You have been tasked to estimate the budget for a new project. Your current project is similar in scope to a completed project from two years ago, which had a final cost overrun of 10% due to unexpected regulatory changes. Considering this, what should your first step be in estimating the budgetary needs for the current project?
Start with a new budget estimate without consulting past projects as every project is unique and should be treated independently.
Increase the total budget estimate by 10% based on the cost overrun from the past project.
Review the financial documents and the lessons learned from the past similar project to identify areas that led to cost overruns.
Use the same cost base as the past project, but add in a buffer for inflation over the past two years.