Quote:
Originally Posted by Larry Jacks
Firm cost estimates on large government projects are often fiction...
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Considering there are many
types of estimates, and these kinds of project usually include many of each type rolled into one, it's easy to see how it happens.
Government is not alone. Business does the same thing. When we put together projects for approval, it is well understood that the numbers put together are for ideal conditions.
One thing that we do have in our proposals is a risk section. Here's what could happen, the likelyhood that it can happen, and the unknowns that can impact the project. This section has no value applied to it, but it lets the upper management get a feel for how much it might actually cost.
Most people are familiar with "firm" or "not-to-exceed" estimates. Those are the ones that have value applied (and hidden) to the risk section.