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This recommended practice provides guidelines for applying the principles of estimate classification specifically to project estimates for engineering, procurement, and construction (epc) work for the process industries. Estimate accuracy is based on a probabilistic assessment of uncertainties and risks that forecasts how far a project’s final cost may potentially vary from the single point value that is selected to represent the estimate, whether a base estimate or end use value. 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).
Table 1 provides a summary of the characteristics of five estimate classes However, there is general agreement that any recommended practice should be in accordance with first principles of decision and risk management as described here. For all applications of this rp to the nuclear capital and plant modification projects, the maturity level of preparation and planning definition is the primary characteristic of the estimate class, not the timeline or gate.
The approach used in table 1 of the aace estimate classification rps and in this rp is to report the range at an 80% confidence interval (i.e., the p10 and p90 range) around the total cost including contingency set at the p50 confidence level.
This recommended practice provides guidelines for applying the principles of estimate classification specifically to project estimates for engineering, procurement, and construction (epc) work for environmental remediation industries. 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. 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. Aace international is the premier professional association for cost engineering and total cost management
We empower professionals in 100+ countries with the tools, certifications, and resources needed to lead successful projects from start to finish. There is no one best way to quantify risks or to estimate contingency Each method has its advocates
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