Chapter 5: Step 2: Developing the Estimating Plan

Because cost estimates seek to define what a given solution will ultimately cost, the estimate must be bound by a multitude of assumptions and an interpretation of what the historical data represent. This tends to be a subjective effort, and these important decisions are often left to a cost analyst’s judgment. Therefore, the cost estimating team must manage a great deal of risk—especially for programs that are highly complex or on technology’s cutting edge. A well-trained, centralized, and multidisciplinary cost estimating team that is allowed ample time to create estimates will appreciably improve an agency’s ability to develop and maintain reliable cost estimates.