The Cost Estimating Process

Do you want an accurate estimate?  Hate asking for more money or time?

You need to follow a process that produces a quality cost estimate.  The US Government Accountability Office (GAO) has produced a 12-step process that results in an estimate that is well-documented, comprehensive, accurate, and credible (4 characteristics of a quality estimate).  Based on the findings from the GAO's assessment of projects and lessons-learned, this process can be used in any type of project or estimate. 

Project's fail for many different reasons but common to most is the lack of a process that facilitates success and assures quality. By following a proven process, your project will minimize errors, increase accuracy, gain confidence from stakeholders, and put you on the path to executing to budget and schedule.

Follow along as I discuss the steps in detail.  You will learn the 12 Steps of a quality estimating process, which include:

1. Define estimate’s purpose

2. Develop estimating plan

3. Define programs characteristics

4. Determine estimating structure

5. Identify ground rules and assumptions

6. Obtain data

7. Develop point estimate and compare it to an independent cost estimate

8. Conduct sensitivity analysis

9. Conduct risk and uncertainty analysis

10. Document the estimate

11. Present estimate to management for approval

12. Update the estimate to reflect actual costs and changes