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286 O.M. Magnussen, N.O.E. Olsson / International Journal of Project Management 24 (2006) 281–288Table 3External consultantÕs revised estimate compared to the project organisationÕsinitial estimateRevised estimate is (compared toproposed estimate)Number ofprojectsPer centLower 5–10% lower 3 9.7 265% lower than or equal to 5 16.1Higher Up to 5% higher 7 22.6 745–10% higher 8 25.810–15% higher 5 16.1More than 15% higher 3 9.7Total 31 100.0external consultants recommended 5% higher budgets.Some might argue that the observed differences are rathersmall. Why should we deal with differences that in an analyticalsense equal the uncertainty in the results? First of all,even a 5% difference in projects of this scale could,expressed in money, be substantial. Secondly, it must bekept in mind that studies of initial estimates and actualcosts that show deviations up to several hundred percentcould include large distortions for instance with respectto inflationary backgrounds. This study is different, obviouslybecause initial estimates from two different actorsrather than initial estimates and actual costs are compared,but also because price escalations, project changes andother factors are not an issue or have been accountedfor. The compared figures are indeed ‘‘answers to the samequestion from two different actors’’. With this in mind, onequestion immediately arises: What could explain theobserved result? An exact explanation must be left openat this stage, but a closer look into the sources can be abasis for discussion. It could be that the external consultantsapply a broader view and include more elementsassumed to have an impact on the cost of the project.The project organisationÕs major concern is the implementationof the project according to specific requirements.The external consultants must also consider the potentialimpact of factors that to the project organisation mayappear to be of a more unpredictable and unmanageablecharacter. These could be factors connected to the market,financing, and changes imposed by the government.It must also be recognized that the prevailing methodsto calculate the estimates rely on subjective assessments.As described by Olsson et al. [9], in some cases differentestimates have been a source of discussion between the projectorganisation and the external consultant. In caseswhere there are fundamentally different subjective viewsconcerning central uncertainty elements, this will clearlybe manifested in the results. Still, this does not explainwhy the external consultants present a higher estimate inso many cases.Some may claim that this indicates an exaggeration ofthe estimates from the external consultants. Since they donot have any responsibility for the actual budget complianceand it is claimed that nobody wants the label that theyunderestimate costs, this could lead to a situation whereextra costs are included just to be sure. It would be hardto establish data that could describe this issue, because thisfundamentally is an assumption about the intentions ofactors. 6 It must otherwise not be forgotten that the foundationfor the external consultantsÕ recommendations areexplained in the reports from the quality assurance exercises.In this way the underlying premises for the recommendedestimate can be verified.The major question in this paper is the Quality-at-entryRegimeÕs influence on the initial decisions connected to theprojects. Does it lead to different practices and other methods?In this perspective an analysis that maintains the timedimension is presented.The difference between the proposal from the project andthe revised estimate is calculated in percent. A plot of thedifferences for all the projects in the sample against themonth of presented report and the result is shown in Fig. 2.Visual inspection indicates that the largest differencesoccurred when the quality assurance scheme was new,and interestingly, no revised estimate substantially lowerthan the initial estimate is observed before late 2002.Another indication from Fig. 2 is the clear decrease inthe differences from the first quarter of 2002.What explanations are there? A number of possible factorsspring to mind. One possibility might be that the focuson more realistic cost frames launched by the Regime hasled to an increase in the use of relevant methods by the projectorganisations to identify the uncertainties in the earlystages of the projects. Observations made during the collectionof the data suggest that more equal estimates coincidedwith a more consistent use of the most commonlyused terms. At the same time, the Ministry of Transportand Communications, which accounts for a large numberof the projects in the sample (cf. Table 1), specified howthe results from the quality assurance of projects in theirarea of responsibility should be employed. This indicatesthat a change in practice and learning has taken place.The literature referred to above suggest that so-called‘‘strategic budgeting’’ could be a cause of underestimationin public projects. This is based on the assumption thatprojects that appear to be inexpensive have a greaterchance of being prioritized. It is easy to predict that theQuality-at-entry Regime could have a rather direct impacton strategic budgeting; assuming that such practice actuallyhas taken place. It is, however, impossible to answerthis question on the basis of this study. The differencesobserved here could just as much be explained by overestimationfrom the external consultant as underestimationfrom the project organisation, and a possible interpretationof the development towards more equal estimates couldalso be that an adjustment to the demands of governmentalinstitutions has taken place, either by external consultants,project organisations, or both.6 Flyvbjerg et al. [6, p. 289], face the same problem when trying toanswer the question whether project forecasts are intentionally biased.