Cost estimation in major public projects’ front-end phase: An empirical study on how to improve current practices

Abstract

Cost estimates in the front-end phase of public projects are critical in ensuring the selection of good projects that provide value for society. In this study, we use theoretical perspectives of front-end and cost estimation under uncertainty to address the gap in project management research on practices to produce realistic cost estimates. We interviewed 31 cost engineers and held a workshop with 53 participants who had a background in costing. The findings demonstrate substantial information and input data challenges in the front-end, and that cost estimation cannot be understood as an isolated process. This study contributes to the literature by demonstrating that the organization and management of the estimation process are critical for achieving realistic front-end cost estimates beyond merely applying specific models or methods. Our results also highlight that focusing on uncertainty is essential for realistic budgeting and responsible decision-making in major public projects. Finally, the study provides practical recommendations to enhance the quality of front-end cost estimates, such as improving the preservation and storage of historical data and maintaining a focus on uncertainty throughout the process.