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69R-12: Cost Estimate Classification System - As Applied in Engineering, Procurement, and Construction for the Hydropower Industry

69R-12: Cost Estimate Classification System - As Applied in Engineering, Procurement, and Construction for the Hydropower Industry
AACE International, January 25, 2013

Price: $0 (Member) / $100 (Non-Member)

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 lineage 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.

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