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COST
UNMANNED
ENGINEERING
July/August 2016

www.aacei.org

AERIAL VEHICLES
FOR CONSTRUCTION
WHAT TO DO WITH
MANAGEMENT UNKNOWNS IN
SCHEDULE
RISK ANALYSIS?

RECOMMENDED PRACTICES
PROVIDE IMPLEMENTATION DETAILS
FOR CMAA STANDARDS OF PRACTICE
 CALL FOR PAPERS

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 CONTENTS

COST ENGINEERING

TECHNICAL ARTICLES
4 Unmanned Aerial Vehicles
For Construction Management
Neil D. Opfer, CCP CEP PSP and Dr. David R. Shields, PE

11 What to Do With Unknowns in

Schedule Risk Analysis?
Dr. David T. Hulett

24 Recommended Practices Provide

Implementation Details for CMAA
Standards of Practice
Christopher W. Carson, CEP DRMP PSP FAACE

ALSO FEATURED
2 AACE International Board of Directors 34 The AACE International Online Store
2 Cost Engineering Journal Information 36 Professional Services Directory
33 Special Feature 36 Index to Advertisers
37 Calendar of Events

COST ENGINEERING JULY/AUGUST 2016 1


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CONTENTS
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 TECHNICAL ARTICLE

Unmanned
Aerial Vehicles
For Construction
Management
Neil D. Opfer, CCP CEP PSP and
Dr. David R. Shields, PE

be camera-equipped for a variety of

Abstract: Construction management is faced with constant project chal- purposes. While many of these UAVs
lenges of time, cost, and quality performance improvement. Performance
are undoubtedly purchased solely for
improvement means that construction managers must adopt new and dif-
ferent methods for their operations. Use of unmanned aerial vehicles (UAVs) recreational use, based on anecdotal
offers the possibility of improving a number of project aspects for construc- evidence seen by the writers, a number
tion management. UAVs can assist in traditional tasks, such as field inspec- of these are being used for commercial
tion and aerial photography. They can provide important benefits in areas purposes. These commercial purposes
including productivity and safety improvement. UAV improvements, along include a number of applications on
with that of related technology, such as cameras, have made their use in construction sites.
construction a practical reality. This technology has become increasingly op-
erator-friendly, requiring less expertise to achieve professional results. There The Problem
are certain governmental restrictions in some countries, such as those from Construction industry organiza-
the FAA in the United States. This article will explore key issues and benefits
tions are continually faced with the
in the implementation of UAVs for various aspects of construction manage-
ment. This article was first presented at the 2015 AACE International Annual challenges of improving time, cost, and
Meeting as PM.2027. quality performance for clients on their
projects. The use of UAVs can assist
construction managers in achieving

U
nmanned aerial vehicles
have been popularized in
the media as to military
and law enforcement ap-
plications. Less well-known are the in-
dustrial applications for UAVs, including
a number of uses relevant for the con-
struction industry. Some believe that
UAVs are impractical for construction
because they witness the publicized
steep price tags paid by the military
sector for its equipment. However, mil-
itary UAVs are typically far different
than construction uses for these de-
vices, both in terms of typical payloads
and typical ranges. Military UAVs in
many instances are piloted remotely
through satellite links from halfway
around the world. The military applica-
tions are ruggedized because of the
often harsh environments encoun-
tered, as well in addition to the require-
ments for hauling substantial payloads.
A military UAV may have the capability
to stay aloft for days. Construction ap-
plications for UAVs are much less de-
manding since the devices are limited
in range to the typical narrow confines
of a construction site. Moreover, when
harsh environments are encountered,
such as high winds or other weather is-
sues, construction sites are often
placed into hibernation mode with
shutdowns, or they see substantially re-
duced activity.
For calendar year 2014, just in the
United States, it has been estimated
that 200,000 UAVs were sold each
month [5]. Many of these either come
equipped with cameras, or can readily
these goals.
UAV Definition
A UAV can be defined as any air-
craft that is meant to be used for flight
with no human pilot actually in the
unit. This then would include devices
ranging from hand-held hobby-type
planes and helicopters to very large
units seen in military applications. The
pilot or operator controls the device
through remote controls separate from
the UAV.
Governmental Restrictions
A number of countries, including
the United States, have restrictions on
the use of UAVs. In certain other lo-
cales, there may be zero restrictions re-

4 COST ENGINEERING JULY/AUGUST 2016

garding their use. Construction organi-
zations need to check for any local gov-
ernmental restrictions. Moreover, while
UAVs may not be separately regulated;
in certain countries, flying too close to
sensitive facilities, such as military in-
stallations, can be problematic with
their inherent restrictions. Construction
industry firms considering UAV use in a
particular country should check the req-
uisite regulations, if any, governing use
of these devices.
In the U.S., the FAA has been
charged as the jurisdictional agency
with developing rules for UAVs in com-
mercial applications. The FAA is the fed-
eral agency with responsibility for
regulating air traffic in the U.S. Numer-
ous other countries have similar agen-
cies. In the U.S., the FAA currently only
allows recreational use of UAVs [6].
These recreational uses are defined as
those flights by hobbyists less than 400
feet in altitude and more than five miles
away from airport facilities. In addition,
the UAV use has to be of a non-mone-
tary nature. While the 400-foot height
restriction may seem onerous, at a 10-
foot story height, this is the obvious
equivalent of a 40-story building. Except
in major metropolitan areas, facilities
exceeding a 400-foot height are uncom-
mon. The FAA has granted a limited
number of permits thus far for com-
mercial use, but the demand for per-
mits is many times greater than this
number [3]. The non-monetary basis for
UAV use has meant that some commer-
cial photography firms have performed
aerial photography with a UAV. The UAV
usage is not billed to the construction
firm, but instead the charges appear
under another area such as “photo
edits.” If challenged, it is very doubtful
that this billing subterfuge would with-
stand scrutiny by the FAA.
The FAA was supposed to issue
UAV regulations by the fall of 2014 with
implementation by the fall of 2015.
Thus far, no regulations have been is-
sued by the FAA and ar release date is
uncertain [12]. However, a recent
leaked FAA document provides the
broad outlines of proposed regulations
[7]. The FAA document is an economic
analysis of proposed rules for regulating
UAV usage. This document could be just
a draft and subject to significant revi-
sion; but based on its timing, the UAV
requirements described may be close to
final form. Based on this document, the
FAA proposes a few requirements for
UAV use as follows:
• UAV operator will have to pass an
aeronautical knowledge test in per-
son at a certified testing site with a
re-test every 24 months.
• Testing cost is estimated at $300
per operator.
• The operator will have to pass a
Transportation Security Adminis-
tration (TSA) background check.
• UAV size will be limited to less than
55 pounds.
• There will be no inspection and
maintenance requirements, but
each UAV will have to be registered
for a nominal fee of $5 per year.
• UAV flights will have to take place
between sunrise and sunset.
• Flights will have to be below 500-
foot altitude ceiling.
• Flights will have to be within line of
sight of the operator.
From the above, if these are the
regulations actually adopted by the
FAA, they open up a vast array of possi-
bilities for the construction industry. In
addition, the testing and other require-
ments would be considered to be a
minimal burden compared to what
could have been proposed by the FAA.
The FAA within this document has con-
cluded that UAV use will provide a sig-
nificant economic benefit. In addition,
for such applications as inspections of
towers and bridges, along with
search/rescue operations, that UAVs
can be used to save lives.
Privacy Issues/
Technology Intrusion
UAVs have been very successful in
military applications, including surveil-
lance tasks. Increasing governmental in-
trusion into a variety of arenas, based
on goals such as countering terrorism,
has meant a lessening of personal pri-
vacy through use of security cameras.
Other governmental incursions have in-
cluded surveillance cameras for tasks
such as ticketing traffic violators for
COST ENGINEERING JULY/AUGUST 2016
“red-light” infractions. Computer hack-
ers have successfully obtained confi-
dential personal information from
supposedly secure databases of both
public and private organizations. While
the Internet has proven to be a revolu-
tionary tool, enhancing communication
along with other tasks, the aspects of
computer hackers and spam are promi-
nent downsides to this technology.
These above-noted intrusions and
data breaches have therefore made
many in the public increasingly more
protective of their privacy rights [1]. The
use of UAVs can create concerns in the
public over privacy issues even when no
privacy intrusions are intended by their
usage. Consider a UAV flying over a con-
struction site performing aerial photog-
raphy. As it flies, it may pass near
private residences and these residents
may come to the conclusion that it is at-
tempting to spy on them. However, sur-
veillance of a neighbor can be done
with a smart phone camera over a
fence or through a gap in a fence. A
smart phone could also be placed at el-
evation for surveillance purposes. Oth-
ers have attached these smart phones
or other types of sensors to vehicles, al-
lowing the vehicle to be tracked via GPS
coordinates.
On a “greenfield” construction site
far from populated areas, the use of
UAVs would not encounter privacy-
issue problems. However, operating
near people’s residences, construction
industry organizations may confront pri-
vacy concerns. This could, for example,
be in a suburban setting near single-
family residences or in an urban area
with an office building under construc-
tion near an occupied condo tower.
Firms may want to be proactive in send-
ing out mailers to those nearby inform-
ing them of the use of UAVs and stating
they are targeted only for on-site con-
struction activities. This will help to allay
potential fears over the invasion of pri-
vacy. Moreover, construction organiza-
tions need to enforce disciplinary
sanctions on those in their firms that
are found to be using this technology to
invade the privacy of others. This tech-
nology, like anything else, can be used
for nefarious purposes. Or, the technol-
ogy can be misused creating or exacer-
5
 bating a problem. A perfect example is
that of cell phones that enabled their
users to make more productive use of
downtime. Then, a segment of users
began texting on these phones, result-
ing in distracted driving problems in-
cluding tragic crashes. Governmental
regulations have been enacted in many
jurisdictions prohibiting cell phone use
with vehicle use, unless it is through
“hands-free” modes. If construction or-
ganizations do not self-police them-
selves in this area, they may find laws
and regulations imposed upon them
that place significant limits on UAV
technology.
UAV Safety
Safety in the use of UAVs must al-
ways be a top priority in their opera-
tion. Insurance firms are now offering
policies specifically formatted for this
work [11]. These devices allow for a
substantial safety improvement in that
they can replace a person that other-
wise would be placed in a dangerous
position, such as for certain field in-
spection tasks. However, safety and re-
liability in flight operations must always
be a key concern [2]. The trend with
most of these devices is that they are
powered by batteries. It is a given that
batteries have a finite charge life,
whether that life be 10 minutes, 20
minutes, or more. Falling objects on a
construction site are a long-recognized
safety hazard. These errant objects
range from small fasteners to larger
items, such as with completed con-
struction assemblies like precast con-
crete panels. UAVs for construction
applications, in the most common
types, range in weight from one-two
pounds to 40-50 pound units. With the
crash of a UAV, resulting from battery-
life limits or mechanical failure, de-
pending on altitude at the time of the
fall, even a relatively light-weight unit
hitting a person on the ground can cre-
ate a significant injury or a fatality.
Therefore, safety in carefully using
these units on an active construction
site must be emphasized to all respon-
sible users. Safety in operation includes
careful flight patterns that avoid con-
tact with personnel on the job site, or
6 COST ENGINEERING JULY/AUGUST 2016
other hazards such as power lines. This
safety emphasis must extend to the in-
spection and maintenance of these
units. Prior to flight operations, batter-
ies should be checked for their correct
charge and battery-time limits must be
adhered to in the flight. If a battery
time is known from experience to be 20
minutes; at 18 minutes, the operator
should plan to land. Additional fresh
battery packs should then be used to
extend flight times. In adverse condi-
tions, such as windy conditions, flight
times should also be reduced since
these situations place more demand on
the units. A number of UAVs are now
being equipped with features that will
autonomously (without operator inter-
vention) return the drone to home or
to the ground prior to battery failure.
Mechanical failures in flight operation
are often the result of a failure to in-
spect parts and assemblies for loose
items. Recommended maintenance in-
tervals should receive the necessary at-
tention as well, to prevent subsequent
mechanical failure. After flights, some
use an infrared thermometer to view
the temperature of critical assemblies
as to potential warnings prior to a prob-
lem [2]. While UAV operation is be-
coming increasingly easier to master,
even for the novice, operation still re-
quires a certain degree of skill. A popu-
lated construction site is not the
recommended venue for learning how
to fly one of these devices. Instead, an
open field or park setting with no one
nearby is a significantly better and safer
choice for practice flights. There have
been several innovations in recent
years with battery-powered units
which tend to predominate over fuel-
powered units because of their inher-
ent simplicity. Batteries have now
transformed from older nickel-cad-
mium supplies to lithium units. Lithium
batteries offer higher charge densities
with a lighter weight, therefore provid-
ing two important advantages over
their predecessors. However, there
have been well-publicized fires with
lithium batteries ranging from laptop
batteries to automotive batteries.
When flight operations have been com-
pleted, the lithium batteries should be
removed from the device and placed
into a fireproof bag. This is the case
even for charging operations. The fire-
proof bag housing the batteries and
charging station should be located in a
safe area away from any flammable or
combustible items.
Requirements for Expertise
Some construction organizations
are receptive to the potential uses for
UAVs on project sites, but uncertain as
to whether they have the necessary
level of expertise to be successful. The
construction industry, as a whole, when
it comes to technology has been rela-
tively slow to adopt new technology
even when it has been proven in other
industries. In addition, numerous firms
have horror stories of themselves or
other firms adopting new technology,
such as computerized software, only to
encounter significant problems. There-
fore, technological advances, such as
lasers for surveying and automatic
grade control for equipment, faced
early-adoption challenges by wary con-
struction personnel. UAVs, because of
publicity from organizations such as the
military and law enforcement, are a
proven commodity. One only has to re-
view some of the large numbers of
video clips posted to the Internet to see
not only UAVs in actual flight, but video
footage from the vantage point of
these UAVs, to see some of the possi-
bilities.
In witnessing videos of these UAVs
in operation, portions at times include
screen shots of the operators or pilots
for these devices which range in age
from children to the elderly. Histori-
cally, unmanned aerial vehicles
whether fixed-wing (planes) units or ro-
tary-wing (helicopters) units have re-
quired a somewhat significant amount
of skill to accurately operate the de-
vices. For the requirements on a con-
struction site, such as inspection and
photography, the skill level is ratcheted
up since the UAV has to typically follow
a fixed path, fly-in close to the target
area, or with a helicopter, hover in
place for a period of time. With the re-
quirements and needs of a construc-
tion site, some who have attempted to
fly UAVs in the past, as hobbyist or in
other settings without success, may
have a negative view of these units as
practical for construction applications.
With a helicopter, in order to in-
spect or take photographs, it has to
hover in place at a certain location. In
the past, with single-blade helicopters,
a premium was placed on the flight
skills of the operator to perform tasks
such as these. However, over the last
few years, multi-rotor devices have
seen widespread use in place of single-
blade (single-rotor) helicopters. These
multi-rotor devices, in a variety of con-
figurations, such as four-rotor, six-rotor,
or eight-rotor formats, are significantly
easier to learn how to fly. With a re-
duced learning curve for the operator,
this means that training requirements
are much less and this also opens up
the effective use of these devices to
more people. In addition, UAV manu-
facturers have introduced features,
such as GPS hold for many of these,
whereby once the operator gets to a
desired position, they can set the con-
trols to have the unit hover in position
[13]. This then frees the operator to ac-
tually do productive work, such as in-
spections or photography.
The UAV Specialist
The construction industry over the
years, as a result of increasing complex-
ity, has developed a series of specialists
for project and other work. The indus-
try has specialists in areas such as
safety, facility commissioning, testing,
CAD, BIM, cost, and scheduling, to
name several. While the requirements
for UAV operation are becoming easier
to learn for prospective operators, on a
construction site, they are being em-
ployed for more sophisticated tasks,
such as quality inspections and thermo-
graphic analysis. Even for raw photog-
raphy, it still takes a degree of skill to
conduct photography in the correct
way as to provide overall views and
close-up views.
Construction organizations may
want to develop selected individuals
within their organizations as UAV spe-
cialists. The specialist would be respon-
sible for all operational aspects,
including UAV inspection and mainte-
nance. In addition, this specialist would
be adept at the set of required tasks
needed by the firm; such as aerial pho-
tography, quality-control inspections,
safety inspections, site security analy-
sis, thermographic analysis, and/or pro-
ductivity analysis. The UAV specialist
could be tasked with periodically visit-
ing jobsites, as well as on an as-needed
basis by the firm. These jobsite visits
would be similar to those made by
safety representatives for those con-
struction organizations lacking the de-
mand for a full time specialist.. A group
for operators has been formed. It is
called the Association of Remotely Pi-
loted Aircraft Systems (ARPAS) [10].
Subcontracting Out
UAV Operations
The construction industry is a sub-
contractor-intensive industry with sub-
contractors ranging from
testing/inspection firms, to cleaning,
and a plethora of other tasks. Currently,
with tasks such as aerial photography
via conventional planes and helicop-
ters, most organizations in the con-
struction industry typically subcontract
out this work. There are aerial photog-
raphy firms that are currently using
UAVs as a supplement to conventional
aircraft, or as a complete replacement
for these. Construction industry organ-
izations then hire these firms as sub-
contractors for these aerial
photography tasks. The construction
organization then does not have to
make the investment in equipment, ex-
pertise, and training to operate the
UAVs. However, UAVs are seeing con-
stant improvements in their ease of
flight, reducing the expertise and train-
ing requirements. Capabilities for these
units are constantly increasing and
costs are decreasing compared to only
a few years ago.
For a firm with only occasional
needs, UAV subcontracting may make
sense. However, with subcontracting,
this firm can be foregoing significant
benefits for not having UAVs as a con-
stant presence on a job site. While aer-
ial photography to record job progress
may be a once per week or once per
COST ENGINEERING JULY/AUGUST 2016
month requirement, other uses could
be on a daily basis for periods of a half-
hour, more or less. A firm may want to
perform a daily overflight of the job site
to monitor safety, with a snap shot of
how many workers are wearing their
hardhats or at a fall hazard area have
fall protection tie-offs. Their safety en-
gineer could do this once in the morn-
ing and once in the afternoon. Daily
progress monitoring by comparing ex-
cavation work with cuts and fills to a 3D
model also require a continual on-site
presence. To call out a subcontractor to
a jobsite for these tasks, taking less
than a half-hour per day, is impractical
in many instances. The other issue is
that as a contractor becomes more fa-
miliar with the use of UAVs, the uses
tend to expand. When computers were
first placed out on jobsites, they were
a novelty and now they are a necessity
for a variety of field office work. It is not
forecasted that use of UAVs will be as
ubiquitous as a desktop, laptop, or
tablet computer on the jobsite, but cer-
tainly daily usage of these units is cur-
rently taking place at a number of
jobsites.
UAV Cost-Benefit Analysis
Costs for UAV technology, com-
bined with miniaturization/cost reduc-
tion of companion technology in
cameras along with other devices, can
be very affordable for the construction
industry. The UAVs that are most widely
used in the construction industry have
price points around $US 1,000 – $US
1,500, including standard camera
equipment. UAV technology price re-
ductions are the “peace dividend” from
the smart phone wars. The phone tech-
nology has been increasingly commer-
cialized to the point where chipsets and
other items have seen both significant
improvements in capabilities combined
with cost reductions. Other types of
sensors, such as thermographic sen-
sors, can add to these costs depending
on the type of device and manufac-
turer. Compared to the investment that
many construction firms make in other
areas, the costs in this area are rela-
tively small by comparison. With con-
stantly improving technology, even UAV
7
 training costs are going down as man-
ufacturers add features to facilitate
ease of operation. Some manufacturers
are giving users the ability to avoid a
separate control device and instead let-
ting the user use a smart phone as a
controller.
What construction firms should
avoid is buying units at very low price
points, such as those sold in toy stores
and similar outlets. Typically, these are
simply toys. The problem with these
UAVs is that when something breaks,
there are no replacement parts. In ad-
dition, while some may be equipped
with cameras, the quality/range of
these cameras is typically not sufficient
for project work. It is beyond the scope
of this article to be a buyer’s guide to
this UAV technology. However, the typ-
ical hobby shop has knowledgeable
people on staff, along with carrying
some of the major hobby publications
that often deal with UAV topics. In
many larger populated areas across nu-
merous countries there are also hobby-
ist flying clubs that gather on a monthly
or weekly basis. These individual club
members can be a sound source of in-
formation as to what works and what
doesn’t work.
The offsetting benefits of UAV op-
eration, as compared to the costs, will
depend on what the construction firm
wants to accomplish with these units.
The typical UAV has a relatively small
payload capability that can carry a still-
photo camera, a video camera, sensing
devices, and the like. They do not have
the wherewithal to perform tasks such
as taking a torque wrench to check
steel bolt tightness. They can’t carry a
significant payload for construction ma-
terial placement. For material place-
ment tasks, such as setting a
transmission pole or HVAC unit, con-
ventional helicopters are still the solu-
tion. The UAV offers the ability to
capture a variety of information at the
construction site that can then be used
in a variety of formats. It also offers the
ability to do this in a safer fashion when
encountering dangerous jobs. A mate-
rial stockpile requires volume measure-
ment, but now a person doesn’t have
to try to navigate the pile, they use the
8 COST ENGINEERING JULY/AUGUST 2016
UAV instead as a safer method. A site
can be flown over by UAV in an hour,
capturing job progress information that
would take a person on the ground a
day or more to accomplish. The UAV in
aerial photography can supplant full-
size helicopters at a fraction of the cost,
with subsidiary benefits of noise reduc-
tion. The UAV can fly through a building
under construction or into an atrium
space that would be impossible for con-
ventional helicopters.
Construction Applications
As to applications for UAVs in the
construction environment, there are a
number of potentials ranging from
earthwork/grading control, aerial pho-
tography, construction marketing,
progress measurement, inspection, site
disaster/rescue, safety review, produc-
tivity improvement, and estimating.
Not every application is practical such
as deliveries to sites [8].
Construction Estimating
A key requirement for bidding on
many projects is a mandatory site visit.
Site visits take time and the view is lim-
ited to what can be seen at ground
level. In areas overgrown with brush or
physical obstacles, such as standing
water, the effectiveness of the site visit
faces limitations. With a UAV, the esti-
mator can quickly overfly the site and
take either still photos or video to be
used in the estimating work. Therefore,
these devices are a force multiplier for
an often-overworked estimating staff.
Earthwork/Grading
Set-Up and Control
Currently, excavation/grading work
for a site is based on surveying work
which includes the development of
contour lines. From this, a site develop-
ment plan is worked out which includes
cuts and fills. Besides a level site for the
facility(s), an often concurrent goal is to
minimize either import of fill material
to the site, or export of cut material off
the site. Computer-based
earthwork/grading software, first
widely available in the late 1980s, has
seen a key role in both estimating
earthwork volumes as well as minimiz-
ing import/export issues. Newer entries
to this mix include automatic grade
control for construction equipment, as-
sisted in some cases by GPS-based con-
trol. UAVs are now starting to become
a part of this mix with the surveying
work performed by an UAV. The infor-
mation is then captured in 3D form and
can be overlaid against CAD drawings
for the site [4]. This UAV information
can then be the basis for automatic
grade control for the construction
equipment at the site. The UAV can also
periodically overfly the site under con-
struction to monitor earthwork/grading
progress, including the verification of
cut/fill volumes. This then assists in ver-
ifying progress payments to the con-
tractor. Trenching work can follow the
same general outlines above with UAVs
measuring progress on a continuous
basis.
Autonomous mining from major
equipment manufacturers with haul
trucks at mine sites, without human op-
erators, has been in use for well over a
decade. In mining, the autonomous
haul trucks drive themselves from the
loading location to the dumping loca-
tion without drivers. Sensors on the
haul trucks enable these vehicles to
slow down/stop and otherwise avoid
other haul road traffic, such as on-com-
ing trucks or graders/water wagons
providing haul-road maintenance. Now,
in the construction environment, lead-
ing construction equipment manufac-
turers are working on autonomous
construction equipment using UAVs to
assist in this effort.
Construction/Maintenance
Inspection
For a number of inspection tasks,
visual inspection at the worksite is a re-
quirement. On a rehab project, rather
than a walk-through limited to ground
level, a UAV can provide up close ceiling
views. Or, aerial views that are ob-
scured by equipment from the ground
level, can be provided by these units.
The ability to avoid climbing on a ladder
makes the inspector’s job safer and
more productive. While UAVs can read-
ily perform a number of visual field in-
spections for quality-control purposes,
there are certain other limitations. Field
inspection tasks, such as verifying
paint-coating thicknesses, are currently
performed by personnel using contact
instruments. Visual sensing of the mil
thickness of a paint coating is not a cur-
rent reality. Wide-ranging discussions
with technical personnel from a variety
of coating-thickness instrument firms
currently finds nothing in this area cur-
rently in testing or development. Simi-
larly, inspection tasks, such as torque
testing for structural steel bolt-up work,
must still be done with a torque
wrench. However, connections with
load-sensing washers can be reviewed
via UAV pointing toward the benefit of
other-specified connection types.
Aerial Photography
Periodic aerial photography of job-
sites is often mandated in contract re-
quirements. Construction organizations
may also want aerial photography for
progress documentation or to use in
case of construction claims. Tradition-
ally, aerial photography is accomplished
by either conventional planes or heli-
copters, incurring significant costs. One
standard estimating reference source
lists a base cost for aerial photographs
at $US400 per time [9]. Other methods
include a person with a camera in a
personnel basket attached to a crane.
For weekly progress photos, conven-
tional methods are significantly more
expensive than via a UAV. Moreover,
the UAV can fly inside buildings or close
to facilities that would be impractical by
conventional means.
Safety Review
These devices allow one person to
cover significantly more ground in a
work day then that person could do on
foot. In addition, a photographic record
is maintained as documentation. This is
particularly helpful on jobsites to deter-
mine safety compliance with a variety
of requirements, such as wearing per-
sonal protective equipment or spotting
potential safety problems. Anyone, for
the first time, who has been up in a
small private plane or helicopter at rel-
atively slow speeds in their own local
area is usually impressed by the differ-
ence in views. This “bird’s-eye” view
can provide these same benefits to-
ward improving site safety.
Construction Accident Site
Disaster/Rescue
With a partially collapsed structure
under construction, rescue efforts can
be hampered by the unknowns, such as
where people may be trapped or the
condition of the structure itself. Res-
cuers place themselves in harm’s way
in an attempt to save others. A UAV can
better locate those trapped from a safe
vantage point, along with providing an
accurate look at the condition of the
structure.
Productivity Improvement
Just as with the safety review, a
“bird’s-eye” view of a site provided via
a UAV, can be very helpful toward pro-
ductivity improvement efforts. From an
aerial view, construction management
can better spot site issues related to
material handling and layout problems.
Summary
The use of UAVs for construction
management can provide a number of
important benefits. The actual nuts and
bolts of UAV technology is less impor-
tant than what this technology can as-
sist with for gathering useful
information on the jobsite. The actual
cost of UAV technology and related
equipment, such as cameras, has been
steadily decreasing in real terms over
the past decade. The construction in-
dustry is advised to look at the numer-
ous areas on the jobsite where these
devices can improve cost, time, and
quality performance. A number of lead-
ing construction firms are already suc-
cessfully using UAVs for their projects.
REFERENCES
1. Atherton, K., E. Biba, B. Borel, R.
Boyle, C. Dillow, E. Gertz, D. Ham-
bling, J. Hsu, G. Mone, and E.
Sofge. “25 Reasons To Love Drones
And 5 Reasons To Fear Them,” Pop-
ular Science, August 2014, pp. 44-
49.
2. ________ (2013), “Data Logging
Can Save Your Helicopter”, Radio
COST ENGINEERING JULY/AUGUST 2016
Control Helicopter How-Tos, Vol-
ume 2, pp. 59-60, Air Age Media,
Wilton, CT.
3. __________ FAA Grants Eight
More UAS Exemptions.
http://www.faa.gov/news/up-
dates/?newsId=81565 (site ac-
cessed February 9, 2015).
4. Grayson, W. (2014), “Eyes In The
Sky: How Drones and UAVs are Al-
ready Affecting Construction Job-
sites Today.” Equipment World,
October 2014 pp. 18-28.
5. Irving, C. (2015) Drones Flying Cir-
cles Around FAA, The Daily Beast,
p. 2 at: http://www.thedaily-
beast.com/articles/2015/01/18/dr
ones-flying-circles-around-the-
faa.html (Site accessed February
14, 2015).
6. Manjoo, F. (2015) “Working
Drones.” New York Times, Febru-
ary 5, 2015, B1 pp. 1 – 9.
7. McNeal, G.S. (2015) Leaked FAA
Document Provides Glimpse Into
Drone Regulations, pp. 1-6 at
http://www.forbes.com/sites/gre-
gorymcneal/2015/02/14/the-faa-
may-get-drones-right-after-all-9-in
sights-into-forthcoming-regula-
tions/ (Site accessed February 15,
2015).
8. Nicas, J., Barr, A. (2014) “Those
Amazon Delivery Drones? Not So
Fast.” The Wall Street Journal, No-
vember 26, 2014, B1 pp. 1 - 2.
9. Plotner, S.C. (2014) "01 32 33 Pho-
tographic Documentation" R.S.
Means Building Construction Cost
Data 2015, 73rd Edition. R.S.
Means, Norwell, MA, p. 14.
10. Reid, J. (2014), “Drone Flight Ba-
sics” in Radio Control Helicopter,
Fall 2014, pp. 64-67, Air Age
Media, Wilton, CT.
11. Richey, E.C. (2015), “Risk – Coming
Soon: More Options For Drone In-
surance Buyers,” Engineering
News-Record, January 26, 2015, p.
16.
12. Sawyer, T., D. Gershgorn, (2014),
“Drones Fly In Rules Vacuum.” En-
gineering News-Record, Septem-
ber 8, 2014 pp. 36-39.
13. Tradelius, P. (2006), The Basics of
RC Helis: The Ultimate Guide to
9
 Rotary Flight. Air Age Media, ABOUT THE AUTHORS
Wilton, CT.
14. Yarrish, G. (2015), “Ares Ethos PPV
The Popular Quadcopter Now Neil D. Opfer, CCP
Sports A Downlink Camera Sys- CEP PSP, is a Princi- Dr. David R. Shields,
tem!,” Electric Flight, March 2015, pal with Opfer Con- PE, is a professor
pp. 24-26. struction & Review with the University
Group. He can be of Nevada, Las
contacted by send- Vegas. He can be
ing email to: contacted by send-
opfern@yahoo.com ing email to: david.shields@unlv.edu

FOR OTHER RESOURCES

For additional resources go to:
www.aacei.org/resources/vl/
Do an “advanced search” by “au-
thor name” for an abstract listing of
all other technical articles this author
has published with AACE. Or, search
by any total cost management subject
area and retrieve a listing of all avail-
able AACE articles on your area of in-
terest. AACE also offers pre-recorded
webinars, an Online Learning Center
and other educational resources.
Check out all of the available AACE re-
sources.

10 COST ENGINEERING JULY/AUGUST 2016

 TECHNICAL ARTICLE

What to Do With
Unknowns in
Schedule Risk
Analysis?
Dr. David T. Hulett

people. It is known these risks

Abstract: Schedule risk analysis explores how unknowns applied to the proj- exist and often their parameters
ect schedules may derive a distribution of possible completion dates. Un-
(probability and impact) are
knowns include known unknowns (we know the cause but do not know
whether the risk will occur; and/or, if it occurs, its impact on activity dura- known. The management does
tions), unknown unknowns (those risks that are not known today, whether not want to discuss them in a
they could be known or not with further inquiry) and “unknown knowns” (we public forum such as a risk
know but do not want to discuss them in a public forum). This article describes workshop since they are sensitive
the types of unknowns, and the methods used to incorporate the unknowns or pessimistic, causing harm and
to drive the Monte Carlo simulation of the schedule. Methods include: even cancellation of the project.
Confidential interviews always
• Using the three-point estimate to represent inherent variability and es- reveal risks not in the risk register
timating error and bias. that are agreed to by subsequent
• Using the risk interview to uncover unknown knowns. interviewees and, on inspection,
• Expanding the three-point range for “far future” (in the context of the
turn out to be the most important
project) activities.
risks of all.
A simple case study shows, through use of Monte Carlo simulation, examples
of the methods and of their impact on final answers. This article was first This article describes the types of
presented at the 2015 AACE International Annual Meeting as RISK.1993. unknowns and the methods used to
incorporate these unknowns to drive a
Monte Carlo simulation of the

S
chedule risk analysis explores
how unknowns applied to the
project schedules may derive
a distribution of possible
completion dates. Unknowns include:
• Known unknowns for which the
cause is known, but it is not
known whether the risk will occur;
and/or, if it occurs, its impact on
activity durations. Interestingly,
risks with 100 percent probability
of occurring, though usually called
“issues,” are included if their
impact is unknown.
• Unknown unknowns are those
risks that are not known today but
it may reliably be expected that
schedule. Methods include:
they will occur in the future. It is
not clear that these risks are
• Using a three-point estimate to
“unknowable,” because they have
represent inherent variability,
been experienced in many
estimating error, and estimating
projects over time. People are
bias.
often myopic about the risks they
• Expanding the three-point range
want to discuss, so near-term risks
for “far future” (in the context of
are often the focus of attention
the project) activities for unknown
during interviews or workshops.
unknowns.
Whether they could be known or
• Using the risk interview to
not with further inquiry, or
uncover unknown knowns.
whether benchmarking to
historical data can help is an area
A simple case study shows,
of interest.
through use of a Monte Carlo
• Unknown knowns may be a new
simulation, examples of these
class of unknowns to some

COST ENGINEERING JULY/AUGUST 2016 11

 methods and of their impact on the
final answers.
The Problem
This article presents a discussion
of the representation of different
uncertainty concepts in quantitative
analysis of a project schedule risk. The
issue is whether quantitative schedule
risk analysis covers adequately and
explicitly, the various kinds of
unknowns, typically classified as
known unknowns and unknown
unknowns. There are also known
knowns that are understood and
probably incorporated in the project
schedule explicitly. Recently, another
classification, unknown knowns,
which means risks that are known but
not talked about, has been added to
the list. These unknowns must each be
represented if the analysis results are
to be useful to project managers.
The most troubling of these are
the unknown unknowns, because how
can one represent an uncertainty that
one knows nothing about, particularly
its cause, its likelihood of occurring,
and its impact? It is argued here that
unknown unknowns are not
necessarily unknowable, but are not
known at the moment. However,
experience shows that people’s
attention during risk interviews or
workshops are focused on the near-
term uncertainties. This myopia may
cause risks in the far-future of the
project to be poorly, if at all,
discussed. Also, the work of Bent
Flyvbjerg, E.M. Merrow and John
Hollmann has shown that
benchmarking may reveal at least the
existence of these risks that are
unknown. This leads to the
opportunity to discover them, or at
least to represent them with wider
ranges on the durations of activities in
this far future (many months or years
from now), depending on the length
of the project.
Categories of Unknowns
Donald Rumsfeld, formerly the
Secretary of Defense of the United
States. famously said in February
2002:
12 COST ENGINEERING JULY/AUGUST 2016
“Reports that say that something
hasn't happened are always
interesting to me, because as we
know, there are known knowns; there
are things we know we know. We also
know there are known unknowns;
that is to say we know there are some
things we do not know. But there are
also unknown unknowns―the ones
we don't know we don't know.
And if one looks throughout the
history of the US and other free
countries, it is the (unknowns) in the
latter category that tend to be the
difficult ones” [11].
According to this description,
there are three categories of knowns
and unknowns that need to be
considered and modeled, in a
schedule risk analysis using Monte
Carlo simulation of a project schedule.
Known Knowns
Known knowns are events or
conditions that are known to exist and
to have an impact known with
certainty. Known knowns are items
that should be included in the plan,
schedule, and budget. There are still
assumptions behind these known
knowns, and those assumptions may
be unknown as to existence, or
impact, or both. Some plans do not
include all the known knowns.
Variation Caused by
Known Unknowns
Fundamentally, “There are no
facts about the future” [5]. Known
unknowns are events or conditions
that can be described well enough to
know the cause. However, one does
not know whether this event or
condition will occur; or, if it does, what
its impact will be. These known
unknowns include:
• Pure uncertainty for which there
is no specific cause, but it is
known with certainty to exist with
an uncertain impact on the
schedule.
• Risk events that can be described
and for which the specific cause is
known. These, in turn, may or
may not occur, or may be certain
to occur, but in either case their
impacts are not known with
certainty.
Included in pure uncertainty are
those conditions that are known with
certainty to exist, but they must be
included in the risk analysis since their
impact is still uncertain. Some
organizations might call these
“issues,” and therefore exclude them
from consideration in a risk analysis.
This is incorrect, since the impacts are
still in the future and are still
uncertain. It does not matter what
these 100 percent likely conditions are
called, they are still included in the risk
analysis.
• Uncertainty―the inherent
variability in project activities that
arise because people and
organizations cannot do things
reliably on plan.
• Estimating Error―attaches to all
types of estimates.
• Estimating Bias―estimates may
be slanted, usually toward shorter
durations, to make desired
project results.
Inherent Variability
Inherent variability is similar to
“common cause” variation described
by Walter A. Shewhart and
championed by W. Edwards Deming.
Common cause variability is a source
of variation caused by unknown
factors that results in a steady, but
random, distribution of output around
the average of the data. Common
cause variation is a measure of the
process’s potential, or how well the
process can perform when special
cause variation is removed. Common
cause variation is also called random
variation, noise, non-controllable
variation, within-group variation or
inherent variation. A condition leading
to common cause variability would be
many X’s with a small impact [9].
In other words, inherent
variability is random “noise” in the
schedule, attaching to durations
indicating that individuals and
organizations cannot be relied upon to
perform to plan. A memorandum may
take two hours or two days to write.
This can be as a result of the
unpredictability of the author’s
productivity, attention span, or the
amount of interruptions. There are
many of these influences that can be
relied upon to occur, but they cannot
be catalogued or addressed in the
span of one project. Corralling this
multitude of influences and their
consequences, in the space of a single
project with a specific team, is not
possible. Advances to narrow the
inherent variation would take
repetition of the project many times
with the same teams, contractors, and
conditions. Such progress was made in
World War II, as thousands of
airframes were produced, and teams
and their organizations learned how
to be more routine and efficient. A
project is not likely to experience such
learning.
By being 100 percent likely to
happen, inherent variability can be
represented by applying a three-point
estimate, with a probability
distribution, directly to the activity
durations that will experience this
variability. The uncertainty of impact is
thought of as being a fairly tight
probability distribution around the
estimated duration, which becomes
the most likely value (mode) of that
distribution. The pure randomness of
inherent variability indicates that the
impact or degree of variation is
symmetrical, that is plus or minus the
same fraction, multiplied by the
activity duration. For instance, the
multiplier used may be 90 percent,
100 percent or 110 percent;
representing the low, most likely, and
high multiplier of the activity’s
durations. The multiplying fraction is
chosen at random from a symmetrical
distribution (e.g., a symmetrical
triangle, a Gaussian, or normal
distribution) during iteration in a
Monte Carlo simulation.
It should be noted that different
types of activities may have different
levels of inherent variability. So, for
instance, detailed engineering and
construction may have different
inherent variability. In the risk analysis
of the schedule, these categories of
activities can have different “reference
ranges” of uncertainty. The possibility
that some categories of activities have
narrower inherent variability than
other categories does not make this
uncertainty reducible. It is “inherent”
after all.
Estimating Error
Estimating error can be attributed
to a lack of information concerning
specific issues needed to make up an
activity’s duration, though it may also
be a result of insufficient or inexpert
resources applied to the project
scheduling. The contractor may not
have specific vendor information until
the vendors bid, but vendor
information is required for completed
engineering. Ultimately, one does not
necessarily have contractor bids for
overall schedule development.
Each of these sources of
information can be helpful eventually
to narrow the estimating error. Still,
the estimates are uncertain, even
after contractor bids.
The duration estimating range is
often related to the “class” of
estimate, determined by the level of
knowledge and the method of
estimating. With less knowledge, the
“plus and minus” range would be
large; but as more information is
known, it may become smaller.
However, at the time of the risk
analysis, the schedule is populated
with estimates made with some stage
of information-gathering. Like
inherent variability, estimating error is
100 percent likely.
Research shows that the range of
uncertainty around estimates is larger
than recommended by professional
associations (including AACE) [3].
These plus and minus estimates
should be symmetrical around the
most likely duration; which, ideally, is
included in the schedule. Perhaps,
adding estimating error to the
inherent variability could increase the
three-point estimate to 80 percent,
100 percent or 120 percent.
COST ENGINEERING JULY/AUGUST 2016
Estimating Bias
Estimating bias is quite common,
whether talking about costs or
schedule durations. The symmetry of
uncertainty ranges around the
estimates of duration in the schedule
should always be challenged, since
only in optimum situations will the
scheduler and the team leads who are
responsible for building the schedule,
be free to make their professional
judgment paramount. Optimum
conditions mostly occur in text books
and training courses―real scheduling
is messy, and fraught with
compromises and pressures. Two such
pressures, one for schedule and the
other applying to cost estimates, are
described by Edward M. Merrow [4]:
• “I want it NOW!” Merrow says
that, “Schedule pressure dooms
more megaprojects than any
other single factor.” These
pressures may come from
ambitious managers who see
early completion as a way for
promotions. Customers usually
want the project to finish early,
maybe because another project is
scheduled to be finished at that
time. But, the other project is also
late and much anguish and many
late nights are dedicated to
achieving finish dates that may
not be realistic or even necessary.
Merrow says that every
megaproject has an appropriate
pace that becomes known early.
Pronouncements about early, and
unattainable completion dates,
do not change this pace.
• “We need to shave 20 percent off
that cost number!” Setting to
work a construction cost-
reduction task force is a
counterproductive exercise that
may just reduce estimates, in
Merrow’s opinion. Reducing
estimates this way is foolish, in
part because, usually
unsustainable assumptions are
needed. The task force may
actually identify scope to come
out in order to cut costs, but the
scope needs to be added back in
13
 later to complete the project, so
the reduction in cost is only
temporary.
In looking at the reasonableness
of the duration estimates, the
question typically asked is, “Was there
pressure put to bear on the scheduler
by management or the customer, by
statements or directives, or was
pressure for early finish implicit in the
competitive process?” If the scheduler
and the team leads are aware of
management’s commitment to an
earlier date, the schedule will have
many activities estimated “on the
short side.” (Activities will also be
scheduled in parallel, rather than in
sequence). When talking with project
participants (management, team
leaders, SMEs) the author often finds
that they do not believe the duration
estimates in the schedule.
With a range represented by
optimistic, most likely, and pessimistic
values, these people say the “most
likely” duration or cost, is not the
value in the schedule for activities or
the estimate for cost elements. Often,
the “most likely” multiplier is 1.05, or
1.1, or more, indicating that the
estimates are viewed as being five
percent, 10 percent, or more above
those in the project documents.
Sometimes, the values in the schedule
or estimate are viewed as the
optimistic value, or even worse, are
not even deemed possible,
optimistically.
One way to combat this pressure
for unrealistically-short activity
scheduling might be to ask the basic
question: “How long would this scope
of work take if no pressure for an
earlier date were brought to bear?” In
other words: “How long would this
scope of work take if the estimates
were purely professional, without
prior expectations?” Contractors
generally admit that the schedule
would take longer without time
pressure having been put upon them,
and say that a nominally 24-month
schedule should be anywhere from 26
to 30 months (8 percent to 25 percent)
14 COST ENGINEERING JULY/AUGUST 2016
longer. But, and even in the same
breath they may say: “We can do it!”
Summary of Sources
of Uncertainty
In summary, since these sources
of uncertainty (e.g., inherent
variability and estimating error always
occur, if estimating bias exists it has
already occurred) are 100 percent
likely, they can be represented by a
three-point estimate of multiplicative
factors applied to activities’ durations.
The three-point estimates
representing these factors are often
represented as multiplicative impacts.
For the balance of this article, assume
some fairly standard values:
• Inherent variability might exhibit
low, most likely, and high
multipliers of 0.9, 1.0, and 1.1.
• Adding estimating error, these
multipliers may become 0.8, 1.0,
and 1.2.
• Adding estimating bias, if it exists,
these multipliers may become
0.8, 1.05, and 1.3. Notice that the
most likely multiplier does not
necessarily equal 1.0. That means
that the durations in the schedule
are not necessarily the most likely
values, as seen by impartial,
professional schedulers.
Two Issues About Implementing
Three-point Estimates
for Uncertainty
Two issues facing the risk analysis
practitioner implanting arise from:
• Under-estimating the range of the
distribution, whether from
motivational bias or cognitive
bias.
• Narrowing of the total schedule
uncertainty range because
simulating the activity duration
uncertainty ranges exhibits
cancelling out of high and low
values in the absence of
correlation.
Under Estimating the
Duration Impact Range―
Motivational and Cognitive Bias
Under estimation of impact
ranges is very common. Under
estimating the probability of a risk
occurring is common too. That fact is
not relevant in a discussion of
uncertainty, since uncertainty is 100
percent likely. Under estimation
needs to be combated by the risk
analyst’ working with the
interviewees; and challenging, with
data or examples from other projects,
their assumption of low probability.
One problem is the overall
motivation of individuals to support,
or not to challenge, the organization’s
assumption of project success.
Individuals who participate in risk
discussions are often subject to
pressures that punish wide
distributions for motivational or
political reasons. Motivational risks
are often caused by people’s
unwillingness to show uncertainty in
the estimates, or expose their inability
to make good estimates. Most
motivational bias involves the conflict
between professional, realistic
estimating, and knowing that wide
estimates will cause the overall
project’s finish to be later than desired
by management.
Even with the best intentions to
produce good estimates of duration
variability, there is also cognitive bias.
Individuals discussing uncertainty of
estimates often refer to heuristics
(rules of thumb) and exhibit naturally-
occurring biases that have been
studied and experienced [7].
One of the most common
examples of cognitive bias is described
as anchoring and adjusting, where
some value, perhaps the duration
estimate in the schedule, forms an
anchor and the interviewee cannot
imagine that low and high ranges vary
from that anchor. Individuals
commonly understand the agreed-
upon duration in the schedule and
may have actually made the estimate.
They find it difficult to imagine even
extreme cases of lower or higher
 durations. A common result is found in
Figure 1.
These estimates may be narrow,
requiring a distribution-widening
distribution. A common adjustment is
to correct for an incorrect narrow
distribution, by applying a TriGen (for
“triangle generation”) function to the
three-point estimate provided by the
interviewee. The risk analyst
estimates that there is some
percentage of the area under the
unbiased triangular distribution that is
below the low estimate and some
Figure 1 – Under-Estimating Durations Because of the Anchoring and Adjusting percentage above the high estimate.
Bias The analyst makes this judgment,
either with the help of the interviewee
or upon reflection after the interview.
A picture of a typical TriGen function
compared to the function provided by
the interviewee is shown in Figure 2.
Another example is illustrated,
using the Monte Carlo method, as
shown in Figure 3.
Correcting the input data for
well-known biases is often required
before performing a Monte Carlo
simulation.

Figure 2 – TriGen Function Correcting for Underestimation of Impact Ranges

Figure 3 – Use of TriGen Function in a Monte Carlo Simulation

COST ENGINEERING JULY/AUGUST 2016 15

 Figure 4 – A Simple Schedule With Nominally 350 Days Duration
Many of these figures are screen shots from Polaris™ v. 1.8, an integrated cost-schedule Monte Carlo simulation
program developed by Booz Allen Hamilton.

Figure 5 – Simulation Results Without Correlation and With Correlation at 100 Percent
Need to Correlate
Duration Impacts
Often the interviewee or
workshop will discuss their estimate of
schedule uncertainty as a plus or
minus percentage range around the
entire schedule. Using a simple
example, the source of the risk data
may say: “The schedule uncertainty is
plus 10 percent and minus 10 minus of
the overall schedule duration.” This
means, in a simple example, a 20-
month project could be as long as 22
months and as short as 18 months.
The interviewee did not put forward
an opinion about the uncertainty that
is attached to the durations of
individual activity durations, but the
range needs to be put on individual
activities at the most detailed level of
the schedule.
In analysis, it is tempting to place
the plus 10 percent and minus 10
percent values to the durations of the
schedule’s individual activities before
simulating the schedule. However, the
individual activity ranges will cancel
each other out to some extent in any
iteration because some durations will
be high in their three-point estimate
range, while others may be low or
middling. The simulation will generate
a finish date with a mixture of long,
short, and middling durations. With
cancelling out, the range around the
total project duration becomes less in
percentage terms than the
interviewee indicated.
In order to use the plus or minus
10 percent ranges, for individual
activities’ ranges, and provide total
project duration results that accurately
reflect the input from the interviewee
of plus or minus 10 percent, you need
to correlate the individual activities’
durations at 100 percent. Imposing a
perfect positive correlation will cause
iterations in which high durations or
low durations will occur for all
activities, together. It is the word
“together” that indicates perfect
positive correlation. As the simulation
calculates finish dates, these high or
low values for the detailed activity
durations reinforce each other with
100 percent correlation and the total
schedule results will mimic the
interviewee’s inputs.

16 COST ENGINEERING JULY/AUGUST 2016

 The six-activity schedule, shown
in Figure 4, is used to illustrate the
need for correlation of uncertain
durations during simulation.
In this case, with two paths of
three activities each, the results
without and with correlation clearly
indicate that applying correlation to
the activity durations causes the
assumed percentage range on each
activity to be carried over to the
results for the entire schedule’s
duration:
• Applying 0.9, 1.0, 1.1 multipliers
and no correlation yields overall
schedule results of:
– Optimistic is 328 days = 0.94
* 350
– Pessimistic is 378 days = 1.08
* 350
Applying 0.9, 1.0, 1.1 multipliers
with correlation set at 100
percent:
– Optimistic is 315 days = 0.90
* 350
– Pessimistic is 385 days = 1.10
* 350
Variation Caused by Known
Unknowns – Risk Events
Unlike inherent uncertainty,
estimating error and estimating bias,
risk events are:
Figure 6 – Offshore Gas Production Platform Construction Project Schedule
• Describable as “root causes” of
variation in durations.
• Characterized by probability of
occurring that is usually less than
100 percent.
• May be reducible by risk
mitigation actions.
These are specified during risk
interviews and implemented with
estimated probabilities, impact ranges
(three-point estimates of
multiplicative factors) if they occur,
and the activities or cost elements
they influence. By modeling specific
risks, the analyst can prioritize these
risks for effective mitigation actions.
Identifiable or discrete risks,
however they are implemented in the
risk model, are similar to the category
of special cause variability described
by Walter Shewhart and W. Edwards
Deming. Unlike common cause
variability, special cause variation is
caused by known factors that result in
a non-random distribution of output.
Special cause variability is also
referred to as “exceptional” or
“assignable” variation. Special cause
variation is a shift in output caused by
a specific factor, such as
environmental conditions or process
input parameters. It can be accounted
for directly and potentially removed
and is a measure of process control
[10].
COST ENGINEERING JULY/AUGUST 2016
Variation determined by risk
events, specifically identified as root
causes of variability if they occur on
the project (and during a Monte Carlo
simulation), are described with a
standard risk structure; including their
cause, the risk (generally a statement
that includes “may”) and the effect if
they occur. Each identifiable risk event
is described with its:
• Probability of occurring with
some noticeable effect on the
duration of some activities.
• Impact ranges stated in days or
multiplicative factors to be
applied to the activities’ durations
if the risk occurs.
• The activities affected by the risk,
if it occurs.
Case Study Showing the
Application of Uncertainty
A simple illustrative case study of
a large capital project, the
construction of an offshore natural gas
production platform, will show the
elements of:
• Inherent variability
• Estimating error
• Estimating bias
• Discrete risk events
The schedule is presented in
Figure 6.
17
 Inherent variability is added by
specifying ranges for uncertainty, in
this case applying to all activities
equally, as shown in Figure 7.
Next, estimating error is added,
expanding the ranges of uncertainty as
shown in Figure 8.
Finally, complete the modeling of Figure 7 – Specifying Inherent Variability to the Uncertainty Range
uncertainty by changing the
uncertainty factor to reflect inherent
variability, estimating error and
estimating bias. In some cases there
are many risk events that are each
small in impact and will not be
modeled individually. These risks may
be swept into the final uncertainty
range, widening the range and making Figure 8 – Adding Estimating Error to Uncertainty
it more pessimistic since most of these
risks are more threat than
opportunity.
The results for each of these steps
are shown in Figure 10. Obviously the
parameters will differ for each project,
but these are representative of data Figure 9 – Adding Estimating Bias to Uncertainty
used on real projects.
In addition to specifying the range steps of uncertainty, are shown in adequacy of the input data and
(low, most likely, and high) or (min, Figure 10. realism of the results. Finally, the
likely, and max) one has to also Notice in Figure 10 that the P-80 probability of completing on or before
consider and implement a 100 percent date is highlighted along with the the scheduled date is shown. The
correlation, so the results for the increase in schedule contingency effect of perfect correlation is to widen
entire schedule will better reserve needed from the scheduled both the opportunity and threat tails
approximate the input data from finish date of 20 March 2017. Also of the distribution so the probability of
various interviewees. highlighted is the calendar day spread finishing on time rises to 32 percent.
The results for the simulations up between the P-5 and the P-95 dates.
to this point, representing various This range of days compared to the Adding Risk Events
total duration of the project, (1,175 Discrete risk events need to be
days), provides some measure of the added to the risk model that contains

Figure 10 – Results for Each Step Representing Uncertainty

18 COST ENGINEERING JULY/AUGUST 2016

uncertainty. Risk events have a
probability of occurring that is usually
less than 100 percent, an impact range
if they do occur, and an identifiable set
of activities that they influence if they
occur.
There are generally two ways to
represent risk events:
• Risk register (term coined by
many including in
Oracle®Primavera Risk Analysis)
by which the risks’ impacts are
characterized by days. A risk
cannot have both opportunity and
threat characteristics.
• Risk drivers (Risk factors in
Oracle® Primavera Risk Analysis)
by which the risks’ impacts are
described as distributions of
multiplicative factors, not unlike
those used above for
uncertainties. Because the impact
multiplier can be less than or
greater than unity, a risk driver
can have both opportunity and
threat “tails,” a smoother
application than a risk register.
To this model, along with
uncertainty, add seven specific risk
drivers and one organizational risk
driver assigned to all tasks, as shown in
Figure 11. Each risk driver is specified
Figure 11 – Adding Risk Drivers to the Model
with a TriGen function to offset
anchoring and adjusting bias.
The results of simulation with
uncertainty and risk events
represented by risk drivers are shown
in Figure 12. Notice that over seven
months is added to the P-80 date and
the spread from P-5 to P-95 almost
doubles. These are illustrative data
only, but are not illogical. The
probability of meeting the scheduled
finish date drops to 17 percent:
Modeling Unknown Unknowns
– A Proposal
In this example, it is not know
what these unknowns are or how
significant they may be. Therefore, the
author concludes from historical
results that the knowledge of risk
events and the size of uncertainty is
limited and that more risks will be
revealed as the project proceeds
through its lifecycle. This results in a
recommendation to repeat
quantitative risk analysis periodically
to identify the new risks, as well as
retire existing risks.
In other words, experience tells
that there exists unknown unknowns
that will potentially affect the project.
They will become known in the future
as events unfold. Therefore, there is a
need to reflect them in the analysis.
COST ENGINEERING JULY/AUGUST 2016
Since unknown unknowns can
reliably be expected to occur on this
project, a relatively conservative
certainty target, e.g., the 80th
percentile (“P-80”) is recommended
when discussing the need for schedule
or cost contingency based on what is
known about uncertainty and risk
events that is revealed in the Monte
Carlo simulation results. In other
words, the author sees a need to be
“ahead of the game” with respect to
the risks that are known so that he is
not “behind the eight-ball” already
when unknown unknowns arise.
Interviews or workshops on risk
often appear to focus on risks and
uncertainties that are close-in or
actually happening now. This myopia
leads to insufficient consideration of
risks that occur most likely in the “far
future” of a project. In practical terms,
this might mean that risks more than
two years out from the interviews will
not be brought to mind and included
in the quantitative database for the
risk analysis. Something needs to be
done to represent these far future
risks.
It is also arguable that unknown
unknowns are not truly unknowable,
but have not been thought of yet. This
may be a result of a lack of attention to
risks that may occur “down the road.:
19
 Figure 12 – Results from Adding Risk Drivers to the Model
If these risks are “unknown” right now,
extra effort to focus on down-stream
risk could improve the understanding
of risks, including making known some
“unknowns.” Some of the risks can be
identified with practice at thinking
forward.
While unknown unknowns have
no known specific cause, one can
confidently anticipate that they will be
revealed as the project execution
continues. One can widen, beyond the
ranges reported for the near-term
uncertainty, the range of uncertainty
that is applied to future activities to
represent these unknown risks before
one knows what they are. The degree
of “widening” and the definition of
“future” would be judgment calls for
the project participants and the risk
analyst. This idea of widening the
uncertainty range for far future (within
the project context) can be
implemented as shown in Figure 13.
The degree of widening the ranges
in the far future for the project is
obviously a judgment based on inputs
from many and experience with
benchmarking. Notice that the new
range for future uncertainty is quite
wide, since it needs to encompass
both uncertainty and risk events. The
results in Figure 14 show adding about
Figure 14 – Results With Wider Uncertainty Ranges on Far Future Activities
20 COST ENGINEERING JULY/AUGUST 2016
Figure 13 – Applying Wider Ranges Representing Unknown on Far Future Ac-
tivities
four months to the P-80 and other
expected results.
Considering Unknown Knowns
Considering the discussion
initiated by Secretary of Defense
Rumsfeld, he missed one of the most
important unknowns, the so-called
“Unknown Knowns.” However, people
have really known for years that there
are risks that cannot be discussed in
public. These risks usually are
detrimental to the project, contradict
management’s position, or are
embarrassing. In some organizations
these cannot be discussed in the halls,
over coffee, or in risk workshops.
“Psychoanalytic philosopher
Slavoj Zizek says that beyond these
three categories there is a fourth, the
unknown known, that which one
intentionally refuses to acknowledge
that he/she knows. German
sociologists Christopher Daase and
Oliver Kessler (2007) agree with a basic
point of Rumsfeld in stating that the
cognitive frame for political practice
may be determined by the relationship
between what we know, what we do
not know, what we cannot know, but
Rumsfeld having left out what we do
not like to know” [11].
Many risk events are known by
the project participants but they may
be unable to discuss these in a public
setting. This is confirmed because the
risk register is always incomplete. The
evidence of this fact is that in
confidential interviews with project
team members a number of new risks,
risks that are not included already in
the risk register are introduced with
their parameters. Subsequent
interviewees often contribute their
information on these new risks
without objection. Many of these
newly-introduced risk events are later
found to be most important in
determining the schedule risk results.
Among these risk are the “Unknown
Knowns” that which we intentionally
refuse to acknowledge that we know
or do not want to know.
Why are some of the most
important risks not included in the risk
register? The risk register is usually a
formal document and is clearly
described in the organization’s
handbook. Often there is someone
assigned to manage the risk register.
Sometimes expensive risk register
software is purchased and maintained.
Periodic risk workshops are conducted
to amend, update, and correct the risk
register. Yet, none of this matters if key
risks never make it to the risk register.
The risks that are omitted are risks
we know but are unwilling or unable to
talk about. Ignoring these risks, or
causing the corporate environment
wherein these risks cannot be
discussed, exhibits an ostrich approach
to risk management.
The author views the
incompleteness of the risk register to
be the result of social pressures or
group dynamics that limit debate in
open workshops, including:
• Groupthink – people in groups
often prefer unanimity, discourage
dissent and make it difficult for
people to raise new issues or voice
an opinion different from that of
the group.
• Moses Factor – some people will
suppress their own ideas,
adopting influential person’s ideas
instead, in a group.
• Cultural Conformity – The
decisions match the group norms
[2].
Risk workshops usually involve
many people getting together for
several hours and often include project
managers. Workshops can be serious
wastes of time with people not willing
to be candid in discussing risk, or they
are not able to talk much at all in a
room full of other people, including
the boss.
A more successful environment to
gain the best data possible by Subject
Matter Experts (SMEs) is the
confidential interview approach.
Confidential interviews bring people a
degree of comfort not found in open
meetings. In these interviews, new
risks are discussed, whether they are
hurtful to the project or embarrassing.
People more openly talk about “the
good, the bad, and the ugly” of a
project in these interviews.
In the confidential one-on-one (or
one-to-a-few) the interviewee(s) can
talk in depth and with focus to
someone and indicate a desire to know
his/her opinion. Most interviewees
open up and find it easy to discuss risks
they cannot discuss in the team
meetings, even the special purpose
risk meetings.
In addition, interviewees
appreciate the opportunity to talk
about risk and that someone is
listening, taking their viewpoints into
account.
Some Evidence on
Project Overruns
Quantifying unknown unknowns
by widening uncertainty ranges on far
future activities’ durations is a “best
guess” strategy, simply because we do
not know what these unknowns are.
As mentioned above, challenging the
interviewees to think about future
risks may reveal some of these
unknown unknowns. Also, looking at
the experience with other projects
may help to calibrate the
representation of unknown unknowns.
At the least we should be somewhat
modest in claiming any specific insight
into unknown unknowns – that is one
reason they are included in an
expanded uncertainty range rather
than as risk events.
Evidence from well-documented
projects tells a startling story, at least
as to cost results. Bent Flyvbjerg and
associates have amassed some
interesting findings: [1]
COST ENGINEERING JULY/AUGUST 2016
• Chunnel project was overrun by
80 percent (this was a commercial
project but with heavy oversight
and involvement of politics,
regulations – e.g., safety).
• Great Belt Link – a bridge tunnel
between east Denmark and
Europe, was a 54 percent overrun.
• Oresund Link bridge between
Sweden and Denmark was a 68
percent overrun.
• The Big Dig in Boston was a 196
percent overrun.
In addition, Flyvbjerg and
associates found:
• Studies in Sweden on road and rail
projects
o Road projects average 86
percent overrun, range +two
percent to +182 percent
o Rail projects average 17
percent overrun, range -14
percent to + four percent
• US Department of Transportation
rail projects
o Average overrun 61 percent,
range -10 percent to +106
percent
• Aalborg University Denmark, nine
of 10 projects underestimated
o Rail average overruns of +45
percent
o Tunnels/Bridges + 34 percent
o Roads + 20 percent
Flyvbjerg and colleagues
concluded that cost underestimating is
common. Coupled with overestimating
the benefits, which are often “non-
measurable, insignificant or even
negative. This means that some of
these projects should not have been
approved. These are large-scale
infrastructure projects, but projects in
other industries appear to be similar or
worse. Interestingly, there appears to
be no learning about overruns – the
activity of constructing large
governmental projects has established
equilibrium over time at substantial
overruns”[1]. They believe that these
results reflect both powerful incentives
to underestimate to get projects
21
 started and weak disincentives to
overrun.
A dissenting voice is that of
Edward Merrow who has stated that:
“Large projects have a dismal track
record because we have not adjusted
our practices to fit the difficulty that
the projects present.” Merrow was
quoted in a 2012 AACE International
Transactions article [3].
Finally, John Hollmann finds that
research has shown that “the
approximate ranges for accuracy or
uncertainty around the reference
amounts are as follows:
• P10: -32 percent to +8 percent
(average about -9 percent).
• P50 or mean: 0 percent to +88
percent (average about 21
percent).
• P90: +34 percent to 190 percent
(average about 70 percent)” [3].
The point of benchmarking
against some real results is to put a
check on the results of a risk model
based on the CPM schedule, using data
gathered at least in part by talking with
SMEs and employing Monte Carlo
simulation techniques. We can learn
more by comparing results from two
quite different methodologies and
data collection approaches than if we
just stick to one method.
Conclusion
This article presents four different
concepts of knowns and unknowns
and shows how they are, or could be,
represented in a schedule risk model
using uncertainty, risk events and
confidential interviews.
Known knowns are those facts of
which we are sure. They should be
reflected in the baseline and current
updated schedule. This is not new or
controversial.
Known unknowns include several
concepts of uncertainty and risk
events. The uncertainties include:
• Inherent variability, which is
known to exist even if its origins
are non-specific. A probability
distribution range of plus and
minus multipliers helps to
22 COST ENGINEERING JULY/AUGUST 2016
implement this concept, since
inherent variability is 100 percent
likely and thought to be
irreducible.
• Estimating error is also known to
exist and to depend on the quality
and maturity of the information at
hand at the time of creating the
schedule. Again, at any one time
this is 100 percent likely to exist so
it can be incorporated in the
probability distribution of impact
multipliers applied directly to the
durations of the activities.
• Estimating bias may or may not
exist, but if it exists it has already
occurred and forms the basis of
the project CPM schedule that is
used as a platform for the
schedule risk analysis. Estimating
bias may cause the pessimistic or
high value of the three-point
estimate to be asymmetrically
further away from the most likely
value than the optimistic or low
value. In addition, the most likely
value may not be the duration in
the project schedule since that
may have been biased, usually
downward to accommodate
management’s requirements.
Having described setting the
parameters of a three-point estimate-
based distribution representing
uncertainty, this article discussed the
two issues of: using the TriGen
function to adjust for a common
underestimation of the ranges, and
correlating the values of the uncertain
activity durations. The interviewees
who describe the plus and minus
ranges have usually described their
opinions about overall schedule
variation rather than variation of
individual activity durations.
The category of known unknowns
that contains risk events is neatly
addressed and handled by the use of
risk drivers. In this article, the common
failing of underreporting the risk
impact, because of anchoring and
adjusting bias, is addressed by creating
TriGen functions that widen the ranges
of the triangular distribution that are
too narrow even in confidential risk
interviews.
The new category of unknown
knowns is introduced as a class of risks
that is known about, but not spoken of
in the context of public meetings such
as risk workshops. This issue is handled
by conducting data gathering in
confidential interviews, and evidence
that these interviews work to address
unknown knowns is that many risks
that do not appear in the risk register
are discussed in those interviews.
It is not surprising that the
method of handling unknown
unknowns, applying wider ranges on
far future activities, is least satisfying
of all. done does expect there to be
risks in the project that are revealed as
the progress occurs, so the existence
of unknown unknowns is well
established, at least early in the
lifecycle. They must be handled as
uncertainty rather than as risk drivers
since their nature is unknown at the
point of analysis. It is suspected from
experience that the interviewees talk
at length and in much detail about the
risks that exist today or are in the near
future. It is suspected that if one works
at expanding the time dimension of
the interview discussion, that some of
the unknown unknowns will become
known. Alternatively, the author of this
article proposes to implement an
expanded range of uncertainty to take
account of unknowns that are
discovered in the future. This begs the
questions of how much to expand the
range and when the far future begins.
Finally, some sobering data from
recent studies of Flyvbjerg and
Hollmann about project cost overruns
needs to be factored into the mix when
explaining and calibrating unknowns of
whatever type. Coming at project
schedule results using quite different
methods, in this case database
examination of comparable projects,
may improve the ability to understand
the degree to which project
performance does not match project
plans.
REFERENCES
1. Flyvbjerg, Bent, Nils Bruzelius and
Werner Rothengatter, 2003,
Megaprojects and Risk: an
 Anatomy of Ambition, Cambridge 7. Tversky, A. and D. Kahneman, ABOUT THE AUTHOR
University Press, Cambridge 1974, Judgment Under
England. Uncertainty: Heuristics and Biases,
2. Hillson, David and Ruth Murray- Science, Sept. 26, 1974,
Webster, 2005, Understanding Science/AAAS, Washington DC. Dr. David T. Hulett,
and Managing Risk Attitude, 8. http://jxb.oxfordjournals.org/con is a principal with
Gower Publishing, Aldershot, tent /60/3/712.full/ February 5, Hulett & Associates,
Hants, England. 2015. LLC. He can be
3. Hollmann, J., 2012, RISK.1027: 9. http://www.isixsigma.com/dictio contacted by
Estimate Accuracy: Dealing with nary/common-cause-variation/ sending email to:
Reality, AACE INTERNATIONAL February 6, 2015. david.hulett@projectrisk.com
TRANSACTIONS, AACE 10. http://www.isixsigma.com/dictio
International, Morgantown, WV. nary/variation-special-cause/
4. Merrow, E. M., 2011, Industrial February 6, 2015. FOR OTHER RESOURCES
Megaprojects, John Wiley & Sons, 11. http://en.wikipedia.org/wiki/The For additional resources go to:
Hoboken, New Jersey. re_are_known_knowns/ January www.aacei.org/resources/vl/
Do an “advanced search” by “au-
5. Moses, L., 1977, Energy 24, 2015.
thor name” for an abstract listing of
Information Administration all other technical articles this author
Annual Report to Congress, EDITOR’s NOTE has published with AACE. Or, search
Volume 3, Administrator’s Figures 4,5,6,8,9,11,12,and 13 are by any total cost management subject
Message, US Government Printing screen shots from PolarisTM v.1.8, an area and retrieve a listing of all avail-
Office, Washington, DC. integrated cost-schedule Monte Carlo able AACE articles on your area of in-
6. Taleb, N. N., 2007, The Black simulation program developed by Booz terest. AACE also offers pre-recorded
Swan: The Impact of the Highly Allen Hamilton. webinars, an Online Learning Center
Improbable, Random House, New and other educational resources.
York. Check out all of the available AACE re-
sources.

COST ENGINEERING JULY/AUGUST 2016 23

 TECHNICAL ARTICLE

Recommended Practices
Provide Implementation Details
for CMAA Standards of Practice
Christopher W. Carson, CEP DRMP PSP FAACE

Project Management
Abstract: While the construction manager on a project should be certified
The most important work product
as a Certified Construction Manager (CCM) by the Construction Management
Association of America (CMAA), the project controls support personnel cer- that the CM provides in the Project
tified in cost, schedule, and risk, and trained in AACE Recommended Practices Management (PM) phase is
(RP), provide the ideal professional services necessary to plan and manage development of the Construction
the project. Management Plan (CMP), which
Nowhere is this more obvious and vital than in the early stages of the contains the Project Controls Plan
project. Developing all the associated project controls aspects of CMAA’s (PCP) to provide specific direction for
Construction Management Plan are professionally fleshed out through the the disciplines of project controls;
use of AACE’s technical products and certifications. planning and scheduling, cost
Two great professional associations, CMAA and AACE International, are management, risk management,
a natural and perfect fit to work together. The author demonstrates a strong document controls, and forensic
case that the AACE Recommended Practices align nicely with the Standards
analysis.
of Practice published by CMAA and professionals certified by each organiza-
tion interface perfectly. The CMP is the written plan to
This article examines the value of implementing the relevant RPs at the define and implement the project
pre-design and design stages of the project using lessons learned and studies management goals of cost control,
that prove this value. CMAA and AACE are natural partners for project suc- time control, quality control, and scope
cess. This article was first presented at the 2015 AACE International Annual control. These four components are
Meeting as TCM.1948. interrelated and affect each of the
other components. The benchmarks

T
he session discusses the ben-
efits and value of the CM
teaming with AACE trained
schedulers and cost estima-
tors to provide high end pre-design and
design phase services in the project
controls disciplines:
• Project Management - Cost and
time control, construction
management plan.
• Cost Management - Cost analysis,
value analysis studies, cost risk
management.
• Time Management - Schedule
constructability, project duration,
schedule risk management.
• Quality Management - design and design stages. The
Constructability reviews, value
engineering.
These management services are
defined and explained in CMAA’s
Standards of Practice, a reference set
that should be on every CM’s bookshelf
[1]. The AACE International
Recommended Practices align well
with the CMAA SOP, and provide the
implementation tools for all the project
controls functions.
for these goals are set early in the
project planning, and must be
evaluated and updated during the pre-
benchmarks are the tools used to
manage the PM goals; budget (cost
control), schedule (time control),
quality control plan (quality control),
and plans and specifications (scope
control). Quality and scope are often
considered as integrated since
installing the full scope at the desired
quality produces the end product.
Time and cost are somewhat
temporary components that are used
to benchmark and monitor but are
consumed in the final product.

24 COST ENGINEERING JULY/AUGUST 2016

 The CMP is the defining document
for project requirements, as well as
identifying team members, the
organizational structure, sets up
communications protocols, identifies
the contracting strategy and project
delivery method and provides the
benchmarks for both project
monitoring and the team’s
performance.
Once the CMP is established, the
documents that are used to implement
the plan are gathered into a Project
Procedures Manual (PPM). The PPM
contains cost, schedule, quality, and
safety control procedures, as well as
the communications procedures and
other organizational processes. This is
the primary reference document for
the PM team during implementation of
all the project phases, and will need to
be updated as any of its components
change. The value of a CCM lies in the
proven expertise and knowledge in
how to organize and manage the
project using these tools as
demonstrated by the certification
process and examination. The planning
in these early stages will place the
project on a path to success, making it
simpler to professionally manage the
project.
The CMP, while specific to CMAA,
is similar to plans developed by other
organizations. These other
organizations’ products contain
valuable perspectives on developing a
plan to organize a project, and are well
worth review and perhaps
incorporation of useful features in the
CMP.
The Project Management
Institute® (PMI®) defines what it calls
the Project Management Plan (PMP),
which describes the project
governance approach to the project
[2]. The PMP is developed right after
the project charter and is part of the
project integration management
knowledge area in the planning
process group. This plan is an output of
the planning process group and an
input to the executing process group
and the monitoring and controlling
process group. The PMP is defined as,
“The process of defining, preparing,
and coordinating all subsidiary plans
and integrating them into the
comprehensive project management
plan. The project’s integrated baselines
and subsidiary plans may be included
within the project management plan.”
AACE International Recommended
Practice 39R-06, Project Planning As
Applied in Engineering and
Construction for Capital Projects,
contains essentially the same contents
as the CMP [3]. This document includes
the following processes:
• Requirements elicitation and
analysis
• Asset planning
• Project implementation
• Project scope and execution
strategy development
• Schedule planning and
development
• Cost estimating and budgeting
• Resource planning
• Value analysis and engineering
• Risk management
• Procurement planning
• Project control plan implementation
Keeping the PCP separate, but
referenced in the CMP, is a nice way of
maintaining the disciplines of cost,
schedule, risk, and document controls
integrated and effective. A good source
for development of the PCP is the
AACE International Recommended
Practice No. 60R-10, “Developing the
Project Controls Plan” [4].
This plan, as described in the AACE
Recommended Practice (RP),
“describes specific processes,
procedures, tools and systems that
guide and support effective project
control. The plan is a narrative or
qualitative representation of the
project control process, while the
estimate, budget, schedule, etc.,
represent the quantitative aspects.”
Project controls develops the
benchmark for cost and time and
freezes those benchmarks in the
budget and schedule. These are vital
support services to the project and
they start in pre-design. It is very
important that these benchmarks are
established and well defined.
COST ENGINEERING JULY/AUGUST 2016
The CM is responsible for the CMP
and the PCP portion of the CMP. One
important issue that is planned at this
time is the field investigation and
development of any as-built
documentation. Often a source for
costs is the unforeseen or differing site
conditions, and the CM will have the
experience and background to make
appropriate recommendations for the
exploration that reveals the site
conditions, whether borings, research,
subsurface investigation, or others.
The Federal Highway Administration
(FHWA) promotes what they call
Subsurface Utility Engineering (SUE) as
a way to reduce costs. FHWA has
quantified the return on investment of
almost five to one in savings ($4.62 of
savings for each $1.00 spent on SUE),
and other significant savings that
cannot be easily quantified [5].
Cost Management
The CMP identifies cost services
that are necessary in each stage or
phase of the project, and explains
stakeholder input, the purpose for
each section of the plan, the
methodology to be used for estimating
costs, as well as reporting to all
stakeholders. CMAA Standards of
Practice suggest that some of the
estimating techniques used by the CM
include: standardized cost indexes, unit
method, scale of operations method,
ratio or factor method, physical
dimensions method, and quantity
take-off method. CCMs are trained in
these methods and know the
appropriate phase and design status
for their use.
The CMAA Cost Management
Standards of Practice is the primary
source for development of the CM’s
plan, but AACE provides the right
resources that provide deeper detail
into cost management. One of those
resources is AACE’s Recommended
Practice No. 35R-09, “Development of
Cost Estimate Plans – As Applied for
the Building and General Construction
Industries” [6]. This RP addresses basic
principles for developing the CMP and
what AACE calls Cost Estimate Plans:
25
 • Preparation of an estimate plan
helps to ensure successful
estimate completion in an
effective and timely manner.
• Engaging key stakeholders in
estimate planning prior to starting
the estimate improves the
likelihood of meeting estimate
objectives.
• The estimate plan defines what
information is required from who
and when.
• An approved estimate plan
provides a duly authorized basis to
proceed with the estimating
effort, clarifying requirements and
responsibilities.
The RP identifies appropriate
source materials for preparing the
draft plan, such as project scope
including alternative scenarios, known
site conditions, current schedule,
lessons learned, risks (both threats and
opportunities) from previous stages or
projects, and estimating tools
preferred by the owner. This can also
include technical components needed
for the estimate such as WBS, code of
accounts, and work packages.
Figure 1 – R.S. Means CostWorks Model. Figures 1 was generated from software by The Gordian
Group®, Inc, RS Means CostWorks®, Version 15.19, 1996-2015. (Carson, 1996-2015).
26 COST ENGINEERING JULY/AUGUST 2016
The plan references the purpose
of cost management at various stages
of the project, and another good
resource to identify the appropriate
level of estimate is AACE’s
Recommended Practice No. 17R-97,
“Cost Estimate Classification System”
[7]. The value of a CCM lies in the
proven expertise and knowledge in
how to organize and manage the
project using these cost resources as
demonstrated by the certification
process and examination. The cost
planning in these early stages will place
the project on a path to success,
making it simpler to professionally
manage the project to meet the
budget.
Pre-Design Phase
Before the project is released to
designers, the conceptual budget is the
driving document that identifies owner
and project objectives, as well as any
limitations on funding. It also is used to
assess the various conditions that will
affect budget such as environmental
conditions, market conditions, site
limitations, and helps identify the need
for contingency and escalation
budgets.
This is the time when feasibility
studies are important and the studies
will determine whether the project
should proceed at all or with
modifications to better fit into the
owner goals. CMAA Standards of
Practice suggest that the estimate at
this phase is the program estimate.
The needs for estimating at this
stage rely upon minimal project
definition so it is important that the
appropriate class of estimating is
performed. From the AACE’s RP 17R-
97, Cost Estimate Classification System,
Class Five identifies the usage as
screening or feasibility. This class uses
stochastic methods along with expert
judgment to provide high-level
estimates at this phase. Stochastic
methods include use of factors,
metrics, and models to provide the
appropriate estimate, while
deterministic methods are generally
measurements of the units required
for construction. Deterministic
methods cannot be used accurately
until there is enough scope definition
to produce some level of drawings
from which to survey quantities.
The CM is generally
knowledgeable about cost estimating,
but AACE trained estimators bring a
much deeper focus and understanding
of these types of estimates. The
estimator would provide a cost
estimate based on some estimating
system such as the online R.S. Means
or CostWorks database using the
square foot models available, modified
by his or her judgment, such as in the
example in Figure 1 . An example of a
stochastic estimate for a computer
data center might be tilt-up concrete
walls and steel frame for a one story,
40,000 sf facility with 16’ height and
costs running $12,100,000. This cost
would include O&P fees of 25 percent
and design fees of seven percent.
The estimator would determine
the needs for project contingencies for
procurement, contractor buy-out,
construction, and perhaps owner
needed management reserves. This
contingency evaluation should be done
using good risk analysis, performing a
Figure 2 – Transportation Model Stochastic Estimate. Figure 2 is generated from software
by The Gordian Group®, Inc, RS Means CostWorks®, Version 15.19, 1996-2015. (Carson,
1996-2015).
risk workshop to identify risk drivers
and specific events and analyzing the
cost and time values of these risks [8].
Once the basic facility pricing is done,
the estimator chooses any escalation
required in the estimate as a result of
the time frame for the project, from
amount of time needed for
procurement of designer and
contractor, as well as construction
time.
With the final cost estimate
established, the estimator provides
pricing for any other known scopes of
work, and after the risk assessment,
converts the single estimate to a range
budget. For the Class Five estimate, the
range budget for this project might be
in the range of +50 percent/-25
percent, or a cost range from
$9,075,000 to $18,150,000.
Of course, this wide range is often
not going to be acceptable for an
owner, particularly in a specific
COST ENGINEERING JULY/AUGUST 2016
industry where there are good
historical costs available. In that case,
the estimator, using expert knowledge
and judgment, might be able to
increase the maturity of the scope
definition and reduce the range to
something more like +25 percent/-15
percent, or a cost range from
$10,300,000 to $15,100,000 which
would be more desirable for use in
starting the funding acquisition. To get
to this range, the scope definition
would have to be 30 percent to 75
percent or greater of full scope
definition in order to allow for a Class
Three or Class Two estimate.
For roadway work, such as
maintenance cost estimating, the
Departments of Transportation (DOT)
generally have feasibility models for
maintenance service costs that can be
used to provide stochastic estimating
with low levels of scope definition as
found in the pre-design phase. These
27
 models are available from the DOTs
and might look something like the
example in Figure 2 .
With historical data available, the
range of accuracy can be reduced quite
a bit since the scope is fully defined in
the historical database projects.
These early budgets are vital in
establishing the funding needs and if
not done appropriately, projects may
be given the green light to proceed
without adequate funding. This could
force scope reductions after the
project is released, increasing costs
and time. The Certified Cost
Professional (CCP) or Certified
Estimating Professional (CEP), working
with the CMAA Certified Construction
Manager, has the experience and
training to provide these valuable
initial planning budgets.
Design Phase
The needs for estimating in the
beginning of this stage still rely upon
minimal project definition, although
during design the scope definition is
increasingly more mature, so it is even
more important that the appropriate
class of estimating is performed. From
the AACE’s RP 18R-97, Cost Estimate
Classification System, Class Four
identifies the usage as concept study
or feasibility which would include the
early stages of the design phase. This
class also uses primarily just stochastic
methods to provide high-level
estimates at this phase, however, often
owners and the CMs have historical
data which will allow tighter ranges of
estimate accuracy.
During this stage, as the scope
definition is maturing by virtue of
development of drawings from
schematic to concept to final
construction documents, the CM has
an important and consistent role in
providing cost estimating and budgets,
coupled with value engineering and
constructability reviews to help
maintain the design and the budget.
When the CM has an AACE trained
estimator on the team, these different
budgeting roles are easily and
professionally performed.
28 COST ENGINEERING JULY/AUGUST 2016
The owner should have released
the CM to work hand-in-hand with the
designers, the Architects and Engineers
(A/E), to ensure constant cost
feedback, as well as an understanding
of the ramifications of design
decisions. This is usually the period
when failure to engage a good CM
causes the largest problem with the
design and budget. If the design
evolution increases costs significantly,
either there was not a good
understanding of the basic scope, or
the A/Es have increased scope or
quality, often at the owner’s request,
beyond the established budget.
As noted in the CMAA Standards
of Practice, failures often result from
inadequate initial budgeting. The
biggest construction risks, according to
the 2012 Smart Market Report by R.S.
Means, with cost overruns in second
place, are [9]:
• Design/project changes and scope
creep
• Budget/cost overruns
• Project process approvals
• Safety
• Site conditions
From the Smart Market Report, 70
percent of contractors report that
more than 80 percent of their projects
completed over budget, with the
average overrun amounting to 18
percent of the total project budget.
This equates to more than half the
projects showing an average of
$500,000 overrun on a $3M project.
This speaks to the need for
accurate and continuous budgeting
during design, providing more and
more accurate cost estimates as the
scope is defined, and preferably
moving into deterministic methods of
estimating, so that quantity surveys
can be used to improve the accuracy of
the estimate. The use of unit costs in
deterministic methods becomes
available when the scope definition
advances to the 10 percent to 40
percent range of complete definition,
and allows estimating in Class Three
and even Class Two. These estimates
are used for budget control or
authorization, and control or
bid/tender, respectively.
As the estimator can move toward
deterministic estimating methods, the
use of project unit costs is available at
the beginning of the design phase, and
the use of trade unit costs is available
as the drawings move toward 35
percent and greater completion.
For a 20,000 sf university facility
for engineering, the cost estimate
might be $5,140,000, with a range of
accuracy of +30 percent/-15 percent
based on a Class Three estimate, and
the range of budgets would then run
from a low of $4,369,000 to a high of
$6,682,000.
The design phase is the critical
period for constant cost feedback and
design guidance. This is an area that
often is not appreciated enough by
owners, with resultant problems in
budgets and final designs. When the
project design has evolved to 85
percent drawings, there is little
opportunity to adjust costs through
design monitoring or even value
engineering.
CMAA Standards of Practice
suggest that cost estimates should be
provided at four stages during the
design phase:
• Completion of schematic design
• Completion of design
development
• In-progress final
design/construction documents
• Completion of bidding documents
Part of the CM’s role in cost
management includes value planning,
engineering, and analysis. This is the
process of reviewing the functions of
the facilities, systems, and equipment,
and ensuring that those functions are
delivered at the lowest life cycle cost
possible while maintaining the quality
and safety programmed into the
project. As noted in the CMAA
Standards of Practice, value
engineering, “aligns scope,
expectations, and budget” [10]. It
includes elimination of unnecessary
costs, such as uncertainties from
reduced site exploration, use of
 Figure 3 – Value Engineering Process
inappropriate standards and criteria,
local or regional habits and attitudes,
reputations and lack of common sense.
The ability to make changes is
highest during the planning and early
design stages, so VE must be
performed early and continuously
during design development, see the
Figure 3, from the CCM training course.
The CM is the primary cost
manager for the project, and it should
be the estimator’s role to constantly
provide cost control through the
various phases, but AACE trained cost
managers have the detailed knowledge
and experience to support during pre-
design and especially the design phase.
Time Management
Similar to the way cost
management relies on more and more
detailed estimates as the project
moves from pre-design to design
phases, time management relies on
phase-oriented scheduling services. An
excellent source for descriptions of
schedules based on the level of detail
and purpose is the AACE International
Recommended Practice No. 37R-06,
“Schedule Levels of Detail – As Applied
in Engineering, Procurement, and
Construction” [11]. This publication
has a section on “Descriptive Levels
Methodology,” which identifies the
program/project summary, milestone,
and project level schedules. Once
again, the value of the CCM lies in the
proven time management expertise
and knowledge in how to organize and
manage the project using these tools
as demonstrated by the certification
process and examination. The planning
and benchmarking in these early
stages will place the project on a path
to success, making it simpler to
professionally manage the project to
an on-time completion.
Pre-Design Phase
During this phase, the primary use
of the schedule is to establish the
major project milestones, estimate the
project duration, and allow time for
requirements, so a milestone schedule,
such as reproduced in Figure 4 , is
usually the first schedule to be
produced, showing overall project
estimated duration and all milestones
related to contract and regulatory
requirements, as well as organizational
milestones.
Figure generated from Software
by Oracle® Primavera Project
Management P6™ Professional R8.3.2.
(Carson, Software by Oracle Primavera
Project Management P6 Professional
R8.3.2, 2015).
As the project moves further along
the pre-design path, there is usually a
necessity to progressively elaborate
the schedule into more detail based on
development of the project
requirements. The milestone schedule
evolves into the concept schedule,
COST ENGINEERING JULY/AUGUST 2016
which still contains the milestone
schedule for major milestones, as well
as later phases, could expand to more
and more items, ideally a high level
master schedule for the project. The
master schedule could have sub-
project information included, contain
the milestones, and even have
predicted funding shown. This is the
phase when funding is acquired so the
funding requirements should be added
to the master schedule. It is most
important that activities are carried for
anything at a high level that drives the
project completion. These items
include governmental regulatory
requirements, such as environmental
issues and permits, as well as design,
construction, post-construction, and
gates that might delay the project if
not scheduled.
Design Phase
During design, the master
schedule is further developed as the
scope is better defined, and once there
is basic scope information, it can be
used to establish the project duration.
This schedule becomes a true Critical
Path Method (CPM) schedule with
activities representing design phases
and work scope by trade and phases,
at a high level. As the design
progresses from schematic to
conceptual to construction drawings,
the schedule develops in more and
more detail. It may also be cost loaded
29
 Figure 4 – Milestone Schedule. Figure generated from Software by Oracle® Primavera Project
Management P6™ Professional R8.3.2. (Carson, Software by Oracle Primavera Project Man-
agement P6 Professional R8.3.2, 2015).
and used for both funding predictions
and cash flow monitoring.
The development of the project
duration schedule, called the Contract
Time Determination Schedule in
transportation and other sectors,
allows for a determination of a
reasonable duration to be used in the
bid documents. The CM uses a
scheduler who brings his or her
construction experience to the
duration schedule to ensure that the
bidders do not see a risk in the
duration, either from an aggressive
schedule or a relaxed schedule, either
of which could cost the contractor
money from acceleration or delays.
The other primary use of the
schedule during this phase to monitor
the design effort is very important. This
requires the CM to meet with the A/Es
and establish a method for monitoring,
as well as the model of the design
process. The meeting and schedule
development will establish design
milestones such as 35 percent, 65
percent, 85 percent, and 100 percent
documents. The design milestones are
important as other project controls
efforts will need to interface with these
milestones such as value engineering,
constructability reviews, and as noted
in the cost management section,
phase/gate cost estimates. Without a
30 COST ENGINEERING JULY/AUGUST 2016
schedule for design, the project is likely
to allow slippage in the design and this
will impact all the other work from
procurement to construction.
While the schedule is evolving
through the various stages at the pre-
design and design phases, it is also
updated frequently with progress. This
effort allows for analysis of completion
predictions, monitoring of
performance, and analysis of trending
that might forecast delays to the
project deadlines.
Studies show that time is a very
important component of project
success and often contributes to cost
overruns. The Smart Market Report
survey showed that an average of 24
percent of projects did not complete
on time, with the average time overrun
of 17 percent of the original project
duration. This means that one out of
every four projects finishes late, with
an average of slightly over two months
late completion for a typical one year
project. At $5,000/day liquidated
damages, this is $306,000, but even
without LDs, at an average daily field
overhead (general conditions), this is
$153,000 additional costs to the
contractor.
The CM acts as the CPM expert,
but generally uses a scheduler who,
with his AACE trained background,
brings the strong belief in scheduling,
knowledge of technical scheduling
techniques, and systematic scheduling
effort to develop the scheduling
culture that enables projects to
succeed.
Quality Management
Quality management from the
perspective of project controls is
primarily provided during the design
phase.
Pre-Design Phase
As noted in the project
management section, quality
management during this phase is
oriented toward the development of
the project implementation tools, such
as the construction or project
management plan and the project
procedures manual, as well as the
project management information
system to handle document control
and project records.
Within the CMP or PMP resides
the process and timing for reviewing
constructability and design
documents. This goes along with
development of the design schedule so
the constructability reviews align with
design stage completions. The process
of value engineering reviews evolves
into constructability reviews,
 Figure 5 – Relationship of Time and Courage
effectively moving the responsibility
for these vital reviews from cost
management to quality management.
Managing the progress of this pre-
design work is still the responsibility of
the scheduler who can keep the
process on track.
Design Phase
During design, it is very important
that the design is reviewed as it is
developed for constructability and
bidability by the CM with deep
construction experience. While many
design architects and engineers have
similar field construction experience,
there are many who have mostly
design experience and do not
necessarily understand efficiency
needs which relate to use of
equipment and labor, as well as
efficient sequencing. For example, an
engineer would make sure that there is
adequate room in the median to install
a ten foot wide box culvert, but may
not realize that once you allow space
for the trench box and room for the
crane and truck to deliver the culvert,
the median is not large enough to
allow the work to freely proceed. This
is constructability and it saves millions
of dollars on projects if implemented.
With transportation work, the
driving impetus behind the sequencing
is the need to keep traffic moving as
efficiently and safely as possible. The
design engineers often do not
understand how this works, but this
Maintenance of Traffic (MOT) as it’s
called will dictate the phases of the
project. So, while there might be
multiple phases in developing a
detour, moving traffic temporarily
onto the detour, reworking the detour
and moving traffic again, the
construction of the bridge 10 miles
long would probably only have one
phase in the MOT. The CM must be the
expert who can help decide how traffic
is managed safely, and AACE trained
schedulers bring the schedule
constructability expertise to the effort.
AACE has several Recommended
Practices that are eminently useful in
supporting constructability and
bidability reviews; No. 48R-06,
“Schedule Constructability Review”
and No. 45R-08, “Scheduling Claims
Protection Methods” [12].
The Constructability Reviews (CR)
must be prepared at appropriate
stages in the project design phase or
they will be developed too late to be
able to implement the
recommendations. With earthwork,
this can be particularly important. A
project that is built without phases
might be a balanced site, with the
same amount of cut/excavation as fill
material needed, but with phases
COST ENGINEERING JULY/AUGUST 2016
could cost millions of dollars to haul
away and bring in fill materials. With a
good constructability review, if it is
possible to adjust phases to better
balance the site, there is a huge
benefit.
The opportunities revealed in
constructability reviews can only be
realized if the CM, with appropriate
project controls staff, is engaged early
enough to provide the reviews during
design, after providing value
engineering during early design. The
natural evolution is to provide value
engineering during schematic and
conceptual design, providing guidance
to the A/E in design development, and
then to move into constructability
reviews once there are plans to review.
Figure 3 shows the last value
engineering study to be done around
35 percent drawings before
construction documents, and that is
the logical place for the first
constructability review to be prepared.
It is early enough to permit
implementation of the CR comments
and late enough to have actual
drawings to review. Figure 5 shows the
relationship of time and change, from
the CCM training course [13]. This slide
shows the “best opportunity for
improvement” window running from
early planning to about the 35 percent
completion time of the design phase
31
 [14]. The AACE trained project controls
staff has the best background and
experience to provide valuable
guidance and technical analysis to
support this effort.
It is the CM and project controls
professionals’ role to provide this
constructability review at the
appropriate stages, and it will yield a
number of good benefits; more
complete drawings with fewer
mistakes, more efficient drawings, and
lowered costs of construction.
The CM’s and estimator’s
familiarity with the bid market and
local conditions will alert the designers
to means and methods that are well
known in the community and will
result in better pricing. Unique
techniques that the contractor market
is not adept at implementing will raise
prices, increase risk, and affect
schedule. A good bidability review,
performed in conjunction with the CR,
will take into account the contractor’s
approach to building and help
minimize these types of issues. The
CM is the experienced construction-
side stakeholder in the process and will
provide value in the bidability review.
A study from 2005 by Pinnell
Busch, Inc., “Risk Assessment and Best
Practices in Scheduling” interviewed
contractors and owners to determine
the source and extent of change orders
in typical projects [15]. The results
from that study were significant; less
than 20 percent of the major causes of
change are within the control of the
contractor. At the top of both the
contractors’ and owners’ lists were
scope changes, averaging between 32
percent and 39 percent. The second
and third items on the list were
reversed by the two; but both included
design errors, averaging between 18
percent and 25 percent, and differing
site conditions, averaging between 13
percent and 19 percent.
This might appear to be slanted
from the contractor’s viewpoint, but
the owner’s survey had very similar
results.
32 COST ENGINEERING JULY/AUGUST 2016
Conclusion and General Construction
The fee for project controls Industries, AACE International.
services to engage in the pre-design 7. AACE International
and design phases of a project is Recommended Practice No. 17R-
minimal compared to the savings and 97, Cost Estimate Classification
avoidance of losses without that System, AACE International.
service. The training and knowledge 8. Carson, Chris, DRMP PSP. Planning
from AACE Certified Planning and and Facilitating a Schedule Risk
Scheduling Professionals (PSP), Workshop, from the 2013 AACE
Certified Cost Professionals (CCP), International Transactions.
Certified Estimating Professionals 9. Mitigation of Risk in Construction:
(CEP), and Decision and Risk Strategies for Reducing Risk and
Management Professionals (DRMP) Maximizing Profitability, Smart
create the perfect team partners for Market Report, McGraw Hill
the CCM. Construction, 2012.
The studies, statistics, and lessons 10. Construction Management
learned clearly demonstrate the Association of America, Certified
incredible value by hiring the CM early Construction Manager training
and using the CM firm with a CCM course, 2014.
augmented by AACE trained staff for 11. AACE International
project controls services during pre- Recommended Practice No. 37R-
design and design phases, for project 06, Schedule Levels of Detail – As
management, cost management, time Applied in Engineering,
management, and quality Procurement, and Construction,
management, as recommended by AACE International.
CMAA. The combination is without 12. AACE International
measure in value to the project. Recommended Practices No.
48R-06, Schedule Constructability
REFERENCES Review and RP No. 45R-08,
1. Construction Management Scheduling Claims Protection
Association of America (CMAA), Methods, AACE International.
Standards of Practice set. 13. Construction Management
2. The Project Management Body of Association of America Certified
Knowledge (The PMBOK™), Fifth Construction Manager training
Edition, Project Management course, 2014.
Institute® (PMI®), Project 14. Construction Management
Management Processes. Association of America Certified
3. AACE International Construction Manager training
Recommended Practice No. 39R- course, 2014.
06, Project Planning – As Applied 15. Risk Assessment and Best
in Engineering and Construction Practices in Scheduling, PMI
for Capital Projects, AACE College of Scheduling, by Steven
International. S. Pinnell, PE, Pinnell Busch, Inc.,
4. AACE International 2005.
Recommended Practice No. 60R-
10, Developing the Project ABOUT THE AUTHOR
Controls Plan, AACE International.
5. Four State DOT Study from Purdue Christopher W.
University commissioned by Carson, CEP DRMP
Federal Highway Administration PSP, is the Director
(FHWA), 1996. of Program and
6. AACE International Project Controls,
Recommended Practice No. 35R- with ARCADIS. He
09, Development of Cost Estimate can be contacted by
Plans – As Applied for the Building sending e-mail to:
chris.carson@arcadis-us.com

Team Building:
Find the GLUE that Binds Your Team
T
he process of leading a team
is about communication and
organization.
Initially, you must determine the
best course of action for the project
that has been assigned to you, and
outline a plan to complete the task
with success. When you have
completed your outline —and can
present it with confidence— you are
ready to face the team. It is confidence
and preparedness that allows them to
buy in to you as the team leader.
Leadership is about finding the
glue that binds your team together.
Let’s look at the GLUE.
• Gather Team Information
• Listen to the Team
• Unify the Team
• Empower and Execute.
GATHER information about the
team members, their backgrounds,
and skill sets. Learn what you can
about what the players have done on
other teams or within the company at
large. This background information is
essential as a basis upon which you will
build the infrastructure of your team.
Now keep in mind: This collected
information will be subject to change
as you watch the team come together
during the life of the project. The initial
information should be reviewed and
analyzed as much is you analyze the
project itself.
Ultimately, it is in the next phase—
as you listen to your team members
and learn—that you will begin to
determine the strengths and
weaknesses of your team in reality.
LISTEN to their concerns and
knowledge to determine their ability to
understand and comprehend. As you
SPECIAL FEATURE
do so, the several types of players will
surface. Listen closely to the comments
and thoughts of your team. The way
they speak and address the situation at
hand will give you great insight into the
type of team member they will
become.
As each team member speaks or
reacts to your plan, you must balance
their words and actions against the
information that you have gathered
about their backgrounds and with the
plan that you wish to implement. Team
members will all individually bring
positive skillsets to the table. Pay
attention to those who will be
constructive team members and
aggressive participants as well as those
with initiative who will lead their
portion of the project with excitement.
You may find that one person is an
expert in the subject matter at hand
while another is an expert in
organization.
As you determine the place for
each of the players, you will want to
make sure that you speak to the
expertise of the individuals so that they
feel that you are speaking directly to
them.
UNIFY them by finding a common
thread, or by creating one that they
can commit to. Once you have
identified the type of team members
you are managing, you will want to
present the project and the individual
tasks in a format that speaks to the
specific skillsets of the individual
members.
Create unity by making it clear
that they are all essential and
necessary members of your team.
Help them understand that they are
working for the common good of the
team and the organization, and let
them know that their relationship to
COST ENGINEERING JULY/AUGUST 2016
Joe Curcillo
each other is vital for success. If they
can understand how they fit into the
big picture—and how the project fits
into the big picture of the
organization—they will be more likely
to feel like a part of the solution.
EMPOWER the team to execute
the plan with dedication and passion.
Make the path ahead clear. Allow them
to understand the stages of
development as your project
progresses. Give them feedback as you
move along the way, and be ready and
willing to step in and assist with
mediation if conflict or hostility begins.
By allowing the team to clearly
visualize the direction upon which they
are embarking, execution will become
more fluid and guaranteed. Always
keep an open line of communication
with all team members in a
transparent and open fashion so that
you will minimize the risk of
competition for control.
With his plan outlined, and with a
firm grasp on who his team members
will be, Danny can walk into the
conference room with all the
information he could gather. He can
now pay attention to the team
members and listen carefully so that he
can unify and empower them. He has
the GLUE to bind his team. He must
now put the plan in motion as he
fosters the all for one and one for all
mindset.
Joe Curcillo, The Mindshark, is a
speaker, lawyer, and communications
expert. As an Adjunct Professor at
Widener University School of Law, Mr.
Curcillo developed a hands-on course,
on the use of storytelling as a persuasive
weapon. For more information please
visit www.TheMindShark.com.
33
AACE INTERNATIONAL ONLINE STORE
more online at www.aacei.org
Skills and Knowledge of
Cost Engineering, 6th Edition
Dr. Makarand Hastak, PE CCP, Editor, 2015
This publication provides information on a wide
range of cost engineering subjects and will prove
to be a valuable resource to any individual seeking
professional growth or pursuing an AACE
International certification. This publication offers
six sections comprising 34 chapters of content on
topics such as cost estimating, project planning,
value engineering, and strategic asset
management, to name a few.
Digital Download - US$80.00 member/US$120.00 nonmember
Paper version available through our Amazon.com link
CCP Certification Study Guide,
2nd Edition
Dr. Makarand Hastak, PE CCP, Editor, 2016
The AACE International CCP Certification Study
Guide, 2nd Edition is designed as a companion
workbook to the Skills and Knowledge of Cost
Engineering, 6th Edition (S&K 6). In conjunction
with S&K 6, this study guide will assist individuals
in their preparation for the CCP Certification
examination and develop the general knowledge a
cost engineering professional is expected to have.
This study guide offers insight into the key topics
found in each chapter of S&K 6 and provides
practice questions and exercises to develop knowledge in individual areas.
Digital Download - US$50.00 member/US$60.00 nonmember
Paper version available through our Amazon.com link
PSP Certification Study Guide, 1st Edition
Peter W. Griesmyer, Editor, 2008
This study guide is intended to assist you in your
study and review of the overall topics as one step
toward successful Planning and Scheduling Profes-
sional certification. The outline provides a listing
of the terms you should know & topics for which
you should have a good understanding of how to
apply the concepts to solve problems. Each chap-
ter also contains sample exercises, which test your
knowledge of that chapter's concepts. Additional
sample questions are provided in an appendix.
The Total Cost
Management
Framework, 2nd
Edition
H. Lance Stephenson,
CCP FAACE, Editor, 2015
The TCM Framework is a
structured, annotated
process map that
explains each practice
area of the cost
engineering field in the context of its relationship to
the other practice areas including allied professions.
It provides a process for applying the skills and
knowledge of cost engineering.
Digital Download
- Free for members/US$110.00 nonmember
Paper Version available through Amazon.com
Cost Engineers’ Notebook
This CD-ROM is an important reference for any
project or cost professional. It includes data and
procedures related to basic skills and knowledge
that all cost engineers should possess, extensive
material on capital and operating cost estimation,
and papers in four subject areas: cost control,
planning and scheduling, project management, and
economic analysis and business planning.
Digital Download
- US$65.00 member/US$80.00 nonmember
AACE International Recommended Practices
Cost Engineering Terminology; Cost Estimate
Classification System; Estimate Preparation Costs in
the Process Industries; Project Code of Accounts;
Required Skills and Knowledge of a Cost Engineer;
Roles and Duties of a Planning and Scheduling
Engineer; Profitability Methods; plus many more.
Digital Download
- US$70.00 member/US$110.00 nonmember

Digital Download - US$45.00 member/US$55.00 nonmember 2016 AACE International Transactions

Paper version available through our Amazon.com link

Digital Download
EVP Certification Study Guide,
3rd Edition - US$90.00
Sean T. Regan, CCP CEP FAACE - Editor, 2015 member
This study guide is intended to assist you in your - US$115.00
study and review of the overall topics as one step nonmember
toward successful Earned Value Professional certi-
fication. The outline provides a listing of the terms For CD-ROM
you should know & topics for which you should version please
have a good understanding of how to apply the
concepts to solve problems. Each chapter also con- contact AACE
tains sample exercises, which test your knowledge International Head-
of that chapter's concepts. quarters
Digital Download - US$45.00 member/US$55.00 nonmember
Paper Version available through our Amazon.com link
 AACE INTERNATIONAL PROFESSIONAL PRACTICE GUIDES
(PPGs) are a series of reference s that
consists of selected Cost Engineering
articles, AACE International Transaction
papers, and other previously published
documents to which AACE has rights.
Price per PPG:
Download Member Price US$50.00
Download Non-Member Price US$80.00
Price for the PPG Package
includes all 22 PPGs:
Download Member Price US$900.00
Download Non-Member Price
US$1250.00
PPG#1: Contracts and Claims, 4th Ed.
James G. Zack Jr., CFCC FAACE, Editor, 2008
Covers: Contract Administration; Management of
Construction Schedules; Schedule Control; Schedule
Float Ownership; Cost Control; Management of
Change; Cost Impacts; Productivity Impacts; Manage-
ment and Analysis of Delay; Concurrent Delay Issues;
Pricing of Delay; and more.
PPG#2: Risk, 3rd Ed.
David C. Brady, P.Eng., Editor, 2012
Covers: Dictionary; Capital Investments; Cash Flow;
Competitive Bidding; Contingency Analysis; Contracts;
Cost Engineering; Currency Rates; Decision Trees; Eco-
nomic Analysis; Escalation; Human Factors; Manufac-
turing; Research & Development; Safety & Health;
Schedule; Technological Risk; and Value Engineering.
PPG#3: Cost Engineering in Aerospace and
Aviation
Sarwar A. Samad, Editor, 1998
Covers: Aerospace and Aviation.
PPG#4: Planning and Scheduling, 3rd Ed.
Trevor X. Crawford, CCP FAACE, Editor, 2011
Covers: Planning; Schedule Development;
Schedule Management/Control; and Classics.
PPG#5: Earned Value, 2nd Ed.
Robert A. Marshall, Editor, 2007
Covers: Why Use Earned Value?; Basics of Earned
Value; Cost/Schedule Control System Criteria; Actual
Physical Percent Complete; Productivity and Earned
More AACE Publications at the Online Store - www.aacei.org
Value; Earned Value Reporting; Applications of Earned
Value Project Management; and more.
PPG#6: Construction Cost Estimating, 3rd Ed.
Dr. Douglas D. Gransberg, PE CCP, and Carla Lopez
del Puerto, CCP, Editors, 2011
Covers: Recommended Practices; Estimating Theory;
Conceptual, Parametric, and Range Estimating; Esti-
mating Factors and Indices; Estimating Material Costs
and Quantity Surveying; Estimating Labor Costs; Esti-
mating Equipment Costs; Subcontracting Costs; Esti-
mating Overhead and Indirect Costs; Profit,
Contingencies, and Mark-Ups; Estimating Interna-
tional Construction Costs; and more.
PPG#7: Cost Engineering in the Utility
Industries, 2nd Ed.
Dennis M. Thompson, Editor, 2007
Covers: Auditing; Cost Estimating; Cost Modeling;
Cost/Schedule Control; Generation Power Plant; Nat-
ural Gas Industry; Nuclear Power Plant; Other Energy
Related Topics; Planning and Scheduling; Project
Management; Utility Rates; and Utility Property Valu-
ation.
PPG#8: Contingency, 4th Ed.
Kul B. Uppal, PE CEP, Editor, 2015
Covers: General Topics On Contingency; Cost Esti-
mating and Contingency; Risk Analysis and Contin-
gency; and Other Related Topics.
PPG #10: Project Delivery Methods, 2nd Ed.
Dr. Douglas D. Gransberg, PE CCP, Tammy L. Mc-
Cuen, and Keith Molenaar, Editors, 2008
Covers: Design-Bid-Build (DBB) – DBB Estimating,
DBB Scheduling, DBB Project Management; Con-
struction Management (CM) – CM Estimating, CM
Scheduling, CM Project Management; Design-Build
(DB) – DB Estimating, DB Scheduling, DB Project
Management; International Project Delivery; Con-
structability; and Partnering.
PPG #11: Environmental Remediation &
Decommissioning, 2nd Ed.
Richard A. Selg, CCP, Editor, 2009
Covers: Environmental Remediation Planning and
Scheduling Methodology; Cost Estimating, Project Con-
trols, Cost Modeling, and Reporting; Contingency Man-
agement, Risk Analysis, and Environmental Regulations;
Benchmarking and Lessons Learned; Economics of En-
vironmental and Waste Management; Cost-Effective
Waste Minimization and Pollution Prevention; Design,
Construction Practices, and Other Related Topics.
PPG #12: Construction Project Controls, 2nd Ed.
Dr. Douglas D. Gransberg, PE CCP,
and Eric Scheepbouwer, Editors, 2010
Covers: Introduction to Construction project Controls;
Cost Control; Schedule Control; Quality Control; Doc-
ument Control; Computer Applications; and Interna-
tional Project Controls
PPG #13: Parametric and Conceptual
Estimating, 3rd Ed.
Larry R. Dysert, CCC CEP; Bruce G. Elliott CCC; and
Todd W. Pickett, CCC CEP, Editors, 2012
Covers: Parametric/Conceptual Estimating; Classifica-
tion; Methodology; Capacity Factoring; Process and
Non-Process Industries; and Systems
PPG #14: Portfolio and Program Management,
2nd Ed.
Randy R. Rapp, PE CCP, Editor, 2007
Covers: Enterprise Management: General Imperatives and
Concerns; Asset Requirements Elicitation and Analysis;
Asset Planning and Investment Decision-Making; Asset Per-
formance Assessment and Change Management; and Pro-
gram Management.
PPG #15: Life-Cycle Cost Analysis, 2nd Ed.
Dr. Carla Lopez del Puerto, CCP, and Dr. Douglas
D. Gransberg, PE CCP, Editors, 2012
Covers: Life-Cycle Cost Theory; Life-Cycle Cost Meth-
ods, Determining Discount Rate; Estimating Capital
Cost of Design and Construction; Estimating Operat-
ing Costs; Estimating Salvage/Residual Value; Estimat-
ing Sustainability; Life-Cycle Cost Risk Analysis; Life
-Cycle Cost Case Studies; Life-Cycle Cost Analysis in
the International Context
PPG #16: Cost Engineering in the
Global Environment
Kul B. Uppal, PE, Editor, 2011
Covers: General Topics on International Projects; Ap-
plicable AACE International Recommended Practices;
Cost Estimating Methodology; Risk and Contingency;
and Miscellaneous Topics
PPG #17: Public Sector Estimating
Joseph L. Macaluso, CCP, Editor, 2007
Covers: Basis of Estimates; Labor Costs; Overhead and
Profit; Soft Costs; Bid/Estimate Reconciliation; and
Change Orders
PPG #18: Green Building, 2nd Ed.
Joseph L. Macaluso, CCP, Editor, 2012
Covers: Recognition of Affects and Economic Costs on
the Environment; Formulating Ways of Addressing
Green Building Strategies and Associated Economic
Costs; Specific Green Building Strategies and Project
Costs; Budgeting and Justifying the Cost of Sustainable
Practices; Evaluating Competing Sustainable Strategies:
Using Value Engineering; Evaluating Competing Sustain-
able Strategies: Other Techniques
PPG #19: Leadership and Management
of People
John J. Hannon, CEP, Editor, 2008
Covers: Leadership; Teams; Leadership Roles; Motiva-
tion; and Ethics.
PPG #20: Forensic Schedule Analysis
James G. Zack, Jr., CFCC FAACE, Editor, 2008
Covers: Recommended Practice No. 29R-03 Forensic
Schedule Analysis; Synopsis of Recommended Practice;
Basics of Schedule Delay Analysis; MIP-Observational
Static Gross; MIP-Observational Static Periodic; MIP-Ob-
servational Dynamic Contemporaneous As-Is; MIP-Ob-
servational Dynamic Contemporaneous Split;
MIP-Observational Dynamic Modified or Recreated; MIP-
Modeled Additive Single Base; MIP-Modeled Additive
Multiple Base; MIP-Modeled Subtractive Single Simula-
tion; Non-CPM Schedule Delay Analysis Techniques;
General Schedule Analysis Articles
PPG#21: Cost Engineering in the Process
Industries
Kul B. Uppal, PE CEP, Editor, 2009
Covers: General Topics on Process Industries; Cost Es-
timating Methodology; Project Management; Inter-
national Projects; Scheduling; Construction Activities;
Risk Management; Project Controls; and Applicable
AACE International Recommended Practices.
 PROFESSIONAL SERVICES DIRECTORY

INDEX TO ADVERTISERS
D R McNatty
software professional services hosting Deltek, this page Infinitrac, this page
D.R. McNatty and Management
Associates, page 23 and Technologies, this page
this page
)URPGH¿QLQJDVWUDWHJ\
    Ron Winter Consulting,
EcoSys, back cover page10
WRH[HFXWLRQVROXWLRQV
  
that VLPSO\ZRUN
 . HATCH, page 10
For additional information about the listed advertisers or about ad-
vertising with us, please phone Cassie LoPiccolo, 1.304.296.8444
GUPFQDWW\FRP‡VDOHV#GUPFQDWW\FRP‡
    x122, or e-mail clopiccolo@aacei.org

36 COST ENGINEERING JULY/AUGUST 2016

 CALENDAR OF EVENTS
JULY 2016
13-15 Advanced Contract
Negotiation
MOGL Training,
Houston, TX
Contact:
training@mogltraining.com
18-20 IFRS-Based Accounting
for Oil and Gas
Mobility Oil and Gas,
Houston, TX
Contact:
training@mobilityoilandgas.com
20 City of LA Sixth Street Bridge
Update,
The Southern California Chapter
of the Construction Manage-
ment Association of America
(CMAA),
The LA Hotel,
Los Angeles, CA
Contact: www.cmaasc.org
21 LA Unified School District
Capital Program Update,
The Southern California Chapter
of the Construction Manage-
ment Association of America
(CMAA),
The LA Hotel,
Los Angeles, CA
Contact: www.cmaasc.org
25-29 The 32nd Annual
Coordinate Metrology Society
Conference (CMSC),
The Coordinate Metrology Soci-
ety Conference (CMSC),
Embassy Suites by Hilton
Convention Center
Nashville, TN
Contact: www.cmsc.org
28 CalConExpo 2016 - The
California Construction Expo,
California Construction Expo,
Long Beach Convention & En-
tertainment Center
Long Beach, CA
Contact: www.calconexpo.com
AUGUST 2016
25-29 Tech Expo 2016,
The Southern California Chapter
of the Construction Manage-
ment Association of America
(CMAA),
The Grand Event Center, Long
Beach, CA
Contact: www.cmaa.org
COST ENGINEERING JULY/AUGUST 2016
JUNE 2017
11-14 AACE International’s 2017
Annual Meeting,
AACE International
Hyatt Regency
Orlando, FL
Contact: phone 1-800-858-COST
fax (304) 291-5728
info@aacei.org
www.aacei.org
Please submit items for future calen-
dar listings at least 60 days in advance
of desired publication.
AACE International,
1265 Suncrest Towne Centre Dr,
Morgantown, WV 26505-1876
USA
phone: 304-296-8444
fax: 304-291-5728
e-mail: editor@aacei.org
website: www.aacei.org
37
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