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(TCMA-3227) Forecasting Cost to Complete on Major Projects

Level: Advanced
Venue: 2019 AACE International Conference & Expo, June 16-19, 2019, New Orleans, LA, USA

Abstract: This paper demonstrates the importance of regularly and accurately calculating forecasted cost-to-complete for major construction projects. The objective is to assist project controls professionals achieve better cost control, oversight of their projects and to deliver accurate projections of cash flow to all project stakeholders. Calculating forecast-to-complete is a critical aspect of project controls. It demands a careful process of budgeting, data gathering, progress measurements, change order management, time-phasing and detailed forecasting, to achieve a reliable result. This paper will dive into the processes and methods required to be able to deliver consistent, accurate results for predicting remaining project costs over a timeline and early identification of critical issues. It will clearly delineate the difference between forecast-to-complete (FTC) and the commonly used industry metric, estimate-to-complete (ETC) and the best practices for the use of each. Where ETC is a calculated metric based on past performance, FTC is a predictive metric made by project controls that forecasts remaining costs based on empirical evidence of work remaining. What’s equally significant to this method, is that it is practical and achievable and the result of working with many project controls professionals in a variety of industries over the past 10 years. This method stands out from previous methods in that it strategically leverages both distributed and automated techniques for capturing and processing key data to feed the forecasting and project controls engine.