Frequent errors
- Starting with a target: adjusting assumptions until the estimate fits available funding.
- Missing integration work: estimating components but not interfaces, testing, training or transition.
- Using stale analogies: copying historic costs without normalizing time, location, size and scope.
- False precision: reporting cents or narrow accuracy when the design is immature.
- Flat contingency: applying one percentage without examining risk.
- Double counting: including the same risk in rates, quantities and contingency.
- Ignoring schedule: omitting escalation, extended overhead and cash timing.
- Overwriting history: changing the baseline to match actual results.
Practical prevention
Use a scope checklist, basis of estimate, peer review, sensitivity analysis and formal version history. Compare outcomes with prior estimates to improve future assumptions.