[b0bby]

My favorite PM to work with never wanted any estimates to be optimistic. Things had to be within reason, but he preferred very conservative to very lean. Once the numbers for a given proposal had been collected, it was his job (and anybody else from the team who went into the pricing/costing delegation) to go back and forth with segment management:

"We can't win with these numbers. Are you trying to lose this business for us?"

"Nope. I'm letting you know what we believe is necessary to finish the work on schedule. We can be more aggressive in some areas and, if so, we'll add items to our risk register."

"You need to hit XYZ target or we're not even going to send a bid."

"Roger."

<Team decides whether it is possible>

The internal cost debate usually ends up with a good budget and the PM/team have an "I told you so" card in their back pocket in case the team can't meet the delegated EBIT. It isn't perfect but this friction (PM sticking up for his team and management pushing for competitive numbers) is better than nothing. I imagine it is similar at most engineering shops.

edit: The fun part is that everybody knows its a game. PM wants as much cushion as possible, management wants great profit at a low price, and the team wants to keep getting work so as to stay employed. Sometimes the costing/pricing stuff goes a little over the top and the infamous "death spiral" gets tossed out by management. Always a hoot.