How to Calculate ICP of Initial Contract Price in Excel

For standardization of the approach to the formation of the ICP (initial contract price, signed with a single supplier) in procurement in accordance with the resolutions "On the contractual system in the field of procurement of products, works, services to meet state and municipal needs," methodological recommendations have been developed with methods and formulas for calculation. And to participate in government tenders, justification of the ICP needs to be prepared. The calculation can be performed in Excel.

 

How ICP is Formed

The calculation and justification of the initial (maximum) contract price depend on the methods defined in regulatory acts:

  • method of comparable market prices (market analysis);
  • normative;
  • tariff;
  • project estimate;
  • cost.

Preference is given to the method of comparable market prices. Price information for identical (similar) products, works, and services can be obtained from the following sources:

  • official publications of state and municipal authorities, international organizations;
  • state procurement website;
  • information-price agencies;
  • statistical reports;
  • public advertising in the media, the Internet.

When calculating the initial contract price, coefficients are used to account for:

  • volume of products, works, services;
  • term of determining ICP, contract performance;
  • place of delivery;
  • changes in the nomenclature, etc.

Calculations and justification of the ICP are documented and signed by the contract service employee.

ICP Justification Methods

The choice of a specific method depends on the situation, initial data, and other factors.

Method of Comparable Market Prices

ICP is calculated based on information on market prices for identical or homogeneous works, products, or services. The necessary information can be collected in the following ways:

  • send inquiries to at least five suppliers of the studied product;
  • publish a request in the EIS;
  • find data in the contract registries of customers;
  • get information from publicly available sources.

Sources of information should be trustworthy and supported by corresponding calculations.

Used formula:

ICP = v/n * Σni=1Pi

, where

  • v - volume of products;
  • n - number of values in the calculation;
  • i - source number of price information;
  • Pi - price of the products with the number i.

Let's consider an example of calculating ICP in Excel.

At the first stage, the collected information is entered into the table:

Price Information.

Requests were sent to 5 suppliers. Responses were received from three. To obtain an objective picture, no less than 3 prices from different suppliers are needed. This condition is met.

Next, it is necessary to check the homogeneity of the set of values of the identified prices used in the calculation. Calculate the coefficient of variation.

Standard Deviation STDEV.S

How to calculate the standard deviation is shown in the figure. We calculate the average price using the AVERAGE function (=AVERAGE(E3:G3)). To calculate the coefficient of variation, divide the standard deviation by the average price: =I3/H3*100. The indicator should not exceed 33%. This condition is satisfied.

Now we calculate the initial contract price. Formula for calculating ICP in Excel:

ICP Formula.

Normative Method

The method is applied in cases defined by regulatory conditions in regulated acts. It implies the use of maximum prices for products, works, services. The state register of maximum ex-works prices is used as an information source.

Formula:

ICP(norm) = V * Plimit

, where

  • V - volume of products;
  • Plimit - maximum price per unit of products.

Calculation of ICP according in Excel:

Normative Method ICP Calculation.

This methodology can be used in conjunction with the method of comparable market prices.

Tariff Method

It is used when prices for products are regulated at the state or local level. The source of information is information about tariffs posted on the official websites or in print publications of state organizations.

Formula:

ICP(tariff) = V * Ptariff

, where

  • V - volume of products;
  • Ptariff - established at the federal or municipal level.

Example of calculation in Excel:

Example ICP Calculation.

download file Download an example of calculating ICP of the initial maximum contract price in Excel

In the construction industry, the project estimate method is used. ICP is formed based on project estimate documentation prepared in accordance with the requirements of regulatory documents.

When it is impossible to apply a specific methodology, the cost method is used. All costs are calculated. The result is compared with the profit indicator characteristic of this industry.


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