Estimate class
A label declaring how mature the scope definition was when an estimate was produced, and therefore how wide its expected accuracy range is.
Glossary
The terms these arguments rest on, defined and attributed.
Most of the terms below are misused in a specific and repeatable way. Each entry says what the term means, and then says how it usually goes wrong, which is generally the more useful half.
These are definitions rather than arguments. Where a term is genuinely contested, the entry says so and points at the article that takes a position. Every factual claim carries its source, and the citation is written to be complete without the link.
Inception & Development
Contingency
An allowance included in an estimate for the cost of risks that are expected to occur but cannot yet be identified individually.
P50, P80 and P90
A cost paired with the probability that it will not be exceeded, read off the cumulative curve produced by a risk simulation.
Whole-life cost (WLC)
All significant and relevant initial and future costs and benefits of an asset across its life, including income, financing and externalities, which is a wider scope than life-cycle cost.
TOTEX
A regulatory allowance framework that combines capital and operating expenditure into a single allowance, so a regulated company has no financial reason to prefer building something over operating differently.
Optimism bias
The demonstrated, systematic tendency for project appraisers to be over-optimistic about costs, benefits and duration, corrected by an explicit empirically based adjustment.
Business as usual (BAU)
The outcome expected if current arrangements continue and the proposal is not implemented, used as the benchmark against which every option is compared.
Do minimum
The option that just achieves the objectives and goes no further, carried on the shortlist to test whether more ambitious options are worth their additional cost.
Theory of change
An explanation of how a proposal is expected to produce its intended outcomes, setting out the mechanism rather than asserting the result.
Benefits realisation
Establishing whether the outcomes a business case promised actually occurred, which requires measurement designed before the project starts.
Reference class forecasting
Building an estimate from the recorded outcomes of a class of comparable completed projects, rather than from a bottom-up view of the project in front of you.
ICMS 3
The third edition of the International Cost Management Standard: a free classification and presentation structure for construction costs, life cycle costs and carbon emissions, agreed by 49 professional bodies.
GAO Cost Estimating and Assessment Guide
The US Government Accountability Office guide, GAO-20-195G, setting out the 12 steps of a reliable cost estimating process and the 4 characteristics a credible estimate must display.
Stage gate
A decision point at the end of a defined stage, at which a named authority decides, against stated evidence and criteria, whether and how the programme proceeds to the next stage.
Delivery & Controls
Assurance
A statement given against established criteria, by somebody other than the party responsible for the thing being examined, intended to raise the confidence of whoever has to rely on it.
Three Lines Model
The IIA governance framework describing how management, risk and compliance functions, and internal audit contribute to governance, replacing the older Three Lines of Defence.
Baseline
The approved reference point for scope, cost and schedule against which performance is measured, and the thing every progress report implicitly assumes has not moved.
Externally provided processes
Processes, products, technologies and services obtained from outside the organisation that affect the achievement of its asset management objectives.
GAO Schedule Assessment Guide
The US Government Accountability Office guide, GAO-16-89G, setting out 10 best practices for a reliable project schedule and the tests an auditor applies to each.
Handover & Transition
Operational readiness4 lenses
The state in which the organisation taking on an asset can actually operate it from the day it becomes responsible, across its people, resources, processes, systems, risk controls and compliance obligations.
As-built records
The record of what was actually constructed, as distinct from what was designed, handed to the owner as a condition of taking over.
Taking over4 lenses
The contractual event under FIDIC at which the Engineer certifies that the works are complete, apart from any minor outstanding work and defects listed in the certificate, and the Defects Notification Period begins. It is not acceptance: under the 2017 edition only the Performance Certificate constitutes acceptance of the works.
Defects Notification Period
The period after taking over during which the employer may notify defects in the works and the contractor is obliged to return and rectify them, called the Defects Liability Period in older forms.
American National Standard
A standard approved by ANSI as having been developed under its Essential Requirements: ten due-process criteria about how a document is made, none of which concerns what it costs to buy.
Capital work in progress4 lenses
The account holding a project’s accumulated cost during construction, before the completed asset is transferred to property, plant and equipment and depreciation begins.
Testing and commissioning
The pair of activities that prove an installed asset works: testing checks an item or system against stated criteria, and commissioning is the managed process that verifies the systems work together to meet the owner’s requirements.
Punch list
The list, made near completion, of work that is incomplete or does not conform to the contract, each item to be corrected and then checked off; also called a snag list.
Operations & Asset Management
Asset management system
The set of interrelated elements an organisation uses to establish its asset management policy, objectives and the processes to achieve them.
Strategic asset management plan (SAMP)
Documented information specifying how organisational objectives are converted into asset management objectives, and the role of the asset management system in delivering them.
Predictive action
Action taken to optimise the timing of an intervention on the basis of expected future condition, rather than in response to something that has already gone wrong.
Componentisation4 lenses
The breaking of an asset into parts that are recognised, valued and depreciated separately, because they have different useful lives.
IPSAS 45
The IPSASB accrual accounting standard for property, plant and equipment in the public sector, replacing IPSAS 17 for reporting periods beginning on or after 1 January 2025.
Asset register4 lenses
A structured record of the assets an entity owns or controls, carrying the attributes needed to recognise them in the accounts and to operate and maintain them.
Useful life4 lenses
The period over which an asset is expected to be available for use by an entity, which is an accounting estimate about that entity and not a property of the equipment.
Correspondence
If something here is wrong, that is worth more than agreement.
Material errors are corrected on the affected pages. Messages are used to reply, not to build a mailing list.
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