AACEInternationalRecommendedPracticeNo.

11R88

REQUIREDSKILLSANDKNOWLEDGEOFCOSTENGINEERING
TCMFramework:GeneralReference
(AllSections)
Rev.June18,2013
Note:AsAACEInternationalRecommendedPracticesevolveovertime,pleaserefertowww.aacei.orgforthelatestrevisions.

Contributors:
Disclaimer: The opinions expressed by the authors and contributors to this recommended practice are their own
anddonotnecessarilyreflectthoseoftheiremployers,unlessotherwisestated.

(June18,2013andMay11,2012revision)
ToddW.Pickett,CCCCEP
JohnK.Hollmann,PECCECEP(Author)
BernardA.Pietlock,CCCCEP
JefferyJ.Borowicz,CCCCEPPSP
H.LanceStephenson,CCC
PeterR.Bredehoeft,Jr.,CEP
RobertB.Brown,PE
CharlesP.Woodward,PECCE
LarryR.Dysert,CCCCEP

(January17,2006revision)
IftikharK.Madni,CCE
JohnK.Hollmann,PECCE(Author)
AlexiaA.Nalewaik,CCE
EdwardE.Douglas,IIICCCPSP
DavidA.Norfleet,CCC
CliveD.Francis,CCC
PaulE.Harris,CCE
RonaldM.Winter,PSP
Dr.KennethK.Humphreys,PECCE
Dr.CarlWolf
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AACEInternationalRecommendedPracticeNo.11R88

REQUIREDSKILLSANDKNOWLEDGEOFCOST
ENGINEERING
TCMFramework: GeneralReference
(AllSections)
June18,2013
Thisrecommendedpracticehasthefollowingpurposes:

define what core skills and knowledge of cost engineering a person is required to have in order to be
consideredaprofessionalpractitioner,andindoingso,
establishtheemphasisofcoresubjectsforAACEInternationaleducationandcertificationprograms.

Itisalsohopedthatenterpriseswillfindthisusefulasareferenceorguidefordevelopingtheirowncompetency
models.Knowledgeisanunderstandinggainedthroughexperienceorstudy,andskillsareabilitiesthattransform
knowledgeintouse.CoresubjectsarethosewhoseusageisoccasionaltofrequentandareconsideredbyAACE
Internationalasbeingrequiredforprofessionalpractitionersofcostengineeringtoknowandbeabletouse.

Thisrecommendedpracticeliststhesecoresubjectsandprovidesgeneralperformancestatements(i.e.,beable
todescribe,perform,etc.)torepresentthelevelofproficiencyexpectedineachsubjectarea.Thesestatements
arerepresentativeorguidingexamplesonly

Thistextisanoutlinethatisintendedtobethestructuralfoundationforproductsandservicesdevelopedbythe
EducationalandCertificationBoards.Itwillcontinuetobemodifiedascurrentpracticechanges.

BACKGROUNDANDSCOPEUPDATE

The original recommend practice Required Skills and Knowledge of a Cost Engineer was developed by the AACE
InternationalEducationBoardandpublishedin1988basedontheirevaluationsofamembershipsurvey.Untilthat
time, AACE International lacked a formal definition of professional cost engineering in terms of skills and
knowledge.Basedontherecommendedpracticefindings,theEducationBoardthenpublishedthefirstSkillsand
Knowledge of Cost Engineering text to provide an educational product to elaborate on the core skills and
knowledgesubjects.TheearliertexthasbeenregularlyupdatedbytheEducationBoard.

Since the original publication, the AACE Technical Board was given the charter to define the technology of cost
engineeringandtotalcostmanagement.In2005,theTechnicalBoardcompleteddevelopmentoftheTotalCost
Management Framework which describes a systematic process (i.e., TCM process) through which the skills and
knowledgeofcostengineeringareapplied.ItalsoprovidesanintegratedstructureuponwhichtheTechnicalBoard
canorganizeitsdevelopmentofrecommendedpractices,includingthisone.

This update of the Required Skills and Knowledge of a Cost Engineer retains most of the content of the earlier
versions while incorporating those elements of the TCM process that the AACE associate boards (Technical,
EducationandCertification)determinedarerequiredforaprofessionalpractitionerofcostengineeringtoknow.It
also incorporates a more systematic organization of the subjects, based on TCM developments, to better
differentiate between general supporting knowledge used in more than one practice or process (e.g., statistics,
elements of cost, etc.), and specific practice knowledge used in particular functions or processes (e.g., cost
estimating,planningandscheduling,etc.)

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INTRODUCTION

A professional cost engineering practitioner must first be able to articulate the meaning of the terms cost
engineeringandtotalcostmanagement(TCM).Practitionerswillfrequentlybeaskedthesequestions.Giventhe
importanceofthisfirstknowledgerequirementtotheunderstandingthisrecommendedpractice,thequestions
are answered here. Elaboration of all other skills and knowledge requirements is left for subsequent Education
Boardproducts.

WhatareCostEngineeringandTCM?

TheAACEInternationalConstitutionandBylawsdefinescostengineeringandtotalcostmanagementasfollows:

Section2.TheAssociationisdedicatedtothetenetsoffurtheringtheconceptsofTotalCostManagementand
CostEngineering.TotalCostManagementistheeffectiveapplicationofprofessionalandtechnicalexpertiseto
planandcontrolresources,costs,profitabilityandrisk.Simplystated,itisasystematicapproachtomanaging
cost throughout the life cycle of any enterprise, program, facility, project, product or service. This is
accomplished through the application of cost engineering and cost management principles, proven
methodologiesandthelatesttechnologyinsupportofthemanagementprocess.

Section 3. Total Cost Management is that area of engineering practice where engineering judgment and
experienceareutilizedintheapplicationofscientificprinciplesandtechniquestoproblemsofbusinessand
program planning; cost estimating; economic and financial analysis; cost engineering; program and project
management;planningandscheduling;andcostandscheduleperformancemeasurementandchangecontrol.

In summary, the list of practice areas in Section 3 are collectively called cost engineering; while the process
throughwhichthesepracticesareappliediscalledtotalcostmanagementorTCM.

Howiscostandschedulemanagementanengineeringfunction?

Most people would agree that engineers and engineering (or more generally, the application of scientific
principlesandtechniques)aremostoftenresponsibleforcreatingfunctionalthings(orstrategicassetsaswecall
them in TCM). However, engineering has multiple dimensions. The most obvious is the dimension of physical
design and the calculation and analysis tasks done to support that design (e.g., design a bridge or develop
software). However, beyond the physical dimension of design (e.g., the bridge structure), there are other
importantdimensionsofmoney,time,andotherresourcesthatareinvestedinthecreationofthedesignedasset.
Werefertotheseinvestmentscollectivelyascosts.Usingtheaboveexample,someonemustestimatewhatthe
bridgemightcost,determinetheactivitiesneededtodesignandbuildit,estimatehowlongtheseactivitieswill
take, and so on. Furthermore, someone needs to monitor and assess the progress of the bridge design and
construction(inrelationtotheexpenditureofmoneyandtime)toensurethatthecompletedbridgemeetsthe
ownersandotherstakeholdersrequirements.Someonemustalsomonitorandassessthecostofoperatingand
maintainingthebridgeduringitslifecycle.

Returning to the Constitution and Bylaws definition, understanding and managing the cost dimensions requires
skills and knowledge in business and program planning; cost estimating; economic and financial analysis; cost
engineering; program and project management; planning and scheduling; and cost and schedule performance
measurement and change control. No significant asset has ever been built without dealing with these cost
dimensions in some way, and the more systematically and professionally these dimensions are addressed, the
more successful the asset performance is likely to be. Therefore, cost engineering recognizes that cost is a
necessary extension of traditional engineering (and other creative functions such as systems analysis, etc.), and
thatthereisanintimateconnectionbetweenthephysicalandcostdimensionsoftheasset.

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Docostengineeringpractitionersneedtohaveatraditionalengineeringbackground?

Theskillsandknowledgerequiredtodealwithcosts(i.e.,costestimating,planningandscheduling,etc.)arequite
differentfromthoserequiredtodealwiththephysicaldesigndimension.Fromthatdifference,thefieldofcost
engineering was born. Cost engineering practitioners work alongside of and are peers with engineers, software
analysts,playproducers,architects,andothercreativecareerfieldstohandlethecostdimension,buttheydonot
necessarilyhavethesamebackground.Whethertheyhavetechnical,operations,financeandaccounting,orother
backgrounds, cost engineering practitioners need to share a common understanding, based on scientific
principlesandtechniques,withtheengineeringorothercreativecareerfunctions.

Docostengineeringpractitionersallhavethesamefunction?

Costengineeringpractitionerstendtobe:a)specializedinfunction(e.g.,costestimating,planningandscheduling,
etc.);b)focusedoneithertheassetmanagementorprojectcontrolsideoftheTCMprocess;andc)focusedona
particularindustry(e.g.,engineeringandconstruction,manufacturing,informationtechnology,etc)orassettype
(e.g.,chemicalprocess,buildings,software,etc.).Theymayhavetitlessuchascostestimator,quantitysurveyor,
parametric analyst, strategic planner, planner/scheduler, value engineer, cost/schedule engineer, claims
consultant,projectmanager,orprojectcontrollead.Theymayworkforthebusinessthatownsandoperatesthe
asset (emphasis on economics and analysis), or they may work for the contractor that executes the projects
(emphasis on planning and control). But, no matter what their job title or business environment, a general
knowledgeof,andskillsin,allareasofcostengineeringarerequiredtoperformtheirjobeffectively.Insummary,
thepurposeofthisdocumentistodefinetheserequiredskillsandknowledgeofprofessionalcostengineering.

THIS DOCUMENTS OUTLINE STRUCTURE AND ITS RELATIONSHIP TO PARTICULAR FUNCTIONS AND AACE
INTERNATIONALCERTIFICATIONS

Figure1illustratesthehierarchicalstructureoftheRequiredSkillsand KnowledgeofCostEngineering.Thefirst
level of the structure differentiates between general supporting knowledge used in more than one practice or
process, and specific practice knowledge used in particular functions or process steps. Succeeding levels further
breakdownthecontenttowhateverlevelisappropriateforeachskillsandknowledgearea.Thelocationofaskill
orknowledgeelementintheleveloftheoutlinedoesnotreflectonitsrelativeimportance.

Ontheprocessandfunctionalside,thestructureisorganizedinaccordancewiththeplan,do,check,(ormeasure),
and assess (PDCA) process model that serves as the basis for the TCM process through which all the skills and
knowledgeofcostengineeringareapplied.Itisnotstructuredbyapractitionersworkfunction.Forexample,cost
estimators will not find all of their required skills and knowledge under one heading. Their particular functions
required skills and knowledge will include elements of supporting knowledge, as well as elements of planning,
measuring,andassessingthatareappropriatetotheirfunction.

Thisdocumentincludestherequiredskillsandknowledgethatcertifiedcostengineersandconsultants(CCE/CCCs)
musthave.Itsscopeisbroadandrepresentsthecomprehensiveskillsandknowledgethatbusinessmanagement
mayexpectsomeonewithoverarchingresponsibilitiesinanorganizationtohave(e.g.,supportingoverallcapital
programorprojectsystemmanagement).

For specialty certifications [e.g., planning and scheduling professionals (PSP)], the Certification Board will
documentappropriateskillsandknowledgerequirements.Thesewillincludeelementsfromthisoveralloutlineas
theyapplytothescopeoftheparticularfunction.Theymayalsoincludemoredetailedskillsandknowledgethan
includedhere.Thescopeofthoserequirementswillnotbeasbroad,butwillbedeeper,representingtheskillsand
knowledgethatbusinessmanagementmayexpectfromamanageroforexpertintheparticularfunction.

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SKILLSANDKNOWLEDGEOFCOSTENGINEERING
DefinitionofCostEngineeringand
TotalCostManagement
1.SupportingSkillsandKnowledge
1.1.ElementsofCost

2.ProcessandFunctionalSkillsandKnowledge
2.1.TotalCostManagement(TCM)Framework

1.1.1.Cost

2.1.1.OverallTCMProcessandTerminology

1.1.2.CostDimensions

2.1.2.StrategicandAssetManagementProcess

1.1.3.CostClassifications

2.1.3.ProjectControlProcess

1.1.4.CostTypes
1.1.4.Pricing
1.2.ElementsofAnalysis

2.2.Planning
2.2.1.RequirementsElicitationandAnalysis
2.2.2.ScopeandExecutionStrategyDevelopment

1.2.1.StatisticsandProbabilities

2.2.3.SchedulePlanningandDevelopment

1.2.3.EconomicandFinancialAnalysis

2.2.4.CostEstimatingandBudgeting

1.2.4.OptimizationandModels

2.2.5.ResourceManagement

1.2.5.PhysicalMeasurement

2.2.6.ValueAnalysisandEngineering

1.3.EnablingKnowledge

2.2.7.RiskManagement

1.3.1.EnterpriseinSociety

2.2.8.ProcurementandContractManagement

1.3.2.PeopleinOrganizationsandEnterprises

2.2.9.InvestmentDecisionMaking

1.3.3.InformationManagement

2.3.PlanImplementation

1.3.4.QualityManagement

2.3.1.ProjectImplementation

1.3.5.ValueManagement

2.3.2.ProjectControlImplementation

1.3.6.Environmental,HealthandSafety(EHS)

2.3.3.PlanValidation
2.4.PerformanceMeasurement
2.4.1.CostAccounting
2.4.2.ProjectPerformanceMeasurement
2.4.3.AssetPerformanceMeasurement
2.5.PerformanceAssessment
2.5.1.ProjectPerformanceAssessment
2.5.2.AssetPerformanceAssessment
2.5.3.Forecasting
2.5.4.ProjectChangeManagement
2.5.5.AssetChange(Configuration)Management
2.5.6.HistoricalDatabaseManagement
2.5.7.ForensicPerformanceAssessment

Figure1.HighLevelOutlineoftheSkillsandKnowledgeofCostEngineering

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Note:Theoutlinethatfollowssignifieskeyconceptsandperformancestatementsforwhichthepractitioner
shouldhaveatleastabasicunderstanding.
1.SupportingSkillsandKnowledge
1.1.ElementsofCost
1.1.1.Costs:beabletodefine/explainthesegeneralconceptsinrelationtoeachotherandtoassetsand/or
activities.
1.1.1.1.Resources
1.1.1.2.Time
1.1.1.3.Cost
1.1.2.CostDimensions:
1.1.2.1.Lifecycle:beabletodescribethistermanddifferentiatethelifecycleofanassetandaproject
1.1.2.2.Process(productvs.project):beabletodescribeanddifferentiatethecostcharacteristicsand
types(seecosttypesbelow)thatmakeupproductandprojectcosts.
1.1.2.2.1.Beabletodistinguishamongproducts,coproducts,andbyproducts.
1.1.2.3.Responsibility:beabletodescribeanddifferentiatethecostperspectivesofanowneranda
contractor/supplier
1.1.2.4.Valuation:beabletodescribeanddifferentiatecostfromcash/monetaryversus
economic/opportunitycosts(alsoseeeconomicanalysis)perspectives.
1.1.2.5.Influence:beabletoexplaintheconceptofthecostinfluencecurve
1.1.2.6.Legal:
1.1.2.6.1.Beabletoexplainhowcostandscheduleanalysispracticesmightdifferwhenappliedfor
forensicversustraditionalplanningandcontrolpurposes.
1.1.2.6.2.Beabletodescribesomepotentiallegalconsequencesthatmayresultfromusingpooror
unethicalcostmanagementpractices(e.g.,antitrust,claims,SarbanesOxley,etc)
1.1.3.CostClassifications:forthefollowingclassifications,beableto:
1.1.3.1.Explainthegeneraldifferencesbetweenthewayscostsareclassifiedforvariouscost
management
purposes
1.1.3.2.Givenaproblemwithappropriatecostclassificationinputs(e.g.,indirectcostusingABC
classificationmethod),beabletocalculatehowthecostwouldbeaccountedforinaprojectorproduct
estimate.
1.1.3.2.1.Operating(Production,Manufacturing,Maintenance,etc.)vs.Capital
1.1.3.2.2.Capitalvs.Expense
1.1.3.2.2.1.Depreciation
1.1.3.2.2.2.Amortization
1.1.3.2.2.3.Accrual
1.1.3.2.3.Fixedvs.Variable
1.1.3.2.4.Directvs.Indirect
1.1.3.2.4.1.ActivityBasedCosting(ABC)
1.1.3.2.4.2.JobCosting
1.1.4.CostTypes:forthefollowingcosttypes,givencosttypeandclassificationinputs,beabletoapplythem
inaprojectormanufacturingestimatingapplication(i.e.,forprojectorproductcost)
1.1.4.1.Materials:
1.1.4.1.1.Materialstypes:beabletodescribethetypesandtheircostdrivers:
1.1.4.1.1.1.Raw
1.1.4.1.1.2.Bulk
1.1.4.1.1.3.Fabricated
1.1.4.1.1.4.Engineeredordesigned

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1.1.4.1.1.5.Consumables
1.1.4.1.2.Purchasecosts:beabletodescribetheseterms/conceptsandtheirinfluenceonthecostof
materials:
1.1.4.1.2.1.Marketpricing(prenegotiatedvs.competitivelybid,etc.)
1.1.4.1.2.2.Orderquantity
1.1.4.1.2.3.Taxesandduties
1.1.4.1.2.4.Carryingcharges
1.1.4.1.2.5.Cancellationcharges
1.1.4.1.2.6.Demurrage
1.1.4.1.2.7.Hazardousmaterialregulations
1.1.4.1.2.8.Warranties,maintenanceandservice
1.1.4.1.3.Materialsmanagementcosts:beabletodescribetheseterms/conceptsandtheirinfluence
onthecostofmaterials:
1.1.4.1.3.1.Deliveryschedule
1.1.4.1.3.2.Packing
1.1.4.1.3.3.Shippingandfreight
1.1.4.1.3.4.Freightforwarding
1.1.4.1.3.5.Handling
1.1.4.1.3.6.Storageandinventory
1.1.4.1.3.7.Agentcost
1.1.4.1.3.8.Surveillanceorinspection
1.1.4.1.3.9.Expediting
1.1.4.1.3.10.Losses(shrinkage,waste,theft,damage)
1.1.4.1.3.11.Spareparts(inventoryorstartup)
1.1.4.1.3.12.Surplusmaterials
1.1.4.1.4.CapitalEquipment:(i.e.,fabricatedorengineereditems)
1.1.4.1.4.1.Rentvs.leasevs.purchase:
1.1.4.1.4.1.1.Beabletoexplainthemechanicsandcostconsiderations.
1.1.4.1.4.1.2.Givenaproblemwithusefullife,fixedandoperatingcost,credits,depreciation,
taxes,etc.,beabletodeterminethemosteconomicaloption
1.1.4.1.4.2.Valuation:beabletoexplaintheseconcepts:
1.1.4.1.4.2.1.Reproductioncosts
1.1.4.1.4.2.2.Replacementcosts
1.1.4.1.4.2.3.Fairvalue
1.1.4.1.4.2.4.Marketvalue
1.1.4.1.4.2.5.Bookvalue
1.1.4.1.4.2.6.Residualoreconomicvalue
1.1.4.1.4.2.7.Operatingvs.economiclife
1.1.4.1.5.TemporaryEquipment:(expenseditemsforconstruction,maintenance,etc)beableto
explainthecostimplicationsofrent,operators,maintenance,scheduling,etc.
1.1.4.2.Labor
1.1.4.2.1.LaborWageRateorSalary:
1.1.4.2.1.1.Beabletodescribethedifferencesinmechanicsofcompensationforwageandsalaried
employeesincludingthemeaningofexemptandnonexempt.
1.1.4.2.1.2.Beabletocalculateaneffectivewagerateallowingfor:
1.1.4.2.1.2.1.Overtimepremium
1.1.4.2.1.2.2.Otherpremiumpays
1.1.4.2.1.2.3.Shortenedshifttime
1.1.4.2.1.2.4.Traveltime
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1.1.4.2.1.2.5.Showuppay
1.1.4.2.2.BenefitsandBurdens(mandatedandfringe):
1.1.4.2.2.1.Beabletodescribethebasicmechanicsofbenefitsandburdenssuchas:
1.1.4.2.2.1.1.Retirement(socialsecurity),
1.1.4.2.2.1.2.Unemploymentinsurance
1.1.4.2.2.1.3.Workerscompensation
1.1.4.2.2.1.4.Insurance
1.1.4.2.2.1.5.Paidtimeoff(sick,vacation,holiday)
1.1.4.2.2.2.Beabletoidentifytypicaldifferencesbetweenindustrializedandnonindustrialized
countriesandbetweenpopulatedandremoteareas.
1.1.4.2.3.Overheadandprofit:beabletodescribethebasicmechanicsofchargingvariousoverhead
andprofitcostelementstodirectlaborcostssuchas:
1.1.4.2.3.1.Indirectlabor(homeoffice,administrativeandsimilarcosts)
1.1.4.2.3.2.Smalltools
1.1.4.2.3.3.Profit
1.1.4.2.4.Union:beabletoexplainthecostdifferencesbetweenunionandopenshoplabor
1.1.4.3.Subcontract:beabletoexplainthecostimplicationsofthefollowingissues:
1.1.4.3.1.Reimbursablevs.nonreimbursablecosts
1.1.4.3.2.Overheadandprofit(includingcontractadministrationandlegalcosts)
1.1.4.3.3.License,feesorroyalties
1.1.4.3.4.Bonds(bid,payment,orperformance)
1.1.4.3.5.Retainage
1.1.4.3.6.Performanceguarantees
1.1.4.3.7.Liquidateddamages
1.1.4.4.Costofmoney:beabletodescribethesecosts:
1.1.4.4.1.Escalation
1.1.4.4.2.Inflation
1.1.4.4.3.Currencyexchangerates
1.1.4.5.RiskandUncertainty:beabletodescribethesecosts:
1.1.4.5.1.Contingency
1.1.4.5.2.Allowance
1.1.4.5.3.Reserve
1.1.5.Pricing
1.1.5.1.Costvs.Pricing:beabletoexplainthedifference
1.1.5.2.Pricestrategy:
1.1.5.2.1.Beabletodescribehowbusinessstrategyandmarketforcesmayaffectpricing.
1.1.5.2.2.Beabletodescribefromanownerorbuyerperspectiveconcernsaboutpricing(i.e.,risks,
competitiveness,cashflow,etc).
1.1.5.2.3.Beabletodescribehowprofitaffectspricing
1.1.5.2.4.Beabletodescribehowprofitmaybedeterminedhowthedifferenttypesofcontractsmay
influencetheamount
1.2.ElementsofAnalysis
1.2.1.StatisticsandProbability
1.2.1.1.SamplesandPopulations:beabletodescribetherelationshipofthemeanofasampletothe
meanofapopulation,andthegeneralaffectofsamplerandomness,biasandsizeonthereliabilityof
thesamplestatistics.
1.2.1.2.DescriptiveStatistics
1.2.1.2.1.BasicStatistics:givenasetofdata,beabletodeterminethearithmeticmean,median,mode,
standarddeviationandvariance.
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1.2.1.2.2.NormalDistribution:beabletoprovidethepercentofobservationswithinoneandtwo
standarddeviationsofthemeanforanormallydistributedvariable.
1.2.1.2.3.NonNormalDistributions:beabletodescribethefollowingconcepts:
1.2.1.2.3.1.Skewness(symmetry)
1.2.1.2.3.2.Kurtosis(centraltendencyrelativetonormal).
1.2.1.2.4.Histograms,CumulativeFrequency:givenatabulardistributionforavariablethatisother
thannormal,beabletodrawahistogramandresultantcumulativefrequencycurve(frequency
distribution),anddeterminethepercentprobabilityofthevariablenotbeinglessthanormorethan
agivennumber
1.2.1.3.InferentialStatistics
1.2.1.3.1.Probability:givenacurveofnormaldistributionandanaccompanyingtableofareasunder
thecurve,beabletodeterminetheprobabilityofa)thevariablebeingbetweentwogivennumbers,
b)notbeinghigherthanagivennumber,orlowerthanthatnumber,andc)givenaconfidence
intervalorrangeintermsofpercentageprobability,givethecorrespondinglowandhighnumberof
theintervalorrange.
1.2.1.3.2.RegressionAnalysis:beabletodescribetheconceptofthemethodologyaswellasdiagnostic
statistics(R2,rootmeansquareerror(RMSE),andt)
1.2.1.3.3.StatisticalSignificance:
1.2.1.3.3.1.Beabletodescribethepurposeanduseofchisquaredandttests
1.2.1.3.3.2.Beabletointerpretthetstatisticforcomparingtwosetsofnormallydistributeddata.
1.2.1.3.3.3.Beabletointerpretofthechisquaredstatisticforcomparingtwosetsofdatathatmay
notbenormallydistributed.
1.2.2.EconomicandFinancialAnalysis
1.2.2.1.EconomicCost:beabletodefineconceptsofopportunitycostandassigningmonetaryvalueto
noncashvalues,costsandbenefits.
1.2.2.2.CashFlowAnalysis:
1.2.2.2.1.Beabletocalculatesimpleandcompoundinterestratesandsolveinterestproblemsusing
thebasicsinglepayments,uniformseries,andgradientformulas.
1.2.2.2.2.Givenasetofcostandrevenueforecastscalculateacashflowforanassetinvestmentoption
1.2.2.3.InternalRateofReturn:beabletodeterminediscountedrateofreturnofacashflowseries.
1.2.2.4.Present/FutureValueAnalysis:beabletocalculatepresentvalue,futurevalue,andequivalent
uniformannualvalueofacashflowseries.
1.2.3.Optimization
1.2.3.1.Model:
1.2.3.1.1.Beabletodescribetheconceptofaquantitativerepresentationalmodelsandparameters.
1.2.3.1.2.GivenanoptimizationgoalinvolvingaresultYwhichisafunctionofX,usegraphicalor
incrementalmethodstodeterminetheoptimumvalueofY.
1.2.3.2.LinearProgramming:beabletodescribethetypesofproblemsamenabletothismathematical
optimizationtechnique(i.e.,findextremepointsofafunctiongivenasetofconstraints).
1.2.3.3.Simulation:beabletodescribetheuseofamodel foranalysisofacostproblem.
1.2.3.4.SensitivityAnalysis:beabletoperformasensitivityanalysisofamodeledproblem.
1.2.4.PhysicalMeasurements:beabletoconvertbasicmetricandimperialweightanddimensional
measurements.
1.3.EnablingKnowledge
1.3.1.EnterpriseinSociety
1.3.1.1.SocietalValues:beabletogenerallydescribesocietalconcernsandneedsthatshouldbe
consideredinassetandprojectplanning.
1.3.1.2.DecisionPolicy:beabletodescribehowtotranslatesocietalvaluestopolicysothatanenterprise
canconsistentlyaddresssocietalvaluesineverydaypractice.

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1.3.1.3.Ethics:
1.3.1.3.1.Beabletoexplaintheneedtojudgethemeansandtheendsofapracticeorprocessagainst
personalandsocietalvaluesandrulesofconduct.
1.3.1.3.2.BefamiliarwithAACEInternationalsethicspolicy(Canons ofEthics).
1.3.2.PeopleandOrganizationsinEnterprises
1.3.2.1.Leadership:Beabletoexplainwhyitisimportanttoobtainteamcommitmentandclearly
communicatethepurposeofataskorproject,andhowthismightbedone.
1.3.2.1.1.LeadershipRoles:
1.3.2.1.1.1.Beabletoexplainwhytheneedforleading,managing,facilitating,andmentoringroles
mayvarybysituation.
1.3.2.1.1.2.Discussthemeaningandprovideexamplesof"participativemanagement.
1.3.2.1.2.Motivation/Incentives(BehavioralScience):
1.3.2.1.2.1.Beabletodiscussmotivator/demotivatoraffectsonlaborattitudeandperformance
1.3.2.1.2.2.Givenalist,beabletodescribethebasicthemesoftwoormoregenerallyaccepted
behavioralsciencetheories:
1.3.2.1.2.2.1.McGregorTheoryXandY
1.3.2.1.2.2.2.HerzbergMotivationHygiene
1.3.2.1.2.2.3.ArgyrisEffectsoforganizationlikeonindividuals
1.3.2.1.2.2.4.LikertFourmodelsystems
1.3.2.1.2.2.5.MoutonManagerialgrid
1.3.2.1.2.2.6.Othercurrenttheories
1.3.2.1.3.Performance/ProductivityManagement:
1.3.2.1.3.1.Beabletodescribetheconceptofproductivity(anditsdifferencefromtheterm
production).
1.3.2.1.3.2.Beabletodescribetheaffectonperformanceofthesefactorsintermsofmotivationand
waste/inefficiency,andhowperformancecouldbeimprovedandatwhatcost(e.g.,leadership
role,workprocesschange,etc.):
1.3.2.1.3.2.1.Individualworkerskills
1.3.2.1.3.2.2.Crewbalanceofskills
1.3.2.1.3.2.3.Immediatesupervisioncompetence
1.3.2.1.3.2.4.Overallsupervisioncompetence
1.3.2.1.3.2.5.Workerandsupervisionattitudes
1.3.2.1.3.2.6.Workforcesociological,culturalanddemographiccharacteristics
1.3.2.1.3.2.7.Absenteeismandturnover
1.3.2.1.3.2.8.Overtime
1.3.2.1.3.2.9.Leveloftechnologyused
1.3.2.1.3.2.10.Learningcurve
1.3.2.1.3.2.11.Workareaenvironment
1.3.2.1.3.2.12.Weather
1.3.2.1.3.2.13.Geographiclocation
1.3.2.1.3.2.14.Proximitytootherworkandcontractors
1.3.2.1.3.2.15.Joblayout
1.3.2.1.3.2.16.Workrules
1.3.2.1.3.2.17.Safetypractices
1.3.2.1.3.2.18.Qualitycontrolpractices(includingqualitycircles)
1.3.2.1.3.2.19.Materialsandtoolsavailability
1.3.2.1.3.2.20.Wages,salariesandbenefits.
1.3.2.2.OrganizationStructure

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1.3.2.2.1.OrganizationalDesign:beabletodescribetheissuesthatorganizationsmustaddress
(divisionoflabor,unityofcommand,unityofdirections,andspanofcontrol)andhoweachmay
affectperformance.
1.3.2.2.2.BasicStructures:
1.3.2.2.2.1.Beabletodrawandexamplechartandexplainthedifferencesbetween,and
advantages/disadvantagesoftraditionalfunctional,divisional,andmatrixstructures
1.3.2.2.3.Teams:
1.3.2.2.3.1.Beabletoexplainhowandwhyteamsareusedinenterprisesandwhytheyaretypically
usedtomanageprojects.
1.3.2.2.3.2.Beabletodescribetypicalteamorganization(i.e.,matrix)andoperationandtheroles,
responsibilities,andmethodsforitssuccessfulperformance.
1.3.2.2.4.TypicalOrganizationsinTCM:beabletogenerallydescribethetypicalrolesofcapital
investmentmanagement(businessplanning),operationsmanagement,andprojectmanagementin
TCM(i.e.,wherecostengineersusuallywork).
1.3.3.InformationManagement
1.3.3.1.Data,Information,andKnowledge:beabletoexplainthedifferencebetweenthesethreetypesof
information
1.3.3.2.DatabasesandDatabaseManagement.Beabletodefineandexplainthefollowingconcepts:
1.3.3.2.1.History:theimportanceofhistoricalandempiricalinformationtomostcostengineering
practice
1.3.3.2.2.ReferenceData:theneedthatspecificmethodsandtoolsforspecificprocesseddata
1.3.3.2.3.LessonsLearned:theneedfordatathatisqualitativeinnature.
1.3.3.2.4.Metric:theneedthatbenchmarkingorvalidationmethodshaveforspecificprocessed
quantitativedata
1.3.3.2.5.Validation:theneedtoassurethereliabilityandsometimescompetitivenessofdata
1.3.3.2.6.Basis:theneedtounderstandthebasisofalldataandinformationinadatabase
1.3.3.2.7.Normalization:beabletoadjustdatatoacommonbasisincurrency,time,location,etc.
1.3.3.3.InformationTechnology(IT)andSystems:beabletoexplainthatinformationsystemsarethe
mechanismsortoolsbywhichknowledgeisdeliveredtotheenterpriseandthoseitinteractswith(i.e.,
includescommunication).
1.3.3.3.1.EnterpriseResourcePlanning/Management(ERP/ERM):beabletodescribethegoalofthese
typesofsystems(supportefficientbusinessprocesses,includingprojectmanagement,through
sharedorcommondatabases)
1.3.4.QualityManagement:beabletoexplainthefollowingconcepts:
1.3.4.1.Quality:beabletodefinethisasconformancetorequirements(whicharebasedoncustomer
needs).
1.3.4.2.Requirements:(seeRequirementsElicitationandAnalysispractices)
1.3.4.3.QualityPlanning:beabletodescribethisasanintegratedwayofplanningdirectedtowards
satisfyingcustomerneeds.
1.3.4.4.QualityManagement:beabletodescribethisasaprocessformanagingqualityandunderstand
thatTCMisaqualitymanagementprocessfocusedoncontinuouscostperformanceimprovement.
1.3.4.5.QualityAssurance:beabletodescribethisasactionsthatprovideconfidencethatthe
requirementswillbefulfilled.
1.3.4.6.QualityControl:beabletodescribethisasactionsfocusedonfulfillingrequirements
1.3.4.7.ContinuousImprovement:beabletodescribethisasacommongoal ofqualitymanagement
processes(thetraditionalresultofthePDCAprocess).
1.3.4.8.PlanDoCheckAssess(PDCA):beabletodescribethisasthebasismodelforTCMandmanyother
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1.3.4.9.QualityMeasurement:beabletoexplainthatinsomeviews,costisthebestsinglequality
measurementbecausesomanymeasurescanbeexpressedincostterms.
1.3.4.10.QualityPolicy:beabletoexplainthatthisasanimposedrequirementthatisassumedguidedby
acceptedqualitymanagementprinciples
1.3.4.11.QualityStandards:beabletodescribetheseimposedrequirements.
1.3.4.11.1.ISO9000standardqualitymanagementseries
1.3.4.11.2.ISO10006qualityinprojectmanagement
1.3.4.12.QualityFocusedPracticesinTCMbeawarethatthesekeypractices(coveredinlatersections)
haveparticularimportancetoqualitymanagement
1.3.4.12.1.Benchmarking
1.3.4.12.2.CostofQuality
1.3.4.12.3.ValueAnalysis/Engineering
1.3.4.12.4.ChangeManagement
1.3.5.ValueManagement:
1.3.5.1.Beabletoexplainthefollowinggeneralconcepts(i.e.,notinthecontextofValueAnalysisand
Engineeringpractice):
1.3.5.1.1.Value(i.e.,ameasureoftheworthofathingintermsofusefulness,desirability,importance,
money)
1.3.5.1.2.ValueManagement(i.e.,whatanenterprisedoestoensurethatitsassetsprovideor
maintaintheusefulnessand/orvaluethatthevariousstakeholdersrequire.)
1.3.5.1.3.ValueImprovingPractices(i.e.,practicesthathaveaspecificfocusand/orsignificanteffecton
gettingthemostvaluefromaprocessandmeetcriteriathatsetthepracticeapartfrombusinessas
usual.)
1.3.5.2.Beabletodescribethepurposesandgeneralapproachofthesevalueimprovingpractices(also
seethesectiononValueAnalysisandEngineering):
1.3.5.2.1.ManufacturabilityAnalysis
1.3.5.2.2.ConstructabilityAnalysis
1.3.5.2.3.Reliability,AvailabilityandMaintainability(RAM)Analysis
1.3.6.Environment,Health,Safety,andSecurity(EHS):beabletoexplainthefollowingconcepts:
1.3.6.1.QualityManagement.beabletodescribewhyTCMisaqualitymanagementprocessandEHS
issuesareconsideredusingthisprocessapproach(i.e.,throughestablishingEHSrequirementsand
managingtothem).
1.3.6.2.NonConformance/Prevention.beabletoexplainwhyitisimportant,asinqualitymanagement,
tofocusonpreventingnonconformancewithEHSrequirementsandimprovingperformancerather
thanafterthefactappraisal,failureandcorrection.
1.3.6.3.EHSStandards/Compliance.beabletoexplainwhycompliancewithminimumstandardsand
regulationsshouldbetheminimumexpected.
1.3.6.3.1.ISO14000:managementsystemsthatanorganizationemploystomanageenvironmental
matters.
1.3.6.4.SustainableDevelopment.beabletoexplainwhyenterprisesshouldnotuseresourcesina
mannerordegreethatcompromisetheabilityoffuturegenerationstosustainsuchdevelopment.
2.ProcessandFunctionalSkillsandKnowledge
2.1.TotalCostManagement(TCM)Process
2.1.1.OverallTCMProcessandTerminology
2.1.1.1.BasicTerminology:beabletoexplainthefollowing:
2.1.1.1.1.PlanDoCheckAssess(PDCA):
2.1.1.1.2.Strategicasset
2.1.1.1.3.Project
2.1.1.1.4.PortfoliosandPrograms

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2.1.1.2.TCMProcesses:beabletosketchtheTCM,strategicassetmanagement,andprojectcontrol
processesinbasicPDCAformatandexplainthefollowing:
2.1.1.2.1.Thecostmanagementpurposeoftheoverallprocesses
2.1.1.2.2.Howthetwocomponentsubprocessesdiffer,butarerelatedtoeachother
2.1.1.2.3.Thebenefitsofanintegrated,systematiccostmanagementapproachoverthelifecycleof
assetsandprojects
2.1.2.StrategicAssetManagementProcess
2.1.2.1.Givenarepresentationofthestrategicassetmanagementprocessmap(orsomeportionofit),be
abletodescribethebasicpurposeofeachstepandhowitrelatestotheotherstepsinthemap.
2.1.3.ProjectControlProcess
2.1.3.1.Givenarepresentationoftheprojectcontrolprocessmap(orsomeportionofit),beableto
describethebasicpurposeofeachstepandhowitrelatestotheotherstepsinthemap.
2.1.3.2.BeabletodescribetheEarnedValuemanagementprocessasaspecificwayofapplyingthe
projectcontrolprocess(i.e.,inwhatwaysisitspecialized)
2.2.Planning
2.2.1.RequirementsElicitationandAnalysis:beabletodescribethefollowingconcepts
2.2.1.1.Stakeholders/Customers:beabletodescribehowtoidentifytheseinrelationtovariousbusiness
problems
2.2.1.2.Needs,wants,orexpectationsofstakeholders:beabledescribechallengesofelicitingthis
informationfromvariousstakeholders
2.2.1.3.Requirements:beabletodescribethecharacteristicsofagoodrequirementforuseinassetor
projectcontrolplanning
2.2.1.4.Costrequirements:beabletodescribethefollowingassetplanningmethodologiesforwhichcost
maybearequirement
2.2.1.4.1.Targetcosting(includingdesigntocost,andcostasanindependentvariable)
2.2.1.4.2.Qualityfunctiondeployment
2.2.1.5.OtherConcepts:
2.2.1.5.1.Assetvs.Project:beabletoexplainhowrequirementsforanassetorproductmightdiffer
fromthoseforaproject.
2.2.2.ScopeandExecutionStrategyDevelopment:beabletodescribethefollowingconcepts
2.2.2.1.Assetscope:beabletodescribethisasthephysical,functionalandqualitycharacteristicsor
designbasisoftheselectedassetinvestment
2.2.2.1.1.Functionaldecomposition
2.2.2.2.Projectscope:beabletodescribethisasthescopeofworktodelivertheasset
2.2.2.2.1.Projectscopebreakdown(workdecomposition)
2.2.2.3.WorkBreakdownStructure(WBS):beabletodiagramaWBSforabasicscopeprovidedin
narrativeform
2.2.2.4.OrganizationBreakdownStructure(OBS):beabletodiagramanOBSforabasicscopeprovidedin
narrativeform
2.2.2.5.Workpackage
2.2.2.6.Deliverables
2.2.2.7.Executionstrategy
2.2.3.SchedulePlanningandDevelopment:beabletodescribethefollowingconcepts:
2.2.3.1.SchedulePlanning
2.2.3.1.1.Activities
2.2.3.1.2.ActivityLogicandLogicDiagramming:
2.2.3.1.2.1.Givenaseriesoflogicstatements,beabletodrawalogicdiagram.
2.2.3.1.2.2.Givenasoftlogicworkpackagewithnostrictactivityinterrelationships,beableto
describewaystodoscheduleplanningforthiswork.

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2.2.3.1.2.3.Beabletodescribehowscheduleplanningdiffersbetweenabatchandacontinuous
process.
2.2.3.1.2.4.Beabletodescribetheconceptoflinearscheduling
2.2.3.1.3.ActivityDuration
2.2.3.1.4.CriticalPath:beabletodefineandidentifythecriticalpath(s)inaprojectschedule
2.2.3.1.5.Float:beabletodescribetherelationshipandsignificanceoftotalandfreefloatinthe
schedulingofanactivity.
2.2.3.1.6.ScheduleModels:UsingthePDMmethod,andgiven alogicdiagramanddurationsfor
activities,beabletocalculatetheearlystartandfinish,latestartandfinish,andtotalandfreefloat
timesforallactivities.Identifyminimumprojectcompletiontime.
2.2.3.1.6.1.PrecedenceDiagramMethod(PDM):inusingthismethodincludeatleastoneachfinish
start,finishfinish,startfinish,andstartstartrelationshipswithlagsandidentifycriticalpath(s)
2.2.3.1.6.2.Barchart/Ganttchart:
2.2.3.1.6.2.1.Beabletoexplainthedifferencebetweenthisandalogicdiagram
2.2.3.1.6.2.2.Givennetworkactivitydurations,earlyandlatestartandfinishtimes,andtotal
float,beabletodrawabarchartbasedonearlystartofallactivities,andshowtotalfloatof
activitieswhereapplicable.
2.2.3.1.7.HistoricalData:beabletodescribetheimportanceofhistorical,empiricaldataand
databasestoscheduleplanningandscheduledevelopment
2.2.3.2.ScheduleDevelopment:describedifferencefromscheduleplanning
2.2.3.2.1.Milestones
2.2.3.2.2.ResourceLoading
2.2.3.2.3.ResourceLevelingorBalancing:forasimplePDMnetworkwithresourceinputs,beableto
resourcelevelthenetworkwithinearlyandlatestartlimits,anddrawahistogramofworkerloading
forearlystart,latestart,andresourceleveledconfigurations.
2.2.3.3.ScheduleControlBasis
2.2.3.3.1.ScheduleControlBaseline
2.2.3.3.1.1.Beabletodescribetheconceptofshortintervalscheduling(SIS)inrelationtoanoverall
projectschedulecontrolbaseline.
2.2.3.3.2.PlannedSchedule
2.2.3.3.3.ScheduleBasis
2.2.3.4.OtherConcepts:
2.2.3.4.1.ProgramsandPortfolios:beabletoexplaintheseconceptsandhowscheduleplanningand
developmentmightbehandledforgroupsofprojects
2.2.3.4.2.Operations/Production:beabletoexplainhowproductionschedulingdiffersfromproject
scheduling
2.2.3.4.3.Schedulestrategy
2.2.3.4.3.1.Beabletodescribethecharacteristicsandrisksofafasttrackschedule
2.2.3.4.3.2.Beabletodescribealternateschedulestrategiesinregardstopotentialchangesand
claimsthatacontractormayapplyindevelopinganetworkschedule(e.g.,crashing).
2.2.3.4.3.3.Beabledescribethecharacteristicsandrisksofjustintime(JIT)scheduling.
2.2.3.4.4.ScheduleDevelopment:
2.2.3.4.4.1.Beabletodescribetheconceptofdevelopmentbyschedulelevel
2.2.3.4.4.2.Beabletodescribetheconceptofrollingwavedevelopment.
2.2.3.4.5.ScheduleChangeManagement:beabletodescribehowschedulechangesmightbe
managed.
2.2.3.4.6.CriticalChain:beabletodescribetheconcept
2.2.3.4.7.LinearScheduling:beabletodescribetheconcept
2.2.3.4.8.ScheduleContingency:

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2.2.3.4.8.1.Beabletodefinethetermincludingwhatitissupposedtocover
2.2.3.4.8.2.Beabletodescribeseveraltypicalwaysthatitcanbeassessed
2.2.4.CostEstimatingSkillsandKnowledge:beabletodescribethefollowingconcepts:
2.2.4.1.GeneralConcepts(mustalsounderstandElementsofCostandAnalysis):
2.2.4.1.1.CostEstimatingTerminology
2.2.4.1.2.CostEstimateClassification.BeabletodescribeAACEsrecommendedpracticeanditsbasis
onscopedefinition(alsoseeprojectimplementationfordiscussionofscopedevelopmentphases).
2.2.4.1.3.EstimateVariability
2.2.4.1.3.1.Beabletodescribetheelements,conditions,activities,etc.thatmayaffectestimate
variability.
2.2.4.1.4.Uncertainty.(alsoseeRiskManagement)
2.2.4.1.4.1.Probability:Beabletodescribetheprobabilisticnatureofcostestimatesandthe
conceptofrangesandaccuracy,andtheimportanceofcommunicatingthesetotheprojectteam.
2.2.4.1.4.2.Accuracy:Beabletodescribeassetandprojectcharacteristicslikelytoaffectthe
accuracyofcostestimates,andtherelationshipofestimateclassificationtoaccuracy.
2.2.4.1.4.3.Contingency:
2.2.4.1.4.3.1.Beabletodefinethetermincludingwhatcostitissupposedtocover
2.2.4.1.4.3.2.Beabletodescribeseveraltypicalwaysthatitcanbeestimated
2.2.4.1.5.AlgorithmsandCostEstimatingRelationships(CER).
2.2.4.1.5.1.Algorithmtypes:Beabletodescribethebasiccharacteristicsofthesealgorithmtypes:
2.2.4.1.5.1.1.Stochasticorparametric
2.2.4.1.5.1.1.1.Giventheinputs,beabletoperformascaleofoperationsestimate
2.2.4.1.5.1.1.2.Beabletoexplainwhythisalgorithmtypeismostoftenappliedinasset
planning.
2.2.4.1.5.1.2.Deterministicordefinitive:beabletoexplainwhythisalgorithmtypeismostoften
appliedinprojectcontrolplanning.
2.2.4.1.5.2.Factors:
2.2.4.1.5.2.1.Beabletodescribesometypicalusesoffactors,ratios,andindicesinalgorithmsof
varioustypes.
2.2.4.1.5.2.2.Givenasetofprojectcharacteristicsandassociatedfactors,beabletoadjustacost
estimatefromonetime,location,situation,currency,etc.toanother.
2.2.4.1.6.ChartorCodeofAccounts:beabletodescribethecharacteristicsofagoodcodeaccount
structureanditsbenefitsforestimatingandprojectcontrol
2.2.4.1.7.HistoricalData:beabletodescribetheimportanceofhistorical,empiricaldataanddatabases
tocostestimating
2.2.4.2.ProcessesandPractices:beabletodescribethebasicmechanicsoftheseestimatingsteps
2.2.4.2.1.PlanforEstimatingandBudgeting
2.2.4.2.1.1.Beabletodescribepracticesforassessingestimaterequirements
2.2.4.2.1.2.Beabletodescribepracticesforresearching,collectingandanalyzinginformation
2.2.4.2.1.3.Beabletodescribepracticesfordevelopingtheestimatestructure
2.2.4.2.2.EstimateMethodologies
2.2.4.2.2.1.BeabletodescribeandapplytheestimatingmethodologyusingInvestmentCurves
2.2.4.2.2.2.BeabletodescribeandapplytheestimatingmethodologyusingCapacityFactoring
2.2.4.2.2.3.BeabletodescribeandapplytheestimatingmethodologyusingAnalogy
2.2.4.2.2.4.BeabletodescribeandapplytheestimatingmethodologyusingParametricModels
2.2.4.2.2.5.BeabletodescribeandapplytheestimatingmethodologyusingEquipmentFactoring
2.2.4.2.2.6.BeabletodescribeandapplytheestimatingmethodologyusingDetailedLineItem
Estimating
2.2.4.2.3.QuantificationandTakeoff:

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2.2.4.2.3.1.Beabletodescribehowtoquantifytheprojectscopeinanapplicablemanner
2.2.4.2.3.2.Beabletodescribewaysthatthisstepissometimesautomated,andconsiderationsfor
usingtheresultsofautomatedtakeoff
2.2.4.2.4.Costing:
2.2.4.2.4.1.Beabletodescribehowtoapplybaselinecoststothescopequantities
2.2.4.2.5.Pricing:
2.2.4.2.5.1.Beabletodescribehowtoadjustbaselinecostsforcommercialorotherconsiderations
2.2.4.2.5.2.Beabletodiscusssomebusinessconsiderationsforestablishingpricing(risk,
competition,desiredrateofreturn,currenteconomicconditions,etc.).
2.2.4.2.5.3.Givenabasicsetofcostinputsandproductionplansbeabletocalculateabreakeven
productprice
2.2.4.2.6.EstimateConditioning:
2.2.4.2.6.1.Beabletodescribehowtoapplyoverallestimatingadjustments,suchasescalation
2.2.4.2.7.RiskEvaluationandContingencyDetermination
2.2.4.2.7.1.Beabletodescribehowtoapplyriskanalysistoanestimatetosupportcontingency
determination
2.2.4.2.8.EstimateDocumentation:
2.2.4.2.8.1.Beabletodescribethetypicalcontentofestimatedocumentation
2.2.4.2.8.2.BeabletodescribehowtodocumenttheBasisofEstimate
2.2.4.2.9.EstimateReconciliation:
2.2.4.2.9.1.Beabletoexplaindifferencesbetweenthecurrentestimatewithpreviousversions;and
provideresolutions
2.2.4.2.10.EstimateReviewandValidation:
2.2.4.2.10.1.Beabletoeffectivelyreviewandvalidatetheestimate,includingprovidingestimate
benchmarking
2.2.4.2.11.EstimateReporting:
2.2.4.2.11.1.Beabletosummarizeandcommunicatetheestimatecontenttostakeholders
2.2.4.2.12.EstimateCloseout:
2.2.4.2.12.1.Beabletodocument,analyze,organizeandarchiveestimateinformationforfutureuse
2.2.4.3.OtherEstimatingIssues
2.2.4.3.1.Bidding
2.2.4.3.1.1.Beabletodiscusssomeconsiderationsforusingsomeoneelsesbidasaninputtoyour
costestimate.
2.2.4.3.1.2.Beabletodescribethepurposeandmechanicsofunbalancingorfrontendloadingabid
2.2.4.3.2.Budgeting:beabletodescribethemechanicsofcreatingacontrolbudgetfromacost
estimate
2.2.4.3.3.CostingandLifeCycleCosting(seealgorithms);beabletoexplaintheconceptofproject
versuslifecyclecosting
2.2.4.3.4.CashFlowandForecasting:
2.2.4.3.4.1.Beabletodiscusstheimportanceofintegratingestimatingandschedulingpractices
(incorporatingtheelementoftiminginquantificationandcosting)
2.2.4.3.4.2.Beabletodiscusstheaffectsonplanningandcostestimatingwhencashflowis
restricted
2.2.4.3.4.3.Givenascheduleandsetofcostinputs,beabletodevelopacostflowcurve.
2.2.4.3.5.CostControlBaseline:beabletodescribehowcostandschedulecontrolbaselinescanbe
integrated
2.2.4.4.OtherConcepts:
2.2.4.4.1.Productvs.Projectcosts:beabletoexplainhowestimatingproduct(i.e.,outputof
manufacturing)costdiffersfromprojectcost

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2.2.5.ResourceManagement:beabletodescribehowthisprocessistiedcloselytocostestimating(e.g.,
quantification)andscheduledevelopment(e.g.,resourceallocation).Alsoseeperformance/productivity
managementconsiderations
2.2.5.1.Resourceavailability:beabletodiscusswaystoassessavailabilityandpotentialconsequencesof
notdoingso
2.2.5.1.1.Beabletodescribethetypesofresourcesandtheirappropriatenesstoanalysis
2.2.5.1.2.Beabletodiscusspotentialsourcesforresources
2.2.5.1.3.Beabletodiscussmethodsforvalidationofinitialestimates
2.2.5.2.Resourcelimitsandconstraints:beabletodiscusstypicallimitsandconstraintsthatmayoccuror
beimposed
2.2.5.2.1.Beabletodiscusstherolesupervisionandspanofcontrolhasonresourcelimits
2.2.5.2.2.Beabletodescribehowoptimalandmaximumcrewsizingmayplayapart
2.2.5.2.3.Beabletodiscusstheeffectsofphysicalworkspacelimits
2.2.5.3.Resourceallocation:beabletodescribethemechanicsofthisstepinscheduledevelopment
2.2.5.3.1.Forwardvs.backwardallocation:beabletoexplainthedifferencesinthemethods
2.2.5.3.2.Smoothingvs.maximumlimits:beabletoexplainthedifferenceintheterms
2.2.5.3.3.Maximumvs.overmaximumallocation:beabletoexplainthedifferencesintheterms
2.2.6.ValueAnalysisandEngineering:beabletodescribethefollowingconcepts:
2.2.6.1.GeneralConcepts:
2.2.6.1.1.Purpose:
2.2.6.1.1.1.Beabledefinetheconcept(i.e.,thesystematicapplicationofrecognizedtechniques
whichidentifythefunctionsoftheproductorservice,establishtheworthofthosefunctions,and
providethenecessaryfunctionstomeettherequiredperformanceatthelowestoverallcost.
Whereoverallcostisusuallylifecyclecost).
2.2.6.1.1.2.Distinguishamongtheterms"lowestlifecyclecost,""bestquality,andbestvalue."
2.2.6.1.1.3.Beabletodescribehowvalueanalysis/engineeringdiffersfromothercostorscope
reductionexercises
2.2.6.1.1.4.Beabletodescribehowvalueanalysisandengineeringdiffersfromothervalue
improvingpracticessuchasmanufacturabilityandconstructability.
2.2.6.1.2.Value:beabletoexplainthethisgeneralconceptaswellasthemeanings,usingexamplesif
desired,ofthesefourkindsofvaluethatmaybeassociatedwithanitem:
2.2.6.1.2.1.Usevalue
2.2.6.1.2.2.Esteemvalue
2.2.6.1.2.3.Exchangevalue
2.2.6.1.2.4.Costvalue
2.2.6.1.3.Functions
2.2.6.2.Process/Practices;beabletodescribethepurposeandmechanicsofthesesteps:
2.2.6.2.1.FunctionAnalysis(ValueMeasurement)
2.2.6.2.1.1.Beabletoapportioncostfortheentireprojectbyfunction.
2.2.6.2.1.2.Beabletodeterminefunctionvalueinordertosupportimprovementopportunities.
2.2.6.2.2.Creativity
2.2.6.2.2.1.Describeeachofthefollowingproblemsolvingtechniques:
2.2.6.2.2.1.1.Brainstorming
2.2.6.2.2.1.2.Checklists
2.2.6.2.2.1.3.Morphologicalanalysis
2.2.6.2.2.1.4.Attributelisting
2.2.6.2.3.ValueScreening
2.2.7.RiskManagement:beabletodescribethefollowingconcepts:
2.2.7.1.GeneralConcepts
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2.2.7.1.1.RiskandUncertainty:beabletodefineriskintermsofopportunitiesandthreats
2.2.7.1.2.RiskFactors(ordrivers)andRiskFactorProperties
2.2.7.1.3.RiskManagementPlan
2.2.7.1.4.Contingency(seecostestimatingandscheduledevelopment)
2.2.7.1.4.1.Beabletodescribetheappropriatelevelofauthorityformanagingcontingency
2.2.7.1.4.2.Beabletodescribetypicalcriteriaforitsuse(i.e.,asopposedtoaslushfund).
2.2.7.1.5.ContingencyActionPlans
2.2.7.2.Practices:beabletodescribethepurposeandmechanicsoftheseriskmanagementprocesssteps:
2.2.7.2.1.RiskAssessment
2.2.7.2.2.RiskAnalysis
2.2.7.2.3.RiskFactorScreening
2.2.7.2.4.RiskMitigationorAcceptance
2.2.7.2.5.RiskControl
2.2.8.ProcurementPlanningandContractManagement
2.2.8.1.Contracttypes:beabletoexplaintheadvantageanddisadvantagesofthesetypesofcontracts
fromtheownerandcontractorviewpoints:
2.2.8.1.1.Fixedprice(withfixed,incentive,orawardfees)
2.2.8.1.2.Unitprice
2.2.8.1.3.Costplus(withfixed,incentive,orawardfees)
2.2.8.1.4.Timeandmaterials(T&M)
2.2.8.2.RiskAllocation:beabletoexplainhoweachcontracttypeaboveallocatesrisksbetweenthe
contractingparties.
2.2.8.3.ContractDocuments:
2.2.8.3.1.Beabletodescribethegeneralcontentsandpurposesofthefollowingelementsofbidding
andcontractdocuments:
2.2.8.3.1.1.Invitationtobidorrequestforproposal
2.2.8.3.1.2.Bidform
2.2.8.3.1.3.Agreement
2.2.8.3.1.4.Generalconditions
2.2.8.3.1.5.Supplementaryorspecialconditions
2.2.8.3.1.6.Technicalspecifications
2.2.8.3.1.7.Drawings
2.2.8.3.1.8.Addenda
2.2.8.3.1.9.Modifications
2.2.8.3.1.10.Bidbondandcontract(performance)bond
2.2.8.3.1.11.Performanceguarantee
2.2.8.3.1.12.Warranties
2.2.8.3.2.Beabletoexplaintheroleofcontractdocumentsinavoidingandresolvingdisputes,changes
andclaims(alsoseeChangeManagement).
2.2.8.3.3.Beabletodescribethevarioustypesofinsurancethatmayberequiredaspartofacontract
2.2.8.3.4.Beabletoexplainthetermretentionandbeabletocalculateitseffectivecostgiventhe
termsofthecontractandtimevalueofmoney.
2.2.8.3.5.Beabletodistinguishbetween"Job(project)overhead"and"generaloverhead'andprovide
examplesofeach.
2.2.8.3.6.Beabletoexplainwhatismeantbyacontractpaymenttermsuchas2/15net30,andgiven
apaymenttimingandtimevalueofmoneyscenario,beabletodeterminethemethodofpayment
thatiseconomicallymostadvantageousundertheseterms.
2.2.8.4.IntegratedProjectControl:

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2.2.8.4.1.Beabletoexplainthebasicmechanicsofhowtheprojectcontrolprocessmightbeintegrated
betweenpartiestoeachtypeofcontract.(e.g.,howtomeasureandreportprogress,integrate
schedules,etc.).
2.2.8.4.2.Beabletoexplaintheroleofcontractdocumentsinavoidingandresolvingdisputes,changes
andclaims(alsoseeChangeManagement).
2.2.8.5.ChangesandClaims:(seeChangeManagementandForensicPerformanceAssessment)
2.2.8.6.OtherConcepts:
2.2.8.6.1.Supplychain:beabletoexplainthisconceptandhowitmightaffectprocurementplanning.
2.2.8.6.2.Supplierrelationships:beabletoexplainthisconceptandhowitmightaffectprocurement
planning(e.g.,initialpriceversuslifecyclecost)
2.2.8.6.3.Scheduleofvalues:beabletoexplainthisconceptinregardstocontracts,change
management,andprojectcontrolforcontractedwork.
2.2.9.InvestmentDecisionMaking
2.2.9.1.GeneralConcepts:
2.2.9.1.1.BeableexplaintheconceptsandperformtheanalysescoveredpreviouslyintheEconomic
andFinancialAnalysissection.
2.2.9.1.2.DecisionPolicy/Criteria:
2.2.9.1.2.1.Beabletodescribetheroleofdecisionpolicyinconsistentassetinvestmentstrategy
deployment
2.2.9.1.2.2.Beabletoexplainwhydecisionpolicyformostcorporationsestablishesnetpresent
valueandreturnoninvestments(orequivalent)asprimarydecisioncriteria.
2.2.9.2.DecisionAnalysis:
2.2.9.2.1.DecisionModel:
2.2.9.2.1.1.Beabletoabletoexplainthebenefitsofusingacostbased,quantitativedecisionmodel
thataddressesprobabilities
2.2.9.2.1.2.Beabletodescribethemechanicsofaddressingnoncashvalueandriskconsiderations
inamonetarydecisionmodel.
2.2.9.2.1.3.Beabletoevaluateandselectthebestalternativefromseveralalternativesusingthese
methods.
2.2.9.2.1.3.1.NetPresentValue
2.2.9.2.1.3.2.DecisionTree(probabilityweightedpresentvalue):
2.2.9.2.1.3.3.InternalRateofReturn(breakeven)
2.2.9.2.1.3.4.Cost/BenefitRatio
2.2.9.2.2.SensitivityAnalysisandMonteCarloSimulation:beabletodiscussmechanicsofusinga
decisionmodeltoassessprobableoutcomes.
2.2.9.3.BusinessDecisionBasisorBusinessCase:beabletodescribetheinformation(e.g.,objectives,
assumptions,constraints,etc)thatshouldbecommunicatedtotheprojectteam.
2.2.9.4.CapitalBudgeting.beabletodescribethemechanicsofinvestmentdecisionmakinginatypical
enterprisecapitalbudgetingprocess.
2.2.9.5.PortfolioManagement.beabletodescribetheaffectofportfolioconsiderations(multipleand
oftencompetingassetsandprojects)oninvestmentdecisionmakingandcapitalbudgetingprocesses.
2.3.Implementation
2.3.1.ProjectImplementation:beabletoexplainthefollowingconcepts:
2.3.1.1.PhasesandGatesProcess:beabletodescribethetypicalstagesinrespecttoprojectplanningand
fundingauthorizationandthebenefitsofanestablishedprocess
2.3.1.1.1.Frontendloading(FEL):beabletodescribethisconceptanditsbenefitsintermsofrisk
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2.3.1.2.ProjectImplementationBasisorScopeStatement:beabletodescribethetypicalinformationin
thisdeliverableatprojectinitiationandtheimportanceofbusinessandprojectteamagreementand
communicatingthisinformationtoallstakeholders.
2.3.2.Projectcontrolplanimplementation:beabletoexplainthefollowingconcepts:
2.3.2.1.ControlAccounts:describethisconceptanditscontentinrelationtoWBSandearnedvalue
application
2.3.2.2.ProjectControlPlanandBasis:beabletodescribethetypicalinformationinthisdeliverableatthe
startofprojectexecutionandtheimportanceofintegrating,agreeingonandcommunicatingthis
informationtotheprojectteam.
2.3.3.Validation:beabletodescribehowthequalityandcompetitivenessofplansmightbeassessedbefore
implementationandwhytheprocessisimportant.Alsoexplainthevalueofhistorical,empirical
information.
2.4.PerformanceMeasurement
2.4.1.CostAccounting:beabletodescribetheinterfaceoftheaccountingprocesswithcostengineering
practice
2.4.1.1.CashandAccrualAccounting.Beabletodescribetheseconcepts
2.4.1.2.ControlandCostAccounts:beabletodiscusstheroleofthechartorcodeofaccountswith
integratingprojectcontrol
2.4.1.2.1.Initiation/closure:beabletodiscusstheimportanceoftimelymanagementofcostaccounts
2.4.1.2.2.Review/correct:beabletodiscusswaystodealwithandtheaffectsonprojectcontrolof
mischarges.
2.4.1.3.Classifyandaccount:beabletoexplaintheroleofthecostengineerinassuringthatcost
accountinginformationisaccountedforsoastoalignwiththecontrolbasis.Beabletodescribethese
costaccountingconcepts:
2.4.1.3.1.Expenditures(i.e.,cashdisbursements)
2.4.1.3.2.IncurredCosts(i.e.,expendedpluscostofworkperformedbutnotpaidforyet)
2.4.1.3.3.Commitments(i.e.,includingexpendedcostsandfinancialobligations)
2.4.1.3.4.CostAllocation
2.4.1.3.5.ActivityBasedCosting(ABC)
2.4.1.4.CapitalizationandDepreciation:beabletoexplaintheseconceptsandthetypicalroleofthecost
engineerinworkingwiththefinancefunctiontoassureitisdoneeffectively
2.4.1.5.Assetvs.ProjectAccounting:
2.4.1.5.1.Beabletodescribehowtraditionalassetoperationandfinancefocusedaccountingdiffers
fromthatneededforprojectcontrol
2.4.1.5.2.Beabletodescribehowlegacyorcontractorcostaccountingsystemaccountsareoftennot
consistentwithprojectcontrolneeds,andhowtheinconsistencymaybeaddressed.
2.4.2.ProjectPerformanceMeasurement
2.4.2.1.GeneralConcepts
2.4.2.1.1.EarnedValue:beabletoexplainthegeneralconceptandtheimportanceofandreliable
controlbasisandobjective,quantitativephysicalprogressmeasures
2.4.2.2.Practices
2.4.2.2.1.PhysicalProgress:beabletoexplainthegeneralconceptandthefollowingmethods,and,
giveninputinformation,beabletocalculatepercentcomplete.
2.4.2.2.1.1.Unitscompleted
2.4.2.2.1.2.Incrementalmilestone
2.4.2.2.1.3.Weightedorequivalentunitscompleted
2.4.2.2.1.4.Resourceexpenditure
2.4.2.2.1.5.Judgment
2.4.2.2.2.TrackResources

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2.4.2.2.2.1.Laborhours:beabletoexplaintheadvantagesanddisadvantagesoftrackinglaborhours
insteadofcostasthebasisforearnedvalue
2.4.2.2.2.2.Materialmanagementandfabrication:beabletodiscusshowmaterialprogress/status
canbemeasured
2.4.2.2.3.MeasurePerformance(howworkisbeingdone)
2.4.2.2.3.1.Beabletodiscusswhyearnedvaluemeasuresalonehavelimitedvalueinfindingwaysto
improveperformance.
2.4.2.2.3.2.Beabletodiscussthemechanicsofthefollowingmethods,howtheycanhelpfindways
toimproveperformance,andtheirstrengthsandweaknesses:
2.4.2.2.3.2.1.Worksampling
2.4.2.2.3.2.2.Timeandmotionstudies
2.4.2.2.3.2.3.Timelapsephotographyandvideomonitoring
2.4.2.2.3.2.4.Expediting
2.4.2.2.3.2.5.Inspection
2.4.2.2.4.StatusSchedule:beabletodiscussthemechanicsofstatusingandupdatingaschedule
2.4.3.AssetPerformanceMeasurement:beabletoexplainhowearnedvaluemethodsdonotapplyfor
operationsandperformanceismeasuredagainstmetricsestablishedbytherequirements.
2.4.3.1.FunctionalPerformance:beabletoexplainhowmeasurescapturewhatanassetdoesandhowit
doesitincludingqualitycontrolattributes,cycletime,andsoon.
2.4.3.2.Utilitymeasures:beabletodiscusswaystocaptureuserorcustomerperceptionsofhowwellthe
assetmeetstheirwantsandneeds.
2.4.3.3.MeasureActivityFactors:beabletoexplainhowifABC/Mmethodsareused,costassignment
networktracingtiesexpensestoactivitieswhoseperformancemustbemeasured.
2.4.3.4.TrackResources:beabletoexplainhowERPsystemsincreasinglyhandlethesemeasuresin
operationfacilities
2.5.PerformanceAssessment
2.5.1.ProjectPerformanceAssessment:beabletoexplaintheconcepts
2.5.1.1.GeneralConcepts
2.5.1.1.1.Variance:beabletodescribethisconceptasanempiricaldifferencebetweenactualand
plannedperformanceforanyaspectofthecontrolplan.
2.5.1.1.2.Trends:beabletodescribethedifferencebetweenrandomandnonrandomvarianceand
howthismightinfluencesubsequentcontrolactionsandforecasts
2.5.1.2.Practicesforcontrolassessment:beabletodescribemethodsforassessingandreporting
performance(variancesandtrends)againstthefollowingbaselineplans:
2.5.1.2.1.Cost:
2.5.1.2.1.1.Beabletodescribebasicearnedvaluemethods
2.5.1.2.1.2.Beabletodescribeandpreparetabularandcumulativedistributioncharts(scurves)
forreporting
2.5.1.2.2.Schedule:
2.5.1.2.2.1.Beabletodescribemethodstoidentifyvariance(e.g.,calculateslip,earnedvalue
methods,etc),assesscriticalpathandremainingfloat.
2.5.1.2.2.2.Beabletodescribeperformancereportingmethods(e.g.,scheduleplotshowingthe
plannedandactualscheduleactivitystatus),tablesshowingapercentageorfactorthatexpresses
theextentthatthescheduleisaheadorbehindatgivenpointsintime,listsofactivitiessortedby
earlystartdateortotalfloat,etc.).
2.5.1.2.3.Resources
2.5.1.2.3.1.Labor
2.5.1.2.3.1.1.Beabletodescribebasicearnedvaluemethods

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2.5.1.2.3.1.2.Beabletodescribeandpreparetabularandcumulativedistributioncharts(s
curves)forreporting
2.5.1.2.3.2.Materialandfabrication:beabletodescribetheuseearnedvalue,scheduleassessment,
materialmanagementreports,andsoon.
2.5.1.2.4.Risk:beabletoexplainthemonitoringandassessmentofriskfactorsinaccordancewitha
riskamanagementplan
2.5.1.3.Practicesforintegratedearnedvalue(EarnedValueManagementSystemorEVMS)assessment
2.5.1.3.1.Beabletoexplainandcalculateallthebasicearnedvaluemeasuresandindices(Planned
and/orBudget[wasBCWS],Earned[wasBCWP],andActual[wasACWP],SV,CV,SPI,CPI)
2.5.1.3.2.BeabletodescribetheadvantagesanddisadvantagesofafullyintegratedEVMSassessment
usingcosts
2.5.1.4.Practicesforworkprocessandproductivityimprovement
2.5.1.4.1.Productivityassessment
2.5.1.4.1.1.Laborproductivityfactor:beabletocalculatethisusingearnedvalueandexplainits
significance
2.5.1.4.2.Workprocessimprovement.
2.5.1.4.2.1.Worksampling:beabletodescribethemechanicsofthemethodandhowitcanbeused
toeliminatewastedeffortandimprovetheworkprocess
2.5.1.4.2.2.Beabletodescribeothermethodssuchasinformalsampling,manpowersurveys,time
cardnotations,qualitycircles,inspectionobservations,etc.
2.5.2.AssetPerformanceAssessment:beabletoexplainhowforoperations,earnedvaluemethodsdonot
applyandperformanceismeasuredagainstmetricsestablishedbytherequirements.
2.5.2.1.MeasurementBasis:beabletodescribetheseconceptsformeasuringandassessingasset
managementperformance(profitabilitybeingthemostcommonmetric):
2.5.2.1.1.BalancedScorecard
2.5.2.1.2.KeyPerformanceIndicators(KPI)
2.5.2.2.Practices
2.5.2.2.1.Profitability:seereturnoninvestment
2.5.2.2.2.CostofQuality:
2.5.2.2.2.1.Beabletodescribethemechanicsofthemethodandcostsofprevention,appraisaland
failure.
2.5.2.2.2.2.Beabletoexplainhowthemethodcanleadtocorrectiveactions
2.5.2.3.Benchmarking:beabletodescribethepurposeandmechanicsofabenchmarkingstudy
2.5.2.4.LessonsLearned.beabletoexplainthepurposeandmechanicsofcapturingandevaluating
lessonslearned
2.5.2.5.RiskAssessment:beabletoexplainthemonitoringandassessmentofriskfactorsinaccordance
withariskamanagementplan
2.5.3.Forecasting
2.5.3.1.ForecastandForecasting.
2.5.3.1.1.Beabletodescribetheconceptsofforecastsandforecasting
2.5.3.1.2.Beabletodescribehowtheprojectcontrolplanningconcepts(e.g.,estimating,scheduling,
etc.)areappliedinthecontextofworkinprogress,performanceassessmentfindings,change
management,andcorrectiveactions.
2.5.3.2.EarnedValueMethods:
2.5.3.2.1.Beabletoexplainandcalculatethebasicearnedvalueconceptsrelatedtoforecasting(BAC,
EAC,laborproductivityfactor)
2.5.3.2.2.Beabletoexplainwhyearnedvaluemeasuresalonemaynotbeanappropriatebasisfora
forecast;explainwhatelsemustbeconsidered.
2.5.4.ProjectChangeManagement

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2.5.4.1.BasicTerminology:beabletodescribetheconcepts
2.5.4.1.1.Scope:beabletodescribehowthemeaningofthetermscopediffersinthecontextsof
ownerprojectfundsauthorizationversuscontracting
2.5.4.1.2.Deviations
2.5.4.1.3.Trends(alsoseeperformanceassessment):
2.5.4.1.4.Changes:beabletoexplain thedifferencebetweenscopeandnonscopechangesinan
ownerfundingcontext
2.5.4.1.5.ChangesandContractTypes:beabletoexplainhowthechangeorderprocessmaydifferwith
differentcontracttypes.
2.5.4.1.6.DisputesandClaims
2.5.4.1.7.Contingency,Allowances,andReserves(seeRiskManagement)
2.5.4.2.Practices:beabletodescribetheconcepts
2.5.4.2.1.Varianceortrendanalysis:beabletodescribethedifferencebetweenperformancevariance
andatrend
2.5.4.2.2.Impactassessment:beabletodescribehowtheprojectcontrolplanningconcepts(e.g.,
estimating,scheduling,etc.)areappliedinchangemanagement
2.5.4.2.2.1.Beabletodescribetheconceptoftimeimpactanalysisrelatedtoschedulechange
2.5.4.2.3.Makeandtrackdisposition
2.5.4.2.3.1.Correctiveaction(alsoimprovementaction):beabletodescribewhattheseareand why
theymightbeneeded.
2.5.4.2.3.2.Beabletodescribewaysthatchangemanagementfindingsanddispositions(actions)are
recorded,reported,andincorporatedintheprojectcontrolplans
2.5.4.2.4.Managecontingencyandreserves:
2.5.4.2.4.1.Drawdown:beabletodescribemethodsformanagingcontingency
2.5.4.2.4.2.Beabletodescribewaystoassesstheneedforcontingencyforworkinprogress
2.5.4.2.5.Resolvecontractdisputesandclaims:beabletodiscusstheconceptofchangesandchange
managementinrespecttocontractagreements(alsoseeForensicPerformanceAssessment)
2.5.5.AssetChange(Configuration)Management
2.5.5.1.Requirements:Beabletoexplainhowmanagingthescopeoftheassetinrespecttoits
requirementsinstrategicassetmanagementdiffersfrommanagingthescopeofworkinproject
control.
2.5.5.2.ConfigurationManagement:beabletodescribetheroleofthispracticeareainmanaging
changeininformationthatdefinestheasset
2.5.6.HistoricalDatabaseManagement(seebasicconceptsinInformationManagement)
2.5.6.1.EmpiricalData:beabletoexplainwhyempiricalinformationisthemostfundamentalplanning
resourceavailable(whyisitcriticalforassetandprojectplanning?)
2.5.6.2.ProjectCloseout:beabletodescribethemechanicsandchallengesofclosingoutaprojectin
respecttoprojectcontrolsystems,dataandinformation.
2.5.7.ForensicPerformanceAssessment
2.5.7.1.Beabletodescribehowforensicassessmentdiffersfromtypicalprojectcontrolperformance
assessments(i.e.,theprimarypurposeistorelatecausationandresponsibility(orentitlement)to
performancetoresolvedisputesinalegalcontextand/ortogainknowledgetosupportlongterm
performanceimprovement.
2.5.7.2.Beabletodescribethedifferencebetweenchangesandclaims(forscope,compensation,relief,
damages,delay,orotherdisagreements)
2.5.7.3.Beabletodescribemajorreasonsforcontractchangesincludingtheroleofprojectscope
definition
2.5.7.4.Beabletodescribevarioustypesofscheduledelayinrespecttocontractchangesandclaims:
2.5.7.4.1.Excusable

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2.5.7.4.2.Nonexcusable
2.5.7.4.3.Compensatory
2.5.7.4.4.Concurrent
2.5.7.5.Beabletodescribethepotentialaffectsofdisputesonprojectperformance
2.5.7.6.Beabletodiscussroleofthesecosts(seeElementsofCost)incontextofdisputesandclaims
(bonds,retainage,performanceguarantees,liquidateddamages,demurrage,legalcosts,etc.)
2.5.7.7.Beabletodiscussmeansandmethodsofresolvingdisputesandclaimsthroughnegotiation,
mediation,arbitration,and/orlitigation(orotherformsofalternativedisputeresolution)including
beingabletodiscusspotentialgoodpointsandbadpointsofeachforum.
2.5.7.8.Beabletodescribethetermsdiscoveryprocess,depositionsandinterrogatory.
2.5.7.9.Beabletodescribewhyitisimporttodistinguishbetweensuppositionandfact.

REFERENCES

1. Hollmann,JohnK.,Editor.TotalCostManagementFramework:AnIntegratedApproachtoPortfolio,Program,
andProjectManagement,FirstEditionRevised,Morgantown,WV:AACEInternational,2011.
2. AACEInternational,RecommendedPractice10S90,CostEngineeringTerminology,AACEInternational,
Morgantown,WV,(latestrevision).

CONTRIBUTORS

Disclaimer: The opinions expressed by the authors and contributors to this recommended practice are their own
anddonotnecessarilyreflectthoseoftheiremployers,unlessotherwisestated.

(June18,2013andMay11,2012revision)

JohnK.Hollmann,PECCECEP(Author)

JefferyJ.Borowicz,CCCCEPPSP
PeterR.Bredehoeft,Jr.,CEP
RobertB.Brown,PE
LarryR.Dysert,CCCCEP
ToddW.Pickett,CCCCEP
BernardA.Pietlock,CCCCEP
H.LanceStephenson,CCC
CharlesP.Woodward,PECCE

(January17,2006revision)

JohnK.Hollmann,PECCE(Author)
EdwardE.Douglas,IIICCCPSP
CliveD.Francis,CCC
PaulE.Harris,CCE
Dr.KennethK.Humphreys,PECCE
IftikharK.Madni,CCE
AlexiaA.Nalewaik,CCE
DavidA.Norfleet,CCC
RonaldM.Winter,PSP
Dr.CarlWolf,CCE

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