The Government Accountability Office (GAO) Cost Estimating Process consists of twelve (12) steps. Each step builds upon each other to develop and comprehensive and complete cost estimate. Each of the 12 steps is important for ensuring that high-quality cost estimates are developed and delivered in time to support important decisions.
12 Step GAO Cost Estimating Process:
Step 1: Define Estimate’s Purpose
Step 2: Develop Estimating Plan
Step 3: Define Program Characteristics
Step 4: Determine Estimating Structure
Step 5: Identify Ground Rules and Assumptions
Step 6: Obtain Data
Step 7: Develop Point Estimate and Compare it to an Independent Cost Estimate
Step 8: Conduct Sensitivity Analysis
Step 9: Conduct Risk and Uncertainty Analysis
Step 10: Document the Estimate
Step 11: Present Estimate to Management for Approval
Step 12: Update the Estimate to Reflect Actual Costs and Changes
Certain best practices should be followed if accurate and credible cost estimates are to be developed. These best practices represent an overall process of established, repeatable methods that result in high-quality cost estimates that are comprehensive and accurate and that can be easily and clearly traced, replicated, and updated.
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