Standard Classification for Cost Estimate Classification System
4.1 Use of this classification will improve communication among all the stakeholders involved with preparing, evaluating, and using cost estimates.
4.2 The various parties that use cost estimates often misinterpret the quality and value of the information available to prepare cost estimates, the various methods employed during the estimating process, the accuracy level expected from estimates, and the level of risk associated with estimates.
4.3 This classification applies the degree of project definition as the primary characteristic for determining an estimate’s classification.
4.4 Using this classification will help those involved with project estimates to avoid misinterpretation of the various classes of cost estimates and to avoid their misapplication and misrepresentation. Improving communications about estimate classifications reduces business costs and project cycle times by avoiding inappropriate business and financial decisions, actions, delays, or disputes caused by misunderstandings of cost estimates and what they are expected to represent.
4.5 This classification is intended to be generic and so provide a system for the classification of cost estimates in any industry. There are also references to specific industries, for cost estimate classification as applied in: AACE International, Process Industry 18R-97, and AACE International, Building/General Construction Industry 56R-08.
4.6 Estimate classifications provide valuable additional reporting information when used as an adjunct to Practice E1804.
1.1 This classification provides a generic classification system for cost estimates and provides guidelines for applying the classification to cost estimates.
1.2 This classification maps the phases and stages of cost estimating to a generic maturity and quality matrix, keyed to a degree of project definition, that can be applied across a wide variety of industries.
1.3 The Cost Estimate Classification System has been developed in a way that:
1.3.1 provides a common understanding of the concepts involved with classifying cost estimates;
1.3.2 defines and correlates the major characteristics used in classifying cost estimates, and;
1.3.3 uses the degree of project definition as the primary characteristic used to categorize estimate classes.
1.4 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
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