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Development and Use of Cost Estimate Matrices for Project Planning and Evaluation

Plant Materials Technical Note Number MT-39

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Plant Materials Technical Note Number MT-39 (PDF; 66 KB)

Issued July 2001.
Joseph D. Scianna, Research Horticulturist, Gerald M. Schaefer, Agricultural Economist, and  Mark E. Majerus, PMC Manager

Introduction

The following information describes the development and use of cost estimate matrices for determining the value of NRCS Plant Materials Program products and services in order to plan, monitor, and meet contractual obligations with cooperators. Although this tool and the example detailed in this bulletin, was developed specifically for Plant Materials-National Park Service (NPS) projects, it is applicable to other cooperative agreements and projects. The cost estimate matrix described was developed for project planning and evaluation purposes and was not designed as an accounting or budgeting tool. The products and services itemized in the attached example reflect those relevant to NRCS, Bridger Plant Materials Center-National Park Service projects. Other centers may offer different products and services. There are multiple approaches to determining the value of a product or service. The methods described in this technical note have been found to provide a level of accuracy and ease of use acceptable for the intended purpose.

Definitions - Cost Estimating

Cost estimating involves assigning monetary values to each product and service provided by a contractor (producer) in order to balance production and costs (charges) for meeting contractual obligations with a second party (consumer). Cost estimating can be used as a planning or evaluation tool. As a planning (prediction) tool, it estimates the value of products and services to be produced in the future. As an evaluation tool, it identifies the value of products and services already produced and supplied, usually within a specified time frame. Although cost estimating provides only an approximation of the value of production, it is more accurate as an evaluation tool since actual products and services are known.

A matrix is a diagram or form consisting of a series of intersecting columns and rows. In our example, the rows are labeled with the product provided and the columns with various product-specific headings, including cost. (See Appendix 1)

If you have any questions, please contact one of the following:

Joe Scianna, Horticulturist
Phone: (406) 662-3579
Email: Joe.Scianna

Jerry Schaefer, Agricultural Economist
Phone: (406) 587-6829
Email: Jerry.Schaefer

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Last Modified: 08/19/2008