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Basis of estimate is a document that describes exactly how an estimate was calculated. It is often described as a tool or system as it gives you everything that you need to apply a consistent estimation method to programs, projects, processes or activities. The following are examples of basis of estimate content.
Assumptions & ConstraintsAny assumptions and constraints that were required to generate a set of estimates. This isn't a repeat of project assumptions but applies to the estimates themselves. For example, assumptions that were made to generate a list of comparable projects for estimate benchmarks.AttachmentsIdentify the version of requirements, risk registers and other project artifacts that are the basis of the estimate. Attach any source documents such as price quotes from suppliers.
Estimate SummaryA high level summary designed to communicate the estimate to all stakeholders such that it can be easily understood. ProcedureA description of the estimation procedure. For example, describing a bottom-up estimation process of identifying tasks and having subject matter experts estimate each. Include details of calculations or algorithms.
GuidelinesPrinciples that are used to guide estimates. For example, a principle of using three point estimates to estimate complex tasks.Bottom-up EstimatesIf bottom-up estimates are used the details are included at the level at which estimates were produced, typically the task level.Parametric EstimatesThe details of any calculations or algorithms that were used to generate estimates. Algorithms are sufficiently explained in plain language such that they aren't a mystery.
Analogous EstimatesAny comparisons that were used to generate or validate estimates based on your historical projects. The details of the historical projects used are listed.Any benchmarks that were used to generate or validate estimates using a database of similar programs, projects and initiatives. The details of relevant database entries are listed.
Third Party EstimatesDetails of price quotations and other estimates provided by third parties.ContingencyDetails of contingency added to an estimate to account for risk. Potentially includes confidence intervals for estimates.AnalysisDetails of any analysis related to the estimates.ValidationsDetails of sanity checks and validations that were performed. For example, a bottom-up estimate technique that is validated with reference class forecasting.
ApprovalsAn audit trail of approvals for the estimate.|
| Type | | | Definition | A document that describes exactly how an estimate was calculated. | | Related Concepts | |
Estimates
This is the complete list of articles we have written about estimates.
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The common types of estimates.
An overview of reference class forecasting as an estimation technique.
Projections of costs, task completion times and resource needs for a project.
An overview of estimating with story points including planning poker.
A definition of parametric estimate with examples.
The common types of cost analysis.
A definition of budget estimate with examples.
The definition of level of effort with examples.
An overview of technical requirements with common examples.
A list of common project risks.
A list of basic project management techniques.
A definition of workaround with examples.
A list of project branding techniques.
A definition of project stakeholder management with examples.
A definition of action plan with examples.
The primary types of cost overrun.
The definition of document control with examples.
A guide to project oversight.
A definition of design driven development with examples.
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