When we mean to build, we first survey the plot, then draw the model; And when we see the figure of the house, then must we rate the cost of erection; Which if we find outweighs ability, what do we then but draw anew the model in fewer offices, or at least desist to build at all?
Shakespeare, Henry IV, part 2, Act 1, Scene 3
For which of you, intending to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘this man began to build and was not able to finish.’
Both of the above quotations emphasize the need to define the scope. Yet it took eleven years (whilst it was being built) before the scope of the British Library was defined, Costs rose from an estimated £116m to over £550m, and it was ten years late!
Each element of the P&WBS is costed (using the best available data) and summated to determine How Much the total cost estimate for the project will be. At various phases throughout the project, estimates are updated and formally reviewed by management. They can be given various names as they develop, namely:
|Trend base estimate||Prepared at time of project award or not later than six weeks afterwards.|
|Preliminary estimate||Normally used in jobs where the scope of work is very unclear at job award and a series of optimisation studies have to be carried out. Once the ...|