The Use of Professional Credentialing in Helping to Establish a Cost Estimating Capability Michael R. Nosbisch, CCC, PSP President - Elect

Outline Introduction – Speaker – AACE International Professional Credentials/Certification – Definition and attributes – Certification vs. licensure – General types of certifications – Specific examples of estimating-based certifications (all associations) The Role of the PMO Conclusion

Introduction Speaker Background – General More than 22 years of project management/controls experience Named contributor to GAO Cost Guide – Specific Currently hold multiple professional certifications Member of task force that developed both an internal (Parsons) and external (AACE) certification Currently President – Elect of AACE International – Will [soon] have responsibility for administration of 6 existing certifications – Management of development process in relation to any new certifications

Introduction AACE International (Association for the Advancement of Cost Engineering) – Founded in 1956, currently largest global organization dedicated to furthering concepts of total cost management and cost engineering – 8 regions – 91 sections – 7,708 members According to 2010 Membership Survey, 22% of respondents were Estimators by primary job function

AACE International Cost Engineering defined as the collective set of practice areas that includes the following: – Business and program planning – Cost estimating – Economic and financial analysis – Cost control – Program and project management – Planning and scheduling – Cost and schedule performance measurement – Change control Total Cost Management (TCM) is the "process" through which these practices are applied – Encompasses multiple “Recommended Practices” related to estimating, including “Cost Estimate Classification System: As Applied in [EPC] for the Process Industries” (JAN 2011)

AACE International DOE Relationship – Cooperative agreement first signed in 1997 Reauthorized in 2002 and 2007 – Current DOE “sponsor” is OECM – Key elements: Advance “state-of-the-art” of TCM through increased communication and dialogue Apply established cost engineering/cost management principles, proven methodologies, and latest technology Develop new cost engineering/cost management methodologies and technology in pursuit of optimum resource utilization Encourage utilization of cost management standards and practices and their continual improvement/advancement

Professional Credentials/Certification Definition – A designation earned by a person to assure qualification to perform a job or task Attributes – Most are created, sponsored, or affiliated with professional associations, trade organizations, or IT vendors interested in raising standards – In general, must be renewed periodically, or may be valid for specific period of time As part of renewal process, common for individual to show evidence of continued learning (PDUs, CEUs, etc.)

Certification vs. Licensure Licensure is when demonstration of ability or knowledge is required by law before being allowed to perform a task/job – In U.S., professional licenses are usually issued by state agencies (e.g. professional engineer) Certifications are usually earned from a professional society or educational institute, not the government – For some organizations, certification assessment process is very similar or even same as licensure May differ only in terms of legal status – Independent “accreditation” often times sought to strengthen validity of process American National Standards Institute (ANSI) Council of Engineering & Scientific Specialty Boards (CESB)

General Types of Certifications Internal certifications – Developed by a company/corporation for internal purposes – Limited “portability” to other companies/corporations – Examples: Corporate – CAM certification for specific projects/contracts with EVMS – Parsons Project Controls Management certification program Government – DoD’s DAWIA certification for acquisition professionals – Tri-Service Cost Engineering Certification Program – DOE’s PMCDP for FPD certification

General Types of Certifications (cont’d) Product-specific certifications – More involved, since they are intended to be referenced to a product across all applications Portable across locations, but not across other products – Very prevalent in information technology (IT) industry, where personnel are certified on a version of software or hardware

General Types of Certifications (cont’d) Profession-wide – Most “general” type of certification Intended to be portable to all places a certified professional might work This generalization increases the cost of such a program, since the process to establish legally defensible assessment of an entire profession is very extensive – 3 types prevalent in project/cost management profession Knowledge-based Experience-based Competency-based In U.S. most are a combination of these two

Estimating-based Certifications General – Certified Cost Consultant/Certified Cost Engineer (CCC/CCE) First offered by AACE in 1976 Accredited by CESB Focuses on estimating as component of cost engineering – Project* Management Professional (PMP) First offered by Project Management Institute (PMI) in 1984 Accredited by ANSI Focuses on estimating as component of project management – Certified Construction Manager (CCM) First offered by Construction Management Association of America (CMAA) in 1995 Accredited by ANSI Focuses on estimating as component of construction management

Estimating-based Certifications Specific – American Society of Professional Estimators (ASPE) Certified Professional Estimator (CPE) – First offered in 1976 – Accredited by CESB – Targeted specifically at construction estimators – Process consists of educational workshop, writing a 2,500 word acceptable technical paper on estimating, and completing two examinations (general knowledge and discipline-specific) – To be eligible to sit for exam, applicant must have at least five years experience in one discipline of professional estimating (mechanical, electrical, landscaping, etc.)

Estimating-based Certifications Specific (cont’d) – Society of Cost Estimating and Analysis (SCEA) Certified Cost Estimator/Analyst (CCE/A) – First offered in 1990 – Body of knowledge required includes estimating in all fields of engineering, not just construction – Exam focuses on various methods of analyzing cost of project, as well as estimating models like parametric estimating and comparison estimating – To be eligible to sit for exam, applicant must fall within one of three categories: 1.College degree heavy in cost estimating/analysis and two years experience in cost estimating/analysis 2.Associate’s degree and five years experience as described above 3.Seven years of experience with submission of biographical sketch demonstrating education, experience and relevant performance

Estimating-based Certifications Specific (cont’d) – International Society of Parametric Analysts (ISPA) Certified Parametric Practitioner (CPP) – First offered in 2002 – Provides professional recognition of practitioner’s education, job experience, knowledge, and skills in parametric estimating/analysis – To be eligible to sit for exam, applicant must have either: 1.College degree in field of study directly related to parametric analysis and two years experience performing parametric analysis 2.Associate degree and five years of experience in parametric analysis 3.Seven years of experience in parametric analysis with submission of brief biographical sketch demonstrating applicant’s ability or knowledge to pass examination

Estimating-based Certifications Specific (cont’d) – AACE International (Association for the Advancement of Cost Engineering) Certified Estimating Professional (CEP) – First offered in 2008 – CESB accreditation in process – Not specifically targeted toward construction estimators, but majority of examples are construction-oriented – To be eligible to sit for exam, applicant must: » Have at least 8 full years of professional experience, of which up to 4 years may be substituted by college/university degree » Agree to adhere to the AACE Canon of Ethics

The Role of the PMO Project Management Office (PMO) defined – Organizational entity chartered to perform in capacity that achieves one or more operational objectives of project management Oversight Control Support – Ideally, should encompass all people, processes, and tools that manage or influence project performance Help PM and “relevant organization” understand and apply professional practices of project management – Relevant organization is business unit or department influenced by PMO functions & in receipt of direct business benefits from PMO operations – What about for an LLC?

The Role of the PMO Development of Certification Program – Should be priority of PMOs as key component of career development – Both external and internal certifications should be considered when defining what will be pursued External serves to obtain third-party validation of professional competency against widely accepted standards Internal allows PMO to consider industry-specific issues as well as applicable organizational and business interests In some organizations, both forms are used

Role of the PMO PMO’s contribution to development process* – Define relevance of certification What will certification do for the individual? How will it benefit the relevant organization? – Specify certification program target group For whom is certification mandatory? Who is eligible for optional entry into program? * Will likely be done in collaboration with HR or Training Department

Role of the PMO PMO’s contribution to development process (cont’d) – Determine certification program implementation approach Individual completion time limits or constraints Multiple and repeat attempts at certification Options for any “grandfathering” (if mandatory) – Construct certification criteria For internal certifications only – Definition of body of knowledge – Skill and performance objectives to be achieved by individuals – Other business or professional qualifications required for individual participation

Role of the PMO: Some Practical Applications Offering incentives for achieving specific external certifications – Spot bonus – Salary increase – Limited number of certifications or not? Requiring achievement of external/internal certification within a set amount of time – Often times one year period from date of hire/promotion is used – Challenge is not only defining what penalty will be for non-compliance, but actually enforcing it Requiring internal certification, but allowing external certification to be substituted for certain elements – Converse (and more difficult) is requesting that an internal certification be substituted for certain elements of a sought after external certification

Conclusion Subject of certification was discussed extensively at recent meeting of EFCOG Cost Estimating Subgroup – No real consensus on level/scope of what should be required vs. recommended as best practice – Bob Raines of OECM then concluded the discussion with following observation: “Similar to how a P.E. is required to stamp a construction design, then so should a certified estimator be expected to sign off on a [complex] construction estimate” – Do you agree?

Association/Certification Websites AACE International: PMI: CMAA: ASPE: SCEA: ISPA: