Topic2a: Estimating (MANDATORY RESPONSE)

Chapter 2 (p.14) of the PMI Practice Standard for Project Estimating (2011) and Chapter 1 (p.6) of the GAO Cost Estimating and Assessment Guide (2009) list several characteristics of good estimating practices. Using this list, comment on each characteristic in the context of estimates prepared by your organization.

Topic 2b: Contingency and Management Reserves

What are contingency and management reserves and why are they added to the sum of control account or work package estimates in deriving the overall project budget? Discuss the use of contingency and management reserves in your organization. What are the typical magnitudes of these reserves? Who determines the magnitude of these reserves?

Topic 2c Direct and Indirect Costs

Describe the differences between direct and indirect costs. Why is it important for a project manager to understand the impact of indirect costs on his/her project? Describe the mechanism for allocating indirect costs allocated to projects in your organization.

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