"Cost engineering [is] the engineering practice
devoted to the project cost management, involving such
activities as cost- and control- estimating, which is cost control and cost
forecasting, investment appraisal, and risk analysis." "Cost
Engineers budget, plan and monitor investment projects. They seek the optimum
balance between cost, quality and time requirements."
Skills and knowledge of Cost Engineers are similar to those
of Quantity Surveyors.
A cost engineer is "an engineer whose judgment and
experience are utilized in the application of scientific principles and
techniques to problems of estimation; cost control; business planning and
management science; profitability analysis; project management; and planning
and scheduling."
Overview
One key objective of cost engineering is to arrive at
accurate cost estimates and schedules and to avoid cost
overruns and schedule slips. Cost engineering goes beyond preparing cost
estimates and schedules by supporting assessment and decisionmaking. "The
discipline of ‘cost engineering’ can be considered to encompass a wide range of
cost-related aspects of engineering and programme management, but in particular
cost estimating,cost analysis/cost assessment, design-to-cost, schedule
analysis/planning and risk assessment." The broad array of cost
engineering topics represent the intersection of the fields of project
management, business management, and engineering. Most people have a limited
view of what engineering encompasses. The most obvious perception is
that engineering addresses technical issues such as the physical design of a
structure or system. However, beyond the physical manifestation of a design of
a structure or system (for example, a building), there are other dimensions to
consider such as the money, time, and other resources that were invested in the
creation of the building. Cost engineers refer to these investments
collectively as "costs".
Cost engineering then can be considered an adjunct of
traditional engineering. It recognizes and focuses on the relationships between
the physical and cost dimensions of whatever is being "engineered".
Cost engineering is most often taught at universities as part of construction engineering, engineering management, civil
engineering, and related curricula because it is most often practiced on
engineering and construction capital projects. Engineering economics is a core skill and
knowledge area of cost engineering.
AACE International "is dedicated to the
tenets of furthering the concepts of Total Cost Management and Cost
Engineering. Total Cost Management is the effective application of professional
and technical expertise to plan and control resources, costs, profitability and
risk. Simply stated, it is a systematic approach to managing cost throughout
the life cycle of any enterprise, program, facility, project, product or
service. This is accomplished through the application of cost engineering and
cost management principles, proven methodologies and the latest technology in
support of the management process. ... Total Cost Management is that area of
engineering practice where engineering judgment and experience are utilized in
the application of scientific principles and techniques to problems of business
and program planning; cost estimating; economic and financial analysis; cost
engineering; program and project management; planning and scheduling; and cost
and schedule performance measurement and change control. In summary, the list
of practice areas ... are collectively called cost engineering; while the
“process” through which these practices are applied is called total cost
management or TCM.
History
Cost engineering is a field of engineering practice that
began in the 1950s (AACE International was founded in 1956). The skills and
knowledge areas of Cost Engineers are similar to those of Quantity
Surveyors. AACE International is one of many international engineering
organizations representing practitioners in these fields. The International
Cost Engineering Congress (ICEC) was founded in 1976 as a Worldwide
Confederation of Cost Engineering, Quantity Surveying and Project Management
Societies.
In 2006, AACE published the Total Cost Management (TCM) Framework which
outlines an integrated process for applying the skills and knowledge of cost
engineering (see References). This has also been called the world's first
process for portfolio, program and project management.
Professional Titles or Positions in Cost Engineering
"Cost engineering practitioners tend to be: a)
specialized in function (e.g., cost estimating, planning and scheduling, etc.);
b) focused on either the asset management or project control side of the TCM
process; and c) focused on a particular industry (e.g., engineering and
construction, manufacturing, information technology, etc) or asset type (e.g.,
chemical process, buildings, software, etc.)... They may work for the business
that owns and operates the asset (emphasis on economics and analysis), or they
may work for the contractor that executes the projects (emphasis on planning
and control)."
Some titles or positions in Cost Engineering practice include:
- Claims and Changes Specialist
- Construction Manager
- Contract Management Specialist
- Cost Analyst
- Cost Engineer
- Cost Estimator (or Estimator)
- Planner/Scheduler (or Scheduling Engineer)
- Pre-Construction Manager
- Project Controls Engineer
- Project Manager
- Quantity Surveyor
- Construction Estimator
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