We Serve Cost Estimators
What is Cost Estimating?
A cost estimate is a compilation of all the probable costs of the elements of a project or effort included within an agreed upon scope.
Cost estimating is the predictive process used to quantify, cost, and price the resources required by the scope of an investment option, activity, or project. Cost estimating is a process used to predict uncertain future costs. In that regard, a goal of cost estimating is to minimize the uncertainty of the estimate given the level and quality of scope definition. The outcome of cost estimating ideally includes both an expected cost and a probabilistic cost distribution. As a predictive process, historical reference cost data (where applicable) improve the reliability of cost estimating. Cost estimating, by providing the basis for budgets, also shares a goal with cost control of maximizing the probability of the actual cost outcome being the same as predicted.
The cost estimating process is generally applied during each phase of the asset or project life cycle as the asset or project scope is defined, modified, and refined. As the level of scope definition increases, the estimating methods used become more definitive and produce estimates with increasingly narrow probabilistic cost distributions. The specific estimating tools and techniques used vary widely depending upon the industry, organization, the life cycle phase, the type of asset or project, and the level of definition of scope information available. The analysis, development, and maintenance of estimating tools and techniques are steps that are considered part of the estimating process.
The cost estimating process is typically performed concurrent to or iteratively with the asset and project planning and evaluation processes described in the TCM Framework. Because costs are often dependent on time duration, while resource requirements identified in cost estimating may affect the schedule, the estimation of the time duration of activities must be considered concurrently with costs. Iterative approaches are used to enable the team to remain current with cost as the project/product scope matures. This is a direct input into the organization’s decision process which systematically evaluates and refines a scope until it satisfies all of the organization’s requirements.
Estimating is a predictive process which requires judgment and experience although some aspects of estimating lend themselves to semi-automation (e.g., quantity take-off tools, estimating software tools, determinations of quantities by computer-aided design tools, and so on). While these tools increase efficiency they are not a substitute for experience and judgment.
Effective cost estimating requires an understanding of the work being planned. In some industries, such as engineering and construction, cost estimating is a recognized discipline because of the specialized knowledge required. In all industries, many individuals contribute to the performance of the estimating process.
The cost estimating process includes: planning for the estimate, quantifying scope, applying cost to the scope, pricing of the project, reviewing, validating, and documenting the estimate.
Project cost estimators predict the cost of a project for a defined scope, to be completed at a defined location and point of time in the future. Cost estimators assist in the economic evaluation of potential projects by supporting the development of project budgets, project resource requirements, and value engineering. They also support project control by providing input to the cost control baseline. Estimators collect and analyze data on all of the factors that can affect project costs such as: materials, equipment, labor, location, duration of the project, and other project requirements. A professional cost estimator practitioner must be able to articulate the meaning of the terms cost estimating and total cost management (TCM).
AACE Certifications
Certified Cost Technician (CCT) – Technician Level
A CCT is an individual who has demonstrated proficiency in the basic skills and knowledge of total cost management. Generally, those seeking CCT certification represent early-career, young professionals who have not yet achieved the requisite years of experience needed to become certified as a Certified Cost Professional (CCP), or experienced mid- to late-career professionals who are working to advance their cost engineering skills.
Certified Cost Professional (CCP) – Professional Level
A CCP is an experienced practitioner with advanced knowledge and technical expertise to apply the broad principles and best practices of Total Cost Management (TCM) in the planning, execution and management of any organizational project or program. CCPs also demonstrate the ability to research and communicate aspects of TCM principles and practices to all levels of project or program stakeholders, both internally and externally.
Certified Estimating Professional (CEP) – Professional Level
A CEP is a professional with vital expertise to contribute to the economic evaluation of potential projects by supporting the development of budgets, project resource requirements and value engineering. By applying the estimating body of knowledge as outlined in AACE’s Recommended Practice 46R-11, the CEP estimates costs of a determined scope in order to advise management on project funding decisions. The CEP’s ability to clearly communicate cost estimates, both verbally and written, to all project stakeholders is critical to their success.
Earned Value Professional (EVP) – Professional Level
An EVP is a practitioner of Earned Value with demonstrated mastery of contract language as it relates to Earned Value application, the organization of a project’s scope into meaningful structure for execution; planning scheduling and budgeting the project work from initiation through close out using an integrated cost/schedule tool; highly proficient in monitoring project progress for performance measurement; an earned value management system (EVMS) and its related accounting component used to record actual costs for a project or activity; generating relevant reports, understanding and analyzing the information reported, using actual cost data from, or reconcilable with, the accounting system for management of a project or activity; and managing change to the scope of work and/or any deviation, performance trend, or change to an approved or baseline project control plan, throughout the life-cycle of a project or portfolio of projects in the public and/or private sector. The experienced EVP will have broad experiences in the interpretation of the EV data/metrics and possess the skills to provide coherent, relevant communications (oral and written) to all levels of project stakeholders (internal and external).
Certified Forensic Claims Consultant (CFCC) – Expertise Level
A CFCC is an experienced claims professional and testifying expert working in the construction dispute resolution and litigation support arenas. With emphasis on claims arising from design and construction projects in countries with common law or mixed law, where common law is part of mixed law, the CFCC represents practitioners and specialists who meet a demanding set of claims preparation and dispute resolution criteria comprising of experience, education, and compliance with industry-accepted ethical requirements.