In cost engineering, cost estimation is a basic activity. Cost estimating is one of three activities performed in project cost management.
In project management, project cost management is a major functional division. A cost estimate is often used to establish a budget as the cost constraint for a project or operation. The GAO reports that "realistic cost estimating was imperative when making wise decisions in acquiring new systems." A cost estimate is often needed to support evaluations of project feasibility or funding requirements in support of planning. Government Accountability Office (GAO) defines a cost estimate as "the summation of individual cost elements, using established methods and valid data, to estimate the future costs of a program, based on what is known today".
There are around 75,000 professional quantity surveyors working in the UK. In the US, according to the Bureau of Labor Statistics, there were 185,400 cost estimators in 2010. Other professionals such as quantity surveyors and cost engineers may also prepare cost estimates or contribute to cost estimates. There are different types of cost estimators, whose title may be preceded by a modifier, such as building estimator, or electrical estimator, or chief estimator. A cost estimator is the professional who prepares cost estimates. The cost estimate has a single total value and may have identifiable component values.Ī problem with a cost overrun can be avoided with a credible, reliable, and accurate cost estimate. The cost estimate is the product of the cost estimating process. A cost estimate is the approximation of the cost of a program, project, or operation.
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