The Use of Professional Credentialing in Helping
to Establish a Cost Estimating Capability
Michael R. Nosbisch, CCC, PSP
President - Elect
Outline
• Introduction
– Speaker
– AACE International
• Professional Credentials/Certification
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Definition and attributes
Certification vs. licensure
General types of certifications
Specific examples of estimating-based certifications
(all associations)
• The Role of the PMO
• Conclusion
Introduction
• Speaker Background
– General
• More than 22 years of project management/controls experience
• Named contributor to GAO Cost Guide
– Specific
• Currently hold multiple professional certifications
• Member of task force that developed both an internal (Parsons) and
external (AACE) certification
• Currently President – Elect of AACE International
– Will [soon] have responsibility for administration of 6 existing
certifications
– Management of development process in relation to any new
certifications
Introduction
• AACE International (Association for the
Advancement of Cost Engineering)
– Founded in 1956, currently largest global organization
dedicated to furthering concepts of total cost
management and cost engineering
– 8 regions
– 91 sections
– 7,708 members
• According to 2010 Membership Survey, 22% of respondents
were Estimators by primary job function
AACE International
• Cost Engineering defined as the collective set of practice areas
that includes the following:
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Business and program planning
Cost estimating
Economic and financial analysis
Cost control
Program and project management
Planning and scheduling
Cost and schedule performance measurement
Change control
• Total Cost Management (TCM) is the "process" through which
these practices are applied
– Encompasses multiple “Recommended Practices” related to estimating,
including “Cost Estimate Classification System: As Applied in [EPC] for the
Process Industries” (JAN 2011)
AACE International
• DOE Relationship
– Cooperative agreement first signed in 1997
• Reauthorized in 2002 and 2007
– Current DOE “sponsor” is OECM
– Key elements:
• Advance “state-of-the-art” of TCM through
increased communication and dialogue
• Apply established cost engineering/cost management principles,
proven methodologies, and latest technology
• Develop new cost engineering/cost management methodologies and
technology in pursuit of optimum resource utilization
• Encourage utilization of cost management standards and practices
and their continual improvement/advancement
Professional Credentials/Certification
• Definition
– A designation earned by a person to assure qualification
to perform a job or task
• Attributes
– Most are created, sponsored, or affiliated with
professional associations, trade organizations, or IT
vendors interested in raising standards
– In general, must be renewed periodically, or may be valid
for specific period of time
• As part of renewal process, common for individual to show
evidence of continued learning (PDUs, CEUs, etc.)
Certification vs. Licensure
• Licensure is when demonstration of ability or knowledge is
required by law before being allowed to perform a task/job
– In U.S., professional licenses are usually issued by state agencies
(e.g. professional engineer)
• Certifications are usually earned from a professional society or
educational institute, not the government
– For some organizations, certification assessment process is very similar or
even same as licensure
• May differ only in terms of legal status
– Independent “accreditation” often times sought to strengthen
validity of process
• American National Standards Institute (ANSI)
• Council of Engineering & Scientific Specialty Boards (CESB)
General Types of Certifications
• Internal certifications
– Developed by a company/corporation for internal
purposes
– Limited “portability” to other companies/corporations
– Examples:
• Corporate
– CAM certification for specific projects/contracts with EVMS
– Parsons Project Controls Management certification program
• Government
– DoD’s DAWIA certification for acquisition professionals
– Tri-Service Cost Engineering Certification Program
– DOE’s PMCDP for FPD certification
General Types of Certifications (cont’d)
• Product-specific certifications
– More involved, since they are intended to be
referenced to a product across all applications
• Portable across locations, but not across other
products
– Very prevalent in information technology (IT)
industry, where personnel are certified on a
version of software or hardware
General Types of Certifications (cont’d)
• Profession-wide
– Most “general” type of certification
• Intended to be portable to all places a certified professional
might work
• This generalization increases the cost of such a program,
since the process to establish legally defensible assessment
of an entire profession is very extensive
– 3 types prevalent in project/cost management
profession
• Knowledge-based
• Experience-based
• Competency-based
In U.S. most are a combination of these two
Estimating-based Certifications
• General
– Certified Cost Consultant/Certified Cost Engineer (CCC/CCE)
• First offered by AACE in 1976
• Accredited by CESB
• Focuses on estimating as component of cost engineering
– Project* Management Professional (PMP)
• First offered by Project Management Institute (PMI) in 1984
• Accredited by ANSI
• Focuses on estimating as component of project management
– Certified Construction Manager (CCM)
• First offered by Construction Management Association of America
(CMAA) in 1995
• Accredited by ANSI
• Focuses on estimating as component of construction management
Estimating-based Certifications
• Specific
– American Society of Professional
Estimators (ASPE)
• Certified Professional Estimator (CPE)
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First offered in 1976
Accredited by CESB
Targeted specifically at construction estimators
Process consists of educational workshop, writing a 2,500 word
acceptable technical paper on estimating, and completing two
examinations (general knowledge and discipline-specific)
– To be eligible to sit for exam, applicant must have at least five
years experience in one discipline of professional estimating
(mechanical, electrical, landscaping, etc.)
Estimating-based Certifications
• Specific (cont’d)
– Society of Cost Estimating and Analysis
(SCEA)
• Certified Cost Estimator/Analyst (CCE/A)
– First offered in 1990
– Body of knowledge required includes estimating in all fields of
engineering, not just construction
– Exam focuses on various methods of analyzing cost of project, as well as
estimating models like parametric estimating and comparison estimating
– To be eligible to sit for exam, applicant must fall within one of three
categories:
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College degree heavy in cost estimating/analysis and two years experience
in cost estimating/analysis
Associate’s degree and five years experience as described above
Seven years of experience with submission of biographical sketch
demonstrating education, experience and relevant performance
Estimating-based Certifications
• Specific (cont’d)
– International Society of Parametric Analysts
(ISPA)
• Certified Parametric Practitioner (CPP)
– First offered in 2002
– Provides professional recognition of practitioner’s education, job
experience, knowledge, and skills in parametric estimating/analysis
– To be eligible to sit for exam, applicant must have either:
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College degree in field of study directly related to parametric
analysis and two years experience performing parametric analysis
Associate degree and five years of experience in parametric
analysis
Seven years of experience in parametric analysis with submission
of brief biographical sketch demonstrating applicant’s ability or
knowledge to pass examination
Estimating-based Certifications
• Specific (cont’d)
– AACE International (Association for the Advancement
of Cost Engineering)
• Certified Estimating Professional (CEP)
– First offered in 2008
– CESB accreditation in process
– Not specifically targeted toward construction estimators, but
majority of examples are construction-oriented
– To be eligible to sit for exam, applicant must:
» Have at least 8 full years of professional experience, of which
up to 4 years may be substituted by college/university degree
» Agree to adhere to the AACE Canon of Ethics
The Role of the PMO
• Project Management Office (PMO) defined
– Organizational entity chartered to perform in capacity that
achieves one or more operational objectives of project
management
• Oversight
• Control
• Support
– Ideally, should encompass all people, processes, and tools that
manage or influence project performance
• Help PM and “relevant organization” understand and apply
professional practices of project management
– Relevant organization is business unit or department influenced by PMO
functions & in receipt of direct business benefits from PMO operations
– What about for an LLC?
The Role of the PMO
• Development of Certification Program
– Should be priority of PMOs as key component of
career development
– Both external and internal certifications should be
considered when defining what will be pursued
• External serves to obtain third-party validation of
professional competency against widely accepted
standards
• Internal allows PMO to consider industry-specific issues as
well as applicable organizational and business interests
• In some organizations, both forms are used
Role of the PMO
• PMO’s contribution to development process*
– Define relevance of certification
• What will certification do for the individual?
• How will it benefit the relevant organization?
– Specify certification program target group
• For whom is certification mandatory?
• Who is eligible for optional entry into program?
* Will likely be done in collaboration with HR or Training Department
Role of the PMO
• PMO’s contribution to development process (cont’d)
– Determine certification program implementation
approach
• Individual completion time limits or constraints
• Multiple and repeat attempts at certification
• Options for any “grandfathering” (if mandatory)
– Construct certification criteria
• For internal certifications only
– Definition of body of knowledge
– Skill and performance objectives to be achieved by individuals
– Other business or professional qualifications required for individual
participation
Role of the PMO: Some Practical Applications
• Offering incentives for achieving specific external certifications
– Spot bonus
– Salary increase
– Limited number of certifications or not?
• Requiring achievement of external/internal certification within a set
amount of time
– Often times one year period from date of hire/promotion is used
– Challenge is not only defining what penalty will be for non-compliance, but
actually enforcing it
• Requiring internal certification, but allowing external certification to be
substituted for certain elements
– Converse (and more difficult) is requesting that an internal certification be
substituted for certain elements of a sought after external certification
Conclusion
• Subject of certification was discussed extensively at
recent meeting of EFCOG Cost Estimating Subgroup
– No real consensus on level/scope of what should be
required vs. recommended as best practice
– Bob Raines of OECM then concluded the discussion with
following observation:
• “Similar to how a P.E. is required to stamp a construction
design, then so should a certified estimator be expected to
sign off on a [complex] construction estimate”
– Do you agree?
Association/Certification Websites
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AACE International: www.aacei.org
PMI: www.pmi.org
CMAA: www.cmaanet.org
ASPE: www.aspenational.org
SCEA: www.sceaonline.org
ISPA: www.ispa-cost.org