I worked at a place where this management insanity was endemic, which lead to everyone padding all estimates with enough contingency to account for that. Which lad to the design team, and the front-end team, and the backend team, and the QA team, all padding out their estimates by 150 or 200% - to avoid the blame storms they'd seen for missing "deadlines".
Then the Project managers added those all ups and added 150 - 200%. Then the account managers and sales teams added 150 - 200% to the estimated costs before adding margins and setting prices.
Which ended up in literally around 1 million dollars a month to maintain a website which could _easily_ have been handled by a full time team of 8 or 10 decent web and full stack devs. Hell, apart from the 24x7 support requirement, I reckon I know a few great Rails or Django devs who could have done all the work on their own, perhaps with a part time of contracted graphic designer.
That all lasted a handful of years, until the client worked out what was going on, and my company management flew the whole thing into the mountain, with ~100 people losing their jobs and their owed entitlements (I was out about $26K that day.)