# Build a project cost estimate with a contingency reserve

A structured cost estimate by work package with explicit assumptions, risk-based contingency, and a range you can defend.

- Topic: Finance & Accounting
- Framework: RTF
- Level: Standard
- Tags: Finance, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/build-a-project-cost-estimate-with-a-contingency-reserve

## Prompt

```text
Help me build a cost estimate for my project, including a contingency reserve.

**Project scope:** [SUMMARY or work breakdown]
**Labor:** [roles, number of people, time on the project, loaded rates if known]
**Non-labor costs:** [software, hardware, vendors, travel, facilities, training]
**Known risks that could add cost:** [LIST]
**Estimating basis:** [past similar projects, vendor quotes, expert judgment]
**Currency and budget period:** [e.g. USD, fiscal year]

Steps:
1. Organize costs by work package or phase, separating one-time from recurring costs.
2. List every assumption behind each line (rate, duration, quantity) so a reviewer can challenge it.
3. Rate each line's estimate confidence (high / medium / low) based on its basis.
4. Size a contingency reserve from the identified risks (probability x cost impact), and explain why it differs from a flat percentage. Mention that a separate management reserve for unknown risks is usually held by the sponsor, not the project.
5. Flag commonly forgotten costs: internal staff time, licenses after go-live, data migration, testing environments, change management, hypercare.

Rules: do not invent rates or prices. Use [QUOTE NEEDED] or [RATE NEEDED] placeholders. This is planning support, not accounting advice - have finance validate it before approval.

Return:
1. An estimate table: work package | item | quantity | rate | cost | basis | confidence.
2. A contingency table: risk | probability | cost impact | expected value.
3. Totals: base estimate, contingency, and a low-high range.
4. An assumptions list for the business case.
```

## What to fill in

- SUMMARY or work breakdown
- software, hardware, vendors, travel, facilities, training
- LIST
- past similar projects, vendor quotes, expert judgment
- e.g. USD, fiscal year
- QUOTE NEEDED
- RATE NEEDED

Free to copy and use. From ThinkWithPrompt (https://www.thinkwithprompt.com/), a library of 2,663 curated AI prompts.