AACE CCT key terms

A rough estimate made early with little project definition, often based on capacity or cost per unit and expressed as a broad range. Accuracy is typically low, around -50% to +100%.

An estimate prepared with moderate project definition, often used for budgeting and authorization. It falls between order-of-magnitude and definitive accuracy, commonly around -15% to +30%.

A detailed estimate prepared when the project scope is well defined, using priced quantities and current rates. It supports final funding decisions and typically achieves accuracy of about -5% to +15%.

A technique that derives cost or duration from statistical relationships between historical data and measurable project parameters, such as cost per square meter or per equipment unit.

A top-down technique that uses the actual cost or duration of a similar past project, adjusted for size and complexity, to estimate the new project. It is quick but less accurate.

A technique that estimates cost or duration for each detailed work package or activity and then rolls the values up to higher levels. It is more accurate but time-consuming.

The process of measuring and listing the quantities of materials, labor, and equipment needed from drawings and specifications, forming the basis for pricing an estimate.

A provision added to the estimate for known risks and uncertainties that are likely to affect cost or schedule. It is not padding for unknown or undefined scope.

The provision for expected increases in the cost of labor, materials, and equipment over time due to inflation or market conditions, applied to costs incurred in future periods.

A monetary or quantity provision included in an estimate for a specific item whose details are not yet known, such as a design allowance or a construction allowance.

A hierarchical decomposition of the total scope of work into manageable deliverables and work packages, used as the foundation for estimating, scheduling, and cost control.

The longest continuous sequence of dependent activities through a network, which determines the shortest possible project duration. Any delay on this path delays the project finish.

The amount of time an activity can be delayed without delaying the project finish date, calculated as the difference between its late and early finish dates.

The amount of time an activity can be delayed without delaying the early start of any successor activity. It is always less than or equal to total float.

A significant point or event in a project, usually with zero duration, used to mark completion of a major deliverable, phase, or contractual requirement.

A scheduling technique that uses nodes to represent activities and arrows to show logical relationships, most commonly finish-to-start links, to build a project network.

A scheduling adjustment that resolves resource over-allocation by delaying activities within their float, which may change the project finish date.

The approved version of the project schedule, including start and finish dates, used to compare actual progress and measure schedule performance.

A planned waiting time or delay inserted between two dependent activities in a schedule, such as a curing period, expressed as a duration.

A project control method that integrates scope, schedule, and cost by comparing the value of work planned, work performed, and money spent at a given point in time.

The authorized budget assigned to the work scheduled to be completed by a specific date. It is the baseline against which earned value is compared.

The budgeted value of work actually completed by a specific date, calculated by multiplying the budget for each activity by its percent complete.

The total cost actually incurred and recorded for work performed during a specific period, including direct and allocated indirect costs.

The difference between earned value and actual cost (EV minus AC). A positive value means the project is under budget; a negative value means it is over budget.

The difference between earned value and planned value (EV minus PV). A positive value indicates ahead of schedule; a negative value indicates behind schedule.

The ratio of earned value to actual cost (EV divided by AC). A value greater than 1.0 indicates cost efficiency better than planned.

The ratio of earned value to planned value (EV divided by PV). A value greater than 1.0 indicates schedule progress ahead of plan.

A forecast of the total cost of the project at completion, often calculated as budget at completion divided by cost performance index when current trends continue.

The estimated cost needed to finish the remaining project work, calculated as estimate at completion minus actual cost to date.

The cost efficiency needed on remaining work to meet a specified budget or estimate at completion, calculated as work remaining divided by funds remaining.

A formal process for requesting, reviewing, approving, and documenting changes to scope, schedule, or cost, ensuring impacts are assessed before implementation.

The total cost of an asset or project over its entire life, including acquisition, operation, maintenance, and disposal, used to compare alternatives.

The present value of future cash inflows minus outflows, discounted at a chosen rate. A positive NPV indicates the investment adds value.

The discount rate at which a project's net present value equals zero. It represents the expected annual return and is compared with a hurdle rate.

The time required for cumulative cash inflows to recover the initial investment. It is simple to calculate but ignores cash flows after payback and the time value of money.

A cost that can be traced specifically to a project or work item, such as labor, materials, and equipment used directly on the work.

A cost that cannot be traced directly to a specific work item and is shared across the project, such as site supervision, temporary facilities, or home-office overhead.

The timing of money coming into and going out of a project, used to forecast funding needs and ensure sufficient cash is available.