Appendix A - Glossary of Terms
- Activity-based costing. ABC techniques associate costs and profits with
products, product families, product mix, and business and manufacturing
processes. The important activities in the manufacturing process that consume
costs and resources are determined. Cost models then compute the cost of
performing each activity and the consumption of activities for each
product(Dragoo and Letendre, 1994). ABC techniques can often serve to make many
environmental costs, previously hidden in overhead accounts, visible.
- A self-contained unit of work within a project (Welcome Software
- Activity base:
- A measure of volume of business activity that is highly correlated with the
amount of cost incurred (Schall and Haley, 1986).
- Activity splitting:
- A method to resolve resource conflicts wherein an activity that has been
started is put on hold and another shorter activity utilizes the resource in
conflict, after which work on the first activity is completed. Software
packages differ in how many activity splits they allow (Welcome Software
- See arrow diagram method.
- Arrow Diagram Method: (ADM)
- Also known as the critical path method (CPM), ADM is a diagramming method
used for project planning. It mainly involves drawing an arrow for each job,
where the sequence of arrows indicate the flow of work from the beginning to the
end of each project. The complete diagram has one beginning and one end point.
Arrow junctions are called nodes (or events) (Spiner, 1989).
- Back-end costs:
- Include environmental costs that arise following the useful life of
processes, products, systems, or facilities. Examples include D&D and site
survey costs (ICF Inc., 1995).
- Bar chart:
- Data can be entered interactively though a barchart screen, which is a
graphical representation of a project with horizontal bars on a time scale
depicting activity information (Welcome Software Technology, 1993).
- Benefit cost ratio:
- The ratio of total benefits to total costs of a project. A value greater
than one implies that a net profit is made. This method recommends using
projects that have the highest benefit cost ratio.
- Budget estimates:
- These are prepared with the help of flow sheets, layouts, and equipment
details. In other words, enough preliminary engineering has taken place to
further define the project scope. An estimate of this type is normally expected
to be accurate within +30% or -15%. They are also called "design
development," "semi-detailed," "appropriation," or "control"estimates
(AACE International, 1992). Also see "order-of-magnitude"and "definitive
- Clean Air Act.
- Capacity restrictions:
- Scheduling software. Refers to restrictions upon the maximum number of
items (activities per project, resources per activity, etc.) that can be
handled(Welcome Software Technology, 1993).
- Capital budgeting:
- The process of analyzing alternative investments and deciding whether they
will be included in a firm's investment budget (White, Becker, and
- Cash Flow:
- The actual cash available to a company after expenses and taxes
- Cost estimating relationship (Hombach, 1995). See "parametric cost
- Comprehensive Environmental Response, Compensation and Liability Act.
- An amount added to the estimate to allow for changes that experience shows
will likely be required. This amount may be derived either through statistical
analysis of past project costs or by applying experience gained on similar
projects. Contingency usually does not include changes in scope or
unforeseeable major events such as strikes or earthquakes (AACE
- Contingent costs:
- Environmental costs that may occur following uncertain future events. These
are also referred to as liability costs. Examples include costs of penalties,
remediation, and legal expenses (ICF Inc., 1995).
- Contingent pricing:
- Unit prices in the contract, additional to the fixed-price elements, which
can be used in lieu of or to supplement the fixed price elements of the contract
as the work develops and the actual quantities become known (Selg, 1993).
- Contract management:
- Aspects of project management that relate to the daily interaction between
the owner and contractor. This interaction includes all specific coordination
roles between such parties as well as the administration of contract terms and
conditions (such as payments, change orders, directions, etc.) (Selg, 1993).
- Contract price:
- Value of the work as established by the contract provisions. In lump-sum
contracts, the contract price is firmly established. In other types of
contracts the contract price is determined by quantity surveys or audits of the
contractor's costs (Selg, 1993).
- Conventional costs:
- Costs that are usually addressed in cost accounting and capital budgeting,
including raw materials, capital goods, and supplies. Some aspects of these
costs, such as cost savings through decreased use of raw materials, and utility
costs, are sometimes overlooked (ICF Inc., 1995).
- Cost engineering:
- The art and science of total cost management with broad components being
cost estimating, cost analysis, cost and schedule control, and cost and value
improvement (AACE International, 1992).
- Cost estimate:
- A compilation of all the costs of the elements of a project or effort
included within an agreed-upon scope. Estimating is a process accomplished
insteps that include the take-off, costing, and pricing. The components of a
cost estimate include direct and indirect cost elements, including labor
material, equipment (direct types) and taxes, risk, and overheads (indirect
types) (AACE International, 1992).
- Cost estimating:
- The determination of resource and material quantities and the predicting or
forecasting of associated costs, within a defined scope (AACE
International,1995). It is an essentially computational process that attempts
to predict the final cost of a future project, even though all the parameters
and conditions are not known when the estimate is prepared. Estimating methods
vary considerably, depending on the available information, nature of the
project, and he time available to prepare the estimate (de la Garza and Rouhana,
1995). The accuracy of the estimate will vary, depending on the stage of the
project and information with which it is prepared.
- Cost index:
- A number that relates the cost of an item at a specific time to the
corresponding cost at some arbitrarily specified time in the past. A cost index
is useful in taking known past costs and relating them to the present (AACE
- Using the take-off and the information presented in the scope documents to
assign cost values to the elements of work previously catalogued (AACE
- Contemporaneous period analysis. Also known as what-if or but-for
evaluations. CPA breaks the construction period into discreet time periods and
examines the delays as project participants would have (Schumacher, 1995).
- Critical path method. This network technique allows the analysis of the
relationship of the timing of the completion of specific work activities (and
delay activities) to the completion of the project as a whole (Schumacher,1995).
- A crew is a group of trade personnel and equipment necessary for a
particular task (Estimator's Notes, 1993). A crew database will contain
information such as hourly rates for equipment and labor. The estimator can
determine unit labor and material costs (per unit of output, for example, for
each glass made) by dividing output (units per hour, for example, glasses made
per hour) by crew labor or material costs. With this information, changes in
labor or material costs can be incorporated into the estimate (or their effects
analyzed) (Schall and Haley, 1986).
- Critical path:
- The sequence of activities through a network with the least float and
therefore the longest path (Welcome Software Technology, 1993). The chain of
interrelated activities in the schedule network having the longest duration and
therefore the earliest possible completion of the project (Schumacher, 1995).
Most scheduling software will (at the minimum) compute start and finish dates
and critical path.
- Cost/schedule control system.
- Cost/schedule control system criteria.
- The modification or addition of features by users as per their
requirements. This can include adding new fields and generating custom
reports(Welcome Software Technology, 1993).
- Clean Water Act.
- Decontamination and Decommissioning (Hombach, 1995).
- Definitive estimates:
- Estimates prepared from very defined engineering data. These include
fairly complete plot plans and elevations, piping and instrument diagrams,
single-line electrical diagrams, equipment data sheets and quotations,
structural designs, etc. This includes all types of estimates, from minimum
order-of-magnitude to the maximum definitive types. They are also called "check,""lumpsum,"
"tender," and "post-contract change"estimates. It is
expected to be accurate within +15% or -5% (AACE International, 1992). Also see
"order-of-magnitude" and "budget estimates."
- The decrease in the value of a capital asset with time. The method of
depreciation is set by income tax rules that allow various rates of
depreciation. The amount depreciated each year is considered an expense for tax
purposes (Winston, 1995)
- Direct cost:
- A cost that can be economically traced to a single cost object.
- Discount rate:
- The time value of money or the rate of interest that a company wants to
earn on its investments (Winston, 1995).
- Department of Defense.
- Department of Energy.
- Department of Transportation.
- Environmental Assessment. EA is a written environmental analysis that is
prepared pursuant to the National Environmental Policy Act (NEPA) to determine
whether Federal action would significantly affect the environment and thus
require preparation of a more detailed Environmental Impact Statement (EIS)(EPA,
- Estimate at completion.
- Earned value:
- The quantification of the overall progress of a project defined in dollar
terms to provide a realistic yardstick for comparison with actual cost to
date(Welcome Software Technology, 1993).
- Economic and financial analysis:
- The evaluation of economic considerations and financial requirements of a
program, operation, project, process, manufactured product, or service within a
specific time frame. It includes the application of fundamental techniques such
as the time value of money, rate of return, break-even analysis, and
profitability analysis, as well as advanced economic comparison methodologies
such as cost optimization studies (AACE International, 1995).
- Environmental Costing Tool
- Environmental Management (Hombach, 1995).
- Pollution discharged into the atmosphere from smokestacks, other vents, and
surface areas of commercial or industrial facilities; from residential chimneys;
and from motor vehicle, locomotive, or aircraft exhausts (EPA, 1989).
- Environmental cost accounting:
- The addition of environmental cost information into existing cost
accounting procedures and/or recognizing embedded environmental costs and
allocating them to appropriate products and processes (ICF Inc., 1995).
- Environmental Protection Agency.
- Emergency Planning and Community Right-to-Know Act.
- Equipment costs:
- Construction: The cost of equipment that a contractor uses to perform a
contract (cranes, bulldozers) and not of the equipment installed permanently as
part of the contract. If the equipment is leased, the costs consist of lease
costs and the costs of fuel. If the contractor owns the equipment the costs
include ownership costs and operating costs (AACE International, 1992).
- Environmental restoration. Measures taken to return a site to previolation
conditions (EPA, 1989).
- Provision for an increase in cost of equipment, material, labor, etc., over
the costs specified in the contract, due to continuing price-level changes
overtime. Escalation has the same effect on project costs as interest does on
the value of a savings account: each year becomes a new base for calculating
escalation for the following year (compounded) (AACE International, 1992).
- Environmental Safety and Health.
- Estimate to complete.
- External / societal / social costs:
- Costs resulting from impacts on the environment and society for which firms
are not held financially responsible. These include environmental degradation
and adverse health impacts for which firms are not held legally liable. These
costs are intangible in nature and need to be valued by nontraditional
methods(ICF Inc., 1995). Some private costs can also be less tangible (see less
- Extremely hazardous substances:
- Any of 406 chemicals identified by EPA on the basis of toxicity and listed
under SARA Title III. The list is subject to revision (EPA, 1989).
- Any industrial, commercial, or industrial structure, installation, or
building (Selg, 1993).
- Financial accounting:
- Refers to the preparation of financial reports for use by investors,
lenders, and others, using generally accepted accounting principles.
Environmental accounting in this context refers to the estimation and public
reporting of environmental liabilities and financially material environmental
costs (ICF Inc., 1995).
- Feasibility study. Analysis of the practicability of a proposal (e.g., a
description and analysis of the potential cleanup alternatives for a site or
alternatives on the National Priorities List). The feasibility study usually
recommends selection of a cost-effective alternative. It usually starts as soon
as the Remedial Investigation (RI) is underway. Together they are commonly
referred to as the RI/FS. The term can apply to a wide variety of proposed
corrective or regulatory actions(EPA, 1989)
- Full cost accounting:
- Accounting: In the context of management accounting, this is a method of
financial and management accounting that allocates all direct and indirect
historical costs to a product or process (ICF Inc., 1995).
- Environment: Used in the environmental context, this refers to desirable
environmental accounting practices. Full-cost environmental accounting is
basically the same concept, except that it aims to highlight the environmental
elements (ICF Inc., 1995).
- Fiscal year
- Government-owned contractor-operated.
- Hazardous substance:
- Any material that poses a threat to human health and/or the environment.
Typical hazardous substances are toxic, corrosive, ignitable, explosive, or
chemically reactive (EPA, 1989).
- Historical costs:
- Costs that were incurred in a past period.
- Indirect cost:
- A cost that is not directly traceable to the manufactured product is
associated with manufacturing two or more units of finished product or is an
immaterial cost that cannot be traced to a single unit of finished
product(Schall and Haley, 1986).
- In construction, it is all costs that do not become a final part of the
installation. They include, but are not limited to, field administration,
direct supervision, capital tools, start-up costs, contractor's fees, insurance,
and taxes (AACE International, 1992).
- Input controls:
- Controls needed to verify that the input into the computer process is
complete and accurate (Schall and Haley, 1986).
- Internal rate of return. This is the discount rate that results in NPV =0.
The IRR is the rate of interest that will make the present value of the cash
proceeds expected from an investment equal to the present value of cash outlays
required by the investment. This method does not require any assumptions about
reinvestment or discount rates (Winston, 1995). The general rule is to accept
projects with an IRR greater than the cost of capital or minimum acceptable rate
of return (Brown, 1994).
- Labor cost:
- The base salary, plus all fringe benefit costs and labor burdens associated
with labor, that can be definitely assigned to one item of work, product,
process area, or cost center (AACE International, 1992).
- Life Cycle Costing. The systematic process of evaluating the life-cycle
costs of a product, product line, process, system, or facility by identifying
life-cycle consequences and assigning measures of monetary values to those
consequences (ICF Inc., 1995). LCC is also referred to as Life Cycle Cost
Assessment (LCCA). However, the definition of life cycle costing traditionally
used by Federal facilities does not typically encompass all life cycle stages or
external costs. See the definition of Life cycle assessment for a description
of the life cycle stages.
- Less-tangible costs:
- This refers to expenses incurred for corporate image purposes or for
maintaining or enhancing relationships with regulators, customers, suppliers,
host communities, investors/lenders, and the general public (ICF Inc., 1995).
These are private costs, but social and environmental costs can also be less
tangible. See "external / societal / social costs."
- Life-cycle assessment/analysis (LCA):
- A holistic approach to identifying the environmental consequences of a
product, process, or activity through its entire life cycle and to identifying
opportunities for achieving environmental improvements. EPA has specified four
major stages in a life-cycle of a product, process, or activity: raw materials
acquisition, manufacturing, consumer use/reuse maintenance, and recycle/waste
management. LCA focuses on environmental impacts not costs (ICF Inc., 1995).
- Life-cycle design:
- An approach for designing more ecologically and environmentally sustainable
product systems and integrating environmental requirements in the earliest
stages of design (ICF Inc., 1995).
- Lump-sum contract:
- A type of contract in which the cost of the work to be performed is shown
as an all-inclusive price; also known as a fixed-price contract (Selg, 1993).
- Management accounting:
- The process of identifying, collecting, and analyzing information primarily
for internal purposes (ICF Inc., 1995). Management accounting is meant to
support a businesses forward looking management decisions.
- Manufacturing costs:
- All costs from the acquisition of raw materials through production, until
the product can be turned over to the marketing division (Schall and
- Material costs:
- The costs for everything of a substantial nature that is essential to
constructing or operating a facility, both direct and indirect. Manufactured
equipment costs generally comprise a large part of material costs (AACE
- Material safety data sheet. A compilation of information required under
the OSHA Communication Standard on the identity of hazardous chemicals, health
and physical hazards, exposure limits, and precautions. Section 311 of SARA
requires facilities to submit MSDSs under certain circumstances (EPA, 1989).
- Multi-project scheduling:
- The ability of a software system to support more than one project at a
time. However, the level of flexibility and functions performed will vary. For
example, some programs allow users only to define subprojects under a master
project and may or may not roll back results to the project level (Welcome
Software Technology, 1993).
- National Priorities List (NPL):
- EPA's list of the most serious uncontrolled or abandoned hazardous waste
sites identified for possible long-term remedial action under Superfund. EPA is
required to update the NPL at least once a year (EPA, 1989).
- Network diagram:
- A graphical representation of a project depicting activity information and
the relationships between activities (Welcome Software Technology, 1993). Some
programs allow interactive data input and editing in network screens.
- Neural network:
- Computer programs loosely modeled after the biological structure of the
human brain; they consist of thousands of interconnected computing units called
neurons. An artificial neural network can be constructed to simulate the action
of a series of neurons, the analogous word being "processing unit." A
neural net is normally constructed by arranging processing units in a number of
layers. In its simplest form, a neural net consists of three layers: an input
layer, an output layer, and a hidden layer (de la Garza and Rouhana, 1995).
- National Pollutant Discharge Eliminating System. A provision of the CWA,
which prohibits discharge of pollutants into the waters of the United States
unless a special permit is issued by EPA, a state, or (where delegated) a tribal
government on an Indian reservation (EPA, 1989).
- Net present value. The algebraic sum of the discounted values of cashflows
each year during the project (Winston, 1995). The general rule is to adopt all
projects with NPVs greater than zero or choosing (between two mutually exclusive
alternatives) projects that have the highest NPVs (Brown, 1994).
- National Technical Information Service
- Operational costs:
- Costs incurred during the operating lives of processes, products, systems,
and facilities. Examples include maintenance and energy costs (ICF Inc., 1995).
- Order-of-magnitude estimates:
- Estimates made without detailed engineering data. Examples include an
estimate made from cost capacity curves, an estimate using scale-up or
scale-down factors, and an approximate ratio estimate. An estimate of this type
would normally be expected to be accurate within +50% or -30%. They are
sometimes referred to as conceptual or "ball park" estimates. They
are usually prepared using only basic criteria and as desired output, total
square feet, or number of units (AACE International, 1992). Also see "budget
estimates" and "definitive estimates."
- Organizational breakdown structure (OBS):
- A hierarchical system for organizing pools and resources to provide
dataroll-up for planning, reporting, and what-if analysis (Welcome Software
- Office of Scientific and Technical Information
- Overhead/indirect costs:
- All manufacturing costs other than direct materials and direct labor(Schall
and Haley, 1986). A cost or expense inherent in performing an operation that is
not traditionally charged to or identified with a part of the work, product, or
asset and, therefore, must either be allocated on some arbitrary basis believed
to be equitable or handled as a business expense independent of the volume of
production (AACE International, 1992).
- Parametric cost estimating:
- This method of cost estimating uses statistical techniques ranging from
simple graphical curve fitting to multiple correlation analysis. In either
case, the objective is to find a functional relationship between changes in cost
and the factor (or factors) upon which cost depends. Parametric cost-estimating
techniques often lead to a mathematically fitted function called a
cost-estimating relationship, which is a functional model that mathematically
describes the cost of a structure, module, or system as a function of one or
more independent variables (de la Garza and Rouhana, 1995).
- Preliminary assessment/site inspection. PA is the process of collecting
and reviewing available information about a known or suspected waste site or
release. SI is the collection of information from a Superfund site to determine
the extent and severity of hazards posed by a site. It follows a PA and is more
extensive. The purpose is to gather information to score the site, using the
Hazard Ranking System and to determine if the site presents an immediate threat
that requires prompt removal action (EPA, 1989).
- Payback period:
- The length of time it takes for future net positive cash flows to equal the
initial investment. Projects are accepted if the payback period is less than
some management guideline. The greatest asset of the payback is its simplicity.
However, it ignores all cash flows and the time value of money. On the other
hand, the discounted payback reflects the length of time it takes for the
discounted future net positive cash flows to equal the initial investment(Brown,
- Performance measurement:
- The systematic application of methods to monitor performance against plan
and to control cost and schedule as well as changes to scope, configuration, and
functional/operational requirements. It also aims to measure and determine
causes of variance from established baselines so that effective and timely
action may be taken (AACE International, 1995).
- The ability to track and calculate cost performance and schedule
performance. The former is based upon a comparison of earned value and actual
costs and the latter on a comparison of earned value and budgeted costs (Welcome
Software Technology, 1993).
- An authorization, license, or equivalent control document issued by EPA or
an approved state agency to implement the requirements of an environmental
regulation (e.g., a permit to operate a wastewater treatment plant or to operate
a facility that may generate harmful emissions) (EPA, 1989).
- Project Management
- Potentially hidden costs:
- Costs that are obscured in overhead accounts or overlooked in business
decision-making, including costs of upfront, operational, and back-end
activities undertaken to comply with environmental laws (ICF Inc., 1995).
- Present value (PV):
- The value today of money received in the future at a specified discount
rate (Winston, 1995).
- Determining the amount to be charged to the owner/client to fully include
the direct and indirect cost items, as well as contingency and profit (AACE
- Private costs:
- Costs that directly affect firm's profits and for which firms are held
financially responsible. These are costs that directly affect a firm's bottom
line. Private costs are sometimes referred to as internal costs (ICF
- Production department:
- A department that is directly engaged in a manufacturing activity and
contributes directly to the content and form of the finished product (Schall
- Profitability index (PI):
- This index is the ratio of the present value of after-tax inflows to the
outflows. An index greater than one indicates that a project has a yield
greater than the discount rate (Winston, 1995).
- A unique goal to be accomplished in a specific time frame, using a limited
set of resources and characterized by a sequence of activities (Welcome Software
- Project management:
- In business and industry it is defined as the managing and directing of
time, material, personnel, and costs to complete a project in an orderly and
economical manner and meet established objectives of time, cost, and technical
results. The three major phases of a project (project phases) are plan,
schedule, and control (Spiner, 1989).
- Our definition of project management (for the purpose of this resource
guide) goes beyond the industry definition. In our definition, we include
planning, cost estimation, economic and financial analysis, cost engineering,
scheduling, and performance measurement.
- Quality assurance/quality control:
- A system of procedures, checks, audits, and corrective actions to ensure
that all EPA research design and performance, environmental monitoring and
sampling, and other technical and reporting activities are of the highest
achievable quality (EPA, 1989).
- Rate of markup:
- The target rate applied against the cost of a product or service to
establish a selling price for goods and services in the external market
(Schalland Haley, 1986).
- Resource Conservation and Recovery Act.
- Remedial design. A phase of remedial action that follows RA/FS and
includes developing engineering drawings and specifications for a site
- Regulatory/compliance costs:
- Costs incurred to comply with Federal, state, or local environmental laws.
Examples include costs for notification, waste management, and pollution
control(ICF Inc., 1995).
- Reimbursable cost contract:
- A type of contract where the cost of the work is determined by actual cost
incurred by the contractor. Contractors' profit and overhead costs can be a
fixed amount or a percentage of the actual costs. Also commonly referred to as
a time-and-materials contract (Selg, 1993).
- Relational database:
- A relational database is built and operated in accordance with a relational
model of data that provides a simple and intuitive method for defining a
database, storing and updating data in it, and submitting queries of arbitrary
complexity to it. It provides a consistent foundation for all other topics that
database managers commonly cover. It enables individual users to work with
customized database schemas instead of all having to use the same underlying
schemas (Ralston and Reilly, 1993).
- Remedial response:
- A long-term action that stops or substantially reduces a release or threat
of a release of hazardous substances that is serious but not an immediate threat
to public health (EPA, 1989).
- Relevant costs:
- Future costs that are different under one decision alternative than under
another (Schall and Haley, 1986).
- A source of project support assigned to activities (labor, materials,
facilities, etc.) (Welcome Software Technology, 1993).
- Remedial Investigation / Feasibility Study. See FS...
- The quantification, normally through statistical methodologies, of the
potential known, known-unknown, and unknown variations to the result
(McDonald,1995). Construction: elements of risk include profit and
contingency. The amount of profit to be added to factor in risk is very
subjective and depends on considerations such as competition, the job market,
local conditions, etc. Contingency is the amount added to an estimate to allow
for changes or project cost growth that experience shows will likely be
required. It can be derived through statistical analysis of past project costs
or by applying experience gained on similar projects (AACE International, 1992).
- Risk assessment:
- Environment: the qualitative and quantitative evaluation performed in an
effort to define the risk posed to human health and/or the environment by the
presence or potential presence and/or use of specific pollutants (EPA, 1989).
- Superfund Amendments and Reauthorization Act (SARA)
- The assignment of the estimated duration and the desired start and finish
times to each activity in a project within the overall time cycle required for
completion according to plan (AACE International, 1995).
- The equipment and materials to be provided and the work to be done. Scope
is documented by the contract parameters for a project to which the company is
committed (AACE International, 1992).
- Sensitivity/what-if analysis:
- Examines the effect on the outcome for changes in one or more input
values(Schall and Haley, 1986).
- Evaluates various project scenarios by modifying certain data (Welcome
Software Technology, 1993).
- Service department:
- A department that provides services or assistance to production
departments(Schall and Haley, 1986).
- Solid waste management:
- Supervised handling of waste materials from their sources through recovery
processes to disposal (EPA, 1989).
- Standard cost:
- The expected cost of production under normal operating conditions. A
standard cost is typically a unit cost concept (Schall and Haley, 1986).
- The program operated under the legislative authority of CERCLA and SARA
that funds and carries out the EPA solid waste emergency and long-term removal
activities. These activities include establishing the National Priorities
List(NPL), investigating sites for inclusion in the list, determining the
priority level on the list, and conducting and/or supervising the ultimately
determined cleanup and other remedial actions (EPA, 1989).
- Measuring and cataloging the quantities of work derived from the scope
documents (AACE International, 1992).
- Total cost accounting:
- A hybrid term sometimes used as a synonym for either of the definitions
given to "full cost accounting," or as a synonym for "Total Cost
Assessment" (see the definitions of Total Cost Assessment and Full Cost
- Total cost assessment:
- Long-term, comprehensive financial analysis of the full range of
internal(i.e., private) costs and savings of an investment (White and Becker).
- Total cost management:
- The application of professional and technical expertise to plan and control
resources, costs, profitability, and risk. It represents a systematic approach
of managing costs throughout the life cycle of any enterprise, program,
facility, project, product, or service (AACE International, 1995).
- Transuranic (Hombach, 1995).
- Toxic Substances Control Act.
- Treatment, storage, and disposal facility. Site where a hazardous
substance is treated, stored, or disposed of. TSD facilities are regulated by
EPA and States under RCRA (EPA, 1989).
- The act of progressing the project status, also called updating or
statusing (Welcome Software Technology, 1993).
- Accumulated costs of materials, labor and overhead applied in all previous
processes or departments (Schall and Haley, 1986).
- Unavoidable fixed costs:
- Costs that cannot be reduced or eliminated by reducing the level of
operations or by discontinuing some level of operations (opposite of avoidable
fixed costs) (Schall and Haley, 1986).
- Unit price contract:
- A type of contract in which the cost of the work is shown as a schedule of
unit prices to be used against a measured set of quantities (Selg, 1993).
- Unit price book
- Upfront costs:
- Include preacquisition and preproduction costs incurred for processes,
products, systems, and facilities. Examples include site studies, R&D, and
installation (ICF Inc., 1995).
- U.S. Army Corps of Engineers
- Value engineering:
- A technical review process in which changes to the specified facilities are
considered in an effort to reduce the total cost of the project. In the case of
a contractor-initiated request for value engineering changes, many contracts
allow sharing of the recovered savings due to the new idea (Selg, 1993).
- The objective of value engineering is to develop or design a facility or
item that will yield the least life-cycle costs or provide the greatest value
while satisfying all performance and other criteria established for it (AACE
- Variable costs:
- Costs that vary in total as the volume of production or sales
changes(Schall and Haley, 1986).
- Volatile organic compound
- Voluntary costs:
- Costs that are not required for, or go beyond, compliance with
environmental laws. These include among others, costs for community relations,
some types of training, audits, and recycling (ICF Inc., 1995).
- What-if analysis:
- (Scheduling). The what-if method uses an anticipated or planned schedule
that indicates key milestones, as a baseline to measure project
delays(Schumacher, 1995). Also see "Sensitivity/what-if analysis"
- Work breakdown structure (WBS):
- A hierarchical system for organizing projects and activities to provide
data roll-up for planning reporting, and what-if analysis (Welcome Software
Appendix B - References
AACE International. 1992. Skills and Knowledge of Cost Engineering. 3rdEd.
Morgantown, WV: AACE Inc.
AACE International. 1995. "Total Cost Management." Cost Engineering
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