Estimating Processes and Deliverables
The estimating process
A disciplined estimate follows a repeatable sequence: define scope and basis; build or adopt a WBS; quantify; price resources; apply indirects and markups; add contingency and escalation; review; and document. Candidates should understand the basis of estimate (BOE) as the narrative that records scope, assumptions, exclusions, methods, data sources, and ranges. The BOE is often the most-tested deliverable because it makes the estimate defensible and auditable.
Deliverables
Know the typical outputs: the estimate summary and detail, the BOE, a code of accounts, quantity and pricing backup, a reconciliation to prior estimates, and a review record. Understand estimate reviews-peer, technical, and management-and their purpose: catch omissions, validate assumptions, and confirm the estimate supports its intended decision.
Reconciliation and change
Understand reconciliation between estimate versions: explain variances by scope, quantity, price, productivity, and escalation so changes are traceable. Recognize the role of check estimates and independent validation.
Traps
Watch for: presenting an estimate without its basis or exclusions; failing to reconcile to the prior estimate; omitting indirects or owner costs; and treating a review as a formality rather than a control. Questions may ask what belongs in the BOE versus the estimate detail.
Rule of thumb
If a number cannot be traced to a documented source and assumption, it is not yet an estimate-it is a guess. Every major line should be traceable to quantity, rate, and source.
Worked example
A revised estimate rises 8%. Reconciliation shows 5% from added scope, 2% from material escalation, and 1% from productivity loss-each attributed and documented.