Creating a Competency Assessment for Cost Estimators Using the GAO’s “Best Practices in Capital Budgeting”

ABSTRACT

Purpose of this paper:

This is the second of a three phase research started in 2011 to create a competency assessment instrument for Cost Estimators. The driving force for creating a competency based assessment is previous publications by Butts (20091. 20102), Flyvbjerg (20093, 20144), Merrow, (20115) Lichtenberg (20056) and others lamenting the fact that projects consistently run late and or over budget, with one of the root causes being lack of “professionalism in cost estimation”. (Butts, 2010)

This paper is being presented seeking organizations interested in adopting and testing this model to see if in fact producing more competent cost estimators will address any issues identified by Butts et al.

Design/methodology/approach:

The competency assessment instrument is a fully integrated model which was structured around the International Labor Organizations (ILO) “Guidelines for Development of Regional Model Competency Standards (RMCS)”. The content for the assessment was based on the US General Accountability Offices (GAO) “Cost Estimating and Assessment Guide- Best Practices for Developing and Managing Capital Program Costs” and the scoring model itself was based on A Taxonomy for Learning, Teaching, and Assessing: A Revision of Bloom's Taxonomy of Educational Objectives, from the Center for Excellence in Learning and Teaching, at Iowa State University.

Findings and value:

The research has produced a non-proprietary, open source (under Creative Commons License BY) competency check list and scoring model that anyone can use or adapt for use to assess the competency of their cost estimators. (And by “Cost Estimators”, this term includes Quantity Surveyors, Cost Engineers, Business Analysts, Project Controls professionals and similar project management and project support professionals)

Research limitations/implications:

The next (final) phase will be to test the model to see if in fact, the recommendations are resulting in an improvement in the professionalism of cost estimators. As there are other variables which enter into the picture, this research is designed to eliminate the most obvious first.

Practical implications:

The practical implications are potentially significant, given the high number of projects which experience cost over-runs. The value in adopting this model is how easily it is adapted or modified to fit the needs of any organization, regardless of the size or complexity of the projects.

Originality/value of paper:

What is new in this paper is the more detailed checklists as well as the actual scoring model to be used as the basis for assessment.

Conclusions:

  1. Change the Codes of Conduct/Codes of Ethics to make producing or accepting “bad” estimates an ethical violation;
  2. Recognize that exam based credentials are only the first step in creating a competency based assessment
  3. Use the competencies as the basis to create better university courses in cost estimating
  4. Require professional liability insurance for cost estimators (see 1 above)

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