Developing a complete and accurate cost estimate can be highly difficult. Throughout this project thus far, we have been able to put together a strong project schedule to identify many of the key areas where we will need to complete various tasks for the project. However, there are many items that are included within a cost estimate that would not necessarily be directly mentioned within a project schedule. For instance, we would need to consider the overhead involved in the project. Overhead can include all of the costs that are not directly associated with the completion of the project, but are still incurred expenses that must be accounted for (Hendrickson, Au & Au, 1989). This means that things such as sickness, the potential for faulty supplies, software and resources as well as possible insurance costs on materials or for human safety on the job site is a necessity as well. By estimating the costs of various “what if” scenarios such as these, it would be helpful to identify a rainy day fund that may be necessary for completion of the project.
In addition to a rainy day fund to help fund the unknown events that may occur, a cost estimate should also include the costs of travel, rent, utilities, the cost of permits to complete projects and work in specific areas of the county/town as well as to consider whether the costs of food should be included in the cost estimate if they are job-related. Given our project, I would not directly include the costs of food, but all other costs mentioned should be considered and fully researched. We should identify specifically where the project will be completed and inquire if permits are required, rent shall be paid and the cost of utilities, if any. Many of these items may not be directly listed on the project schedule but each is a key component to putting together an accurate and complete cost estimate for the customer.
Hendrickson, C., Au, T. H., & Au, T. (1989). Project management for construction, fundamental concepts for owners, engineers, architects, and builders. Prentice Hall. Retrieved from http://pmbook.ce.cmu.edu/05_Cost_Estimation.html