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(OWN-2210) An Owner’s Approach to Cost Estimating and Quantitative Risk Analysis

Primary Author: James Wolf, CCP
Co-Author(s): John W. Blodgett

Audience Focus: Intermediate
Application Type: Practice
Venue: 2016 AACE International Annual Meeting, Toronto, ON, Canada

Abstract: This paper will present an owners approach, from a major utility industry perspective, to applying cost estimating standards and quantitative risk analysis to major projects. In the area of cost estimating, the authors will provide a model for using AACE International Recommended Practices to develop enterprise standards to shepherd major project investments through the Plan, Do, Check, Act cycle. In the area of quantitative risk analysis, the paper will explore a variety of approaches for owners to use stochastic modeling and simulation to perform integrated cost and schedule risk analysis. Modeling examples will include the use of historical project data, scope quantification, and facilitated workshops to predict project outcomes throughout the project lifecycle. Business applications include estimate validation and contingency determination for major projects.