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284 O.M. Magnussen, N.O.E. Olsson / International Journal of Project Management 24 (2006) 281–288tion technique is the so-called judgmental forecasting andthe forecast serves the purpose of predicting the future factorsthat may influence project costs. A statistical modelwhere it is assumed that the uncertainty is normally distributedis used [3]. The proposed budget for the project, preparedby the project organisation before the qualityassurance takes place, pertains in most cases to the 50%subjective probability, i.e., there is a 50% expected probabilitythat the project will be completed within this cost.The recommendation from the external consultant consistsof the expected cost and total budget, most often based on50% and 85% probability, respectively. The uncertaintyanalyses performed by the project organisation and theexternal consultant represent the basis when the projectowner decides upon the estimates that are to be presentedin the national budget or in a separate project-specific Governmentwhite paper. Formally, the Parliament reacheswhatever conclusion on the matter it would find appropriate.In practice, however, the estimates presented in thenational budget or the project-specific white papers aresanctioned by Parliament without changes.4.4. The new approach to project costsOlsson et al. [9] describe the situation that, as a consequenceof the Quality-at-entry Regime, a more sophisticatedoverview of the project cost is presented. Theexternal consultant recommends a total budget that isexpected to cover the consequences of the identified uncertainties.The reserves are, however, not expected to be used,and specific rules for the management of reserves have beenestablished. The budget allocated to the executing governmentagency is the basic budget plus expected extra costs(based on 50% subjective probability), which also was thetypical standard before the Quality-at-entry Regime wasestablished. Use of the reserves must be approved by theresponsible ministry. This implies that there is a bindingupper financial level for the projects and a new controlscheme for budget compliance. Olsson et al. [9] point outthe need for management of project reserves for portfoliosof projects since a project owner often deal with manymajor projects at the same time. If this succeeds, it isexpected that the new approach will reduce the need foradditional funding and result in increased reliability ofthe cost estimate. Attempts to summarise some of theeffects of quality assurance suggest that:‘‘The involved ministries, being projects owners, haveexpressed a general satisfaction with the analyses, since theygive a ‘‘second opinion’’ of the projects. They also feel thatthey get a better basis to prepare the decision proposal forthe Norwegian parliament.’’ [9, p. 38]The new approach also raises some concerns. Olssonet al. [9] refer to the situation that some projects maybecome more expensive as a result of the allocated reserves.Planned use of the reserves could occur, and this couldenhance the observed tendency that projects at least filltheir allocated budget. Some claim that costs might soarbecause of the situation that the external consultants haveno responsibility for the actual budget. They recommend abudget, but have no role in the execution of the project.This could lead to a situation where the external consultantssystematically exaggerate the recommended totalbudget in order to reduce the risk that cost overruns couldoccur. On the other hand, if cost elements are omitted inthe initial estimates, quality assurance is designed to intervene,and in this respect have a rather direct impact on thecost estimation process.5. Data collection and refinementThe quality assurance report, which is a compilation ofthe results from quality assurance, represents the fundamentaldata source in our research. From the qualityassurance report it is possible to obtain cost estimates preparedby the project organisation/the executing governmentagency and of course the recommendation from theexternal consultant. The project budget approved by theParliament is obtainable from the national budget or project-specificGovernment white paper presented by theresponsible ministry. When it was deemed to be necessaryto ensure the quality of the data, projects were contactedseparately via e-mail.To compare the cost estimates presented at the specificpoints in the process (cf. Fig. 1), cost data had to be correctedfor inflation. This basically means that cost data ineach individual project are brought to the same price levelas the approved budget, either with the aid of specific methodsfor the single project, or by appropriate indices fordiscounting.Before a presentation of the important findings fromanalyses done on the existing material, it should be notedthat the aim of this paper is not to present a final evaluationof the effects of the quality assurance scheme, sincemost of the projects are still in the planning stages or inthe early stages of implementation.6. Presentation of important findingsThe collected data are stored in a research database.Proper storage and the possibilities for fast retrieval oflarge quantities of data seem to be the most importantcharacteristics of a database [13]. Fifty-two projects havebeen through the quality assurance procedure between2000 and 2004. On the basis of these projects a sample of31 projects representing a broad range of project typeswas established (cf. Table 1).6.1. The external consultantÕs recommended budget – projectreservesIn this section a closer look at the recommendation ofthe external consultant is presented. A special interest isconnected to the size of the reserve. The allocation of pro-