Project Cost Proposal Sample Template

What procedures will be adopted for working on the project completely depends on the budget allocated to that project? The cost is very important information to be considered before working on the project. The businessmen with limited resources and budget constraints are required to take the cost into consideration.

What is the cost proposal?

A cost proposal is a document that is submitted by a contractor to tell the estimated cost. On the basis of the information provided in the cost proposal, two parties can negotiate and make plans about working on the project.

What is the purpose of using a cost proposal?

Many organizations ask their contractors to submit the cost proposal because it enables them to know the estimated amount they need for working on the project. With the help of the information about cost, the business can make several important decisions.


Some businesses also decide not to start the project because of a lack of funds. The project cost proposal includes all types of costs such as administrative costs, cost on the provision of facilities, direct costs related to the project, and a lot more.

Tips for making a cost proposal budget:

  1. The main focus of the proposal is always on the direct cost of the project because it covers most of the cost. Many contractors include all the costs in the proposal as direct costs. The cost of administrative tasks and direct costs should never be mixed. If you are providing information about the indirect costs, make sure that you provide all the documentation that can justify those costs. Moreover, these documentations should be able to prove that the said costs are necessary for the project.
  2. There are different methods that are commonly used for cost estimation such as price quotation, comparison between current and historical costs, etc. Choosing the right cost estimation method is very important if you want the cost estimate to be accurate and correct. As a professional contractor, you should always be able to choose the right method.
  3. While budgeting a project, the cost proposal should be able to explain how the project will incur the cost. The costs should be itemized in the proposal appropriately for better understanding of the company.
  4. The details of the cost should be described in the proposal. These details are very important for the client.
  5. Try to keep the cost low as much as possible. There can be many ways by which you can minimize several types of costs. Sometimes, a company prefers those contractors who propose the lowest estimate of the project.


A project cost proposal is a document written by a business to another business that defines the correct and exact line of cost. It guides and elaborates the details about the amount of investment or the total cost need to be required for a certain project.

Project cost proposal