Overview of AACE > 8,000 Members Around The World – 84 Countries – 9 Sections – > 250 in Southern California Section alone Top Contractors And Owners – Bechtel, Flour, KBR, Jacobs, CB&I, Exxon, BP, Chevron, Duke Energy, NRG Energy Cooperative Agreements – American Society Of Civil Engineers Multiple Industries – Oil And Gas, Utilities, Civil Construction, Defense Contracting
Discounted Membership For Students – $37.50/year or $3.13/month Magazines – Cost Engineering Journal – Source Scholarship Program For College / University Students – More Than $91,750 Awarded Annually (2013-2014) Virtual Library – Over 4,500 technical papers – AACE Presents Mentoring Program Networking And Contacts Benefits of Membership
Monthly Meetings (September – May) – Technical presentation of projects/topics – Discounted cost to Students Annual Symposium (November 1-3) – Full Weekend of programs on variety of topics – Palm Springs Resort Scholarship Program For College / University Students – Local Scholarships offered VISIT www.aacei.org or www.aace-scs.comwww.aacei.orgwww.aace-scs.com Local Section Events
Entry-Level / Junior Certification – CCT (Certified Cost Technician) – Requirement: 4 Years Of Experience OR 4 Years Of College-Level Academic. Professional Level Certification – CCP (Certified Cost Professional) – CEP (Certified Estimating Professional) – CFCC (Certified Forensic Claims Consultant) – EVP (Earned Value Professional) – PSP (Planning & Scheduling Professional) http://www.aacei.org/educ/cert/CCT/ AACE International Certification
2011 Salary Survey AACE certifications will earn you over $5,000 more per year than without. Membership in AACE earned you almost $9,000 more per year than non- members.
What is the YPC The Young Professionals Committee develops, implements, and oversees programs and training designed to enhance the experience of young professionals in project controls; it adds value by attracting new members and establishing meaningful relationships with other committees and organizations within and outside of AACE. In addition to our university outreach and scholarship program, we partner with various speakers at the annual meeting to sponsor tracks that might be of interest to younger members of the association. YPC Gives You A Vehicle To Become A Leader In AACE And In Your Career
YPC Value Proposition Why YPC? – Growth In Capital Projects – Aging Workforce – Training – Networking – Development Opportunities
YPC Events Annual Meeting Networking Event Website And LinkedIn Subgroup – http://www.linkedin.com/groups/AACE- International-Young-Professionals-Committee- 2802271/about Profile Articles – Source Magazine Leadership Conferences University Outreach Mentoring Program Impromptu Dinners and Social Events
Why Projects Fail Projects fail for any number of reasons, including but not limited to: – Ambiguous business case – Lack of upfront planning – Inadequate or untrained resources – Failure to properly integrate deliverables or data – Unrealistic schedules or estimates – Poor communication – Inability to meet contractual requirements
Project Controls 101 Project Controls Is That Element Of A Project That Keeps It On-Track, On-Time And Within Budget Cost, Risk, Quality, Communication, Time, Change, Procurement, And Human Resources Project Controls Can Be Responsible For Projects, Programs, Or Portfolios That Contribute To The Company’s Bottom-Line
Project Control Progression Source: Randy R. Rapp, Enhancing Professionalism in Construction Project Controls, AACE International (AACE), Morgantown, West Virginia,
Software Applications MS Project / Oracle Primavera MS Excel / Access MS Word / Powerpoint Acumen Fuse / Oracle Risk Analysis Crystal Ball / @Risk Aspen Icarus / Questar / Kbase / CAPCO$T SAP / JD Edwards Software is the single biggest enabler so learn as much as you can!
Useful Skill Sets Technical Engineering Economics Cost Estimating / Scheduling Business Law Financial Accounting Computer Application Statistics and Probability Contract Administration Behavioral Written and Oral Communication Motivation Conflict Management Team Building Interpersonal Skills Self-Awareness Empathy Self-Regulation
The Basics “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.” To invest or not invest… Purpose of estimates: – Determine economic feasibility – Evaluate alternatives – Establish project budget – Provide a basis for project cost and schedule control
The Basics Estimating Deliverables: – Estimating Plan: States methodology to be used to develop the estimate by type – Basis of Estimate (BoE): Documents the inputs and assumptions that form the estimate – CAPEX Estimate (Nominal then Real): Real value has been adjusted for price changes over time (e.g. inflation) – Estimate Phasing: Projected spending profile by period – Estimate Benchmarking / Assurance
The Basics Costs of a constructed facility to the owner include the initial capital costs and subsequent operation and maintenance costs. Examples of CAPEX: – Land acquisition, studies, architectural and engineering design, construction (materials, equipment, labor), supervision, financing, insurance and taxes, overhead, equipment, inspection and testing Examples of OPEX: – Land rent, operating staff, labor and materials for maintenance and repairs, periodic renovations, insurance and taxes, utilities
The Basics Costing v. Pricing – Costing: Process of applying unit costs to the individual quantities of items associated with the estimate Labor hours, wage rates, material costs, subcontract costs – Pricing: Adjusting costs that have been applied for specific project conditions and commercial terms Allow for overhead and profit, improve cash flow Material costs may need to be adjusted for location, materials of construction Labor will require productivity adjustments – Price will be higher than cost
Structuring the Estimate Coding is not a WBS…. – In order to prepare for project execution, it is necessary to segregate costs into various categories (e.g. material v. labor, direct v. indirect) – Also referred to as code of accounts – Serves as the link between cost accounting and cost control – Used for benchmarking between and across projects with varying scopes Work Breakdown Structure (WBS) – Utilized on larger projects – Represents division of a project for purposes of management and control – Customized for a particular project
Estimating Process Neat Estimate: Compilation of cost elements known and defined; Utilizes WBS structure Growth Allowance: Provisions that represent the gap between what is known and what is likely to occur based on experience (e.g Non-Productive Time, SIMOPs, etc.) Escalation: Expected increase in prices of specific project inputs (e.g. HIS CERA, IPA, trade journals, etc.) Contingency: Covered in the next slide
Contingency & Risk Analysis Contingency means many things to many people By definition, contingency is used to deal with uncertainties in estimating (i.e. known unknowns) Required because estimating is not an exact science Cost items in estimate are subject to some measure of probability distribution Risk Analysis = Used to determine probability of over- or under-running specific estimated values Improves accuracy of project evaluations not accuracy of estimate A team exercise requiring time and resources
Type and Classification Source: AACE International Recommended Practice No. 18R-97, “Cost Estimate Classification System As Applied in Engineering, Procurement, and Construction for the Process Industries,” 2005.
Estimating Best Practices GAO’s 9 Basic Characteristics of Credible Cost Estimates (1972): – Clear Identification of Task – Broad Participation in Preparing the Estimate – Availability of Valid Data – Standardized Structure for the Estimate – Provisions for Program Uncertainties – Recognition of Inflation – Recognition of Excluded Costs – Independent Review of Estimates – Revision of Estimates for Significant Program Changes Source: GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs, March 2009.
More Information Source: AACE Total Cost Management Framework
Conclusion “A bad system will defeat a good person every time.” – W. Edwards Deming Project controls is a profession that is in high demand. – Competitive Salaries – Multiple opportunities AACE-I and YPC allows students and young professionals to connect. Join us on Linked In!