The Requirements of a Best Practice Cost Estimation Process
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Despite many reported cases of project cost overrun and several efforts at improving the accuracy of cost estimates, cost overrun arising from the cost estimation process and other related causes is still prevalent and seen as the norm rather than an exception. It is therefore imperative that more focus should be placed on this process with the aim of developing a „standard‟ or „best practice‟ process capable of eliminating or drastically reducing the issue of cost overrun associated with projects and cost estimates. This research will focus on the construction industry and the main objective of the research is to find out what a typical cost estimation process looks like, the requirements a „best practice‟ cost estimation process should fulfill, the types of cost estimation methods there are, and their associated strengths and weaknesses and lastly, the challenge when the result of a cost estimation process is transformed to a budget for cost control. Interviews provided deeper insights into these questions and data collected through the administration of a questionnaire, from 26 randomly selected project managers and cost estimators from construction related companies was used to try and answer these questions.