---
id: risk-oriented-estimating
aliases: []
tags: []
---

# Risk Oriented Estimating

Risk-Oriented Estimating (ROE), is a methodology for [[construction-estimating]] which
* prioritizes estimating tasks,
* determines necessary [[estimating-detail]]

ROE leans heavily on [[expected-value-of-perfect-information]],
which challenges the natural tendency to shy from uncertainty
with the reality of the cost of certainty.

ROE does not endorse common shortcuts that round up to "cover" uncertainty,
as these ultimately _increase_ risk by inflating the apparent project cost,
increasing the probability of loss to a competitor.

> Bid risk may fit a [Taleb distribution](https://en.wikipedia.org/wiki/Taleb_distribution).

> Actuarial Science

## Prioritizing Tasks

ROE prioritizes estimating tasks by their contribution to _cost certainty_.

## Determining Necessary Detail

ROE determines the appropriate level of [[estimating-detail]]
given an organization's [[risk#Risk Tolerance]].