Cost engineering
the engineering practice devoted to the management of
project cost, involving such activities as estimating, cost control, 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. In
many industries, cost engineering is synonymous with project controls.
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.
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 helping manage resources and
supporting assessment and decision making. 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".
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.
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