Cost Engineering

The Association for the Advancement of Cost Engineering (AACE International) defines Cost Engineering as:
"the area of engineering practice where engineering judgment and experience are used in the application of scientific principles and techniques to problems of cost estimating, cost control, business planning and management science, profitability analysis, project management, and planning and scheduling."[1]

Key objectives of cost engineering are to arrive at accurate cost estimates and to avoid cost overruns.

This broad array of topics represent the intersection of the fields of project management, business management, and engineering. Most people have a limited view of what engineering encompasses. The most obvious perception is that engineering addresses technical issues such as the physical design of a structure or system. However, beyond the physical manifestation of a design of a structure or system (for example, a building), there are other dimensions to consider such as the money, time, and other resources that were invested in the creation of the building. Cost engineers refer to these investments collectively as "costs".

Cost engineering then can be considered an adjunct of traditional engineering. It recognizes and focuses on the relationships between the physical and cost dimensions of whatever is being "engineered". Cost engineering is most often taught at universities as part of construction engineering, engineering management, and related curricula because it is most often practiced on engineering and construction capital projects. Engineering economics is a core skill and knowledge area of cost engineering.

Cost engineering is a field of engineering practice that began in the 1950s (AACE International was founded in 1956). The skills and knowledge areas of Cost Engineers are similar to those of Quantity Surveyors. AACE International is one of many international engineering organizations representing practitioners in these fields.

In 2006, AACE published the Total Cost Management (TCM) Framework which outlines an integrated process for applying the skills and knowledge of cost engineering (see References). This has also been called the world's first process for portfolio, program and project management.

References
1.Amos, Scott (editor), "Skills and Knowledge of Cost Engineering," Fifth Edition, AACE International, Morgantown, West Virginia, 2004.
2.Humphreys, Kenneth K (editor), "Jelen's Cost and Optimization Engineering" 3rd Edition, McGraw-Hill, 1991.
3.Hollmann, John K. (editor), "Total Cost Management Framework", AACE International, Morgantown WV, 2006.

Source: http://en.wikipedia.org/wiki/Cost_engineering