104R-19: Communicating Expected Estimate Accuracy
AACE International, February 22, 2021
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This recommended practice (RP) defines expected estimate accuracy; and
describes how the concept of estimate accuracy should be communicated to a
stakeholder or decision maker that is interested in understanding the potential
variability or predictability that is associated with a particular
The results of the estimating process are often conveyed as a single
value of cost or time. However, since estimates are predictions of an uncertain
future, it is recommended that all estimate results should be presented as a
probabilistic distribution of possible outcomes in consideration of risk.
However, because probabilistic methods are difficult to communicate, its
concepts are reduced to an expression called expected estimate accuracy that is
a simplified means of communicating uncertainty as a single expression.
Discussions of expected estimate accuracy often describe estimate accuracy in
terms of +/- percentages that bound the published single estimate value, but
too often fail to convey other significant information that is required by an
estimate stakeholder to truly assess what the +/- percentages indicate. Worse,
rule-of-thumb percentages often fail to reflect the true risk and uncertainty
This RP applies to estimates of both cost and time (duration). Its
subject matter deals with the integration of the disciplines of decision and
risk management, cost estimating and planning and scheduling within the AACE
International community. Where a discussion in the RP focuses on either cost or
time specifically, it is noted as appropriate.
This RP is intended to provide guidelines (i.e., not a standard) to be
used in conveying the expected accuracy level of an estimate to a stakeholder
that are considered to be good practices that can be relied on and that would
be recommended for use where applicable. This RP will present an estimate as a
probabilistic range of potential values in consideration of risk, discuss the
typical shapes of the probability distribution associated with the range of
potential values, discuss the concept of estimate contingency, and identify the
elements required to convey information about expected estimate accuracy to
stakeholders. When referring to cost or duration estimating, this RP focuses on
cost or duration estimating for a project or dedicated effort to accomplish a
scope of work or activities.
This RP does not discuss the calculation or determination of the
variability of the indicated accuracy of an estimate after completion of the
associated project or effort (a comparison of an estimate with actual results).
When the term estimate accuracy is used in this RP, it is intended to convey
expected estimate accuracy.
Take a look inside RP 104R-19