IPA research has shown that excellent cost engineering and project control practices help drive and maintain better cost and schedule effectiveness and predictability. Cost engineering and project control practices include estimating, scheduling, and cost/schedule control. Unfortunately, cost engineering and project control are particularly weak areas for many project systems. In fact, many companies have no personnel dedicated to the function. IPA has developed an extension to its project system benchmarking analyses products focused on the cost engineering function. The cost engineering evaluation is combined with the benchmarking analysis because it is imperative to examine functional-level practices within the context of the overall project system.

Cost evaluations use a set of statistical, parametric models. IPA employs these cost models and metrics in pacesetter, prospective, and closeout evaluations, as well as in project system benchmarking analyses. However, project cost can also be evaluated alone, for example, when a business is considering alternate conceptual estimates or competing venture proposals. IPA has cost capacity models for the inside battery limits costs of downstream process units such as cogeneration, hydrocrackers, hydrotreaters, pipelines, sour water strippers, and sulfur recovery units. IPA also has cost models for various upstream project types such as SPJs, FPSOs, subsea, and others.

Schedule evaluations also use parametric models to predict schedule duration. These evaluations can be conducted alone or in combination with cost evaluations. A primary driver of schedule duration is cost, so cost evaluations usually precede the schedule study. IPA uses schedule models that are suitable for most upstream and downstream projects.

Lastly, IPA can predict project contingency use. These evaluations can be conducted alone or with a cost evaluation. IPA does not use Monte Carlo or similar line-item focused methods because we have found that contingency use is driven by overarching project characteristics. IPA has contingency models for both upstream and downstream projects.

HOW WILL YOUR COMPANY BENEFIT?

Cost is a critical outcome measure for project systems. A company that executes projects for 10 percent less cost than its competitors will have a 2 percent to 4 percent advantage in their internal rate of return. IPA research has shown that excellent cost engineering and project control practices drive better cost outcomes. IPA's Cost Engineering and Project Control Evaluations will give your company that competitive edge.

COST ENGINEERING AND PROJECT CONTROLS EVALUATION DELIVERABLES

Based on the data offered by your project team, IPA will measure your company's project performance and compare it with the process industry as a whole. We assess the strengths and weaknesses of cost engineering and project control at your company and its contribution to the project system performance. IPA offers recommendations for good practices to be maintained or improvements to practices if necessary.

For more information, contact Robert Brown (+1 703-726-5369).