In the engineering domain, customers traditionally purchase a product by paying a one-off price to the supplier. Currently, customers are increasingly demanding engineering services in different disciplines, such as in the aerospace, defence, manufacturing and construction sectors. This means that the customer may buy a product, which includes an integrated service or purchase the usage of a product/service (i.e. availability and capability) rather than the ownership of a product. To meet this demand for engineering services rather than stand-alone products, many companies have moved from providing a tangible product to offering such services. In both academia and industry, the majority of the activities have focused on estimating the cost for products with little in the area of estimating the cost of providing engineering services. There appears to be a clear knowledge gap in the field of costing models and rules for providing such services. It is this gap in knowledge, which is the focus of the research presented in this thesis. This research is focused on estimating the cost for engineering services using parametrics and the bathtub failure model. This is illustrated through the application to a Chinese manufacturing and service provider. Eight years of cost-related data such as historical bills, service charges, maintenance records, and costs for storage has been collected. Observations, questionnaires and structured meetings have been conducted within the company. A methodology and a cost model for estimating the cost for engineering services are provided. The major contribution of this research is the creation of an approach, which is to estimate the cost of engineering services using parametrics and the bathtub failure model.