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 cost estimating together with a generic scope definition maturity and quality matrix, which can be applied across a wide variety of industries and scope content.

This recommended practice provides guidelines for applying the principles of estimate classification specifically to decommissioning for offshore petroleum exploration and production (E&P) industries. It supplements the generic cost estimate classification RP 17R-97 by providing:

• A section that further defines classification concepts as they apply to decommissioning in the offshore E&P 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 RP, the intent of this document is to provide common terms to improve communications among all the stakeholders involved with planning, preparing, evaluating, and using project cost estimates specifically for  decommissioning in the offshore E&P industries.

The overall purpose of this recommended practice is to provide the offshore E&P industry with a decommissioning definition deliverable maturity matrix that is not provided in 17R-97. It also provides an approximate representation of the relationship of specific design input data and scope 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, terminology, and may classify estimates in other ways. This guideline provides a generic and generally acceptable classification system for the E&P industries that can be used as a basis to compare against. This recommended practice should allow each user to better assess, define, and communicate their own processes and standards in the light of generally accepted cost engineering practice.

Contributors:

Cócis Alexandre dos Santos Balbino (Primary Contributor)

Leonardo Muller, CCP PRMP PSP (Primary Contributor)

Alberto Carlos Caldeira Costa Coelho

Glauco Bezerra da Silva

Martin R. Darley, CCP FAACE

Dr. Elvis Hernandez-Perdomo

John K. Hollmann, CCP CEP DRMP FAACE Hon. Life

About Cócis:

Life cycle cost analysis (LCCA) is a comprehensive economic assessment method used to evaluate the total cost of owning, operating, maintaining, refurbishing, and disposing of an asset over its expected life span. LCCA extends beyond initial acquisition or construction costs to include all subsequent expenses, such as operation, maintenance, upgrades, and eventual disposal costs, as well as the potential savings or benefits over the asset’s life. The primary purpose of LCCA is to assist decision-makers in choosing the most cost-effective option among different competing alternatives. By evaluating the total cost of ownership of a project, asset, or system over its entire lifespan, LCCA enables informed decision-making that balances initial investment costs with long-term operational, maintenance, and disposal costs.

The AACE International Total Cost Management Framework states that “the most important business requirement for most enterprises, and the basis for their asset investment decisions, where applicable, is a measure of economic return on investment; a single measure that expresses in monetary terms the value of investment over its life cycle to the enterprise.” A goal of cost engineering is to support decision-making, ensuring that the best option among competing alternatives is selected, followed by effectively managing project execution to realize all project goals and objectives. Support for early investment decisions should place a focus on determining the optimal life cycle cost option. The result of an effective LCCA provides that single monetary measure of value, which should underpin the selection of a preferred alternative or the decision to approve (or disapprove) a final capital investment decision. There are times when other constraints, such as limited capital funds, may not support the lowest life cycle cost option; however, due diligence should always encourage life cycle cost analysis as a part of the decision-making process.

Life cycle cost analysis is important in supporting overall investment decisions that underpin effective strategic asset management, “the macro process of managing the total life cycle cost investment of resources in an enterprise’s portfolio of strategic assets.” However, LCCA can be just as important in selecting an optimal technology during the project development process for an asset (value engineering) as it may be in choosing the preferred replacement pump during the operation and maintenance of an asset. LCCA enables value-driven decision-making by identifying the most cost-effective option among competing alternatives, focusing on total cost of ownership rather than just initial capital expeditures.  This approach is especially critical in infrastructure, industrial, and public sector projects where long-term costs can significantly exceed initial capital costs.

This recommended practice (RP) of AACE International introduces life cycle cost analysis as a crucial tool for assessing the total cost of ownership of assets over their lifecycle. It will address the concept, purpose, methodologies, and application of life cycle cost analysis. It will also address life cycle cost estimating, which is a key step in the overall LCCA process.

Contributors:

Larry R. Dysert, CCP CEP DRMP FAACE Hon. Life (Primary Contributor)

Sam Kitchin, PSP (Primary Contributor)

Shoshanna C. Fraizinger, CCP FAACE

John K. Hollmann, CCE CEP DRMP FAACE Hon. Life

Dan Melamed, CCP EVP FAACE

Tom Orr

Amanjeet Singh

About Larry:

AACE International is proud to announce Calgary, Alberta, has been selected as the host city for the 2028 AACE Conference and Expo. This premier global event for cost engineering and total cost management brings together professionals, practitioners, and thought leaders from around the world to share peer-reviewed papers, best practices, and emerging innovations that are shaping the future of the profession. Calgary was selected for its strong commitment to advancing cost engineering and the implementation of AACE Recommended Practices across Canada’s leading sectors, including construction, energy, and infrastructure. Supported by the exceptional team at Tourism Calgary, attendees can expect a welcoming and vibrant environment that reflects the city’s reputation for hospitality, collaboration, and excellence in project delivery.

“Our annual Conference and Expo is the most comprehensive gathering of cost and project controls professionals anywhere in the world,” said Michael Kobylka, Executive Director and CEO of AACE International. “Calgary embodies the forward-looking spirit of our community, with a thriving economy and a strong record of applying AACE standards to drive project success. We are excited to partner with Tourism Calgary to deliver an unforgettable experience in 2028.”

Upcoming Conference & Expo Dates/Locations:

2026 – June 28-20 | MGM Grand; Las Vegas, Nevada, USA 

2027 – June 13-15 | Hyatt Regency Orlando; Orlando, Florida, USA

2028 – June 25-27 | TELUS Convention Centre; Calgary, Alberta, CANADA

This recommended practice (RP) of AACE International provides guidance on using system dynamics modeling (SD) to produce expert evidence to support entitlement to compensation for claims arising from disruption in construction and engineering projects. System dynamics assists in identifying and quantifying the root causes, damages, and delays resulting from project disruption.

This RP is intended to provide guidelines for a suggested process using the system dynamics modeling approach to identify the root causes, damages, responsibilities, and delays resulting from project disruption. The system dynamics process applies across all common engineering and construction contracting strategies and delivery methods, and it can be particularly useful in identifying and quantifying the cumulative impact of disruption. This recommended practice includes the concepts reviewed and approved by the cost engineering industry using good industry practices and recommendations, and it is relevant to all project stakeholders, whether owner, designer, contractor, subcontractor, construction manager, or others. Although this recommended practice is written in the context of a contract between an owner and a prime contractor, it applies to all parties contracted to perform work on a project, including subcontractors and suppliers.

Contributors:

Erich Alexander Voigt (Primary Contributor)

Dr. Stephen P. Warhoe, PE CCP CFCC FAACE Hon. Life (Primary Contributor)

Adam Clements

Dr. Sam G. Mattar

H. Lance Stephenson, CCP FAACE Hon. Life

About Alex:

We are excited to share important news for members and certificants: you can now use 529 education savings accounts to pay for AACE International certification fees and approved certification preparation courses.

This change comes as a result of the recently enacted Investing in America’s Workforce Act, which expanded the allowable uses of 529 accounts to include workforce training and professional certification. AACE International’s Certification Institute was proud to be part of the coalition that advocated for this legislation, ensuring that professionals like you have greater access to the resources needed to advance your careers.

AACE certifications—including the Certified Cost Professional (CCP), Earned Value Professional (EVP), Planning & Scheduling Professional (PSP), Decision & Risk Management Professional (DRMP), and others—are recognized worldwide as the benchmark of excellence in cost engineering and project controls. They validate your expertise, open doors to new career opportunities, and strengthen our profession.

To learn more about our certification programs and how to apply, visit AACE.

Use of 529 funds for certification expenses may depend on individual circumstances. Members are encouraged to consult their tax professional or plan administrator to confirm eligibility.

This recommended practice (RP) of AACE International defines the use of the discipline of decision analysis (DA) to structure, analyze, and generate stakeholder decision buy-in and commitment to important organizational decisions, whether made by a team, group or individual. It illustrates how modern decision analysis methods can be applied broadly to making decisions on projects, programs, and at the enterprise level in the presence of uncertainty.

Application of DA is intended to assure decision quality (DQ). DQ embodies DA concepts and processes that help assure both effectiveness and efficiency in analyzing decision problems, as well as organizational commitment to action around the best expected course of action. This RP encases DA methods in the DQ envelope throughout and provides a specific section giving an overview of DQ processes that can lead to high-quality decisions.

This document is intended to provide a guideline for decision support analysts 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.  The document is intended to be a complement to AACE’s Total Cost Management Framework, Section 3.3 and Chapter 4, which embeds DA within TCM, and which includes helpful further discussion of DA and methods.

The intended audience includes project managers, decision analysts, and decision makers.  DA can be applied during each stage of the project life cycle across industries. For example, it is frequently applied during concept selection, before the subject project has been fully defined. These early stage decisions, usually called “analysis of alternatives,” deal with the basic structure and strategy space that an ultimate project encompasses. As such, this recommended practice has broad application for decision makers and project managers. DA can also be applied in mid-project to make course corrections or to evaluate newly available alternatives.

When applied successfully in a demonstration project, organizations frequently adopt this decision-making framework organization-wide. Some corporations have created dedicated internal Decision Support organizations to assist in facilitating the process and carrying out the analytics embedded in the DA method. As the organization adopts the process, it frequently empowers the workforce and fosters a sense of responsibility. As it sees more examples and gathers data on outcomes of the process, they are able to compare them to the probabilistic assessments of key uncertainties made by the DA participants. Adjustments in the process can be made for subsequent decisions, fostering a culture of accountability throughout the organization. The goal is to strive for continuous improvement in decision making.

Contributors:

Dr. David T. Hulett, FAACE (Primary Contributor)

Dr. Harry D. Saunders (Primary Contributor)

James E. Arrow, DRMP

Larry R. Dysert, CCP CEP DRMP FAACE Hon. Life

John K. Hollmann, CCP CEP DRMP FAACE Hon. Life

Sagar B. Khadka, CCP DRMP PSP FAACE

John R. Schuyler, CCP DRMP

Lance Stephenson, CCP FAACE Hon. Life

About David:

This recommended practice (RP) discusses control accounts (CAs) at a high level and describes the purpose, development, and management of both work packages (WP) and planning packages (PP) in support of performance management in any project or contract environment. This RP also discusses some basic background for work package design development and execution, which is based on the decomposition of project scope elements as defined in the statement of work (SOW).  The RP’s recommendations apply to projects as described but can be used similarly for programs. 

This RP provides guidance regarding the development and use of a project budget. This includes the use of control accounts that are subdivided into WPs as well as PPs. The RP presents typical examples for a WP. The RP also recommends that, to the extent practical, all work should be divided into work packages using dollars, hours, or other measurable units. Work packages are developed and used for engineering, procurement, installation, etc. If this is not feasible for far-term activities, planning packages should be created for budget and scheduling purposes. 

Progress is compiled and summarized at the control account level, with the control accounts typically sub‐subdivided into smaller packages for measuring, analyzing, and reporting on the actual work completed. Budgets for near-term discrete work will be included through work packages in terms of monetary amounts or hours with far-term effort included in planning packages. The sum of the work packages and planning packages within a control account must equal the overall approved control account budget. Work package authorization should be obtained before work begins through a clearly defined process identifying the responsible manager, the time frame of the work package/control account, and the resources necessary to complete the work. This work package authorization is typically done via a work authorization document or similar document. This RP’s section on work package authorization includes an example of a work authorization document, which should be formatted following the organization’s guidance and procedures.

The intent of this RP is to document what most practitioners would consider to be good practices that can be relied on and would be recommended for use where application of the WPs and PPs in preparation of a performance measurement baseline (PMB) is required. The intended audience includes project managers, cost professionals, project controls professionals, and earned value practitioners who may develop and/or use the WPs and PPs as parts of the project or program planning process.

This RP is aligned with the Total Cost Management Framework, as well as the Electronics Industries Alliance (EIA) – 748 Earned Value Management Systems (EVMS) guidelines and serves to help readers understand the slight differences in how EVMS is successfully implemented in contracts using EIA-748 and common commercial practice contracts using EVMS.

Contributors:

Christopher W. Carson, CEP DRMP PSP FAACE (Primary Contributor)

Andrew Dick, PSP (Primary Contributor)

James L. Dozier, EVP (Primary Contributor)

Dan Melamed, CCP EVP FAACE (Primary Contributor)

Larry R. Dysert, CCP CEP DRMP FAACE Hon. Life

Luis O. Figueroa

Shoshanna Fraizinger, CCP FAACE

Donny Lai

Michael F. Marcell, EVP PSP

Babak Nikpour

Abbas Saifi, CCP EVP PSP

Abbas Shakourifar, PSP

Lance Stephenson, CCP FAACE Hon. Life

Rens van Arkel

Anton W. van der Steege, CCP

Dr. Stephen P. Warhoe, PE CCP CFCC FAACE Hon. Life

About Chris:

Dan Melamed, CCP EVP FAACE is a Program Analyst with the Department of Energy’s (DOE) Office of Environmental Management (EM), where he has organized, directed, and participated in environmental baseline reviews for a wide variety of sites across the EM Complex: most recently the EM Los Alamos Integrated Baseline Review as the organizer and co-lead.

He has also been involved in the earned value management system evaluation for new contractors for the EM program.  Dan has served as the president for the AACE National Capital Section and is currently a member of the Technical Board of AACE International. 

Prior to his work at the Department of Energy, Dan Melamed was a staff scientist at Brookhaven National Laboratory, where he did research on waste processing technologies and solar energy conversion. In addition to being a Certified Cost Professional and an Earned Value Professional, Dan Melamed has a Ph.D. in Chemistry from Princeton University. He is a member of AACE International, Sigma Xi the Scientific Honor Society, as well as the American Chemical Society. He is the author of over 20 peer-reviewed publications and one patent. Dan may be reached at: dan.melamed.dc@gmail.com

You can find the new RP here: 125R-22: Developing Work Packages and Planning Packages in Support of Performance Management