15.8. JUSTIFYING THE COSTS

Project pricing is often based upon best guesses rather than concrete estimates. This is particularly true for companies that survive on competitive bidding and where the preparation cost of a bid may vary between $50,000 and $500,000. If the probability of winning a bid is low, then the company may spend the minimum amount of time and cost during bid preparation.

Table 15-7 shows a typical project pricing summary.