HKSM
Independent Estimates
Engaging an impartial outside party to collect and analyze data in order to forecast costs, schedules, or other project parameters.
Key Points
- Performed by a neutral third party separate from the project team and vendors.
- Provides an objective benchmark for costs, timelines, and other estimates.
- Helps spot unrealistic bids, overpricing, underestimation, or possible collusion.
- Supports negotiations, budgeting, and risk planning with evidence-based figures.
Example
A project manager planning a data center build hires an external cost consultant to develop a should-cost estimate for labor, equipment, and schedule duration. When supplier bids arrive, the team compares them to the independent estimate, identifies one bid that is 30% higher without clear justification, and uses the analysis to negotiate and adjust the procurement strategy.
PMP Example Question
During procurement planning, the PM wants to verify whether vendor proposals are reasonable and detect any signs of price fixing. Which tool or technique should the PM use?
- Parametric estimating by the internal team
- Three-point estimating
- Independent estimates
- Reserve analysis
Correct Answer: C — Independent estimates
Explanation: Independent estimates use a neutral third party to develop objective benchmarks, which are ideal for validating vendor bids and identifying potential anomalies.
