Top 5 Estimating Mistakes in Capital Projects—And How to Avoid Them

Roger Farish
May 7
3 min read

Capital project estimates do more than forecast cost—they shape funding decisions, drive stakeholder confidence, and influence how a project gets executed.

When estimating goes wrong, the effects ripple far beyond the numbers. Missteps can lead to budget overruns, delayed approvals, broken trust, and even canceled projects. And while no estimate is perfect, many of the issues we see are preventable.

At ROMAN Consulting Group, we’ve reviewed and developed estimates across all stages of industrial capital projects. Here are five of the most common estimating mistakes—and how you can avoid them.

1. Relying on Incomplete Scope Definition

The strength of your estimate is directly tied to the clarity of your scope. When the scope is vague, shifting, or assumed, the estimate becomes unstable. What starts as a ballpark figure can quickly become a liability if used out of context.

Why it matters: Using a rough estimate to make a firm decision is like building a house on sand.

How to avoid it: Match your estimate to the maturity of your project. For example, a Class 5 or Class 4 estimate should not be presented with Class 3 confidence. Acknowledge what’s known, what’s assumed, and where the gaps are. Progress your estimate with your scope—not ahead of it.

2. Skipping Risk and Contingency Analysis

No two projects face the same risks—and ignoring uncertainty doesn’t make it go away. Yet many estimates gloss over or understate risk, leading to unrealistic baselines and major surprises later.

Why it matters: Without contingency, your estimate may look lean on paper—but that lean turns into overrun in the field.

How to avoid it: Use structured risk modeling to identify and quantify uncertainty. We work with clients to apply risk-based contingency—aligned to project complexity, scope gaps, and external factors. That makes your estimate more transparent, defensible, and resilient.

3. Using Outdated or Generic Cost Data

Cost data isn’t one-size-fits-all. Market conditions vary by region, timing, and scope specifics. Relying on outdated or averaged numbers—especially for specialized industrial work—can quickly degrade estimate quality.

Why it matters: A few percentage points off in unit costs can turn into millions of dollars on large projects.

How to avoid it: Integrate current, market-specific data. At ROMAN, we adjust for location, market trends, and project type—ensuring unit rates reflect reality, not outdated norms. Benchmarking is only useful when it’s relevant.

4. Overconfidence in Contractor Estimates

Contractor input is valuable—but it reflects their perspective and priorities. Their estimate may not capture your internal funding needs, long-term risks, or the strategic context of your project.

Why it matters: Taking a contractor estimate at face value can leave gaps in oversight and justification.

How to avoid it: Perform independent, owner-side validation of contractor numbers. This allows you to compare apples to apples, identify red flags, and ensure alignment with your risk appetite and funding expectations. Don’t outsource your accountability.

5. Neglecting to Document Assumptions

An estimate without clear assumptions is just a number with a question mark. If those assumptions change—and they will—no one knows what to update or how to evaluate the impact.

Why it matters: When decisions are based on undocumented assumptions, accountability disappears—and so does confidence.

How to avoid it: Every estimate should include a Basis of Estimate (BoE) that outlines methodology, assumptions, exclusions, and sources. It’s not just a formality—it’s a strategic tool for communication, validation, and future revisions.

Capital Project Estimating Should Be a Strategic Advantage—Not a Liability

Capital project teams already operate in high-stakes environments. Estimating shouldn’t add risk—it should reduce it. At ROMAN Consulting Group, we help industrial project teams build better estimates from the start—structured, scalable, and aligned to your real-world decisions.

Let’s turn your estimate into a tool for confidence and clarity—not just a cost exercise.