PSP CERTIFICATION

Overview

By: Girish P Dhavalikar, CCP, PMP

Girish P Dhavalikar
o 30 plus years of experience in Cost
Engineering & Project Management for
Oil & Gas, Power & Industrial Projects
o PMI ATP Instructor, Level 3 Assessor,
Facilitator, Visiting Faculty, SME (Oil &
Gas and Power) (Since Oct 2018)
o Certified Cost Professional (2004)
o Project Management Professional
(2010)
o Level 3 CAVA (2021)
o AACE India, Region 8 (Asia Pacific)
o PMI Pune Deccan India Chapter
About AACE
AACE
• Established in 1956
• AACE International is the Association for the Advancement
of Cost Engineering.
• It serves over 10,000 members and certified professionals
in 100 countries.
• Cost Engineering is a field of study using integrated means
and methods to enable sound decision making in enterprise
asset management.
• AACE’s Body of Knowledge is developed, refined, and
deployed by industry professionals worldwide.
Certification Offered
Three Levels of Certification

Senior-level practitioners, specialists, decision

Expertise makers, and expert witnesses

Experienced practitioners with advanced knowledge &

Professional technical know-how of Total Cost Management

Technician Early-career professionals or recent college graduate

Not Certified
Certification Offered
Three Levels of Certification
• Certified Forensic Claims Consultant (CFCC)
• Decision & Risk Management Professional
(DRMP)
Expertise

• Certified Cost Professional (CCP)

Professional • Certified Estimating Professional (PSP)
• Earned Value Professional (EVP)
• Planning & Scheduling Professional (PSP)

Technician • Certified Cost Technician (CCT)

• Certified Scheduling Technician (CST)

Not Certified
Planning & Scheduling Professional
Certification (PSP)
AACE’s Certification
• Tests and Certified that a PSP meets :
➢ Minimum experience and knowledge criteria
➢ Required expertise in Planning & Scheduling Professional
− Professional experience requirement
− Documented education criteria
− Ethical standards
− Passing Examination
➢ Acceptable standards for best management practices
PSP Certification

• Recognizes specialists who meet a demanding set of

planning and scheduling expertise
• Distinguishes planning and scheduling professionals
who have the knowledge and skills
• PSP designation is mark of expertise
➢ Is a mark of distinction
• Accredited by Council of Engineering & Scientific
Specialty Boards (CESSB)
Requirements
• Experience requirement
➢ 8+ full years of professional experience (4 years may be
substituted by college/university degree)
• Application & Fees
➢ AACE members $500 / Non-members $625
• Submit application 45 days in advance of exam
➢ Documented experience / education is reviewed and verified
➢ Must take exam within 6 months of registration
➢ Resit fee $250 applicable up to 6 months from registration
Requirements
• Examination
➢ Closed book
➢ Computer based online test at Kryterion exam center
➢ 119 Questions (Basic Knowledge (56 Q), Practical Exercise
(29 Q), and Planning & Scheduling applications (34 Q)
➢ Pass / Fail : 70%
➢ Overall 5 hours duration
➢ 1 Memo writing assignment
➢ Validity 3 years
Preparation Guidance
• AACE’s reference materials
➢ Total Cost Management Framework, 2nd Edition (Ch 3,7&8)
➢ Skills & Knowledge of Cost Engineering, 6th Edition
➢ PSP Certification Study Guide, 2nd Edition
➢ Recommended Practice 11R-88, Required Skills &
Knowledge of Cost Engineering, 2006 (As applicable)
➢ Cost Engineering Terminology 10S-90
• Supplemental reading
➢ Professional Practice Guide #4: Planning & Scheduling
Preparation Suggestions
• Examination
➢ Apply sound test-taking tactics
− Read through exam & do problems of greatest comfort first
− Allocate time proportionally to value of problem
➢ Study & work example problems in all areas
➢ Master financial calculator before exam
• Memo Writing Assignment
➢ Memo to simulate reporting on planning & scheduling
analysis to a project manager
➢ Key is clearly communicating issues & proposing solutions
Recertification Process (Every 3 years)
• Designed to ensure that professional has maintained
continued expertise through
➢ Work experience
➢ Continued education
➢ Professional development
➢ Active involvement in the profession
➢ Earning 12 CEU (Continuous Education Unit)
• Re-examination
• Single point credits and fees for multiple certifications
SKILLS AND KNOWLEDGE OF
PLANNING AND SCHEDULING
TEST YOUR PSP KNOWLEDGE

What are PSP’s

What is a CPM
What is planning duties and
schedule
responsibilities

What is a work What are the

Why is planning breakdown different types of
important structure (WBS) schedule
and how is it used activities

Who are the

Why is
What is stakeholders who
scheduling
scheduling work with plans
important
& schedules
TEST YOUR PSP KNOWLEDGE
What is forward
What makes for a
and backward pass Why do plans and
successful
schedule schedules fail
schedule
calculation

What types of Define basic steps

schedule logic and What makes for a in CPM schedule
constraints are successful plan model
used development

What is the What does

What are schedule
difference modeling of
levels and why
between ADM and resource
used
PDM schedules utilization provide
TEST YOUR PSP KNOWLEDGE

What is analyzed when What is important to

Define schedule
defining a schedule document as the plan
calendars and their use
recovery plan and schedule basis

What is involved in
What are planning and
shortening the
How are schedules scheduling
duration or
updated for progress deliverables during the
compressing a
life cycle of a project
schedule

What is the difference

How changes and
between material unit
delays be incorporated
price and material
into a schedule model
price
PLANNING
PLANNING
PLANNING
PLANNING
• Present day strategy to achieve desired goal in future
• Planning helps to achieve the desired goal with the
highest quality in the shortest possible time and by
consuming fewer resources and cost
• Project planning is a process comprised of a series of
integrated steps
• Planning defines the actions & activities, the time &
cost targets and the performance milestones that will
result in successfully achieving objectives
PLANNING
• Planning Culture
➢ Organisation that encourages a proactive, structured
approach to planning will reap significant benefits
➢ Preparing a clear scope definition minimizes the potential for
overlooking an aspect critical to success
➢ Team effort permits various viewpoints and ideas
➢ Documenting the resultant plan provides a means and
structure for communication between the participants
➢ Baseline plan prepares for managing the execution phase
and basis for measuring progress and controlling change
PLANNING
• Planning Tools
➢ The most fundamental and useful planning tool is the
experience gained by planning team on previous assignments
➢ Commercial handbooks and software programs
➢ Standard, company-wide, policies and operating procedures
➢ Model plans (referred to as “go-bys” or “templates”)
➢ Checklists
➢ Historical databases
➢ Codes of Accounts
PLANNING
• Planning Process
➢ Project plan provides the specifics of;
− WHAT (Objective, scope, statement of work)
− HOW (Approach, work breakdown structures)
− WHO (Project organization and resource schedule)
− WHEN (Schedule and milestones)
− WHERE (Facilities required)
− WHAT-IF (Contingency plans in the event of risk)
PLANNING
• Planning Process
Plan-Do-Check-Act (PDCA)
PLANNING DEVELOPMENT
PLANNING DEVELOPMENT
Input and Data
• Contract Requirements
➢ Contract types
− Fixed price
− Cost reimbursable contracts
− Unit rate contract
− Time and Material (T&M)
➢ Delivery methods
− Design-Bid-Build / Design-Build
− Turnkey / JV / EPC
− BOOT / Design-Build-Operate-Maintain
Input and Data
• Identification of Stakeholders
➢ Identify every stakeholder
➢ Stakeholders can be internal or external to the Project
➢ Stakeholders, whether major or minor, have a significant
influence on the success or failure of the project
➢ Identify stakeholder’s influence and interest levels
➢ Each stakeholder’s concerns and limitations must be
identified, evaluated, and reconciled
➢ Manage effective interface (engagement) with stakeholders
Input and Data
• Constructability Methods
➢ Constructability is concerned with technology, methods of
installation and the associated costs
➢ Constructability tends to optimize time and cost
performance by considering alternate installation methods
➢ Constructability can involve changes to the design details to
optimize physical performance of the work
➢ Construction Driven Scheduling as Key to CPM Program -
schedule is structured around the construction schedule,
assuming that it has been developed on best economic basis
Considerations and Constraints
• Identification of Resources
➢ Resource Planning
− Resource Planning is a critical aspect of the planning process, and if
not considered, may adversely impact the project
➢ Resources includes;
− People
− Equipment
− Materials
− Technology
− Capital funding
Considerations and Constraints
• Value Engineering
• Stakeholder Considerations
• Project Variables
➢ Physical location and space
➢ Transportation limitations/restrictions
➢ Productivity restrictions
➢ Funding methods, timing and phases
➢ Contracting and project delivery method
➢ Historical data
PLANNING PRODUCT
PLANNING PRODUCT
Output and Deliverables
• Define Scope of work / Project Goals
➢ Scope definition is a matter of project discipline and design
control necessary to identify and prevent scope changes that
are all too common on fast track projects
➢ The purpose of the feasibility study is to define the scope
➢ The major deliverable of the feasibility study is the basic
design package—Statement of Requirements (SOR)
➢ Scope document includes : Project description
− Project objectives
− Project justification / Economic justification
Output and Deliverables
• Define Scope of work / Project Goals
➢ Scope document includes: Design basis and specifications
− Process definition: PFD, Heat & Material balance
− Mechanical definition: P&ID, Plot plan, GA’s, equipment list
− Electrical definition: SLD, cable schedule, panel diagrams
− Instrumentation definition: IO’s, control points, set points
− Safety definition: HAZOP, safety devices, Interlock logic
− Project location: Logistic review, infrastructure requirement
− Project conditions: Site access, operational restraints
− Estimate definition: WBS, BOQ, budget, risk, contingency
− Schedule definition: Sequence and phase relationship, constraints
Output and Deliverables
• Define Project Plan
➢ A project execution plan is the most significant output of the
planning process
➢ Phase relationships are the foundation for developing the
framework used for monitoring, analyzing, controlling and
reporting project execution
➢ Sequencing is the part of the planning process that begins to
bring together the interrelated phase of the project, using
simple logic relationships
➢ Breakdown structure is a mechanism that helps to organise
scope, resources, cost and schedule
 Project
Life Cycle
Output and Deliverables
• Establish Work Breakdown Structure
➢ The Work Breakdown Structure (WBS) is a hierarchical
division of the work elements to be performed on a project
➢ WBS divides the scope of work into manageable parts that
correspond to key deliverables, phases and/or milestones
➢ Use of WBS ensures no omission of key elements and assist
in the communication of cost, schedule, and resource
performance data to stakeholders and team members
➢ WBS deliverable elements decompose the scope down to
work packages, for effective management of scope
Output and Deliverables
• Establish Organisation Breakdown Structure (OBS)
➢ The Organization Breakdown Structure (OBS) is a
hierarchical division of the producers of the work
➢ The function of the OBS is to identify the entity responsible
for performing each deliverable of the scope of work as
identified in the WBS
➢ The lowest level of an OBS is the organizational entity
performing the work package
➢ level of breakdown is a balance between convenience and
effectiveness
Output and Deliverables
• Establish Cost Breakdown Structure (CBS)
➢ At the highest level these are; labor, materials, direct&
indirect costs
➢ The CBS is a key element of control for a project which
allows to track the cost for the project to meet control and
reporting needs
➢ The development of the CBS allows tracking and forecasting
of estimated costs versus actual costs
➢ CBS allows effective capture, accurate estimation and
monitoring & control of costs
Output and Deliverables
• Cost Estimate Development
➢ Scope is decomposed, the WBS, OBS, and CBS for each
work package are identified and this integrated structure
forms the basis for the preliminary cost estimate and the
initial schedule model
➢ Cost estimate, plus contingencies, along with other risk
factors, should lead to the final cost estimate
➢ Budgetary process development provides underlying basis of
cost and schedule baselines for project monitoring,
controlling, and reporting
Output and Deliverables
• Baseline Plan
➢ Baseline Plan is the final output of the planning process for a
project
➢ Baseline provides framework for all progress and
measurement evaluation and basis to exercise control of
ongoing work in order to achieve successful outcomes
• Risk and Recovery Plan
➢ Risk planning includes the development and implementation
of risk response plans to mitigate cost/schedule/technical
impacts caused by risk and/or change
SCHEDULING
Scheduling
• Scheduling is the process that converts the project
work plan into a road map, that if followed, will assure
timely project completion
• Scheduling is one of the tools used for monitoring and
controlling projects to ensure that objectives of cost,
time, resources, and quality are met
• Schedules provide the baseline against which progress
is measured and reported
• Schedule improves effective use of resources to ensure
SCHEDULE DEVELOPMENT
Schedule Development
Input and Data
• Define Schedule Scope
➢ Goals, Objectives, WBS, Deliverables, Milestones
• Breakdown Structure Relationship
➢ WBS, OBS, CBS, RBS, intersection points
• Schedule specification
➢ Milestones, sequencing, duration, resource loading
• Feedback from Stakeholders
• Cost Estimate Model
➢ Cost loading
Creating Schedule
• Types of Schedule
➢ Bar charts (sometimes referred to as Gantt charts)
➢ Critical Path Method (CPM).
− Arrow diagram method (ADM)
− Precedence diagram method (PDM)
➢ Program Evaluation and Review Technique (PERT)
➢ Linear schedule
➢ Rolling wave
➢ Milestone
➢ List
Creating Schedule
PDM activity boxes comprised of:
• Activities are represented by boxes or nodes
• Arrow represent direction of relationship / dependency
• Each box has attributes such as activity duration, description, early start, early
finish, late start, late finish etc. etc.

Activity Identifier
ES 9 E 12 EF
LS 14 4 17 LF
Duration
Creating Schedule
• Activities
➢ Unique alphanumeric identifier.
➢ Unique descriptive name, optimally phrased as verb-object.
➢ Duration
➢ Milestone – An activity with ‘0’ duration
➢ Sequence
➢ Relationship
➢ Cost and resource loading
➢ Constraints
Creating Schedule
• Schedule Quality Analysis and Compliance Review
➢ Is the critical path reasonable?
➢ Are there multiple critical paths
➢ What activities are near-critical
➢ Does the work flow as planned
➢ Are there conflicts between concurrent activities
➢ Is there excessive amount of work done at any one time?
➢ Are there resources enough to support all concurrent
activities?
Creating Schedule
• Schedule Basis Documentation
➢ Assumptions, constraints, and parameters used to build the
schedule is put into a narrative, with supporting materials to
form a complete baseline package.
➢ If changes occur to the schedule and significantly impact the
critical path or completion date, the schedule and supporting
documentation may be referenced and the necessary action
taken to support status updating, changes, and rebaselining,
as appropriate.
SCHEDULE MAINTENANCE &
CONTROLLING
Schedule Maintenance & Controlling
Maintain Schedule
• Baseline schedule
➢ Used to measure progress and identify trends and changes
➢ It identifies the initial critical path and provides the basis for
measuring progress
➢ Foundation for cash flow planning, resource managing,
trending for cost and schedule forecasting, and reporting
➢ Analysis of the updated schedule against the baseline will
show the impact of any milestone or completion date
variance. May trigger rebaselining
Maintain Schedule
• Tracking Schedule Progress
➢ Original schedule should be updated to reflect current status
➢ Updating is a control process, which implies that adjustments
may be necessary and forewarns of major consequences
➢ Four major reasons a schedule should be updated regularly
− Reflect current project status
− Keep the schedule as an effective management tool
− Document performance
− Provide documentation to plan for changes and support delay
analysis
Maintain Schedule
• Cost and Resource Management
Maintain Schedule
• Cost and Resource Management
Operators

Time in Weeks
Maintain Schedule
• Schedule Change Management & Acceleration
Output and Deliverables
• Control Level Schedules
Output and Deliverables
• Control Level Schedules
Output and Deliverables
• Schedule Forecast
Output and Deliverables
• Schedule Forecast
Maintain Schedule
• Scheduling Pitfalls
➢ Poorly defined activities & structure
➢ Inadequate work package definitions
➢ Inappropriate level of scheduling detail
➢ Poor duration estimating
➢ Poor updating procedures & lack of information
➢ Long information processing time
➢ Failure to disseminate the proper information to all parties
➢ Application of hard logic to a soft logic situation