cost estimate

Definition

Approximation of the probable total cost of a product, program, or project, computed on the basis of available information. Four common types of cost estimates are: (1) Planning estimate: rough approximation of cost within a reasonable range of values, prepared for information purposes only. Also called ball park estimate. (2) Budget estimate: approximation based on well defined (but preliminary) cost data and established ground rules. (3) Firm estimate: based on cost data sound enough for entering into a binding contract. (4) Not-to-exceed /Not-less-than estimate: maximum or minimum amount required to accomplish a given task, based on firm cost estimate.