Independent cost estimates are an important part of certain kinds of businesses and governmental agencies. Without them, the business or agency would have a hard time doing business they way that they should. 

Independent Cost Estimate

Many businesses and governmental agencies require suppliers to provide a bid as to how much it will cost in order to make sure that they are supplied with necessaries and they have to put jobs out to bid as well. For example, government agency A needs a supplier for paper products and they require bids by paper product supply companies before they choose one. Government agency B has a construction job that needs to be done and they open it up to bids. When both agencies get their bids back, they have to figure out which one is the best one to take. That is where an independent cost estimate comes in. An outside consultant comes in and looks over all the bids. They go over the bids and do an analysis on the bids to see which one meets the appropriate standards. 

Independent Cost Estimate Benefits

The biggest benefit to using an independent cost estimate is that it helps to eliminate cost overrun. In the case of paper products, the consultant that agency A uses will look at the length of the supply contract, the quality of the products being supplied, how much they want for the supplies, and several other things. The consultant will make sure that they use the exact same criteria for each bid. That way everything is being compared equally, making it easier to decide which bid is the best deal, which might not necessarily be the lowest bid. Without that independent cost estimate, it would be easy to just choose the lowest bid which could end up costing more in the long run. 

The process would be similar for agency B and their construction project. Some of the differences would include things like penalties for not meeting set deadlines and bonuses for meeting them. The consultant would also look at the companies putting in the bid to make sure that they have the capability that they say they do so that the project can actually be done in the time and manner the construction company says it would be.

Getting an independent cost estimate will make sure that big companies and government agencies are able to do their work the way they should. For more information or assistance, contact companies like Wirthlin Consulting Group.