03 Listado y Detalle de Las AACE RPs Al 18-11-2014

To date (Nov 18, 2014), AACE International's RPs includes the following documents:
COST ENGINEERING TERMINOLOGY RP 10S-90
(Rev. Nov 14, 2014)

AACE International Recommended Practice No. 10S-90
TCM Framework:
General Reference
This document provides terms commonly used in all facets of cost engineering and in total cost
management. Unless otherwise noted, all terms contained in this document have been developed by
various AACE International technical subcommittees, special interest groups, or project teams. All terms
have been subject to a thorough review process, followed by approval by the AACE International
Technical Board.
REQUIRED SKILLS AND KNOWLEDGE OF COST ENGINEERING RP 11R-88
(Rev. June 18, 2013)

AACE International Recommended Practice No. 11R-88
TCM Framework:
General Reference
This recommended practice has the following purposes: 1.) define what core skills and knowledge of cost
engineering a person is required to have in order to be considered a professional practitioner, and in
doing so, 2.) establish the emphasis of core subjects for AACE International education and certification
programs.
It is also hoped that enterprises will find this useful as a reference or guide for developing their own
competency models. Knowledge is an understanding gained through experience or study, and skills are
abilities that transform knowledge into use. Core subjects are those whose usage is occasional to
frequent and are considered by AACE International as being required for professional practitioners of cost
engineering to know and be able to use.
This recommended practice lists these core subjects and provides general performance statements (i.e.,
be able to describe, perform, etc.) to represent the level of proficiency expected in each subject area.
These statements are representative or guiding examples only.
MODEL MASTER'S DEGREE PROGRAM WITH EMPHASIS IN COST

ENGINEERING RP 12R-89
(Rev. November 1990)
TCM Framework:
General Reference
RECOMMENDED METHOD FOR DETERMINING BUILDING AREA RP 13S-90
(Rev. November 1990)

AACE International Recommended Practice No. 13S-90
TCM Framework:
7.3: Cost Estimating and Budgeting
RESPONSIBILITY AND REQUIRED SKILLS FOR A PROJECT PLANNING AND

SCHEDULING PROFESSIONAL RP 14R-90
(Rev. September 19, 2006)
TCM Framework:
7.2: Schedule Planning and Development
PROFITABILITY METHODS RP 15R-81
(Rev. July 16, 2008)

TCM Framework:
3.3: Investment Decision Making 6.1: Asset Performance Assessment
Scope
This Recommended Practice (RP) of AACE International defines specific practices for determining the
profitability of investments. The methods offered are general, since not all profitability techniques can or
should be included in an RP. In its broadest sense, profitability is a measure of value added. Increased
profitability thus reflects greater economic good for society. There is no economic progress without
profitability.
Purpose
This RP is intended to provide broad guidelines, not standards, for profitability methods that most
seasoned practitioners in most industries would consider to be reliable and would generally endorse.
Profitability methods with less general applicability, e.g., the revenue requirement technique used by
electrical utilities or the benefit-cost ratio used in the public sector, are not included in this RP.
Background
Profitability methods are critical tools for assessing asset performance and making effective investment
decisions. These processes are central to portfolio and program management in that selecting the right
capital or maintenance projects can be as important to enterprise success as effectively executing any
particular project.
CONDUCTING TECHNICAL AND ECONOMIC EVALUATIONS: AS APPLIED

FOR THE PROCESS AND UTILITY INDUSTRIES RP 16R-90
(Rev. April 1991)
TCM Framework:
3.2: Asset Planning 3.3: Investment Decision Making
COST ESTIMATE CLASSIFICATION SYSTEM RP 17R-97
(Rev. November 29, 2011)

TCM Framework:
COST ESTIMATE CLASSIFICATION SYSTEM: AS APPLIED IN

ENGINEERING, PROCUREMENT, AND CONSTRUCTION FOR THE PROCESS
INDUSTRIES RP 18R-97
TCM Framework:
The Cost Estimate Classification System provides guidelines for applying the general principles of
estimate classification to asset project cost estimates. Asset project cost estimates typically involve
estimates for capital investment, and exclude operating and life-cycle evaluations. The Cost Estimate
Classification System maps the phases and stages of asset cost estimating together with a generic
maturity and quality matrix that can be applied across a wide variety of industries.
17R-97 provides a generic methodology for the classification of project cost estimates in any industry,
while 18R-97 provides extensions and additional detail for applying the principles of estimate
classification specifically to project estimates for engineering, procurement, and construction (EPC) work
for the process industries.
An intent of the guidelines is to improve communication among all of the stakeholders involved with
preparing, evaluating, and using project cost estimates.
ESTIMATE PREPARATION COSTS: AS APPLIED FOR THE PROCESS

(Rev. June 19, 1998)

TCM Framework:
This recommended practice presents benchmark information on the costs to prepare cost estimates (for
engineering, procurement, and construction) in the process industries. It includes qualitative and
quantitative lessons that cost engineers and estimators can use to benchmark their cost estimating
experiences against. The data on preparation costs was used to develop a parametric cost model that
can be used to estimate the cost of preparing estimates. The effort or cost to prepare a cost estimate is a
secondary characteristic of a cost estimate classification. This Recommended Practice supports AACE
Internationals Recommended Practice 18R-97 Cost Estimate Classification System - as Applied in
Engineering, Procurement, and Construction for the Process Industries.
PROJECT CODE OF ACCOUNTS RP 20R-98
(Rev. January 27, 2003)

TCM Framework:
7.1: Project Scope and Execution Strategy Development 7.2: Schedule
Planning and Development 7.3: Cost Estimating and Budgeting
This guideline establishes the basic principles of codes of accounts (COA) for projects in any industry. It
examines key characteristics including usage, content, structure and format and describes benefits of
establishing standard COAs. Topics such as activity-based costing and work breakdown structures as
they relate to COAs are addressed. The issues of properly defining a WBS and how it should be
structured are outside the scope of this guideline. COAs are applicable to all phases of the asset life
cycle, however, this guideline specifically addresses the project execution phases of asset design
development through to start of normal operation.
A project code of accounts is a coded index of project cost, resource and activity categories. A complete
COA includes definitions of the content of each account code and is methodically structured to facilitate
finding, sorting, compiling, summarizing, defining and otherwise managing information the code is linked
to. The information is used to support total cost management practices such as cost estimating, cost
accounting, cost reporting, cost control, planning and scheduling. Other names used for COAs are coding
matrices, coding structures, charge accounts, asset or material classification accounts, value categories,
cost elements, work breakdown structures, resource breakdown structures and activity breakdown
structures.
PROJECT CODE OF ACCOUNTS: AS APPLIED IN ENGINEERING,

PROCUREMENT, AND CONSTRUCTION FOR THE PROCESS INDUSTRIES
RP 21R-98

TCM Framework:
7.1: Project Scope and Execution Strategy Development 7.2: Schedule
Planning and Development 7.3: Cost Estimating and Budgeting
This guideline is an industry-specific addendum to AACE International's generic guideline for project code
of accounts (Recommended Practice No. 20R-98). This document describes recommended practices for
codes of accounts (COA) as applied to engineering, procurement, and construction (EPC) projects in the
process industries. "Process industries" are those with facilities whose main function is to perform a
process. This includes chemical, petrochemical, hydrocarbon, pulp and paper, pharmaceutical, power
generation, thermal, metallurgical, assembly, fabrication, and other processing. The primary characteristic
of these industries, as it relates to codes of accounts, is that process or manufacturing equipment is the
core or primary physical component of the facility. Equipment differentiates these projects from
commercial construction and infrastructure where the core component is a structure, from software
development projects where the core component is programming code, and so on.
COAs are applicable to all phases of the asset life cycle, but this guideline specifically addresses the EPC
for creation, modification, or termination of a process facility. This guideline does not apply to code of
accounts to support ongoing operations of process facilities. Properly defining a work breakdown
structure (WBS), and other project structures, and deciding how they should be structured are outside the
scope of this document.
A project code of accounts is a coded index of project cost, resource, and activity categories. A complete
COA includes definitions of the content of each account code and is methodically structured to facilitate
finding, sorting, compiling, summarizing, defining and otherwise managing the project information that is
linked to the code. The information is used to support total cost management practices such as cost
estimating, cost reporting, cost accounting, planning, and scheduling. Refer to 20R-98 for a more
complete description of the principles of COAs.
DIRECT LABOR PRODUCTIVITY MEASUREMENT: AS APPLIED IN

CONSTRUCTION AND MAJOR MAINTENANCE PROJECTS RP 22R-01
(Rev. April 26, 2004)

TCM Framework:
9.2: Progress and Performance Measurement
This recommended practice of AACE International describes a direct method to measure, monitor and
optimize construction and maintenance project labor productivity. The method described is statistical
sampling of the work process, or: work sampling. The work process is made up of steps and activities that
take input resources, add value, and produce the completed project. Understanding the capability of the
process, or 'management system,' to produce efficiently is important for project planning and control.
Sampling is a cost-effective way to provide information about the performance of the work process, i.e.,
about 'how' the work is done, and how to do it better. Work sampling complements conventional project
management methodology, which typically tracks 'what' work is done.
Sampling provides project managers, supervisors, and the workforce with objective feedback re: the
efficiency of the work process (not of individual workers, which is part of the foreman's job): and the ability
to respond quickly to adjust. In addition, it provides a measure of management's ability to effectively plan,
coordinate, and control project execution. Analysis of the sampling data allows for prompt removal or
reduction of roadblocks, optimizing the construction work process through redesign and innovation.
Streamlining the work process ensures that performing productive work is made more convenient for the
workforce, ensuring that, at all times, crafts and technicians have all the necessary tools, materials, parts,
supplies, information, supervisory support and personal needs readily available. Work sampling, properly
applied, recognizes that productivity results from an optimal work process, i.e., from 'managing smarter,'
not from people working harder.
Construction labor productivity is a measure of work process efficiency. It can be defined as the ratio of
the value labor produces to the value invested in labor. Productivity increases as needed labor resources
are minimized and wasted efforts eliminated from the work process. This definition and the practice
covered here treats productivity as a direct, absolute measure to be optimized.
IDENTIFICATION OF ACTIVITIES RP 23R-02
(Rev. May 3, 2007)

TCM Framework:
This recommended practice is for use by the project team members involved in the schedule planning
process for any project type and in any industry. Many individuals contribute in the identification of
activities, and having an experienced planner coordinate the process improves final quality and adds
value to the planning process.
As a recommended practice of AACE International, identification of activities in schedule planning and
development provides guidelines for the conversion of scope definition to specific activities and tasks
required to complete a program or project. Identification of activities is a key planning step that takes
place early in the schedule planning and development process which also includes estimating durations,
determining and defining resources, and identifying external project constraints.
The scope definition of a program or project is generally described in various planning and technical
documents, databases, or other deliverables. To begin the planning process, information in the scope
documents must first be translated into manageable activities. For example, the scope may include the
installation of a length of pipeline. Installing that pipeline may require designing, procuring, cutting,
welding, erecting, and inspection activities. This process of expanding the high level scope or functional
definition into the detailed work required for completion is the practice of "identification of activities".
DEVELOPING ACTIVITY LOGIC RP 24R-03
(Rev. March 26, 2004)

TCM Framework:
7.2 Schedule Planning and Development
As a recommended practice of AACE International, development of activity logic (also called network
logic) in planning and scheduling provides guidelines for the sequencing of activities in a logical way
generally before duration estimating can be performed. Logic is generally determined before durations
are considered. Logic development methods include precedence diagramming, or arrow diagramming
methods. Logic is the set of activities and dependency relationships between them. Logic dictates the
planned sequencing of activities. A network diagram is often used to illustrate the logic.
Planning and scheduling are not the same. Planning is determining how the work will be done, while
scheduling is the analysis and calculation of start and finish dates.
Logic enables the combination of activities to be arranged in one of the aforementioned formats so that a
completion date can be established. Logic also enables backward passes to arrive at optimal overall
schedule duration.
This recommended practice is for use by project team members involved in planning process, a
continuation of activity identification process (reference TCM Framework section 8.2). As in identification
of activities, many individuals contribute to the development of activity logic. Having an experienced
planner coordinate the process improves final quality, and adds value to the planning process.
ESTIMATING LOST LABOR PRODUCTIVITY IN CONSTRUCTION CLAIMS

RP 25R-03
(Rev. April 13, 2004)

TCM Framework:
6.4 Forensic Performance Assessment
This Recommended Practice focuses on identification of various methods for estimating lost labor
productivity in construction claims. Often the claim is the result of one or more change order requests that
cannot be fully resolved to capture their full and final effect on the entire project cost and schedule.
Specifically, this Recommended Practice examines the issue in terms of claims for cost recovery of lost
productivity. Therefore, the purpose of the Recommended Practice is to
Identify Lost Productivity Estimating Methodologies: That is, survey as many of the various
methodologies employed in litigation throughout North America as can be identified;
Rank Order the Methodologies: That is, based on reliability, professional acceptance, case law
and construction claims literature, rank the identified methodologies from most to least reliable
with respect to documenting estimating damages in claim situations. While it may not be
possible to state with certainty which methods are absolutely most or least reliable, it can be
stated that under certain sets of circumstances some methods are generally considered more
reliable than others. (CAUTION: This Recommended Practice was prepared on the basis of the
author's understanding of Canadian and U.S. case law. It is recommended that anyone
preparing a lost productivity claim seek appropriate legal advice on the methodology to be used.
This is especially true if the claim is being pursued under national law other than Canada or the
United States.)
Define and Discuss Each Methodology: That is, discuss the method and how it is employed.
Also, when possible, discuss the strong and weak points of each method;
Identify Selected Studies Applicable to Each Methodology: Herein, identify as many studies and
professional or technical papers as possible which will help the practitioner in learning more
about and/or employing a particular method.
It needs to be noted that this Recommended Practice does not define in detail how one should properly
perform the various analytical methods identified herein. The Recommended Practice gives a brief
description of each method only in an effort to help claimants properly identify the method. That is,
different claimants may have differing nomenclature for the same methodology. In this case, the brief
description of each method is intended to help overcome this situation.
SCHEDULE CLASSIFICATION SYSTEM RP 27R-03

TCM Framework:
7.2 Schedule Planning and Development
This recommended practice (RP) is intended to serve as a guideline, not a standard. As a recommended
practice of AACE International, the intent of the guideline is to improve the understanding and the
communication among stakeholders involved with preparing, evaluating, and using project schedules.
Various enterprises often misinterpret the quality and value of the information available to prepare
schedules and the various methods employed during the scheduling process. It is understood that each
enterprise may have its own project scheduling processes and terminology, and may classify schedules
in their own particular ways. This guideline provides a generic and generally acceptable classification
system that can be used as a basis of comparison. If an enterprise or organization has not formally
documented its own schedule classification system, then this RP guideline can be used to provide an
acceptable basis.
This recommended practice introduces a schedule classification system, which provides the guidelines
for applying the general principles of schedule classification to project schedules. A schedule
classification system maps the phases and stages of scheduling with a generic maturity and quality
matrix that can be applied across a wide variety of industries. It is intended to be applied to any schedule
in any industry, and across all stakeholders including government and academia.
A separate recommended practice provides a guideline for describing the specific use of schedule levels
to project schedules. Schedule levels provide the details necessary to recognize the characteristics of
each of the schedule levels for the purposes of communicating, executing (controlling and monitoring)
and reporting the specific details of the project. Schedule levels consider reporting requirements for each
of the stakeholders and the appropriate amount of information necessary for effective communication and
decisions.
This recommended practice has been developed such that it:
Provides common understanding of the concepts involved with classifying project schedules
regardless of the type of enterprise or industry
Fully defines and correlates the major characteristics used in classifying schedules so that
enterprises may determine how their practices compare to these guidelines
Uses degree of project definition as the primary characteristic to categorize schedule classes
Reflects generally accepted practices in the cost engineering profession
This classification guideline is intended to help those involved with project schedules to avoid
misinterpretation of the various classes of schedules and to avoid their misapplication and
misrepresentation. Improving communications about schedule classifications reduces business costs and
project cycle times by avoiding inappropriate business and financial decisions, actions, delays, or
disputes caused by misunderstandings of schedules and what they are expected to represent.
DEVELOPING LOCATION FACTORS BY FACTORING: AS APPLIED IN

ARCHITECTURE, ENGINEERING, PROCUREMENT AND CONSTRUCTION
RP 28R-03
(Rev. October 19, 2006)

TCM Framework:
7.3: Cost Estimating and Budgeting 10.4: Project Historical Database
Management
This recommended practice provides a generic method of developing location factors in support of the
Total Cost Management (TCM) cost estimating and budgeting and database management processes for
construction related projects. The method applies to construction projects of all types including buildings,
infrastructure, utilities, process plants, and so on. This generic method provides a basis for users to tailor
their own detailed process around their own needs and computing capabilities. Location factors are used
during preliminary project evaluations (i.e., Class 5 or 4 estimates). They are not intended to be used
when preparing appropriation-quality estimates (i.e., Class 3 or better estimates).
FORENSIC SCHEDULE ANALYSIS RP 29R-03
(Rev. April 25, 2011)

TCM Framework:
6.4: Forensic Performance Assessment
The purpose of the AACE International Recommended Practice 29R-03 Forensic Schedule Analysis is
to provide a unifying reference of basic technical principles and guidelines for the application of critical
path method (CPM) scheduling in forensic schedule analysis. In providing this reference, the RP will
foster competent schedule analysis and furnish the industry as whole with the necessary technical
information to categorize and evaluate the varying forensic schedule analysis methods. The RP
discusses certain methods of schedule delay analysis, irrespective of whether these methods have been
deemed acceptable or unacceptable by courts or government boards in various countries around the
globe.
This RP is not intended to establish a standard of practice, nor is it intended to be a prescriptive
document applied without exception. Therefore, a departure from the recommended protocols should not
be automatically treated as an error or a deficiency as long as such departure is based on a conscious
and sound application of schedule analysis principles. As with any other recommended practice, the RP
should be used in conjunction with professional judgment and knowledge of the subject matter. While the
recommended protocols contained herein are intended to aid the practitioner in creating a competent
work product it may, in some cases, require additional or fewer steps.
IMPLEMENTING PROJECT CONSTRUCTABILITY RP 30R-03
(Rev. May 20, 2009)

TCM Framework:
11.5: Value Management and Value Improving Practices (VIPs)
Constructability is the integration of construction expertise into all phases of the project to benefit cost,
schedule, quality, and overall project objectives. The successful use of construction knowledge and
expertise improves for and probability of project success. Constructability reviews (CRs) should be
conducted at key points in the project life cycle: in the planning phase, early in the design phase, prior to
the procurement phase and again prior to the mobilization phase for construction. CRs should hold true to
the designer's intent, and the design concept is easiest molded to good constructability early in the design
phase.
Constructability, as addressed in this RP, is applicable to projects in any industry in any location (e.g.,
architectural, process plant, transportation, utilities, offshore, etc.) that include construction work of any
scope. In total cost management (TCM), constructability is one of many value improving practices (VIPs)
such as manufacturability analysis; reliability, availability and maintainability (RAM) analysis; and so on.[9]
Constructability is also useful as a risk management practice that supports risk mitigation. However, these
other VIPs and risk management practices are not directly included in this RP.
AACE is not the sole or even primary steward of recommended constructability practice; there are several
leading organizations included in the reference section. However, constructability is a skill and knowledge
area of cost engineering because, as a VIP, constructability practices require the assessment of cost,
schedule, risks and other project attributes for which AACE is the leading organization. This RP highlights
the role of cost engineering in the practice.
This RP will discuss how to implement a constructability program in order to maximize the positive impact
on the project. It also provides project examples illustrating the success of those properly implemented
efforts. Integrating constructability into project plans can result in better safety, lower costs, better
productivity, earlier completion and start-ups for ultimately better projects.
REVIEWING, VALIDATING, AND DOCUMENTING THE ESTIMATE RP 31R-03
(Rev. May 12, 2009)

TCM Framework:
Scope
This Recommended Practice (RP) of AACE International defines the basic elements of and provides
broad guidelines for the cost estimate review, validation and documentation process. Estimate review and
documentation is a step in the cost estimating and budgeting process of the Total Cost Management
(TCM) Framework. This RP is applicable to all estimate types for any industry and is intended for those
responsible for and/or participating in an estimate review. Expert knowledge is not required to understand
or use this RP.
Purpose
This RP is intended to provide guidelines (i.e., not a standard) for reviewing, validating and documenting
estimates. Most practitioners would consider these guidelines as good and reliable practices. It is
recommended to consider using these guidelines where applicable.
Background
Cost estimates typically represent a complex compilation and analysis of input from many project
stakeholders. To ensure the quality of an estimate, budget or bid, a review process is required to ensure
that the estimate meets project and organization requirements. The project plan typically requires that the
cost estimate:
Reflect the project strategy, objectives, scope and risks
Be suitable for a given purpose (e.g., cost analysis, decision making, control, bidding, etc.)
Address the stakeholders financial and performance requirements
Ensure that all parties agree on and understand the estimates basis, content and outcome,
including the estimates probabilistic characteristics (e.g., range, cost distribution, etc.).
DETERMINING ACTIVITY DURATIONS RP 32R-04

TCM Framework:
This recommended practice (RP) for Determining Activity Durations is intended to provide a guideline and
a resource, not to establish a standard. As a recommended practice of AACE International, it provides

guidelines for the project scheduler to determine schedule activity durations and understand the
limitations and assumptions involved in such determination as part of the total cost management (TCM)
project planning, scheduling forecasting, and change management processes (7.2).
This recommended practice provides information about determining the original durations for activities for
developing the project schedule and general considerations related to the establishment of remaining
durations while updating the project schedule. Specific considerations regarding the topic of establishing
the activities remaining durations for schedule performance assessment are not within the scope of this
RP. Therefore the information presented here generally applies to determining original activity durations;
and general considerations for the establishment of remaining durations be provided only as appropriate.
This recommended practice offers methods for determining original activity durations through the analysis
of past project data with anticipated future performance data. It also incorporates an iterative effectanalysis of constraints on activity duration.
BASIS OF ESTIMATE RP 34R-05
(Rev. May 2, 2014)

TCM Framework:
AACE Internationals Total Cost Management (TCM) Framework identifies a basis of estimate (BOE)
document as a required component of a cost estimate. As a recommended practice (RP) of AACE
International, the template outlined in the following sections provides guidelines for the structure and
content of a cost basis of estimate.
In the TCM Framework, the BOE is characterized as the one deliverable that defines the scope of the
project, and ultimately becomes the basis for change management. When prepared correctly, any person
with capital project experience can use the BOE to understand and assess the estimate, independent of
any other supporting documentation. A well-written BOE achieves those goals by clearly and concisely
stating the purpose of the estimate being prepared (i.e. cost study, project options, funding, etc.), the
project scope, pricing basis, allowances, assumptions, exclusions, cost risks and opportunities, and any
deviations from standard practices. In addition the BOE is a documented record of pertinent
communications that have occurred and agreements that have been made between the estimator and
other project stakeholders.
A well prepared basis of estimate will:
Document the overall project scope.
Communicate the estimators knowledge of the project by demonstrating an understanding of scope and
schedule as it relates to cost.
Alert the project team to potential cost risks and opportunities.
Provide a record of key communications made during estimate preparation.
Provide a record of all documents used to prepare the estimate.
Act as a source of support during dispute resolutions.
Establish the initial baseline for scope, quantities and cost for use in cost trending throughout the
project.
Provide the historical relationships between estimates throughout the project lifecycle.
Facilitate the review and validation of the cost estimate.
This RP is intended to be a guideline, not a standard. It is understood that not all organizations that
prepare estimates employ the same processes and practices, and therefore, may opt to use this
information either in part or in its entirety.
DEVELOPMENT OF COST ESTIMATE PLANS AS APPLIED FOR THE

BUILDING AND GENERAL CONSTRUCTION INDUSTRIES RP 35R-09
(Rev. Oct 23, 2013)

TCM Framework
This recommended practice (RP) is a guideline for the development of cost estimate plans for the building
and general construction industry. With reference to the Total Cost Management (TCM) Framework, this
document addresses the need to develop effective estimate plans.
This RP is intended to provide a guideline (i.e., not a standard) for establishing and communicating how
to prepare, review and approve an estimate plan.
The basic principles of cost estimate plans can be applied to various contracting strategies, project
execution approaches and asset owner configurations in the building and general construction industries.
Some key principles are:
Preparation of an estimate plan helps to ensure successful estimate completion in an effective and
timely manner.
Engaging key stakeholders in estimate planning prior to starting the estimate improves the likelihood of
meeting estimate objectives.
The estimate plan defines what information is required from who and when.
An approved estimate plan provides a duly
DEVELOPMENT OF COST ESTIMATE PLANS AS APPLIED IN

(Rev. June 12, 2009)

TCM Framework:
Purpose
This recommended practice (RP) of AACE International (AACE) is a guideline for development of cost
estimate preparation plans for engineering, procurement and construction (EPC) projects in the process
industries. The purpose of a cost estimate preparation plan (herein referred to as estimate plan) is to
establish and communicate how the preparation, development, review and approval of the estimate will
be completed.
Background
AACE Internationals Total Cost Management (TCM) Framework section 7.3.2.1 Plan for Cost Estimating
and Budgeting highlights the need to develop estimate plans. This RP delineates industry specific
practices for development of an estimate plan as they are applied to EPC projects in the process
industries. (A future AACE International RP will provide a guideline for development of a generic cost
estimate plan.) Cost estimating in the hydrocarbon processing industries (e.g.; chemical, refining,
petroleum production facilities, etc.) has evolved to a relatively advanced state over more than four
decades of application. These industries have developed many common practices and identified industryspecific best practices through benchmarking and knowledge-sharing. The practices reflected in this
document are a result of compiling notes made by industry practitioners, lessons learned and publicly
available documents.
Scope
With reference to the TCM Framework, this document addresses the steps before and after the Plan for
Estimating and Budgeting step to the extent necessary for an effective estimate plan. This document is
primarily focused on estimates prepared for project sanction purposes of land-based facilities. Typically,
project sanction is based on a Class 3 estimate. Estimate plans for other classes of estimates may be
adapted from this document. The basic principles are applicable to all contracting strategies and asset
owner (herein referred to as owner) configurations. For example, contracting strategies may be in the
form of reimbursable engineering with fixed price procurement and construction and/or EPC alliances,
etc. Owner configurations may include self-perform, partnerships with a named operating company or
consortiums responsible for managing the project/program and so on. Some key principles are:
Preparation of an estimate plan helps to ensure successful estimate completion in an effective
and timely manner.
Engaging key stakeholders in the estimate planning process prior to the start of the estimate
development process, improves the likelihood of meeting estimate objectives.
The estimate plan defines what information is required from who and when.
An approved estimate plan provides a duly authorized basis to proceed with the estimating
effort, clarifies requirements and responsibilities.
SCHEDULE LEVELS OF DETAIL -- AS APPLIED IN ENGINEERING,

PROCUREMENT AND CONSTRUCTION RP 37R-06
(Rev. March 20, 2010)
TCM Framework:
Purpose
This recommended practice (RP) is intended to serve as a guideline, not a standard for owners and
contractors to establish a common frame of reference and understanding when describing the level of
detail for any construction project schedule. This RP identifies four schedule formats based on level of
detail, and provides descriptions of schedule levels and the intended use of these schedules by project
participants.
Background
This recommended practice provides descriptions of the schedule levels methods with the intent to
improve the understanding and communication among project participants and stakeholders involved with
preparing and using project schedules. This recommended practice (RP) describes the schedule level
methods that are prevalent in the construction industry today for reporting and communicating project
schedule plans, results and forecast or "to-go" data to respective stakeholders. This RP excludes "turnaround projects", and does not necessarily apply to line of balance or linear scheduling applications.
DOCUMENTING THE SCHEDULE BASIS RP 38R-06
(Rev. June 18, 2009)

TCM Framework:
Scope
This recommended practice (RP) provides an outline and describes a format for the various elements of
information that may be included in the schedule basis document. This RP describes the important
elements of schedule information that may be included to document the basis and assumptions of this
project management tool. This recommended practice includes a checklist in the appendix that can be
used to confirm that all elements of the basis document have been considered. The schedule basis is a
document that defines the basis for the development of the project schedule and assists the project team
and stakeholders in identifying any key elements, issues and special considerations (assumptions,
exclusions, risks/ opportunities, etc.). The project schedule represents the complete logical time-phased
representation of the project plan. The schedule basis document may accompany the submittal of the
project baseline schedule. The schedule basis further substantiates the confidence and degree of
completeness of the project schedule in order to support change management, reconciliation, and
analysis. This document also doubles as a tool for assisting any personnel who are transitioning into the
project and may be used in claims situations to illustrate a change of scope.
Purpose
This AACE International recommended practice is intended to provide a guideline, not to establish a
standard for documenting the schedule basis for the planning of projects. This recommended practice is
written and intended primarily for use on construction projects by the project team members and
stakeholders involved in the planning and scheduling of the project work activities. These RP guidelines
may be applicable to many other types of projects. The focus of this recommended practice is on
documenting the necessary elements of the schedule basis. Many project individuals and groups
contribute to the planning and development of the project schedule. By documenting the schedule basis,
the project team captures the coordinated project schedule development process, which is by nature
unique for most construction projects. This improves the final quality and adds value to the project
baseline schedule, which serves as the time management navigation tool to guide the project team
toward successful project completion. The schedule basis also is an important document used to identify
changes during the schedule change management process.
Background
The requirement to document the basis of the schedule has been an established procedure for several
years with many large corporations, and some federal agencies. This recommended practice describes
the important elements of schedule information that may be included to document the basis and
assumptions of this project management tool.
PROJECT PLANNING - AS APPLIED IN ENGINEERING AND CONSTRUCTION

FOR CAPITAL PROJECTS RP 39R-06
(Rev. December 8, 2011)
TCM Framework:
3.1 Requirements Elicitation and Analysis 3.2 Asset Planning 4.1 Project
Implementation 7.1 Project Scope and Execution Strategy Development 7.2
Schedule Planning and Development 7.3 Cost Estimating and Budgeting 7.4
Resource Planning 7.5 Value Analysis and Engineering 7.6 Risk Management
7.7 Procurement Planning 8.1 Project Control Plan Implementation
Purpose
This recommended practice (RP) to project planning provides guidelines developed primarily for
engineering and capital construction projects.
AACE International Recommended Practices are intended to provide guidelines, not to establish
standards. This recommended practice is intended to be a guide for the many project team members
involved in the planning and scheduling of their work process and can be adapted for any type of project
or program where planning is required.
This recommended practice is intended to focus on the elements of project planning: who, what, where,
when, and how. It also focuses on the actions required by members of the project team in order to
translate that planning effort into a useful project plan that will serve as a management navigation tool to
guide the project team to successful project completion. This RP will focus on the actions required by the
engineering and construction project team AFTER the development of the clients business requirements,
business case, alternatives and assumptions.
CONTINGENCY ESTIMATING: GENERAL PRINCIPLES RP 40R-08
(Rev. June 25, 2008)

TCM Framework:
7.6: Risk Management
Scope
This Recommended Practice (RP) of AACE International defines the expectations, requirements, and
general principles of practice for estimating contingency, reserves and similar risk funds (as defined in RP
10S-90) and time allowances for project cost and schedule as part of the overall risk management
process (as defined in TCM Framework Section 7.6). The RP provides a categorization framework and
provides a foundation for, but does not define specific contingency estimating methods that will be
covered by other RPs.
This RP does not address the general risk management "quantification" steps as might be used for
screening or ranking risks in terms of their probability or impact. While the quantification methods of
contingency estimating may be similar to those used for screening, the application often differs.
Purpose
This RP is intended to provide guidelines (i.e., not a standard) for contingency estimating that most
practitioners would consider to be good practices that can be relied on and that they would recommend
be considered for use where applicable. There is a broad range of contingency estimating methodologies;
this RP will help guide practitioners in developing or selecting appropriate methods for their situation.
Background
This RP is new. It is based on discussions of the AACE Decision and Risk Management committee.
There is no one best way to quantify risks or to estimate contingency; each method has its advocates.
However, there is general agreement that any recommended practice should be in accordance with first
principles of decision and risk management as described here.
RISK ANALYSIS AND CONTINGENCY DETERMINATION USING RANGE

ESTIMATING RP 41R-08

TCM Framework:
7.6: Risk Management
Scope
This Recommended Practice (RP) of AACE International describes the process known as range
estimating, a methodology to determine the probability of a cost overrun (or profit underrun) for any level
of estimate and determine the required contingency needed in the estimate to achieve any desired level
of confidence. The process uses range estimating and Monte Carlo analysis techniques (as defined in RP
10S-90). The RP provides the necessary guidelines for properly applying range estimating and Monte
Carlo analysis to determine probabilities and contingency in a reliable manner using any of a number of
commercially available risk analysis software packages.

The RP does not recommend any particular software. Rather it describes the factors that the analyst must
consider when using risk analysis software for probability and contingency determination.
Purpose
This RP is intended to provide guidelines (i.e., not a standard) for risk analysis using range estimating
that most practitioners would consider to be a good practice that can be relied on and that they would
recommend be considered for use where applicable.
This RP is also intended to improve communication as to what the practice called "range estimating" is.
Many of the methods found in industry that are being called this are not in accordance with this RP.
Practitioners should always make sure that when someone uses the term "range estimating", that they
are talking about the same practice recommended here.
Background
This RP is new. It is based upon the successful efforts of many companies to evaluate project risk and
contingency using the range estimating techniques originally developed by Michael W. Curran[1,2,3].
Users should be aware that the principles outlined in this RP must be rigorously followed in order to
achieve the desired results. Failure to follow the RP's recommendations will likely lead to significant
misstatements of risk and opportunities and of the amount of required contingency. In the great majority
of cases, contingency and bottom line uncertainty are understated when the RP's recommendations are
not followed.
It is AACE's recommended practice that whenever the term "risk" is used, that the term's meaning be
clearly defined for the purposes at hand. In range estimating practice as described in this RP, risk means
"an undesirable potential outcome and/or its probability of occurrence", i.e. "downside uncertainty (a.k.a.
threats)." Opportunity, on the other hand is "a desirable potential outcome and/or its probability of
occurrence", i.e, "upside uncertainty." The range estimating process for risk analysis quantifies the impact
of uncertainty, i.e. "risks + opportunities".
RISK ANALYSIS AND CONTINGENCY DETERMINATION USING

PARAMETRIC ESTIMATING RP 42R-08
(May 26, 2011)

TCM Framework:
7.6 Risk Management
This recommended practice (RP) of AACE International (AACE) defines general practices and
considerations for risk analysis and estimating cost contingency using parametric methods. Parametric
methods are commonly associated with estimating cost based on design parameters (e.g., capacity,
weight, etc.); in this case, the method is used to estimate contingency based on risk parameters (e.g.
level of scope definition, process complexity, etc.). This RP includes practices for developing the
parametric methods and models (generally empirically-based). Recommended practice 43R-08 provides
example process industry parametric models (including software) [12]. For scheduling applications, there
is less research and reference material available; therefore schedule duration risk and contingency will be
covered in future revisions of the RP.
RISK ANALYSIS AND CONTINGENCY DETERMINATION USING

PARAMETRIC ESTIMATING EXAMPLE MODELS AS APPLIED FOR THE
PROCESS INDUSTRIES RP 43R-08
TCM Framework:
7.6 Risk Management
Click here for Microsoft Excel Example Models for 43R-08

This recommended practice (RP) is an addendum to the RP 42R-08 titled Risk Analysis and Contingency
Determination Using Parametric Estimating. It provides three working (Microsoft Excel) examples of
established, empirically-based process industry models of the type covered by the base RP; two for cost
and one for construction schedule. The example models are intended as educational and developmental
resources; prior to their use for actual risk analysis and contingency estimating, users must study the
reference source documentation and calibrate and validate the models against their own experience.
This RP summarizes three landmark empirically-based models; the Hackney model, first presented in
John Hackneys 1965 text Control and Management of Capital Projects (later expanded on in 1992, and
now an AACE publication-reprinted 2002), and the later two RAND models. The RAND cost model is
from 1981 research by Edward Merrow et al. for which Mr. Hackney was a consultant. The RAND
construction schedule model is from 1986 research by Christopher Myers et al. building on the 1981 cost
research. These models posit plausible causal relationships between cost growth (i.e., contingency
usage) and schedule slip and various risk systemic drivers such as the levels of development of process
and project scope information and the level of process technology. They present similar empirical and
quantitative analysis of the reasons for inaccurate estimates of capital costs and schedule duration and
provide tools to improve assessment of the commercial prospects of projects at early stages of scope
development and/or using advancing technologies. Prior to these models, the literature on the causes of
cost and schedule growth for process plants provided little consensus about the relative contribution of
various risk factors. Therefore, the authors of the source documents measured the factors and statistically
assessed their relative influence on cost and schedule growth for process plant projects undertaken in
North America. The results of their work had a significant impact on the practice of cost engineering and
the evolution of project management phase-gate scope development systems (i.e., these studies are a
basis of AACEs RP on classification of cost estimates; RP 18R-98).
While this document attempts to summarize the basis of the models, it is highly recommended that users
review the source documents before using the tools as a basis for their own study or development.
Instructions for using the tools themselves are included in worksheets.
RISK ANALYSIS AND CONTINGENCY DETERMINATION USING EXPECTED

VALUE RP 44R-08

TCM Framework:
7.6 Risk Management
considerations for risk analysis and estimating cost contingency using expected value methods. This RP
applies specifically to using the expected value method for contingency estimating in the risk
management "control" step (i.e., after the risk mitigation step), not in the earlier risk assessment step
where it is used in a somewhat different manner for risk screening.
SCHEDULING CLAIMS PROTECTION METHODS RP 45R-08
(Rev. June 1, 2009)

TCM Framework:
6.4: Forensic Performance Assessment 7.2: Schedule Planning and
Development
8.1: Project Control Plan Implementation
Purpose
This recommended practice (RP) is intended to serve as a guideline, not establish a standard for
schedule claims protection. The RP is intended to provide the scheduling practitioner with an overview of
topics related to schedule delays as well as the various schedule practices and procedures that should be
considered when developing and managing the project schedule. This RP will explain items to consider
when creating and maintaining a critical path method (CPM) schedule in order to be prepared for
potential delay claims. This RP begins by describing schedule delay terminology and outlining potential
causes and required actions related to schedule delays. The sections following are related to some of the
planning considerations recommended when developing a project schedule, plus good practices related
to the management and control of the schedule throughout the project.
REQUIRED SKILLS AND KNOWLEDGE OF PROJECT COST ESTIMATING

RP 46R-11

TCM Framework:
General Reference
Purpose
practice of AACE International, the intent of the guideline is to define the required skills and knowledge to
perform project cost estimating. It serves as the foundation of the skills and knowledge of an AACE
Certified Estimating Professional (CEP).
Project cost estimating requires knowledge of all elements of cost from project conception to completion.
This includes: direct material and labor costs, indirect costs, general administration costs, profit, finance
cost, owners costs and startup costs. This may also include operations and maintenance costs for
selection of project alternatives.
COST ESTIMATE CLASSIFICATION SYSTEM AS APPLIED IN THE MINING

AND MINERAL PROCESSING INDUSTRIES RP 47R-11
(Rev. July 6, 2012)

TCM Framework:
Purpose
As a recommended practice (RP) of AACE International, the Cost Estimate Classification System
provides guidelines for applying the general principles of estimate classification to project cost estimates
(i.e., cost estimates that are used to evaluate, approve, and/or fund projects). The Cost Estimate
Classification System maps the phases and stages of project cost estimating together with a generic
project scope definition maturity and quality matrix, which can be applied across a wide variety of process
industries.
This addendum to the generic recommended practice provides guidelines for applying the principles of
estimate classification specifically to project estimates in the mining and mineral processing industries,
excluding upstream oil and gas projects. This addendum supplements the generic recommended practice
(17R-97) by providing:
a section that further defines classification concepts as they apply to the mining industries
a section on the geopolitical nature and investment regulation of mining projects that impact on
the estimating process and its basis definition deliverables
a chart that maps the extent and maturity of estimate input information (project definition
deliverables) against the class of estimate.
As with the generic RP, the intent of this addendum is to improve communications among all of the
stakeholders involved with preparing, evaluating, and using project cost estimates, specifically for the
mining and mineral processing industries.
The overall purpose of this recommended practice is to provide the mining and mineral processing
industry definition deliverable maturity matrix which is not provided in 17R-97. It also provides an
approximate representation of the relationship of specific design input data and design deliverable
maturity to the estimate accuracy and methodology used to produce the cost estimate. The estimate
accuracy range is driven by many other variables and risks, so the maturity and quality of the scope
definition available at the time of the estimate is not the sole determinate of accuracy; risk analysis is
required for that purpose.
It is understood that each enterprise may have its own project and estimating processes and terminology,
and may classify estimates in particular ways. This guideline provides a generic and generally acceptable
classification system for the mining industries that can be used as a basis to compare against. This
addendum should allow each user to better assess, define, and communicate their own processes and
standards in the light of generally-accepted cost engineering practice.
As a final note regarding purpose, users must be aware of the industrys well documented history of
challenges with overruns of feasibility estimates [6 to 9]. An intent of this RP is to help improve upon this
past performance.
SCHEDULE CONSTRUCTABILITY REVIEW RP 48R-06
(Rev. August 28, 2009)

TCM Framework:
7.2: Schedule Planning and Development 11.5: Value Management and Value
Improving Practices (VIPs)
Purpose
This recommended practice (RP) is intended to serve as a guideline, not establish a standard for
schedule constructability reviews. This recommended practice describes the schedule constructability
review (SCR) process and some of the recommended planning that should be considered when
developing a construction project execution-phase schedule. This recommended practice includes a
suggested review process for the construction project schedule. This RP was written as a stand alone
document however it can be used as a companion guideline with the AACE Recommended Practice 30R03 Implementing Project Constructability.
IDENTIFYING THE CRITICAL PATH RP 49R-06
(Rev. March 5, 2010)

TCM Framework:
7.2: Schedule Planning and Development 9.2: Progress and Performance
Measurement 10.1: Project Performance Assessment 10.2: Forecasting
Purpose
This recommended practice (RP) for Identifying the Critical Path is intended to serve as a guideline and a
resource, not to establish a standard. As a recommended practice of AACE International it provides
guidelines for the project scheduler when reviewing a network schedule to be able to determine the
critical path and to understand the limitations and assumptions involved in a critical path assessment.
Such a determination is a part of the total cost management (TCM) project planning, scheduling
forecasting, and change management processes.
TIME IMPACT ANALYSIS: AS APPLIED IN CONSTRUCTION RP 52R-06

TCM Framework:
6.4: Forensic Performance Assessment 7.2: Schedule Planning and Development
10.2: Forecasting 10.3: Change Management
This Recommended Practice for Time Impact Analysis (TIA) is intended to provide a guideline, not to
establish a standard. This recommended practice of AACE International on TIA provides guidelines for
the project scheduler to assess and quantify the effects of an unplanned event or events on current
project completion. While TIAs are usually performed by a project scheduler and can be applied on a
variety of project types, the practice is generally used as part of the Total Cost Management (TCM)
change management and forecasting processes on construction projects.
SCHEDULE UPDATE REVIEW: AS APPLIED IN ENGINEERING,

PROCUREMENT, AND CONSTRUCTION RP 53R-06
(Rev. August 14, 2008)

TCM Framework:
9.2: Progress and Performance Measurement 10.3: Change Management
This Recommended Practice for Schedule Update Review is intended to provide a guideline, not to
establish a standard. As a recommended practice of AACE International, this document provides
guidelines for the project scheduler to create a professional schedule update or assess the
reasonableness of changes to be made in a schedule due to a change of project status and progress.
This recommended practice is associated with the Total Cost Management (TCM) progress and
performance measurement, and change management processes on construction projects.
RECOVERY SCHEDULING - AS APPLIED IN ENGINEERING,

(Rev. November 19. 2010)

TCM Framework:
10.2: Forecasting 10.3: Change Management
This recommended practice (RP) for recovery scheduling is intended to provide a guideline, not to
establish a standard. As a recommended practice of AACE International, this document provides
guidelines for the project scheduler to create a professional recovery schedule or assess the
reasonableness of a recovery schedule necessary due to a change of project status and progress that
forecasts late completion.
ANALYZING S-CURVES RP 55R-09

TCM Framework:
10.1: Project Performance Assessment
AACE International Recommended Practice No. 55R-09 TCM Framework: 10.1: Project Performance
Assessment This recommended practice (RP) for analyzing S-curves is intended to serve as a guideline,
not to establish a standard. As a recommended practice of AACE International, analyzing S-curves
provides guidelines for stakeholders of a project to evaluate the current status and trends of a project in a
simple graphical format.
S-curves are usually developed by a project scheduler or cost engineer and can be applied on a variety
of project types. The product is generally used as a project management and/or total cost management
(TCM) tool for graphic representation of project performance.
The RP provides descriptions of S-curves with the intent to improve understanding and communication
among project participants and stakeholders when preparing and analyzing graphics based upon project
schedule information. The RP describes different types of S-curves that may be generated from a
schedule provided the proper information is loaded into the schedule and the status of the information is
maintained throughout the duration of the project.
COST ESTIMATE CLASSIFICATION SYSTEM - AS APPLIED FOR THE

BUILDING AND GENERAL CONSTRUCTION INDUSTRIES RP 56R-08

TCM Framework:
7.3 Cost Estimating and Budgeting
As a recommended practice of AACE International, the Cost Estimate Classification System provides
guidelines for applying the general principles of estimate classification to project cost estimates (i.e., cost
estimates that are used to evaluate, approve, and/or fund projects). The Cost Estimate Classification
System maps the phases and stages of project cost estimating together with a generic project scope
definition maturity and quality matrix, which can be applied across a wide variety of construction
industries.
This addendum to the generic recommended practice (17R-97) provides guidelines for applying the
principles of estimate classification specifically to project estimates for the building and general
construction industries. It supplements 17R-97 by providing:
a section that further defines classification concepts as they apply to the building and general
construction industries;
a chart that maps the extent and maturity of estimate input information (project definition
deliverables) against the class of estimate.
As with the generic recommended practice, the intent of this addendum is to improve communications
among all of the stakeholders involved with preparing, evaluating, and using project cost estimates
specifically for the building and general construction industries.
The overall purpose of this recommended practice is to provide the building and general construction
industry definition deliverable maturity matrix which is not provided in 17R-97. It also provides an
approximate representation of the relationship of specific design input data and design deliverable
maturity to the estimate accuracy and methodology used to produce the cost estimate. The estimate
accuracy range is driven by many other variables and risks, so the maturity and quality of the scope
definition available at the time of the estimate is not the sole determinate of accuracy; risk analysis is
required for that purpose.
This document is intended to provide a guideline, not a standard. It is understood that each enterprise
may have its own project and estimating processes and terminology, and may classify estimates in
particular ways. This guideline provides a generic and generally acceptable classification system for the
building and general construction industries that can be used as a basis to compare against. This
addendum should allow each user to better assess, define, and communicate their own processes and
standards in the light of generally-accepted cost engineering practice.
INTEGRATED COST AND SCHEDULE RISK ANALYSIS USING MONTE

CARLO SIMULATION OF A CPM MODEL RP 57R-09
(Rev. June 18, 2011)

TCM Framework:
7.6 Risk Management
This recommended practice (RP) of AACE International defines the integrated analysis of schedule and
cost risk to estimate the appropriate level of cost and schedule contingency reserve on projects. The
main contribution of this RP is to include the impact of schedule risk on cost risk and hence on the need
for cost contingency reserves. Additional benefits include the prioritizing of the risks to cost, some of
which are risks to schedule, so that risk mitigation may be conducted in a cost-effective way, scatter
diagrams of time-cost pairs for developing joint targets of time and cost, and probabilistic cash flow which
shows cash flow at different levels of certainty.
The methods presented in the RP are based on integrating the cost estimate with the project schedule by
resource-loading and costing the schedule's activities. The probability and impact of risks/uncertainties
are specified and the risks/uncertainties are linked to the activities and costs that they affect. Using Monte
Carlo techniques one can simulate both time and cost, permitting the impacts of schedule risk on cost risk
to be calculated.
These methods can be used both by the contractor and the owner. The contractor usually has a more
detailed schedule and understanding of resource allocations used to put the costs into the schedule. The
owner may use a more summary schedule and summary notion of resources, but still is able to put the
costs into the schedule at a summary level. In fact there are many risks to the owner that do not affect the
contractor as risks. Also, the contractor will not know about some of the owner's risk, such as having
insufficient resources. In the case of joint venture owners the JV is often a marriage of convenience of
disparate organizations with risks arising from different goals and methods.
This RP is consistent with the Total Cost Management (TCM) Framework Section 7.6 Risk Management.
In particular, the entry in the TCM Section 7.6.2.2 Identify and Assess Risk Factors, highlights the
fundamental "risk factors (or drivers) are events and conditions that may influence or drive uncertainty
(i.e., either opportunities or threats) in asset or project performance." This RP uses the same approach,
starting with the RP section Simulating Using Risks as Drivers and illustrating the method in the case
study.
ESCALATION ESTIMATING PRINCIPLES AND METHODS USING INDICES

RP 58R-10
(Rev. May 25, 2011)

TCM Framework:
7.3 Cost Estimating and Budgeting 7.6 Risk Management
This recommended practice (RP) of AACE International defines basic principles and methodological
building blocks for estimating escalation costs using forecasted price or cost indices. There is a range of
definitions of escalation and escalation estimating methodologies; this RP will help guide practitioners in
developing or selecting appropriate methods for their definitions and situation. Other RPs are expected to
cover methods that do not involve indices, that cover specific examples of fully elaborated methodologies
for specific project situations, technologies, industries, and probabilistic applications. Also, while the RP
discusses the relationships of escalation estimating to other risk cost accounts (namely contingency and
currency exchange), dealing with those costs is not this RPs focus.
Escalation estimating is an element of both the cost estimating and risk management processes.
Like other risks escalation is amenable to mitigation, control, etc. However, this RP is focused on
quantification, not on escalation treatment (i.e., how it is addressed through contracting, bidding,
schedule acceleration, hedging, etc.) or control. In terms of cost estimating, this RP covers practices
applicable to all classification of estimates. The examples in the RP emphasize capital cost estimating,
but the principles apply equally to operating, maintenance and other cost.
DEVELOPMENT OF FACTORED COST ESTIMATES - AS APPLIED IN

(Rev. June 18, 2011)

TCM Framework:
7.3 Cost Estimating and Budgeting
As identified in the AACE International Recommended Practice No. 18R-97 Cost Estimate Classification
System As Applied in Engineering, Procurement, and Construction for the Process Industries, the
estimating methodology tends to progress from stochastic or factored to deterministic methods with
increase in the level of project definition.
Factored estimating techniques are proven to be reliable methods in the preparation of conceptual
estimates (Class 5 or 4 based on block flow diagrams (BFDs) or process flow diagrams (PFDs)) during
the feasibility stage in the process industries, and generally involves simple or complex modeling (or
factoring) based on inferred or statistical relationships between costs and other, usually design related,
parameters. The process industry being equipment-centric and process equipment being the cost driver
serves as the key independent variable in applicable cost estimating relationships.
This recommended practice outlines the common methodologies, techniques and data used to prepare
factored capital cost estimates in the process industries using estimating techniques such as: capacity
factored estimates (CFE), equipment factored estimates (EFE), and parametric cost estimates. However,
it does not cover the development of cost data and cost estimating relationships used in the estimating
process.
All data presented in this document is only for illustrative purposes to demonstrate principles.
Although the data has been derived from industry sources, it is not intended to be used for commercial
purposes. The user of this document should use current data derived from other commercial data
subscription services or their own project data.
DEVELOPING THE PROJECT CONTROLS PLAN RP 60R-10

TCM Framework:
8.1 Project Control Plan Implementation
This recommended practice is intended to serve as a guideline, not a standard. As a recommended
practice of AACE International, the intent of the guideline is to improve the communication among
stakeholders involved with preparing, evaluating, and using project controls information. This
recommended practice (RP) of AACE International defines the overall development, implementation and
management of a project controls plan. This deliverable can be included as part of an overall project
execution plan (PEP), or considered a stand alone document that describes specific approaches that
each functional entity will use (engineering, procurement, construction, safety, quality, etc.).
The project controls plan describes specific processes, procedures, tools and systems that guide and
support effective project control. The plan is a narrative or qualitative representation of the project control
process, while the estimate, budget, schedule, etc. represent the quantitative aspects. Organizations may
use this RP to develop a fit-for-use template as a model document, which is further customized for each
specific project.
SCHEDULE DESIGN AS APPLIED IN ENGINEERING, PROCUREMENT AND

CONSTRUCTION RP 61R-10
(Rev. Oct 11, 2013)

4.1 Project Implementation 7.1 Project Scope and Execution Strategy
Development 7.2 Schedule Planning and Development 7.3 Cost Estimating
TCM Framework
and Budgeting 7.4 Resource Planning 7.5 Value Analysis and Engineering
7.6 Risk Management 7.7 Procurement Planning 10.3 Change Management
This recommended practice (RP) for schedule design is intended to provide a guideline, not to establish a
standard. As a recommended practice of AACE International, this document provides guidelines for the
project scheduler to start the planning for developing a baseline schedule and is applicable only as a
precursor to the development of the baseline schedule.
This recommended practice is oriented to critical path method (CPM) schedule design. This
recommended practice does not address schedule development but instead provides the framework to
enable an efficient and accurate facilitation of the schedule development process. All schedule
development should be done after this schedule design process is complete since the completion of
design is necessary before a good schedule development process can progress effectively.
IDENTIFICATION AND QUALITATIVE ANALYSIS RP 62R-11
(Rev. May 11, 2012)

TCM Framework:
7.6 Risk Management
This recommended practice (RP) of AACE International defines the expectations, requirements, and
practices for identifying and qualitatively analyzing risk drivers as part of the overall risk management
process. It expands on TCM Framework section 7.6.2.2 Risk Assessment, sections a) Risk Identification
and b) Qualitative Risk Analysis, covering common practices and tools such as brainstorming, interviews,
and checklists. It also covers documentation for and the deliverables from the process step (e.g., risk
register). It does not cover quantification of risks or risk treatment planning.
In TCM, the risk management process is applied in the strategic asset management and project control
processes. In the strategic arena, the risk focus tends to be on the state of the current asset, the business
environment, and other issues that differentiate alternative asset solutions (e.g. varying levels of scope
definition). In project control, the risk focus expands to more specific project conditions, plans,
deliverables, and events affecting a defined project scope while strategic risks remain. This RP is
intended to be generic to either any focus area and any project scope.
Risk identification may require skills and knowledge of behavioral psychology because methods such as
brainstorming and Delphi must deal with participant biases.
This RP is intended to provide guidelines, not a standard, for developing a process to identify project risks
and perform qualitative risk analysis that most practitioners would consider to be practices that can be
relied upon and that they would recommend be considered for use. It provides a foundation for
developing risk treatment plans as described in RP 63R-11, Risk Treatment. Ideally, the risk management
process provides an opportunity for all stakeholders and contracting parties to work together and manage
project risk for their collective benefit. The implementation of all or part of this RP will depend on the size
and complexity of the project but the basic processes described should be used in all cases.
This RP outlines the processes and practices but is not a detailed "how-to" in each case. In that respect it
will most benefit those that are new to risk management or to decision and risk management
professionals who want to refresh their knowledge of recommended practices.
RISK TREATMENT RP 63R-11
(August 23, 2012)

TCM Framework:
7.6 Risk Management
Scope
This recommended practice (RP) of AACE International defines the expectations, requirements, and
practices for risk treatment. This RP follows the steps identified in RP 62R-11, Risk Assessment
Identification and Qualitative Analysis. In this process, an action owner is assigned who, working with the
risk team, is responsible for devising and implementing risk response plans for those risks that were not
deem acceptable in the qualitative analysis screening step. It expands on TCM Framework section
7.6.2.3 Risk Treatment and leads into 7.6.2.4 Risk Control.
In TCM, the risk management process is applied in the strategic asset management, as defined in RP
10S-90, Cost Engineering Terminologyand project control processes. In the strategic arena, the project
has not yet been selected, so the treatment focus tends to be on devising alternative asset or project
solutions that mitigate the risks while meeting business objectives and requirements. In project control,
the risk treatment focus is more on tactical refinements (per TCM 3.3.1.4 - identify creative alternative
solutions, leveraging value engineering for example, and, through a formal quantitative analysis process)
of project scope, conditions, plans and deliverables as well as developing contingency plans. This RP is
intended to be generic to either focus area or any project scope.
Purpose
This RP is intended to provide guidelines, not a standard, for including risk management during the
planning of a project or asset management that most practitioners would consider to be good practices
that can be relied on, and would recommend for use. It will provide a foundation for risk control.
This RP will outline the processes and practices but is not a detailed how-to. In that respect it will most
benefit those that are new to risk management or decision and risk management professionals who want
to refresh their knowledge of recommended practices.
CPM SCHEDULE RISK MODELING AND ANALYSIS: SPECIAL

CONSIDERATIONS RP 64R-11
(May 2, 2012)
TCM Framework:
7.6 Risk Management
This recommended practice (RP) of AACE International defines general practices and considerations for
the various aspects of conducting a project schedule risk analysis using a critical path method (CPM)
network of activities and Monte Carlo methods to estimate contingency and/or to understand the projects
behavior in consideration of risk. This RP does not present a standalone methodology, but is an
extension of other RPs that present CPM-based approaches to schedule risk analysis and contingency
estimating. This RP discusses key procedural, analytical and interpretive considerations in preparation
and application of a CPM model; considerations that were not covered in the broader methodological
RPs.
A quantitative schedule risk analysis is an important aspect of risk management on a project. It can help
project teams understand how project risks and uncertainty may impact the project schedule and when
key milestones will be achieved. The analysis should be conducted by a skilled risk analyst. This analysis
is typically performed during project development prior to key approval points, but can also be used
during project execution to assess the current status of the project schedule risks.
Most schedule risk analyses utilize a CPM network as the base tool for conducting a Monte Carlo type
simulation of project schedule variability. The CPM model for risk analysis must be properly constructed
and realistically reflect how the identified risks may impact the project activities and overall duration. The
identified schedule risks may be linked to the activities in the model in a variety of ways, depending on
the software used and user preference. Regardless of how the risks are linked to activities in the
software, the analysis needs to be based on a comprehensive list of schedule risks and an understanding
of how they may impact the project. Understanding the compromises, assumptions and basis of the
analytical methods and what the resulting schedule risk analysis means are key to developing
appropriate risk treatment plans, contingency estimates, and making well supported value adding project
decisions.
This RP is applicable to any industry or project where the CPM approach is used. It addresses
considerations for risk analysis as they relate to the CPM model and not to any integration with cost risk
analysis.
INTEGRATED COST AND SCHEDULE RISK ANALYSIS AND CONTINGENCY

DETERMINATION USING EXPECTED VALUE RP 65R-11
(May 2, 2012)
TCM Framework:
7.6 Risk Management
considerations for integrated cost and schedule risk analysis and estimating contingency using expected
value methods.
This RP is intended to provide guidelines, not standards, for contingency estimating that most
practitioners would consider to be good practices that can be relied upon and that would be recommend
for use where applicable. There is a range of useful risk analysis and contingency estimating
methodologies; this RP will help guide practitioners in developing or selecting appropriate methods for
their situation.
This RP is an extension of 44R08, Risk Analysis and Contingency Determination Using Expected
Value, that addresses using expected value methods only for cost. However, integrated cost and
schedule methods are generally recommended; this RP for expected value methods, or 57R09,
Integrated Cost and Schedule Risk Analysis Using MonteCarlo Simulation of a CPM Model, for
CPMbased methods.
SELECTING PROBABILITY DISTRIBUTION FUNCTIONS FOR USE IN COST

AND SCHEDULE RISK SIMLUATION MODELS RP 66R-11
(August 24, 2012)
TCM Framework:
7.6 Risk Management
Scope
This recommended practice (RP) of AACE International provides guidance for selecting probability
distribution functions (PDFs) for use in probabilistic decision and risk management (DRM) simulation
models within cost engineering and total cost management (TCM)[1]. These DRM models are used to
analyze asset and project cost, schedule, profitability and similar measures in consideration of risks.
While AACEs definition of risk is fully defined elsewhere[2], this RP uses the term risk to address both
threats and opportunities.
Purpose
This RP will describe the basic characteristics of commonly used PDFs and define their advantages and
disadvantages for use in typical probabilistic modeling. It is intended to provide practical advice for nonstatisticians who are applying risk analysis tools such as Monte Carlo modeling. In this area of practice,
the data inputs are generally subjective; they are not based on sampling of data about a population or
statistical analysis of empirical data. In that regard, this RP does not cover the topic of curve fitting or
statistical analysis of empirical data such as linear regression. The goals of this RP are to help users find
PDFs: a) with an inferred goodness of fit to the opinions and perceptions of participants in risk analysis
exercises; and b) that are reasonably simple to apply, understand and communicate. It does not cover
methods to elicit these opinions and perceptions.
CONTRACT RISK ALLOCATION AS APPLIED IN ENGINEERING,

(January 14, 2014)
TCM Framework: 7.6 Risk Management
This recommended practice (RP) of AACE International defines the contract risk allocation principles as applied in
engineering, procurement and construction (EPC). Such principles address for example; contract basics, legal risk
allocation principles, general risk allocation principles, typical contract forms, common contract risks, and quantitative
contract risk assessment. Much of the discussion focuses on construction; however, the principles apply to contracts
for any element of an EPC project.
This RP is intended to provide guidelines for making equitable contract risk allocations that reduce the potential for
disputes and enhance the likelihood for project success.
This RP summarizes and clarifies contract risk allocation practices in the context of the TCM Framework and risk
management processes. It has been developed as a reference or overview document and may not be relied upon as
legal or specific risk action advice. In addition, it is recommended to seek the advice and input of experts in
contracting, claims, and dispute resolution as appropriate.
ESCALATION ESTIMATING USING INDICES AND MONTE CARLO

SIMULATION RP 68R-11
(May 2, 2012)
TCM Framework:
7.6 Risk Management
This recommended practice (RP) of AACE International defines basic principles and methodological
building blocks for estimating escalation using forecasted price or cost indices while also addressing
uncertainty using Monte Carlo simulation. The methods in this RP are an extension of the principles and
methods in RP 58R-10, Escalation Estimating Principles and Methods Using Indices, from a probabilistic
and scenario/sensitivity viewpoint. This RP will guide practitioners in developing or selecting appropriate
methods for their definitions and situation. While this RP discusses the relationships of escalation
estimating to other risk cost and schedule accounts (namely contingency), dealing with those cost types
is not the focus of this RP. This RP assumes that practitioners are already familiar with Monte Carlo
simulation as typically applied in spreadsheet applications.
Escalation estimating is an element of both the cost estimating and risk management processes. Like
other risks, escalation is amenable to mitigation, control, etc. However, this RP is focused on escalation
quantification, not on treatment (i.e., how it is addressed through contracting, bidding, schedule
acceleration, hedging, etc.) or control. In terms of cost estimating, this RP covers practices applicable to
all classes of estimates. Escalation uncertainty is partly driven by schedule risk; therefore this RP also
references AACEs RPs on integrated cost and schedule risk analysis and contingency estimating. The
examples in this RP emphasize capital cost estimating and scheduling, but the principles apply equally to
operating, maintenance and other cost and time evaluations. While a model such as that covered in this
RP could be used for schedule optimization in consideration of escalation, optimization is not covered
here.
As with RP 58R-10, Escalation Estimating Principles and Methods Using Indices, this RP recommends
segregating escalation versus exchange rate impacts and their estimation for projects with resources
priced in currencies other than the base currency.
COST ESTIMATE CLASSIFICATION SYSTEM AS APPLIED IN

ENGINEERING, PROCUREMENT, AND CONSTRUCTION FOR THE
HYDROPOWER INDUSTRY RP 69R-12
(January 25, 2013)
TCM Framework 7.3 Cost Estimating and Budgeting
As a recommended practice of AACE International, the Cost Estimate Classification System provides guidelines for
applying the general principles of estimate classification to project cost estimates (i.e., cost estimates that are used to
evaluate, approve, and/or fund projects). The Cost Estimate Classification System maps the phases and stages of
project cost estimating together with a generic project scope definition maturity and quality of inputs matrix, which can
be applied across the hydropower industry.
This addendum to the generic recommended practice (17R-97) provides guidelines for applying the principles of
estimate classification specifically to project estimates for engineering, procurement, and construction (EPC) or other
contractual arrangements and execution venues, both for owners and service providers, and their related work in
developing hydropower projects. This addendum supplements the generic recommended practice by providing:
a section that further defines classification concepts as they apply to the hydropower industry and their unique
differences to other industries
a section on the regulatory requirements and resulting impacts that are specific to hydropower projects
a chart that maps the extent and maturity of estimate input information (project definition deliverables) against the
class of estimate.
As with the generic recommended practice, the intent of this addendum is to improve communications and consensus
among all of the stakeholders involved with preparing, evaluating, and using project cost estimates specifically for the
hydropower industry.
The overall purpose of this recommended practice is to provide the hydropower industry with a definition deliverable
maturity matrix which is not covered in 17R-97. This RP provides an approximate representation and logical linage of
the relationship of specific design input data and design deliverable maturity to the estimate accuracy and methodology
used to produce the cost estimate.
The estimate accuracy range is driven by many other variables and risks, so the maturity and quality of the scope
definition available at the time of the estimate is not the sole determinate of accuracy; risk analysis is required for that
purpose.
This document is intended to provide a general guideline, not a standard. It is understood that each enterprise may
have its own project and estimating processes and terminology, and may classify estimates in their own particular
ways. This guideline provides a generic and generally acceptable classification system for the hydropower industry that
can be used as a starting point for the basis of comparison. This RP should allow each user to better assess, define,
and communicate their established and developed procedures and standards in light of generally-accepted cost
engineering practice.
REQUIRED SKILLS AND KNOWLEDGE OF DECISION AND RISK

MANAGEMENT RP 70R-12

TCM Framework 7.2 Schedule Planning and Development 7.6 Risk Management
This recommended practice (RP) describes schedule contingency implementation and schedule risk
management techniques to consider when developing a capital construction project execution phase
schedule. AACE International recommended practices are intended to provide guidelines, not to establish
standards. This RP describes general principles for applying schedule contingency in engineering,
procurement and construction project schedules.
Although this RP was written as a stand-alone document it can be used as a companion with the AACE
recommended practices related to schedule planning and development, risk management, forecasting,
and change management. Overlapping information has been eliminated from this document in deference
to the more detailed guidelines in the other RP documents.

There are a wide range of opinions regarding whether or not to allow the use of schedule contingency.
This RP reflects the general consensus concerning guidelines for the proper use of schedule contingency
when schedule contingency is allowed to be used.
Because the application of schedule contingency is not an area of generally accepted practice, this RP is
focused on describing the schedule contingency definition, attributes and principles that professionals can
generally consider for application. This RP excludes discussion of schedule risk modeling processes and
analysis as well as the integrated cost and schedule risk analysis. It also excludes the detailed procedure
for managing contingency through change management and other project cost/schedule control methods.
AACE recommended practices have been developed to provide detailed guidelines for those related
processes.
This RP describes guidelines for implementing schedule contingency as part of the overall capital project
risk management process when schedule contingency is desired. These principles may be applied to any
phase of a project, but become more relevant at the time of planning for project control during the
execution phase. After analysis of schedule risks on the established schedule model, the project team
should plan the methods to establish time contingency in the project schedule logic, and describe these
procedures in the project execution and control plans.
REQUIRED SKILLS AND KNOWLEDGE OF DECISION AND RISK

MANAGEMENT RP 71R-12
(June 17, 2013)

TCM Framewok 0.0 Genreal Reference
perform decision and risk management. It serves as the foundation of the skills and knowledge of an
AACE certified Decision and Risk Management Professional (DRMP) and provides an outline for its study
guide.
Decision and risk management (DRM) requires knowledge ranging from analytical (e.g., statistics and
modeling) to socio/psychological (e.g., risk elicitation and communication) to management (e.g. risk
response planning and management). DRM is practiced within the context of all the processes and
practices of total cost management (TCM). All TCM practices have elements of uncertainty and the need
to make some decisions, and interfaces with all the associated disciplines working in a TCM process.
DEVELOPING A PROJECT RISK MANAGEMENT PLAN RP 72-R-12
(April 25,2013)
TCM Framework 7.6 Risk Managment
This recommended practice (RP) of AACE International defines practices for developing and
implementing a risk management plan for any type of project for any project phase. A risk management
plan defines how the project team intends to implement its applicable risk management process. This RP
assumes the process is aligned with TCM Framework section 7.6 Risk Management (e.g. plan, assess,
treat, and control risks over the project life cycle.) It is recommended that the risk management plan be
part of an overall project execution plan (PEP) or similar integrated project plan to better ensure project
objectives are achieved.
The risk management plan describes specific processes, procedures, organization, tools and systems
that guide and support effective risk management throughout the life cycle of the project.
This RP is intended to provide guidelines (i.e., not a standard) for developing a project risk management
plan. This will provide a basis for what most practitioners would consider to be good practices that can
be relied upon, and that they would recommend be considered for use where applicable. In general, the
risk management plan model includes:
ensuring risk management objectives are addressed for all stakeholder and project requirements
implementing an integrated set of work processes, procedures, and applications to plan, identify,
analyze, evaluate, treat, and monitor risks specific to the life of the project
implementing an organizations integrated suite of risk management applications (tools and

systems)

identifying organizational roles, responsibilities, and accountabilities with respect to risk
management
producing, updating, and controlling the risk management deliverables
communicating risk management information and deliverables
initiating the risk management process
capturing and disseminating learnings for future risk management planning

This RP will assist in developing a fit-for-use template which can be customized for each specific project.
According to TCM, the risk management plan must describe what the project or asset management team
recognizes as being the risk management objective so that it may be incorporated within the overall
project execution plan and/or project charter. The time invested in preparing, documenting, and
communicating a solid risk management plan will increase the success of the execution of the project.
ESTABLISHING PRODUCTIVITY LABOR NORMS RP 73R-13
(January 14, 2014)

TCM Framework: 7.3 Cost Estimating and Budgeting
This recommended practice (RP) provides principles and key attributes of construction project labor
productivity norms or reference bases which most practitioners would consider to be a foundation for
good labor norm practices that can be relied on and that they would recommend be considered for use
where applicable. This RP may also be applicable in non-construction related industries. Labor resource
requirements are a key element of project estimates, schedules, resource management and risk
management plans.
In terms of valuation, the purpose of a labor norm is not to provide true values for every situation. Its
purpose is to provide logical, reliably consistent values; and a practitioner should know how to adjust the
labor norms to the situation based on an understanding of the labor norms explicit basis. It is understood
that every estimate will require adjustment to the base labor norms. It is also understood that every
organizations needs differ and there is no single best labor norm and no standard cross-labor norms set
of adjustments. However, this RP outlines what should be considered in developing an in-house labor
norm or selecting an external labor norm and developing adjustments.
Labor hours used in estimates and other tasks, and the labor norms they are based on, must consider
issues that affect productivity such as organization, culture, motivation, skills levels (sometimes all
encompassed in location factors), indirect and overhead resources, risks, work conditions, worker morale,
safety practices, fatigue and other drivers of productivity. This RP does not address the costing or
pricing of labor; it only addresses the basis of hours. It also does not address contract forms.
BASIS OF ESTIMATE AS APPLIED FOR THE SOFTWARE SERVICES

(April 2, 2014)
TCM Framework: 7.3 Cost Estimating and Budgeting
AACE Internationals Total Cost Management (TCM) Framework identifies a basis of estimate (BOE)
document as a required component of a cost estimate. As a recommended practice (RP) of AACE
International, the template outlined in the following sections provides guidelines for the structure and
content of a cost basis of estimate specific to the software services industries (i.e. software development,
maintenance & support, infrastructure, research & development, etc.).
This document is based upon AACE International Recommended Practice 34R-05, Basis of Estimate [1].
It identifies a basis of estimate (BOE) document as a required component of a cost/effort/duration
estimate.
In the TCM Framework, the BOE is characterized as the one deliverable that defines the scope of the
engagement and ultimately becomes the basis for change management. Note: In the software services
industries, the term engagement is commonly used and synonymous with project. When prepared
correctly, any person with (capital) project experience can use the BOE to understand and assess the
estimate, independent of any other supporting documentation. A well-written BOE achieves those goals
by clearly and concisely stating the purpose of the estimate being prepared (i.e. cost/effort/duration study,
project options, funding, etc.), the project scope, cost basis, allowances, assumptions, exclusions, cost
risks and opportunities, contingencies, and any deviations from standard practices. For software services
the effort expended is the main driver for cost and duration. In addition the BOE is a documented record
of pertinent communications that have occurred and agreements that have been made between the
estimator and other stakeholders.
A well prepared BOE will:
Document the overall engagement scope.
Communicate the estimators knowledge of the engagement by demonstrating an understanding of
scope, quality and duration as it relates to cost.
Provide a record of all the hypothesis and assumptions taken into account for deriving the BOE.
Alert the stakeholders to potential cost risks and opportunities.
Provide a record of key communications made during estimate preparation.
Provide a record of all documents used to prepare the estimate.
Act as a source of support during dispute resolutions.
Establish the initial baseline for scope, quantities, effort, duration and cost for use in engagement
control.
Provide the historical relationships between baselined estimates throughout the project lifecycle.
Facilitate the review and validation of the estimates.
This RP is intended to be a guideline, not a standard. It is understood that not all organizations that
prepare estimates employ the same processes and practices, and therefore, may opt to use this
information either in part or in its entirety. However, in all cases this RP supports creating consistent
estimate documentation that provides a high degree of traceability and repeatability for the estimate.
SCHEDULE AND COST RESERVES WITHIN THE FRAMEWORK OF ANSI-EIA

748 RP 75R-13
(October 24, 2014)

TCM Framework 7.3 Cost Estimating and Budgeting - 7.6 Risk Management - 9.1 Project Cost
Accounting
This recommended practice (RP) describes the definition, purpose, management, and control of schedule
and cost reserves on projects being implemented under American National Standards Institute (ANSI)
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 ANSI EIA-748 standard. It is intended to provide
general guidelines from the owner and contractor perspectives. As with all AACE International
recommended practices, this document is not intended to be a standard.
This RP starts with contingency as defined in common usage in RP 10S-90, Cost Engineering
Terminology. It specifically provides guidance regarding the management and use of management
reserve and undistributed budget on projects being executed using earned value management (EVM)
techniques consistent with the ANSI 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 EVMS 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 ANSI EIA-748 Guidelines 14 and 15 entirely and components of ANSI EIA748 Guidelines 8, 28, 29, 30 and 32 regarding revisions and change control (as listed in the National
Defense Industries Association (NDIA) Program Management Systems Committee (PMSC) Earned Value
Management Systems Intent Guide).
ORIGINAL BASELINE SCHEDULE REVIEW AS APPLIED IN ENGINEERING,

(October 23, 2014)
TCM Framework: Any TCM Section

This recommended practice (RP) for baseline schedule review addresses two aspects of the schedule
development process. First, it is intended to provide guidelines for the engineering, procurement, and
construction scheduler to create a professional, useable baseline critical path method (CPM) project
schedule by making him/her aware of the criteria by which the schedule is to be reviewed. Second, and
the focus of this RP, it provides guidelines for the reviewing scheduler to evaluate that baseline schedule
for acceptance by the owner or client. This recommended practice is associated with Section 7.2,
Schedule Planning and Development, of the Total Cost Management (TCM) Framework.[10]
The accepted initial schedule is often referred to as the baseline schedule. The baseline schedule
establishes the activity dates (and possibly budgeted costs) that forms the basis of the original project
execution plan. It will be used to compare the original planned dates, durations, logic sequence, and
costs against the actual as-built progress. This usage of the term, baseline schedule, in this RP is
different from the same term used by several software companies to indicate any saved copy of a CPM
schedule or its updates.
This recommended practice is to assist both the creator of the baseline schedule (scheduler) and the
person (reviewer) who receives the submitted schedule and reviews it for acceptability on behalf of the
owner or client. It may also assist owners in the development of their scheduling specifications. The use
of the term owner also includes the work performed by their agents such as contractors, subcontractors,
or a project manager acting as the owners representative.
Most contracts require the contractor to submit a baseline schedule. The baseline schedule is a model of
the contractors project execution plan, and is the standard by which project performance is
measured.[11] The schedule should be a reflection of the contractors intent to achieve project completion
while integrating all contractual scope and requirements. For the purposes of this RP it is assumed that
the schedule is originally created and updated by the contractor, however, the guidelines may apply to
other contractual relationships. The baseline schedule serves as a common basis for assessment of
project progress and performance.
Reaching agreement on a baseline schedule is often difficult, frequently requiring team effort, negotiation,
and perseverance. During the initial stages of developing the baseline schedule, meetings between the
contractor and the owner to discuss expectations and requirements can go a long way towards assuring
timely completion, review and acceptance of a useful and effective baseline schedule. A lack of timely
agreement on the acceptance of a baseline schedule can result in confusion, disagreements, loss of
productivity, extra work, and un-resolved issues that may afterward lead to claims or disputes. It is in the
best interests of all parties to achieve an accepted baseline schedule in a timely manner.
This recommended practice is intended to address the evaluation of critical path method (CPM) original
baseline schedules. This RP does not apply to a revised baseline plan or to a schedule update review
where project progress/status is of primary concern.
The focus of a baseline review is on the overall quality and completeness of the original project schedule
and overall plan; it is not an assessment of current progress or subsequent project schedule changes. A
baseline schedule review focuses on the following issues that are not normally considered in a schedule
update review:
Inclusion of the entire project scope.
Sequence and work flow.
Constructability.
Timing and phasing.
Adherence to legal and contractual requirements.
Unambiguous and clear descriptions of the work.
Resource usage and balance.
Level of detail.
Design and coding of activities and project organization [i.e. organizational breakdown structure
(OBS) and work breakdown structure (WBS)].
Highlighting key or critical areas of risk
LEVEL OF EFFORT PLANNING AND EXECUTION ON EARNED VALUE

PROJECTS WITHIN THE FRAMEWORK OF ANSI EIA-748 RP 79R-13
(October 24, 2014)

This recommended practice (RP) describes the purpose, application, measurement and control of level of
effort (LOE) work in projects that operate with an earned value management system. It provides
explanations of use and management of LOE work as it pertains to EVM implementations that may not be
contained in the Total Cost Management (TCM) Framework.
This RP is intended to provide guidance for planning, managing and reporting performance of LOE tasks
that most EVM practitioners would consider to be sound practice for managing and claiming performance
related to work that is not considered to be measureable. The target audience for this RP is project
managers, control account managers (CAMs), and project staff responsible for planning projects and
managing and measuring project performance. It is also considered to be beneficial to EVM analysts who
want a clearer understanding of LOE task management and measurement.
This RP is aligned with the TCM Framework, as well as the American National Standards Institute (ANSI)
Electronics Industries Alliance (EIA) - 748 Earned Value Management Systems (EVMS) guidelines.
(Guideline 12, parts of Guidelines 6 and 7 regarding task planning and scheduling, and parts of
Guidelines 30 and 31 regarding revisions and change control.) This document provides further
explanation of the intent and application of LOE that is not contained in the ANSI EIA-748 standard and
the National Defense Industries Association (NDIA) Earned Value Management Systems Intent Guide.
This document is not intended to be a standard, but provides further clarification of recommended EVM
practices as they apply to planning, implementing, and reporting LOE work being performed under the
ANSI EIA-748 standard.
ESTIMATE AT COMPLETION (EAC) RP 80R-13
(November 11, 2014)

This recommended practice (RP) explains what an estimate at completion (EAC) is, and considerations to
use when developing an EAC for both cost and schedule components of the performance measurement
baseline (PMB).
This RP is aligned with the Total Cost Management Framework, as well as the American National
Standards Institute (ANSI) Electronics Industries Alliance (EIA) - 748 Earned Value Management
Systems (EVMS) guidelines. (Guidelines 27 entirely, and components of Guidelines 22-26)
This document provides additional details that are not included in the ANSI EIA-748 standard such as the
use of estimated completion date (ECD) metrics to help compare the schedule completion date against
what is shown on a projects working schedule. It also provides some additional aspects of EVM that are
not covered in the TCM Framework, such as to complete performance index (TCPI) and earned schedule
(ES). As with all AACE International recommended practices, this document is not intended to be a
standard, rather it is intended to provide general guidance.
This RP will address the fundamental attributes used to develop an EAC or forecast, both from a cost
perspective and from a schedule perspective. It will also address common independent EAC calculations
used to compare and validate the EAC provided by the control account managers and/or project
management.
REQUIRED SKILLS AND KNOWLEDGE OF EARNED VALUE MANAGEMENT

RP 81R-13
(May 1, 2014)
perform earned value management (EVM). It serves as an important foundation of the skills and
knowledge of an AACE certified Earned Value Professional (EVP) and provides an outline for its study
guide.
EVM integrates scope, schedule, and cost along with budget and performance measurement within a
project framework. It is a method for project progress measurement analysis and control that combines
work scope, schedule, and resource evaluation to enable objective comparison of the planned schedule
of the project to the work completed along with its actual costs.
The RP highlights the necessary skills and knowledge of EVM. It identifies competencies for an EVM
practitioner, across any industry, portfolio, program, or project. Detailed skills, knowledge and
methodology, are excluded from this recommended practice.
This RP is aligned with RP 11R-88, Required Skills and Knowledge of Cost Engineering and the Total
Cost Management (TCM) Framework, as well as the American National Standards Institute (ANSI)
Electronics Industries Alliance (EIA) - 748 Earned Value Management Systems (EVMS) guidelines.
EARNED VALUE MANAGEMENT (EVM) OVERVIEW AND RECOMMENDED

PRACTICES CONSISTENT WITH ANSI EIA-748 RP 82R-13
(November 4, 2014)
This recommended practice (RP) applies to contracts employing the American National Standards
Institute (ANSI) Electronics Industries Alliance (EIA) - 748 Earned Value Management Systems
(EVMS)[9] guidelines or the equivalent. It takes precedence over other TCM Framework guidance when
ANSI EIA-748 is required. It provides an overview of the concept of earned value and its application in
accordance with the ANSI EIA-748 earned value management system (EVMS) standard. ANSI EIA-748
contains 32 principles that are interrelated. This RP provides an overview of the ANSI EIA-748 guidelines
1-32 and provides a comparison with the Total Cost Management (TCM) Framework.
ORGANIZATIONAL BREAKDOWN STRUCTURE AND RESPONSIBILITY

ASSIGNMENT MATRIX RP 83R-13
(May 1, 2014)
This recommended practice (RP) describes the purpose, management, and control of an organizational
breakdown structure (OBS) and responsibility assignment matrix (RAM).
This RP provides guidance regarding the use of an OBS and RAM on projects. This RP defines the
purposes of and typical examples for the OBS and RAM.
The intent of the RP is to document what most practitioners would consider to be good practices that can
be relied on and that they would recommend be considered for use where applicable. The intended
audience is total cost management professionals who are developing an OBS and RAM.
This RP is aligned with the Total Cost Management Framework, as well as the American National
Standards Institute (ANSI) Electronics Industries Alliance (EIA) - 748 Earned Value Management
Systems (EVMS) guidelines. (Guidelines 2, 3, 5, and 9).
USE OF DECISION TREES IN DECISION MAKING RP 85R-14
(November 14, 2014)

This recommended practice (RP) of AACE International defines the use of decision trees in evaluation of
alternatives around project strategy in the presence of uncertainty and their potential implications. A
large part of the risk management process involves looking into the future, trying to understand what
might happen and determining whether it matters to an important decision we need to make.
The decision tree technique can be applied to many different uncertain situations. For example:
Distinguishing the costs or benefits of using a low-price bidder whn delivery time and quality are
uncertain.
The relative costs or benefits of adopting a state-of-the-art technology or staying with the proven
technology.
The relative attractiveness of building a greenfield plant or retrofitting an existing plant.

Decision tree techniques involve determining the objective (e.g., maximizing profit, minimizing cost),
specifying the objective (e.g., choosing among bids for the EPC contractor) and creating a decision tree
that distinguishes between choices to be made (decision nodes) and potential consequences (chance
nodes). The cost of taking a particular path to the end point (e.g., project completion) and the probabilities
of specific uncertain outcomes are key data inputs into the decision and are applied to the decision tree
model.
This recommended practice shows the application of decision trees for two types of organizations: one is
risk neutral and the other is risk averse. The decision process used for both types of organizations is to
maximize the expected utility. This recommended practice then looks at two different approaches to
expressing the organizations utility. These approaches are generally those of a risk-neutral organization
or a risk-averse organization:
Maximize utility based on the expected value of a linear function of monetary value, which is a
hallmark of a risk-neutral organization.
Maximize expected utility based on the expected value a non-linear function of monetary value,
which is the appropriate measure of merit for a risk-averse or a risk-seeking organization.
The results (e.g., which contractor to choose) are examined using sensitivity analysis to decide whether
it is worth gathering more data since improving the accuracy of the data could result in changing the
decision. This decision depends on the accuracy of the existing data and whether a reasonable variation
in the numbers could change the decision.
Finally, continuous distributions of the uncertain variables usually approximate reality better than
selecting and representing alternative outcomes using a limited number of discrete outcomes. Uncertain
future outcomes can be represented by the use of Monte Carlo simulations of continuous distributions.

03 Listado y Detalle de Las AACE RPs Al 18-11-2014

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03 Listado y Detalle de Las AACE RPs Al 18-11-2014

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To date (Nov 18, 2014), AACE International's RPs includes the following documents:

COST ENGINEERING TERMINOLOGY RP 10S-90

(Rev. Nov 14, 2014)

REQUIRED SKILLS AND KNOWLEDGE OF COST ENGINEERING RP 11R-88

(Rev. June 18, 2013)

MODEL MASTER'S DEGREE PROGRAM WITH EMPHASIS IN COST

RECOMMENDED METHOD FOR DETERMINING BUILDING AREA RP 13S-90

(Rev. November 1990)

RESPONSIBILITY AND REQUIRED SKILLS FOR A PROJECT PLANNING AND

PROFITABILITY METHODS RP 15R-81

(Rev. July 16, 2008)

CONDUCTING TECHNICAL AND ECONOMIC EVALUATIONS: AS APPLIED

COST ESTIMATE CLASSIFICATION SYSTEM RP 17R-97

(Rev. November 29, 2011)

COST ESTIMATE CLASSIFICATION SYSTEM: AS APPLIED IN

ESTIMATE PREPARATION COSTS: AS APPLIED FOR THE PROCESS

(Rev. June 19, 1998)

PROJECT CODE OF ACCOUNTS RP 20R-98

(Rev. January 27, 2003)

AACE International Recommended Practice No. 20R-98

PROJECT CODE OF ACCOUNTS: AS APPLIED IN ENGINEERING,

(Rev. January 27, 2003)

DIRECT LABOR PRODUCTIVITY MEASUREMENT: AS APPLIED IN

(Rev. April 26, 2004)

IDENTIFICATION OF ACTIVITIES RP 23R-02

(Rev. May 3, 2007)

DEVELOPING ACTIVITY LOGIC RP 24R-03

(Rev. March 26, 2004)

ESTIMATING LOST LABOR PRODUCTIVITY IN CONSTRUCTION CLAIMS

(Rev. April 13, 2004)

SCHEDULE CLASSIFICATION SYSTEM RP 27R-03

(Rev. November 12, 2010)

DEVELOPING LOCATION FACTORS BY FACTORING: AS APPLIED IN

(Rev. October 19, 2006)

FORENSIC SCHEDULE ANALYSIS RP 29R-03

(Rev. April 25, 2011)

IMPLEMENTING PROJECT CONSTRUCTABILITY RP 30R-03

(Rev. May 20, 2009)

REVIEWING, VALIDATING, AND DOCUMENTING THE ESTIMATE RP 31R-03

(Rev. May 12, 2009)

DETERMINING ACTIVITY DURATIONS RP 32R-04

(Rev. January 14, 2012)

a resource, not to establish a standard. As a recommended practice of AACE International, it provides

BASIS OF ESTIMATE RP 34R-05

(Rev. May 2, 2014)

DEVELOPMENT OF COST ESTIMATE PLANS AS APPLIED FOR THE

(Rev. Oct 23, 2013)

DEVELOPMENT OF COST ESTIMATE PLANS AS APPLIED IN

(Rev. June 12, 2009)

SCHEDULE LEVELS OF DETAIL -- AS APPLIED IN ENGINEERING,

DOCUMENTING THE SCHEDULE BASIS RP 38R-06

(Rev. June 18, 2009)

PROJECT PLANNING - AS APPLIED IN ENGINEERING AND CONSTRUCTION

CONTINGENCY ESTIMATING: GENERAL PRINCIPLES RP 40R-08

(Rev. June 25, 2008)

RISK ANALYSIS AND CONTINGENCY DETERMINATION USING RANGE

(Rev. October 27, 2008)

commercially available risk analysis software packages.

RISK ANALYSIS AND CONTINGENCY DETERMINATION USING

(May 26, 2011)

RISK ANALYSIS AND CONTINGENCY DETERMINATION USING

Click here for Microsoft Excel Example Models for 43R-08

RISK ANALYSIS AND CONTINGENCY DETERMINATION USING EXPECTED

(Rev. December 4, 2012)