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102R-19: Cost Estimate Classification System – As Applied in Engineering, Procurement, Construction, and Qualification for the Pharmaceutical and Related Industries

102R-19: Cost Estimate Classification System – As Applied in Engineering, Procurement, Construction, and Qualification for the Pharmaceutical and Related Industries
AACE International, August 7, 2020

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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 industries and scope content.

This recommended practice provides guidelines for applying the principles of estimate classification specifically to project estimates for engineering, procurement, and construction (EPC) and qualification work for the pharmaceutical and related industries. This document supplements the generic cost estimate classification RP 17R-97 [1] by providing:
• A section that further defines classification concepts as they apply to the pharmaceutical and related 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 improve communications among all the stakeholders involved with preparing, evaluating, and using project cost estimates specifically for the pharmaceutical and related industries .

The overall purpose of this recommended practice is to provide the pharmaceutical and related industries with a project 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 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.

For development of this recommended practice input from representatives from major pharmaceutical and engineering companies serving the pharma industry and supporting organizations as Parenteral Drug Association (PDA), International Society for Pharmaceutical Engineering (ISPE), Project Management Institute (PMI) and AACE International (AACE) has been involved (the companies are not named for confidentiality).

An objective for this RP is to support the pharmaceutical industry with a recommended maturity level of project definition deliverables (Table 3). In general, pharmaceutical projects are like other process industry projects, However, there are a few areas of difference. These include issues such as room cleanliness standards and validation/qualification after commissioning. Improving the early definition of commissioning and validation/qualification plans as part of the estimate process has been shown to help improve project performance.

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 pharmaceutical and related 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.

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