Articles by J. Hollmann - validest.com

Selected Articles and Publications
by John Hollmann

The following is a sampling of some of John Hollmann's papers published in AACE International Transactions or Cost Engineering Journal. They track the author's developments in topics such as controls practices, historical data, risk quantification, estimate validation and other topics. Other papers are available from the AACE International Virtual Library (if you are not a member of AACE, and you take Cost Engineering seriously, join now! The publications alone are well worth the modest cost.)

Besides these papers, Mr. Hollmann was the lead author of the AACE International Total Cost Management (TCM) Framework and the text "Project Risk Quantification" (PRQ). The TCM Framework is available from AACE. PRQ is available from Amazon in Kindle format, or in hard copy from Probabilistic Publishing. Mr. Hollmann was also the primary contributor to many of the estimating and risk related Recommended Practices (RPs) of AACE. The AACE Professional Guidance Documents (PGDs) provide a map to these RPs and are free to the public. John also publishes articles in Linkedin from time to time.

aace tcm framework

aace recommended practices

project risk quantification book

This 2022 paper "Risk Analysis and Contingency Estimating for Class 10 Estimates" describes a realistic QRA method for Class 10 (long range) and Class 5 (conceptual) estimates. It uses a decision tree approach to consider multiple scope options or scenarios to better reflect the broad range of outcomes.

hollmann_class 10 QRA.pdf
File Size:	890 kb
File Type:	pdf

This 2021 paper "The Case for Parametric Quantification of Systemic Risks for Transportation Projects" shows how parametric risk analysis predicts the cost overruns being seen in transportation projects. Overruns result not from bias or deception, but from understated contingencies resulting from subjective QRA methods.

hollmann_parametric_risk_transport.pdf
File Size:	1875 kb
File Type:	pdf

This 2019 paper title "Estimate Validation and Bias Assessment: Ratio-to-Driver Method" describes a best practice for validating cost estimates using metrics (i.e., benchmarking). It forms the basis for AACE's RP 110R-20. Metrics require data; a 2021 paper on developing project historical databases will be posted soon.

hollmann_est_validation.pdf
File Size:	698 kb
File Type:	pdf

A series of 3 papers from 2014-2020 titled "Variability in Accuracy Ranges: A Case Study" document actual cost growth vs. estimate classification for US and Canadian hydro, power transmission, and power projects.

hollmann_power_cost_growth_2020.pdf
File Size:	668 kb
File Type:	pdf

hollmann_trans_cost_growth_2018.pdf
File Size:	758 kb
File Type:	pdf

hollmann_hydro_2014.pdf
File Size:	767 kb
File Type:	pdf

hollmann_history_of_cost_eng.pdf
File Size:	987 kb
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This 2016 paper titled the "The Early History of Cost Engineering" traces the history of CE from the 19th century to the founding of AACE. Arthur Wellington summarized CE's purpose in the 1870s: "It would be well if engineering were less generally thought of, and even defined, as the art of constructing. In a certain important sense it is rather the art of not constructing; or, to define it rudely but not inaptly, it is the art of doing that well with one dollar, which any bungler can do with two after a fashion.”

hollmann_chaos.pdf
File Size:	1363 kb
File Type:	pdf

This 2014 paper titled "Risk Analysis at the Edge of Chaos" outlines how the cost growth of complex projects is often non-linear and presents a method of measuring complexity and using that measure to warn if a project is approaching the tipping point (the tipping point capability is included in the ValidRisk software.

hollmann_accuracy.pdf
File Size:	388 kb
File Type:	pdf

This 2012 paper titled "Estimate Accuracy: Dealing with Reality" reviewed >50 years of empirical estimate accuracy research. It made that case that cost engineers are facilitating management’s collective and sometimes willful biases regarding accuracy by using flawed, unreliable risk analysis methods.

hollmann_alternate_methods.pdf
File Size:	260 kb
File Type:	pdf

This 2010 paper titled "Alternate Methods for Integrated Cost & Schedule Contingency Estimating" presented the recommended practices of AACE at that time, including basic principles. It points out that the most common method in use, "line item ranging" has been a disaster for projects that have significant risks.

hollmann_risk.pdf
File Size:	394 kb
File Type:	pdf

This 2007 paper titled "The Monte-Carlo Challenge: A Better Approach" addressed 2004 IPA Inc. research that showed MCS, as being commonly applied in line-item ranging, was a disaster. It outlines for the first time the concept of "Systemic" risk, parametric modeling and other "risk-driven" quantification methods.

hollmann_best_control_practices.pdf
File Size:	440 kb
File Type:	pdf

This 2002 "Best Owner Practices for Project Control" summarizes research the author led at IPA, Inc. It is still the only empirically-based research that shows that project controls actually makes a difference. The resulting "project control index" is one systemic risk rating in later parametric risk models.

hollmann_dysert_escalation.pdf
File Size:	141 kb
File Type:	pdf

hollmann_dysert_escalation_part_2.pdf
File Size:	266 kb
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This pair of papers, co-authored with Larry Dysert, from 2007/2008 (at the peak of the 2004-2012 capex "supercycle") addresses methods of forecasting Escalation (i.e., the orphan risk). This evolved into the AACE RPs for probabilistic escalation risk analysis. It points out that published price indices do not track the prices of services that are bid.

hollmann_estimating_systems.pdf
File Size:	210 kb
File Type:	pdf

This 1996 paper, co-authored with Larry Dysert, titled "The Evolution of Estimating Systems at Kodak" describes what was probably one of the most comprehensive owner cost estimating departments and set of systems, tools and data known to the author.

hollmann_historical_data.pdf
File Size:	2550 kb
File Type:	pdf

This 1995 paper title "Project History – Closing the Loop" is the first at AACE published on developing a comprehensive project historical database and developing and using metrics for estimate validation. This eventually led to AACE's RPs on those topics.