What can organizations do to ensure valid estimates?
Adopt new technology for estimates
check & balance
What can they do to prevent cost overruns?
Cost overruns, unforeseen needs and other factors can all lead to a project which is well over budget.
To protect your company and your project, one of the best and most sound decisions you can make is to conduct formal, independent and unbiased cost estimates throughout the project lifecycle.
According to the Association for the Advancement of Cost Engineers, a cost estimate is "a compilation of all the costs of the elements of a project or effort included within an agreed-upon scope." To a contractor, this is the cost that will most likely be incurred in completing the project as defined in the contract documents.
Because every organization does things a little differently, a cost estimate from one company might look completely dissimilar to an estimate from another. Normally, cost estimates are provided to the owner and include projections for the overall budget cost, which help minimize surprises for items that the owner might have otherwise left out of the overall budget.
Cost estimates are typically performed early in the project, when clients need a budget for authorization -- a time when drawings and specifications have either not begun or have not been completed.