The Handbook is intended to be used by both model developers and model reviewers, their management or oversight, either technical or financial. Government and industry cost analysts and auditors who utilize CERs and/or parametric cost models to develop or evaluate an estimate generated with these parametric tools should find the Handbook useful. It is also intended to be utilized as a source document by trainees within a generic parametric cost estimating training program. This Handbook includes basic information concerning data collection, Cost Estimating Relationship (CER) development, parametric cost models, and statistical techniques. Parametric techniques are a credible cost estimating methodology that can provide accurate and supportable contractor estimates, lower cost proposal processes, and more cost-effective estimating systems.