a lecture on ccp certificate

Mohamed ElSaadanyB.Sc. Eng, PMP, CCP, RMP

C C P CERTIFICATE

Prepared By: Eng. Mohamed ElSaadany, PMP, CCP

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 Sections


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


CCP Exam Location


RecertificationRecertification 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

DirectCosts

IndirectCosts

FixedCosts

VariableCosts

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

1 • Recording

2 • Classifying

3 • Summarizing

Cost Accounting

1 • Estimating

2 • Trending

3 • Forecasting

4 • Life-Cycle Costing

Cost Management



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 ESTIMATIONCost Estimate Classification Matrix



SECTION 2—COST ESTIMATION

ESTIMATING METHODOLOGIES

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 CorrelationFactor of

Main Equipment

B- Deterministic Estimating



SECTION 2—COST ESTIMATION

ESTIMATING METHODOLOGIES

ReviewScope

IFC

Takeoff HOC

Customs & Taxes

FeesIf Applicable

Risk Analysis(Reserve)

Review & Validation



SECTION 3—PLANNING & SCHEDULING

PlanningInfluencing 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.

SchedulingIt 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

HandBooks

CompanyStandards

Model Plans

Checklists

HistoricalDatabase

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




SchedulingTools

Bar Chart

CPMPERT


Skills & Knowledge of Cost Engineering• SECTION 4—PROGRESS & COST CONTROL

Earned Value ExampleCost Units Total

Scheduled BC($ 500) WS(40) $ 20’000

Actual AC($ 550) WP(42) $ 23’100

PV (BCWS) = $ 20’000AC (ACWP) = $ 23’100EV (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


Skills & Knowledge of Cost Engineering• SECTION 5—PROJECT MANAGEMENT

16. Project Management Fundamentals17. Project Organization Structure18. Project Communication19. Project Labor Cost Control20. Leadership and Management of Project People21. Quality Management22. Value Engineering23. Contracting for Capital Projects24. Strategic Asset Management25. Change Management Practical Guide26. Construction Claims & Disputes


Skills & Knowledge of Cost Engineering• 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


Skills & Knowledge of Cost Engineering• SECTION 6—ECONOMIC ANALYSISEx: 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 Net0 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 P1 (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) = 38’115P = (38’000) + (4’945 )+ 38’115 = (4’830)


Skills & Knowledge of Cost EngineeringSECTION 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 Probability1.00 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 Out34.15 % 15.85 %

40 % 10 %

45 % 5 %

47.5 % 2.5 %

47.7 % 2.3 %

49 % 1 %

49.5 % .5 %

49.85 % .15 %



Standard Normal DistributionEX: 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 %

Mohamed ElSaadany, PMP, CCP, RMP

Thank You

CCP Certificate