New Recommended Practice

142R-26: Cost Estimate Classification System – As Applied in Engineering, Procurement, and Construction for the Tunneling Industries

As a recommended practice (RP) of AACE International, the Cost Estimate Classification System provides guidelines for applying the general principles of estimate classification to tunneling project cost estimates (i.e., cost estimates that are used to evaluate, approve, and/or fund projects). The Cost Estimate Classification System maps the phases and stages of project cost estimating together into a generic project scope definition maturity and quality matrix, which can be applied across the tunneling industries.

This addendum to the generic recommended practice RP 17R-97 [1] provides guidelines to both owners and service providers for applying estimate classification principles specifically to project estimates for engineering, procurement, and construction (EPC) contracts, as well as other contractual arrangements and execution strategies, in the context of ongoing or developing tunneling projects. This addendum supplements the generic recommended practice by providing:

• Sections that further define classification and stage-gate concepts as they apply to the tunneling industries and their unique differences from other industries.
• A chart that maps the extent and maturity of estimate input information (for example, project definition deliverables) into the estimate class.

As with the generic RP, the intent of this document is to improve communication and consensus among all the stakeholders involved with preparing, evaluating, and using project cost estimates, specifically for the tunneling industries.

The overall purpose of this recommended practice is to provide the tunneling industries with a project definition deliverable maturity matrix that is not covered in RP 17R-97 [1]. It also provides an approximate representation of the relationship of planning, preparation, design input data, and project scope deliverable maturity with the estimate accuracy and methodology used to produce the cost estimate.

This document is intended to provide a guideline, not a standard. It is understood that each enterprise may have its own project and estimating processes and terminology, and may classify estimates in its own way. This guideline provides a generic and generally acceptable classification system for the tunneling industries that can be used as a starting point for the basis of comparison. This recommended practice should allow each user to better assess, define, and communicate their established and developed procedures, considering generally accepted cost engineering practice.

Contributors:

Contributors:

• John K. Hollmann, CCP CEP DRMP FAACE Hon. Life (Primary Contributor)
• Peter R. Bredehoeft, Jr. CEP FAACE
• Dean Brox
• Jordan Cote
• Andrew Cushing
• Paulo Jorge Aleixo Martins da Silva
• Igor Adolfo de Avila
• Larry R. Dysert, CCP CEP DRMP FAACE Hon. Life
• Shoshanna C. Fraizinger, CCP FAACE
• Saumil H. Maniar
• Claudio Manriquez Ortega
• Hemal Patel
• Carlos Fernando Rodrigues
• Giulio Sansonetti
• Tolga Togan

About John:

John joined AACE in 1986 and is a passionate leader in the cost engineering field, holding multiple certifications from AACE (CCP, CEP, and DRMP). He has authored and contributed to numerous AACE recommended practices, plus many papers, and led the development of AACE's Decision and Risk Management Professional (DRMP) certification. He was the principal author of the first edition of AACE’s 2006 landmark publication, The Total Cost Management Framework: An Integrated Approach to Portfolio, Program, and Project Management, and also authored two books: Project Risk Quantification, Volumes 1 and 2 in 2016 and 2024.

John has served AACE in various roles, including chairs of multiple technical subcommittees. He was elected to and served on AACE’s Board of Directors for one year (1996-1997), where he was instrumental in the reorganization that created the three Associate Boards (Technical/Education/Certification). John was a member of the Technical Board for several years, where he served as Director of Recommended Practices and Director of Total Cost Management. John contributed to over 70 Recommended Practices and was the primary contributor on over 20 of them.

He has previously been recognized by AACE with the Outstanding Technical Committee Chair Award (1994, 1996), O.T. Zimmerman Founder’s Award (2005), Fellow (2006), Award of Merit (2008), Technical Excellence (2010), Honorary Life Membership (2011), the Lifetime Achievement Award (2018), and the TCM Excellence Award (2022).

John helps companies improve their cost engineering competencies and capabilities by evaluating processes, organization, tools, and practices for cost engineering-related functionality; assisting in implementing practice improvements; validating and reviewing major project estimates; performing risk analyses, contingency, and escalation estimates; and by developing and conducting training.

He is currently the owner of Validation Estimating, LLC, and an alliance partner in ValidRisk software.

You can find the new RP here: 142R-26: Cost Estimate Classification System - As Applied in Engineering, Procurement, and Construction for the Tunneling Industries