Cost estimation is not just about numbers — it’s a collaborative process requiring alignment across engineering, procurement, and management teams.

1. Importance of Team Alignment

• Ensures all stakeholders agree on the basis and assumptions of the estimate.
• Reduces disputes later when budgets are locked.
• Links technical scope with financial feasibility.
• Builds confidence for management approvals or funding.

2. Estimate Validation Process

• Internal Review: Cross-verification by project controls or estimation team.
• Management Review: Validation by senior management or client-side PM.
• Peer Benchmarking: Compare with similar past projects or industry databases.
• Reconciliation: Resolve variances between design, procurement, and finance.
• Sign-Off: Formal approval and baseline creation.

3. Common Validation Tools

• Estimate Basis Document (EBD): Explains data sources, exclusions, and assumptions.
• Estimate Review Checklist: Used to confirm accuracy and completeness.
• Cost Benchmark Library: Maintains historical project cost data for reference.

Module Summary

• Early estimates shape project feasibility and decision-making.
• Estimation evolves from conceptual to definitive stages as design matures.
• The estimating process uses systematic data collection, WBS, and capacity models.
• Risk and contingency must be quantified — not guessed.
• Alignment and validation ensure credibility, transparency, and accountability.