SCAF REVIEW

Conducted for the Chairman by D W Daniel

Origins

ISPA – The International Society of Parametric Analysts was originally created in the US by those who were PRICE model users, and a UK group of ISPA was formed in 1979. This group had grown to a membership of around 30 by 1983. However at that time UK cost analysts were using a variety of forecasting methods, and perceived that the UK ISPA group would be too focused on PRICE to meet their requirements; furthermore MoD staffs were reluctant to appear to be too closely associated with a single commercial technique. There were also some difficulties associated with attempts to turn this group into a semi-autonomous UK chapter of ISPA. As a result, a paper was written arguing the case for the formation of a UK Society, independent of ISPA. Following this, a small steering committee prepared a letter and questionnaire which were circulated to individuals within MoD and the Defence, Aerospace and Electronics industries. Separately, the RAeS Management Studies Group had become interested in cost forecasting and were encouraging the formation of a society outside the RAeS to promote cost analysis and forecasting. As a result of favourable responses to the letter, SCAF was formed in 1984 with a structure and constitution based loosely on that of a learned society.

The initial membership numbered 94 (though this soon dropped to the 40-60 range) and the society achieved the publication of six newsletters a year for the first 12 years or so. The objectives of the society as at 1985 are reproduced at Annex A. In 1989 these objectives were recast in a more succinct way and published on a card given to members. The aims of the Society were separated in to broad objectives and stated ways of achieving these, termed operations, as follows:

Objectives

To promote the best professional interests of its members.

To improve cost analysis and prediction methods.

To disseminate information about cost analysis techniques.

Operations

Annual Conferences

"Theme" Seminars (2 or 3 per year) (with attendance of 20-40)

Annual lecture

Bi-monthly newsletter

Annual publication of Conference and Seminar Proceedings

Publication exchanges and collaborative links with other Societies

Library

Working Groups on specific topics

The Society today has an active membership of around 40. It still holds an annual conference and an annual lecture, although this has taken on a more light hearted or general interest theme and been linked to an annual social event. Themed seminars are still held at about the original rate with attendance also around the same level. The newsletter is, however, published less frequently 2-3 times a year. Communication and keeping in touch with members, the original purpose of the newsletter, is now increasingly being conducted through the SCAF web site.

Collaborative links with other societies has always depended upon the personal interests of individual members and has been, therefore, spasmodic. Working groups on specialist topics are still active but depend upon the limited time individual members can devote to Society activities. The library of accumulated papers does seem to be in danger of disappearing since the papers have not been kept in one place but are distributed in a number of locations. Some papers may have only survived in the collections of assiduous individuals such as Frank Sawdon.

The Society gains most of its annual income (£4,500) through the attendance fees for the annual conference, against conference costs of £2,500. Seminar venues are usually provided by members’ parent organisations at no charge and the publicity costs of each, around £350, are usually covered by the small attendance fees charged. Conference and seminar fees include annual membership, which is often an easier way for members to get employers to fund membership subscriptions than as a separate charge. The only other significant expenditure is the newsletter at £800 per issue for a mailing list of about 350. Historically, the newsletter was simply produced but in recent times the Society has taken the view that the newsletter now needs to compete against all the other "mail shots" a recipient receives and therefore has to be professionally typeset. The Society holds a balance slightly larger than annual expenditure and the finances would appear to be in control in the sense that the committee, having a year’s expenditure in hand, has sufficient time to react to adverse events.

DPA Staffing Policy. When SCAF was formed, the principal focus of cost analysis and forecasting in MoD(PE) was in DPTCAn, serving the Air Systems Controllerate; there were other, smaller groups doing related work for the Land and Sea Controllerates. Most of DPTCAn's recruits joined in mid career, after at least a decade of project office
experience, and remained in the group for many years. They were therefore inclined to promote their expertise by joining SCAF and benefiting from the expertise presented at its seminars. Today by contrast the staff in the PFG/CF group in DPA expect to remain in cost analysis and forecasting for only a few years (given the rapid staff turnover in that area, and official limits on time in any DPA post) and are less inclined to develop their expertise by joining SCAF.

Size. With a membership of only around 40 to 60 there is a potential problem of finding volunteers for the tasks of Society Officers, committee members and event organisers without imposing upon the good offices of the same individuals time after time. The broad rule of thumb often applied to societies is to assume that only 10% of members are sufficiently committed to volunteer for such duties. SCAF membership, under these assumptions, would be barely sufficient to provide a committee. The fact that SCAF has operated with similar membership numbers for so many years implies a higher level of commitment than the norm. However, such a small number of members must place a strain on its organisers. There must be a risk that any future faltering of commitment level could precipitate a crisis fairly quickly. Raising numbers, if it were possible, would be of great benefit to the Society.

Formal Qualifications. It has often been suggested that unless membership of SCAF can be seen as a stepping stone to obtaining a formal qualification (e.g. NVQ) employers will be reluctant to grant attendance at meetings on their training budgets. Some members would argue that seeking formal qualification may be the only way for cost analysis to gain the recognition it deserves. A Society lacking any link to formal qualification may appear increasingly unattractive and irrelevant to today’s self help careerists. In practice it is difficult to see how such a small society could undertake such a role, although it is just conceivable to envisage how this might be achieved if the society were to amalgamate with some other society such as The Association of Cost Engineers (which does have formal links to The Engineering Council and the overseeing committee of the Project Control element of NVQs – see Annex B). Others would argue, however, that such a formal training role is unnecessary in what is in essence a debating society.

Looking Beyond Defence. The Society was founded very much with a Defence orientation and although the methods of cost analysis are applicable to all forms of projects, the Society has never really widened its scope. Estimating the cost of software projects is an example where one might expect to find common ground between civil and defence applications of estimating technique, though civil project staff may find the sheer scale of defence projects intimidating. The move of the DPA from London to Bristol, a change in locus that the Society very successfully followed, has probably increased further the barriers to such broadening. Without a broader base it is difficult to see how the Society can expand. If expansion and a broader base is what the Society seeks then it would be another reason to consider the case for amalgamation mentioned above and discussed below.

Sponsorship. Throughout its 18 years existence the Society has relied on sponsorship, usually of an indirect nature such as indulgent employers providing employees’ time and venues for meetings, photocopying and duplicating etc. This review, for example, is sponsored by HVR-CSL. The Society has also relied on MOD sponsoring about half the membership. Members, however, are very sensitive to any heavy handedness in commercial sponsorship particularly in respect to presentation of papers that are little more than sales pitches for proprietary techniques.

Documentation. It is clear that the Society is in danger of losing track of its accumulated papers and the knowledge base this represents. This is a potentially valuable, perhaps after 18 years an irreplaceable, resource that could and should be made more accessible to the membership. Indeed, better exploitation of this knowledge base might be a selling point to attract new members. The first task is to attempt to locate collections of: newsletters; conference proceedings (which may contain copies of seminar presentations through the year as well); seminar reports (probably very few are recorded separately); and minutes of meetings. Frank Sawdon is known to hold a substantial collection. The next task is to catalogue then review the sources. At which point the Society would be in a position to make decisions on the utility of making copies available. The effort required to complete these tasks should not be underestimated but it does seem the responsible thing to do for a Society dedicated to disseminating information about cost analysis techniques.

Amalgamation. As mentioned above there are potential problems associated with a Society being as small as SCAF. Although the worst of these, implosion, has remained dormant over 18 years, the lack of a sizeable membership has curbed ambition with regard to such activities as working groups, and would certainly curb the implementation of a number of ideas in this report. There are two approaches to increasing membership, not necessarily independent, that should be given consideration. The first is an attempt to make the Society more attractive. In this regard the advent of the website offers opportunities that could never have been envisaged by the Society’s founding fathers. There ought to be plenty of material in the archive that, if only it could be published on the web, would act as a strong inducement to join for anyone searching the appropriate keywords. The problem, a consequence of size again, is the effort and resource required to do this.

The other approach is to seek amalgamation. The Association of Cost Engineers has been mentioned above in the context of how to provide a link to formal qualifications in the UK. The downside is the obvious loss of identity, especially within a large society which may not be particularly sympathetic towards the views of cost analysis as understood by SCAF members. There is, however, an alternative and that is to contemplate once more amalgamation with a US based society chosen to have more sympathetic views. Becoming a "chapter" of a US cost analysis society with similar aims to SCAF, if it were possible, would give access to much needed moral support. As an "off-shore" chapter, SCAF might enjoy a great deal of autonomy. More importantly, it would give access to a broader range of papers thereby making the Society more attractive and useful to its members. From a brief inspection, the Society of Cost Estimating and Analysis (SCEA) (aims and objectives at Annex C) would seem a closer match to SCAF than resurrecting the historical connection to ISPA. An example of the sort of paper produced in their journal and posted on their website, www.sceaonline.net, is reproduced at Annex D (but for ease of electronic distribution is forwarded as a separate PDF file). In a defence context, amalgamation with a US society might be an additional attraction to members of UK defence industries.

The Society has retained a stable membership of about 40 for the past 18 years. It has survived the relocation from London to Bristol of the DPA which, over the years, has provided around 50% of the membership. It has also survived the significant reduction in the budgets employers are willing to spend on training over this period. It has broadly followed the ambitious aims set out in the original objectives. What the Society appears to have been particularly successful at is in providing a series of seminars and annual conferences. This is what the Society does well, it obviously satisfies one need of the membership, and the Society could do a lot worse than simply concentrate on this alone.

But the Society has relatively few members and hovers around the mythical "critical mass". If insufficient "young blood" is joining to replace the "golden oldies", or, of more immediate concern, if the collective commitment of members falls, the Society could easily tip into decline. Two steps are put forward for consideration to improve membership. Neither is without its downside. One is to scour the archive and make the best papers available on the web to demonstrate the value of the Society and make it generally more "attractive". The other is to contemplate amalgamation. The obvious downside here is loss of identity. However, there might just be a way of minimising this loss of identity if amalgamation could be achieved with a like minded US society. Amalgamation with a US society might be well received by UK defence industry members for other reasons as well. In any event there appears no case, at the moment, for winding up the Society.

The significant non-revenue generating expenditure is the £800 an issue newsletter. Historically, the newsletter was simply and cheaply produced but in recent times the Society has taken the view that the newsletter now needs to compete against all the other "mail shots" a recipient receives and therefore has to be professionally typeset. The Society already has a website and many of the original "keeping in touch" functions of the newsletter either have or will migrate to this medium. Whether the revamped, relatively expensive in both effort and money, newsletter serves its "promotional" purpose against the junk-mail that its 350 recipients also receive is open to debate. The Society could profitably review making greater use of the web-site for what are now many newsletter functions and concentrate postal mail shots on seminar flyers and other membership gathering ideas. Alternatively, a cheaper from of publication might be sought.

The Society holds valuable papers which are in danger of being lost to the corporate memory. These resources could and should be made more accessible to the membership. Indeed accessibility might be a selling point to attract new members. As a first step these papers should be located and secured then at least catalogued, though the effort to do this should not be underestimated.

I would like to acknowledge the assistance that I have received from: Heather Benwood, Peter Cook, David Faddy, Arthur Griffiths, Joe Harland, David Kirkpatrick, Harry Roberts and Frank Sawdon in compiling this report. They have willingly provided me with information and personal viewpoints. However, responsibility for the accuracy and balance of the final draft lies with me alone.

The overall objectives of the Society shall be to improve the capability in cost analysis and cost forecasting of UK companies and Government agencies and to serve the needs and best interests of UK cost analysts.

These objectives will be achieved by the following specific activities:

 

1. To promote parametric and other cost modelling techniques and methodologies.
2. To provide means of developing, exchanging and disseminating methods and data.
3. To establish and maintain a library of appropriate literature and technical papers.
4. Publish and distribute a Technical Journal.
5. Publish and distribute a regular Newsletter.
6. Hold and promote technical meetings and publish the transactions.
7. To expand the membership of the Society.
8. To promote and advertise the objectives and aims of the Society.
9. Liaise and pursue common interests with other Societies and groups in the UK and overseas which have complementary aims and objectives (and in particular ISPA).
10. Establish local branches where sufficient interest exists.
11. Help to formulate standard cost terms and common data definitions.
12. To promote research into cost and forecasting methods.

Annex B

Description of Association of Cost Engineers

The Association of Cost Engineers was formed in mid-1960 in London, as the British Group of the American Association of Cost Engineers. In late 1961 an independent British Association of Cost Engineers was formally established. The Association has developed a wide range of institutional services for its members. It promotes the technical study and development of cost engineering with the objective of furthering the application of scientific principles and techniques to problems of cost estimating, cost control, planning, profitability and investment appraisal.

The Association is a member of the International Cost Engineering Council (ICEC) whose objective is to promote co-operation between national and multinational cost engineering organisations worldwide. The Association's certification programme, for the award of the title Certified Cost Engineer (CCE), is accredited by ICEC.

The Association has been licensed by The Engineering Council as a nominated body through bilateral agreements with the Institution of Chemical Engineers and the Institute of Incorporated Engineers. This enables the Association to propose suitably qualified members for the award of the titles of Chartered Engineer (CEng) and Incorporated Engineer (IEng).

The Association supports PROVOC, the committee which oversees the implementation and development of the National Vocational Qualification (NVQ) in Project Control. PROVOC is made up of representatives from the Association, the Engineering Construction Industry Training Board (ECITB), the Occupational Standards Council for Engineering (OSCEng) and a number of the user organisations. The NVQ in Project Control at Level 4 meets the qualification requirements for Member (MACostE) whilst Level 3 meets the requirements for Graduate. The Association is only the second body in the engineering profession to accept an NVQ as a qualification for membership.

The major objectives of the Association are to promote Cost Engineering as a recognised discipline of engineering technology, to provide means of developing, exchanging and disseminating standards, methods and data relating to Cost Engineering and to provide recognised standards of attainment in the practice of Cost Engineering.

The Association's Journal 'The Cost Engineer' and extensive library appertaining to our discipline are complemented by meetings and conferences throughout the UK and we have active and growing memberships in both Hong Kong and Siberia.

The UK is served by a number of Regional Sections each with its own chairman and committee. Standing and Technical Committees carry out specific functions reporting to the Association's Council which meets monthly throughout the year

Annex C

To further the effectiveness and efficiency of cost estimating and analysis and related disciplines in the public and private sectors by: 

• Promoting and enhancing the profession of cost estimating and analysis
• Fostering the professional growth of its members
• Enhancing the understanding and appreciation of cost estimating, analysis and related disciplines throughout the general public
• Promoting a Common Body of Knowledge as a standard for individual excellence
• Advocating a uniform Code of Ethics for the profession
• Rewarding achievement through an appropriate program of recognition and certification
• Providing forums and media through which experiences with the principles and techniques of cost estimating and analysis may be reported, discussed and published in furtherance of public interest
• Fostering, promoting, and conducting research and educational programs
• Developing and maintaining standards of proficiency and performance
• Cooperating with other organizations and individuals, having common or related purposes, in furtherance of public interest
• Providing an opportunity for government, industry and academia to collectively discuss and comment on related proposed or suggested subjects of common interest
• Establishing standards in the terminology, conduct and application of cost estimating and analysis

Educational opportunities include: 

• Annual National Symposium featuring speakers from Government, Industry and Academia in a dynamic forum for presentation and discussion of major issues and topics and excellent opportunities to learn through hands-on workshops and tutorials.
• Regional seminars designed to address specific topics of special interest such as Cost/Schedule Control Systems and Performance Measurement Systems are held in selected cities each year.
• Local Chapter meetings held either monthly or quarterly designed to bring top speakers from both local and National discussing current topics of concern and interest. Many chapters also feature education and training opportunities.

Applicants will be assigned to a local chapter where possible. If an applicant cannot be assigned, they will be members-at-large and encouraged to initiate interest to others in their area to start a new chapter. All benefits of membership are provided to members-at-large. 

The Society also administers a certification program which further enhances the credibility of the members and the profession. 

Membership is open to all interested individuals in the cost estimating and cost analysis professions and related disciplines. 

Members are from all levels of management, are experts, journeymen, and beginners from the government, private sector and academia. Some of the many professions represented by our members are: 

The Society of Cost Estimating and Analysis is a non-profit organization chartered by the State of Virginia and operated by the National Officers acting under the policies of the National Board of Directors and the counsel of the Board of Regents. Revenue is derived from the dues of individual members, a part of which is refunded to the chapters for their operation. Funds are also raised by conducting seminars, workshops and symposia and through the sale of publications and other educational materials. The Society accepts no sponsorship from any organization or persons.

 JOURNAL OF COST ANALYSIS

The Society promotes efficiency and effectiveness in the study of cost estimating and analysis by bringing together persons who are interested in the relevant disciplines the Society supports. The Journal which is published twice a year is a forum by which these individuals may submit papers for publication and represent the Society in areas of research, analysis and education. These papers are refereed to assure the articles best serve the needs of the membership and the organizations they represent and to maintain the high standards of scholarship represented by the Journal. 

 NATIONAL ESTIMATOR

Cost Estimating and Analysis are dominant elements in the acquisition cycle. The continuing concern for cost makes the need for identifying and demonstrating new and innovative tools and techniques an imperative. The National Estimator which is published four times a year provides members opportunities to express their views on procedure and practice in today's environment. These articles which are not refereed, offer the reader a practical view of the estimating and analysis profession and related disciplines.