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7 - PROJECT COST MANAGEMENT

7.2.2.8 Project Management Software

Project management software applications, computerized spreadsheets, simulation, and statistical tools are
used to assist with cost estimating. Such tools can simplify the use of some cost-estimating techniques and thereby
facilitate rapid consideration of cost estimate alternatives.

7.2.2.9 Vendor Bid Analysis

Cost estimating methods may include analysis of what the project should cost, based on the responsive bids from
qualified vendors. When projects are awarded to a vendor under competitive processes, additional cost estimating
work may be required of the project team to examine the price of individual deliverables and to derive a cost that 7
supports the final total project cost.

7.2.2.10 Group decision-Making techniques

Team-based approaches, such as brainstorming, the Delphi or nominal group techniques, are useful for engaging
team members to improve estimate accuracy and commitment to the emerging estimates. By involving a structured
group of people who are close to the technical execution of work in the estimation process, additional information is
gained and more accurate estimates are obtained. Additionally, when people are involved in the estimation process,
their commitment towards meeting the resulting estimates increases.

7.2.3 Estimate costs: outputs

7.2.3.1 Activity cost Estimates

Activity cost estimates are quantitative assessments of the probable costs required to complete project
work. Cost estimates can be presented in summary form or in detail. Costs are estimated for all resources that
are applied to the activity cost estimate. This includes, but is not limited to, direct labor, materials, equipment,
services, facilities, information technology, and special categories such as cost of financing (including interest
charges), an inflation allowance, exchange rates, or a cost contingency reserve. Indirect costs, if they are included
in the project estimate, can be included at the activity level or at higher levels.

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