Quotation generation from Projects

Dear Experts,

My client wants to create project, plan the cost and then generate Quotation in the system with reference to this Project. (Sometimes they get inquiries directly and most of the times, they go for quotation based on the advertisements in the news paper/website etc..)

For this purpose we'll have to create DIP profile.

As I have never worked before with this scenario, I request you all to give me your suggestions on where to start & how to proceed. One thing I want to tell you, we are following milestone billing, So DIP will be used only for generating quotation.

Following are my question:

1)What are the complexities involved in DIP profile creation?

2)Is it mandatory to use ECP for cost estimation, to generate quotation from the system? Or I can use any other method also, like n/w costing?

3)In case, If it is mandatory to use ECP, then once the quotation get converted to order, do i again need to do cost planning?

4)In case if the quotation didn't get converted to order, then can i delete the project? Or Can I use the same project number for next project? In other words, if I didn't get the order, how will I close my project?

Thanks & Regards