New Recommended Practice (RP)

AACE's Technical Board has released the new Recommended Practice (RP) 110R-20: Cost Estimate Validation. You can link to it by double-clicking on the image (login is required). RPs are free for members. Non-members may purchase each RP for $100/RP.

This RP defines the basic elements of and provides broad guidelines for the cost estimate validation process. Validation is a quality-focused sub-element of the estimate review process step in the cost estimating and budgeting process of the Total Cost Management (TCM) Framework. It is related to the practice of benchmarking; while both use quantitative metrics, benchmarking is focused more on system performance as opposed to estimate quality. Validation applies to both cost estimates and schedule duration estimates; however, this RP covers only the cost estimate. This RP is applicable to all cost estimate types for any industry and is intended for those responsible for and/or participating in estimate development and review. Expert knowledge is not required to understand or use this RP.

This RP is intended to provide guidelines (i.e., not a standard) for validating cost estimates. Most practitioners would consider these guidelines as good and reliable practices. It is recommended to consider using these guidelines where applicable.

Revised Recommended Practices

This RP describes the definition, purpose, management, and control of schedule and cost reserves on projects being implemented under Electronics Industries Alliance (EIA) - 748 Earned Value Management Systems (EVMS) guidelines with a focus on Federal Acquisition Regulation (FAR), required for projects funded by the United States government. This includes contingency, management reserve (MR), schedule margin (SM), undistributed budget (UB), and authorized unpriced work (AUW). Overall use of management reserve for programs and portfolios are not within the scope of this document. This document elaborates and provides additional detail that is consistent with, however not included in the EIA-748 standard. This recommended practice is intended to provide guidelines from the owner and contractor perspectives and not intended to be a standard.

This RP specifically provides guidance regarding the management and use of management reserve and undistributed budget on projects executed using earned value management (EVM) techniques consistent with the EIA-748 standard. This RP defines the non-time-phased components of the contract budget baseline (CBB) and may be used when project management consistent with EVM tenets is implemented and practiced in a disciplined manner.

In this RP, the cost contingencies are mitigated through the use of management reserve and schedule contingencies in schedule margin. Also, undistributed budget is defined as the amount of the budget of the performance measurement baseline that has yet to be allocated either to control accounts or to summary level planning packages.

This RP covers the scope of EIA-748 Guidelines 14 and 15 entirely and components of EIA-748 Guidelines 8, 28, 29, 30 and 32 regarding revisions and change control (as listed in the National Defense Industries Association (NDIA) Integrated Program Management Division (IPMD) Earned Value Management Systems Intent Guide).

Recommended Practices Out for Public Review

There are multiple RPs out for public review. The closing dates on the review process vary, so please check each RP carefully. Please note that you need to join the community (top-right hand corner) in order to provide comment.

109R-19

Recommended Practice 109R-19, Schedule Change Management – As Applied in Construction, has been posted for public review and comment until December 27, 2020. You can find the draft RP here: (PUBLIC REVIEW DRAFT) 109R-19: Schedule Change Management – As Applied in Construction

111R-20

Recommended Practice 111R-20, Estimating for Long-Range Planning – As Applied for the Public Sector, has been posted for public review and comment until December 27, 2020. You can find the draft RP here: (PUBLIC REVIEW DRAFT) 111R-20: Estimating for Long-Range Planning – As Applied for the Public Sector

10S-90

Four terms and definitions have been posted for public review and comment until January 22, 2021. You can find the draft terms here:

December 8, 2020 Revision to RP 10S-90: Cost Engineering Terminology

42R-08, 44R-08, 65R-11, 113R-20

Four risk quantification RPs have been posted for public review and comment until January 22, 2021

• 42R-08, Risk Analysis and Contingency Determination Using Parametric Estimating [Revision]

• 44R-08, Risk Analysis and Contingency Determination Using Expected Value [Revision]

• 65R-11, Integrated Cost and Schedule Risk Analysis and Contingency Determination Using Expected Value [Revision]

• 113R-20, Integrated Cost and Schedule Risk Analysis and Contingency Determination Using Combined Parametric and Expected Value [New]

The first three are revisions to existing published RPs, with the inclusion of additional information and examples. 113R-20 is new. All four RPs are inter-related and cross reference each other; hence the request for a concurrent review.

You can find the draft RPs here: (PUBLIC REVIEW DRAFTS) Risk Quantification RPs (Four)

112R-20

Recommended Practice 112R-20, Cost Estimate Classification System – As Applied in Maintenance Turnarounds for the Process Industries, has been posted for public review and comment until January 22, 2021.

You can find the draft RP here: (PUBLIC REVIEW DRAFT) 112R-20: Cost Estimate Classification System – As Applied in Maintenance Turnarounds for the Process Industries

114R-20

Recommended Practice 114R-20, Project Historical Database Development, has been posted for public review and comment until January 23, 2021.

You can find the draft RP here: (PUBLIC REVIEW DRAFT) 114R-20: Project Historical Database Development

Rising Professionals Committee: Technical Event

Join AACE International's Rising Professionals Committee during this free technical event.

Presenters: Brian J. Furniss, PE CFCC PSP and Cory R. Milburn, CFCC PSP

Date/Time: January 20, 2021 - 11:00 AM Eastern US

Fee: Free to members and non-members

You can find this event and others in the Global Calendar. If your section or AACE committee has an activity that you'd like to let others know about, please complete the form on the Global Calendar page to let us share your information with the AACE community.

2020 Salary and Demographic Survey of Project and Cost Professionals

The 2020 Salary and Demographic Survey of Project and Cost Professionals results are in and available. As always, the Salary Survey is free for members. Non-members may purchase a copy for $100.

AACE members note: The raw data used to compile the survey results is available in the member version of the survey located through the Virtual Library. Enter "2020 Salary" under the search terms.

Tech Talks Reminder

Need another reason to renew your dues? Remember that AACE offers members a free-of-charge opportunity to watch AACE Conference & Expo presentations for your personal continuing education, and if you are AACE certified, also earn CEUs toward recertification. Each presentation will be offered for one week, then it will expire. However, your CEUs earned will remain on your profile. The “Tech Talks" will be offered on Wednesdays for the period of time that our members will be working from home as a result of the COVID-19 pandemic.

We encourage you to engage with your fellow members and to share what resources, both work and home/family resources, that may help others navigate this difficult time.

Tech Talks are available for a fee for non-members.