Estimate the project’s effort and cost for work products and tasks based on estimation rationale.


Estimates of effort and cost are generally based on results of analysis using models or historical data applied to size, activities, and other planning parameters. Confidence in these estimates is based on rationale for the selected model and the nature of the data. There can be occasions when available historical data do not apply, such as when efforts are unprecedented or when the type of task does not fit available models. For example, an effort can be considered unprecedented if the organization has no experience with such a product or task.

Unprecedented efforts are more risky, require more research to develop reasonable bases of estimate, and require more management reserve. The uniqueness of the project should be documented when using these models to ensure a common understanding of any assumptions made in the initial planning phases.

Example Work Products

  1. Estimation rationale
  2. Project effort estimates
  3. Project cost estimates


1. Collect models or historical data to be used to transform the attributes of work products and tasks into estimates of labor hours and costs.

Many parametric models have been developed to help estimate cost and schedule. The use of these models as the sole source of estimation is not recommended because these models are based on historical project data that may or may not be pertinent to the project. Multiple models and methods can be used to ensure a high level of confidence in the estimate.

Historical data should include the cost, effort, and schedule data from previously executed projects and appropriate scaling data to account for differing sizes and complexity.

2. Include supporting infrastructure needs when estimating effort and cost.

The supporting infrastructure includes resources needed from a development and sustainment perspective for the product.

Consider the infrastructure resource needs in the development environment, the test environment, the production environment, the operational environment, or any appropriate combination of these environments when estimating effort and cost.


Examples of infrastructure resources include the following:
  • Critical computer resources (e.g., memory, disk and network capacity, peripherals, communication channels, the capacities of these resources)
  • Engineering environments and tools (e.g., tools for prototyping, testing, integration, assembly, computer-aided design [CAD], simulation)
  • Facilities, machinery, and equipment (e.g., test benches, recording devices)

3. Estimate effort and cost using models, historical data, or a combination of both.


Examples of effort and cost inputs used for estimating typically include the following:
  • Estimates provided by an expert or group of experts (e.g., Delphi method, Extreme Programming’s Planning Game)
  • Risks, including the extent to which the effort is unprecedented
  • Critical competencies and roles needed to perform the work
  • Travel
  • WBS
  • Selected project lifecycle model and processes
  • Lifecycle cost estimates
  • Skill levels of managers and staff needed to perform the work
  • Knowledge, skill, and training needs
  • Direct labor and overhead
  • Service agreements for call centers and warranty work
  • Level of security required for tasks, work products, hardware, software, staff, and work environment
  • Facilities needed (e.g., office and meeting space and workstations)
  • Product and product component requirements
  • Size estimates of work products, tasks, and anticipated changes
  • Cost of externally acquired products
  • Capability of manufacturing processes
  • Engineering facilities needed
  • Capability of tools provided in engineering environment
  • Technical approach