Estimates

Get everyone aligned on the ground rules before you start crunching numbers. What's the confidence level required? Are we doing rough order of magnitude or detailed bottom-up? What assumptions are we making about labor rates, material costs, and timeline? Document these decisions now - they'll save arguments later when the numbers come back higher than expected.

Gather everything that defines what you're estimating. Specifications, drawings, requirements documents, statements of work - all of it. Incomplete scope is the biggest reason estimates blow up later. If something's unclear, flag it now and get clarification. Missing info should become documented assumptions, not guesses.

Calculate the core costs - labor hours, materials, equipment, subcontractors. Use historical data from similar projects when available. Break it down to a level where you can actually defend each number. If you're guessing, note the uncertainty. Direct costs are the foundation - get these wrong and everything else falls apart.

Add the overhead, contingency, and escalation factors. Include indirect costs like project management, quality control, and admin support. Apply inflation or indexation based on project timeline. Don't forget risk contingency - how confident are you in those direct costs? These factors can add 30-50% to your base estimate, so they matter.

Have another estimator or subject matter expert check your work. Fresh eyes catch errors and questionable assumptions. They should review methodology, verify calculations, and challenge any numbers that seem off. Document their feedback and your responses. A good peer review can save you from an embarrassing overrun or underbid.

Package everything into a clear basis of estimate report. Include your assumptions, methodology, data sources, and confidence level. Make it easy for approvers to understand how you got your numbers. Route to the right approvers based on estimate size. Be ready to defend your numbers - good documentation makes that conversation much easier.