Estimate to Complete a Fixed-Fee Project

An estimate to complete forecasts the cost of work still required. It is different from the original budget remaining, which is simply budget minus spending so far. Substituting the latter for a fresh estimate can conceal an overrun until the project ends. Rebuild the remaining work from deliverables, unresolved issues, reviews, and closeout tasks, then combine that estimate with the cost already incurred.

Calculate a new final-cost forecast

Suppose a hypothetical fixed-fee project has $8,000 of revenue and an original cost budget of $5,000. Actual cost to date is $3,000. A review of unfinished tasks identifies 30 hours of remaining work at an internal cost of $80 per hour plus $400 of additional expenses. Estimate to complete is $2,800, so expected final cost is $5,800. Forecast profit is $2,200, or 27.5% of the fee.

Compare with the original plan

The original budget implied $3,000 profit and a 37.5% margin. The new forecast is $800 above budget, reducing expected profit by the same amount. The budget still has $2,000 unspent, but that does not make $2,000 a credible estimate of the work remaining. The difference between the $2,800 estimate and $2,000 remaining budget is the problem the review must explain.

Estimate work rather than a vague completion percentage

A statement that a project is 70% complete may reflect elapsed time, deliverables, or subjective confidence. Those are not necessarily proportional to cost. List unfinished activities and dependencies separately, including testing, review, integration, and handover. Ask the people doing the work for the remaining effort under the current scope. Include known rework and supported uncertainty, while avoiding a second contingency for risks already reflected in the task estimates.

Test the range and decision options

If remaining labor is 40 hours instead of 30, estimate to complete becomes $3,600 and final cost $6,600, leaving $1,400 or 17.5% margin. Discuss whether scope, resources, sequence, or schedule can change with the appropriate parties. An expected overrun does not automatically authorize a higher client fee. Keep a separate record of approved changes, estimating errors, and execution issues so their commercial and operational consequences are not confused.

Update at meaningful checkpoints

Refresh the forecast after major approvals, discoveries, or delivery phases, not merely when the invoice cycle closes. Reconcile actual costs to time and supplier records, including committed costs not yet invoiced when relevant to the management forecast. Forecast cost may exceed the fee; show the resulting negative profit. If no work remains, estimate to complete can be zero, but missing supplier bills or unresolved acceptance work should not disappear simply because the visible production task is finished.

Method references: Acquisition.gov: firm-fixed-price description; OpenStax: break-even and contribution analysis. Accessed October 22, 2026. All dollar figures are hypothetical worked examples.