A lecture on CCP Certificate

Contents
• AACE International
• AACE Sections and Region 7
• AACE Certifications
• What is CCP
• Eligibility Requirements and Registration
• Examination & Recertification
• Certification Challenges
• Skills & Knowledge of Cost Engineering 6.0

AACE International
• Association for the Advancement of Cost Engineering
• A non-profit professional association since 1956
• Members in 87 countries
• Cover 80 local sections in 9 regions

AACE Region 7
• EGYPT - Greater Cairo
• UAE - United Arab Emirates
• SAUDI ARABIA - Arabian Gulf
• PAKISTAN – Pakistan
• OMAN – Oman
• LEBANON – Lebanon
• KUWAIT – Kuwait
• JORDAN – Jordan
• INDIA - South India
• INDIA - North India
• INDIA - Central India

AACE Certifications
1. Certified Cost Professional (CCP)
2. Earned Value Professional (EVP)
3. Planning & Scheduling Professional (PSP)
4. Certified Forensic Claims Consultant (CFCC)
5. Certified Estimating Professional (CEP)
6. Decision & Risk Management Professional (DRMP)
7. Certified Cost Technician (CCT)
8. Certified Scheduling Technician (CST)

What is (CCP) ?
1. CCP certification recognizes specialists who meet a set of cost and management
criteria by examination, experience, education and ethical qualifications.
2. CCP Certification is independently accredited by the Council of Engineering &
Scientific Specialty Boards (CESB).
3. Formerly known as Certified Cost Engineer (CCE) / Certified Cost Consultant (CCC).

CCP Eligibility Requirements
1. Professional experience
At least 8 full years of professional experience, of which up to 4 years may be
substituted by a college/university degree.
2. Technical Paper
Minimum of 2,500 word technical paper and signed affidavit must be
submitted within 30 days of registration.
3. Accept Canon of Ethics

CCP Registration
1. Registration and payment (US$500 Members, US$625 Non-Members) where
membership cost is ($170).
2. Submit experience verification, education certificate, and technical paper.
3. Receive clearance from AACE to schedule the exam
4. Login to KRYTERION web site to schedule your exam

Examination
Computer Based Test (CBT)
• CBT is 5 Hours (120 Questions)
• Exam is fully closed book
• Calculator is permitted
• Formula guides were developed to assist in specific
questions and available onscreen when needed
• Passing Grade is 70 %
• Results will be sent within 14 days after CBT exam
• Rescheduling is free-of-charge till 72 hours before exam

Recertification
Recertification By Credit Plan
• Accumulation of 15 CEUs over a 3-year period.
• CEUs (Continuing Education Units) are equivalent to 10 hour.
• CEUs are earned in 6 separate categories:
A. Performed (Employment in related field)
B. Learned (Seminars, conferences, workshops, and courses)
C. Taught ( Full-time / part-time instructor)
D. Professional Papers (Published or presented)
E. Served (Volunteer work for AACE)
F. Obtained (Technical certification/license/degree)
Recertification By Exam
• Registration, payment, and passing the examination every 3 years.
• Fees : $500 members; $625 non-members.
• Technical paper is not required.

Certification Challenges
1. Technical Paper
2. Several Authors
3. Various Knowledge Areas
4. Significantly Large Material
5. No Well-known Help Books

Skills & Knowledge of Cost Engineering
• SECTION 1—COST
• SECTION 2—COST ESTIMATING
• SECTION 3—PLANNING & SCHEDULING
• SECTION 4—PROGRESS & COST CONTROL
• SECTION 5—PROJECT MANAGEMENT
• SECTION 6—ECONOMIC ANALYSIS, STATISTICS,
PROBABILITY, & RISK

SECTION 1—COST
Cost
Structuring
Direct
Costs
Indirect
Costs
Fixed
Costs
Variable
Costs
EX:
Cost of
concrete used
for casting
foundation
EX:
Cost of
administrative
work in the
main office
EX:
Payrolls of site
engineers and
other
supervisors
EX:
Material used
and consumed
in producing
the product

SECTION 1—COST

SECTION 1—COST
Material
Raw Material
Bulk Material
Fabricated
Material
Engineered
Material
Labor
Base wage
Fringe
Benefits
Medical &
Life Insurance
Overhead &
Profit
Engineering
Pure/Applied
Research
CAM / CAE /
CAD
Prototype
Patents &
Trade Secrets
Equipments
Cost New
Value
Market Value
(Used)
Residual
Values
Residual
Curves

SECTION 1—COST
Cost-Change Concepts:
1- Inflation 2- Deflation 3- Escalation 4- Currency Variation
Sources of Inflation
1- Money Supply 2- Exchange Rate 3- Demand-Pull 4- Cost-Push
Depreciation Techniques
1- Straight Line 2- Double Declining Balance 3- Sum-of-Year Digits
Economic Analysis Techniques
1- Net Present Worth 2- Payback Period
3- Benefit / Cost Ratio 4- Equivalent Uniform Annual Cost

SECTION 2—COST ESTIMATION

A- Conceptual Estimating
Units No.
Physical
Dimension
Capacity
Factor
Ratio or
Factor
Parametric
200 Rooms
Hotel 80 KM
Pipeline
(Nonlinear)
(CapA/CapB) e
e= 0.6
Mathematical
Correlation
Factor of
Main
Equipment

B- Deterministic Estimating
Review
Scope
IFC
Takeoff HOC
Customs &
Taxes
Fees
If Applicable
Risk Analysis
(Reserve)
Review &
Validation

SECTION 3—PLANNING & SCHEDULING
Planning
Influencing the future by making decisions based on missions, needs,
and objectives. It is the process of stating goals and determining the
most effective way of reaching them.
Scheduling
It is the process that converts the project work plan into a road map, that
if followed, will assure timely project completion.

Planning
Tools
Gained
Experience
Hand
Books
Company
Standards
Model
Plans
Checklists
Historical
Database
Chart of
Accounts

Planning Major Elements:
1. Summarizing Goals & Scope of Work
2. Time Planning
3. Cost Planning
4. Resource Planning
5. Quality Planning
6. Review
7. Planning for Change

Scheduling
Tools
Bar Chart
CPMPERT

• SECTION 4—PROGRESS & COST CONTROL
Earned Value Example
Cost Units Total
Scheduled BC($ 500) WS(40) $ 20’000
Actual AC($ 550) WP(42) $ 23’100
PV (BCWS) = $ 20’000
AC (ACWP) = $ 23’100
EV (BCWP) = $ 500 x 42 = $ 21’000
Cost Performance
• Cost Variance
CV = EV – AC = - 2’100
• Cost Performance Indicator
CPI = EV / AC = 0.91
Over Budget
Schedule Performance
• Schedule Variance
SV = EV – PV = 1’000
• Schedule Performance Indicator
SPI = EV / PV = 1.05
Ahead Schedule

• SECTION 5—PROJECT MANAGEMENT
16. Project Management Fundamentals
17. Project Organization Structure
18. Project Communication
19. Project Labor Cost Control
20. Leadership and Management of Project People
21. Quality Management
22. Value Engineering
23. Contracting for Capital Projects
24. Strategic Asset Management
25. Change Management Practical Guide
26. Construction Claims & Disputes

• SECTION 6—ECONOMIC ANALYSIS
27. Financial & Cash Flow Analysis
28. Corporate Investment Decision
29. Statistics & Probability
30. Optimization
31. Risk Management Fundamentals
32. Risk Management Practice Guide
33. Total Cost Management Overview
34. International System of Units

Discount Factors

Ex:
If present value is P=20’000 and i = 10 %
Find Future value after 5 years
F = 20’000 x ( 1 + 0.1)5
= 20’000 * 1.6105 = 32’210
Ex:
If present value is P=20’000 and i = 10 %,
Find Annuity value for the next five years
A = 20’000 x 0.1 x ( 1 + 0.1)5 / [( 1 + 0.1)5 -1]
= 20’000 x 0.1 x 1.61 / 0.61
= 20’000 x .02639 = 5’278
0 1 2 3 4 5
F
P
0 1 2 3 4 5
A
P
A A A A

Ex: For the following Cashflow If the contractor’s minimum attractive
rate of return (MARR) is 6 percent, should the investment be made?
Year Expense Income Net
0 38’000 0 (38’000)
1 0 11’000 11’000
2 1’000 11’000 10’000
3 2’000 11’000 9’000
4 3’000 11’000 8’000
Total 44’000 44’000 0.00
Factor P
1 (38’000)
0.9434 10’377
0.8900 8’900
0.8396 7’556
0.7921 6’337
Total (4’830)
Another Solution : P = P0 + P1 + P2
P0 = (38’000)
P1 = -G (P/G,i,n)=-1,000 (P/G, 6 %, 4)=-1,000 (4.945) = (4’945)
P2 = A (P/A,i,n)=11,000 (P/A, 6 %, 4)=11,000 (3.465) = 38’115
P = (38’000) + (4’945 )+ 38’115 = (4’830)

SECTION 7—STATISTICS, PROBABILITY, & RISK
Mean : The sum of measurements divided by the number of
measurements
Median: The middle number when the data observations are
arranged in ascending or descending order
Mode: The measurement that occurs most often in the data set
Dispersion

Variance : The average of the squared
deviations from the mean.
Standard Deviation : The square root of the variance
Central Tendency

Z Score: Deviation from the mean relative to the standard deviation
Z=(X- μ)/σ
Standard Normal Distribution
Z Probability
1.00 68.3 %
1.282 80 %
1.645 90 %
1.96 95 %
2.00 95.4 %
2.326 98 %
2.576 99 %
3.00 99.7 %
Single In Single Out
34.15 % 15.85 %
40 % 10 %
45 % 5 %
47.5 % 2.5 %
47.7 % 2.3 %
49 % 1 %
49.5 % .5 %
49.85 % .15 %

Standard Normal Distribution
EX: After reviewing the results for a concrete foundation activity that was exuted
several times , we found that the mean duration was 35 days with standard
deviation of 3.04 .
What will be the probability of finishing this activity in 35, 30, and 40 days?
1. For 35 Days, Probability = 50 %
2. Z = (35-30) / 3.04 = 1.645
From table, Probability = 5 %
3. Z = (40-35) / 3.04 = 1.645
From table, Probability = 50 + 45 = 95 %

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