The basis of estimates is a document that outlines the key assumptions and factors used to develop a cost estimate for a project. The document serves as a reference point for stakeholders and project team members to understand the underlying rationale and sources of data used to develop the cost estimate.
A basis of estimate typically includes the following components:
1. Scope of work: Describes the project requirements and objectives, including any constraints or assumptions that may impact the estimate.
2. Work breakdown structure (WBS): Outlines the tasks and subtasks required to complete the project, providing a detailed breakdown of the work that needs to be done.
3. Resource requirements: Identifies the types and quantities of resources (e.g., labor, materials, equipment) needed to complete each task.
4. Cost estimates: Provides a detailed breakdown of the estimated costs associated with each task, including direct and indirect costs, contingency and management reserves, and any other relevant cost factors.
5. Assumptions and risks: Lists any assumptions made during the estimating process, as well as any identified risks and their potential impact on the estimate.
6. Basis of cost estimate: Describes the methodology used to develop the cost estimate, including any data sources, formulas, or techniques used.
The basis of estimate document provides transparency into the cost estimating process, helping project teams and stakeholders to understand the key drivers of project costs and any associated risks or uncertainties. It also provides a benchmark for assessing the accuracy of the estimate as the project progresses and any changes occur.
