 1Develop the Estimating PlanStep 2Conduct Sensitivity AnalysisStep 8Conduct Risk and Uncertainty AnalysisStep 9Document the EstimateStep 10Present Estimate for Management ApprovalStep 11Update the Estimate to Reflect Actual CostsStep 12

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Cite this page
Bureauify. (2026). Identify Ground Rules and Assumptions — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/identify-ground-rules-and-assumptions

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