This tool is about evaluating those bids and choosing the one you will accept.

You might even have more than one contractor bid on the job. Vendor bid analysis: Sometimes you will need to work with an external contractor to get your project done.Determining resource costs means figuring out what the rate for labour and materials will be. Any materials you use to build the project (e.g., wood or wiring) will be charged at a rate too. Determination of resource cost rates: People who will be working on the project all work at a specific rate.Here are some tools and techniques for estimating cost: This estimate will become more refined as time goes on and you learn more about the project. When you make an estimate early in the project without knowing much about it, that estimate is called a rough order-of-magnitude estimate (or a ballpark estimate). Often, when you come into a project, there is already an expectation of how much it will cost or how much time it will take. It is now possible to track the project according to that budget while the work is ongoing. Once this is compiled, you add up the cost estimates into a budget plan. It is important to come up with detailed estimates for all the project costs. But no matter whether your project is big or small, and no matter how many resources and activities are in it, the process for figuring out the bottom line is always the same. That’s why no project plan is complete until you come up with a budget. If you had a bigger budget, you could probably get more people to do your project more quickly and deliver more. Adrienne Watt Project Management Open Resources TAP-a-PM and David Wiley, et al.Ĭlick play on the following audio player to listen along as you read this section.Įvery project boils down to money.

Budgetary planning