---
ref_id: PR15
ref_type: Process
ref_name: "Estimate Costs"
version: "1.0.0"
status: Active
pmbok8_source: "PMBOK8 Guide §2.4"
companion_ref_shortcode: PG-APG-5.12
related_skills:
  - SKL-03-14
related_artifacts:
  - A16
file_path: "reference/processes/PR15-estimate-costs.md"
---
# PR15 — Estimate Costs

## Classification
- **Performance Domain:** Finance
- **Process Group:** Planning
- **PMBOK 8 Reference:** Section 2.4
- **Process Groups Practice Guide Reference:** Section 5.12

---

## Purpose
Estimate Costs is the process of developing an approximation of the cost of resources needed to complete project work. The key benefit is that it determines the monetary resources required for the project.

---

## Inputs
- Project management plan (cost management plan, quality management plan, scope baseline)
- Project documents: lessons learned register, project schedule, resource requirements, risk register
- Enterprise environmental factors
- Organizational process assets

---

## Tools & Techniques
- Expert judgment
- Analogous estimating
- Parametric estimating
- Bottom-up estimating
- Three-point estimating
- Data analysis (alternatives analysis, reserve analysis, cost of quality)
- Project management information system
- Decision making (voting)

---

## Outputs
- Cost estimates
- Basis of estimates
- Project documents updates (assumption log, lessons learned register, risk register)

---

## Key Concepts
- A cost estimate is a quantitative assessment of likely costs for resources, based on information available at a given point in time.
- Costs are estimated for all resources: labor, materials, equipment, services, facilities, inflation allowance, cost of financing, contingency costs.
- Accuracy improves as the project progresses: ROM estimate range −25% to +75% in start-up; definitive estimates narrow to −5% to +10% later.
- Cost trade-offs: make vs. buy, buy vs. lease, sharing resources.
- Cost estimates are generally expressed in currency units.

---

## Source Traceability
- PMBOK 8: Section 2.4
- Process Groups Practice Guide: Section 5.12

---

## Cross-References

| Related Item | Type | Relationship |
|---|---|---|
| A16 | Artifact | Primary artifact produced or updated by this process |
| SKL-03-14 | Skill | Skill that executes this process |

## Practitioner Notes

Practitioners executing this process should seek answers to the following questions:
1. Are cost estimates developed using at least two estimation techniques for cross-validation?
2. Are resource rates and quantities validated against current market or organizational data?
3. Is the basis of estimates documented for each cost component?
4. Are cost reserves distinguished from management reserves in the estimate?
5. Have analogous or parametric benchmarks been applied where historical data is available?

## Change Log

| Version | Date | Description | Author |
|---|---|---|---|
| 1.0.1 | 2026-06-03 | Added Cross-References, Practitioner Notes, and Change Log sections (F-12 Batch 4) | PMO Director |
