PIP PEEPJ003

This Practice defines the process of initiation and development of cost estimates for projects to ensure consistency and predictability of delivered projects. It provides key elements of the estimating process to enable the project team to deliver an estimate of a quality sufficient to match the agreed expectations between owner and project team. The process outlined covers initiation through establishment of final approved estimate, which becomes the project baseline budget. The cost estimate for a capital project is critically important to all stakeholders. Owners rely on cost estimates to validate the viability of a project’s return on investments through economic analysis. Engineering and construction companies utilize the cost estimate for developing their proposals and negotiating, which are key to securing work and ensuring their profitability. This Practice does not address the subject of cost control of the baselined project budget. The terms “project estimating” and “cost estimating” are used interchangeably.