Large bids will typically contain a significant labor component. Whether the contract is fixed price or based on level of effort it is important to not only estimate the labor effort required as accurately as possible, but to also justify this estimate to the client or prospect.  While most lay-people think of a labor estimate as a bunch of resources spread over time in a spreadsheet - or perhaps an MS-Project plan with resource assignments to calculate the estimated work - a complex bid submitted with the basis of each labor estimate is made up from a combination of:

• Level of effort estimates (also called engineering estimates) - aka numbers plugged into a spreadsheet like interface
• Estimates from a discrete (also called bottom-up estimate) plan e.g. imported from MS-Project or from Primavera P6 
• Parametric estimates based on for example "hours per drawing" x "number of drawings" or based on cost estimating relationship e.g. "7% of engineering hours"
• Estimates that are similar to, or copied from, a prior estimate (also called analogous or similar-to estimates) with complexity and efficiency factors
• Estimates based on actual performance history (actual labor recorded in a system such as SAP) again with complexity and efficiency factors.

Make-part labor estimates are not included here.

To build up your labor estimate click on the LABOR tab of your estimate, having first made sure labor estimating is checked in the Cost Structure tab:

If you are using an analogous or similar-to estimating methodology to start with then you can copy a previous WBS [insert link to new article how to find and copy a prior WBS for similar work] with its labor or you can select the estimating methodology and prior proposal or actual project and WBS to copy and reference. [move the stuff below to its own article called 'How to Copy Labor from a prior project & WBS in the LABOR tab]

1. Select the basis for your estimate (at least for the majority of it) from the list. Each option is explained above. Depending on what option you select you must select or input the proposal and proposal WBS (copy from a previous estimate) or input the reference SAP project and WBS (copy from actual performance history - as shown in the image above). Also note:
   • Estimates based on level or effort or copied from a discrete plan use a spreadsheet like input as explained below
   • Click here to learn more about importing estimates from Primavera
   • Parametric estimates are based on formula which are added to each individual resource, because each resource can be based on a unique formula. Click here to learn more about parametric estimates
2. Once you have selected the source to copy from, optionally enter a complexity factor, and click on the COPY button to copy in your estimate
   • Specify in the popup the complexity factor, whether to copy in hours as well as a list of resources, and whether to add to or replace your existing labor resources in the current estimate