This study by Mott MacDonald, commissioned by the UK Treasury, reviews the outcome of large public procurement projects in the UK over the previous 20 years.
The objective of the study is to assist the public sector in evaluating and reducing excessive optimism in project estimates during appraisals.
The study demonstrates the existing high level of optimism in project estimates arising from underestimating project costs and duration or overestimating project benefits.
The report sets out an explicit method for determining optimism, based on the results of the study, in current and future projects. It identifies the critical project risk areas that need to be managed to prevent high optimism bias levels. It also provides guidance, based on study results, for managing those areas using best practice to minimise optimism in project estimates.