AACE CCP: Communication Competency

Use this focused AACE CCP page to drill Communication Competency decisions before returning to mixed practice, timed mocks, and the full PM Mastery question bank.

Topic snapshot

What this topic is really testing

Communication Competency is narrow in weighting but important in CCP preparation because the exam includes communication-memo judgment. Strong answers state the cost-control issue, cite the evidence, explain the impact, name the recommended next step, and make uncertainty visible instead of hiding it behind technical language.

Common CCP traps in this topic

• Writing or choosing a response that reports numbers without a recommendation.
• Overstating certainty when the estimate basis, data quality, or remaining-work assumption is weak.
• Blaming another function instead of naming the missing input and the control action needed.
• Sending the same message to every stakeholder instead of matching detail to the decision they own.
• Treating communication as a writing task only; in CCP scenarios, communication is part of cost-control governance.

Sample questions

These questions are original PM Mastery practice items aligned to this topic area. They are designed for self-assessment and are not official exam questions.

Question 1

Topic: Communication Competency

A cost engineer is reviewing a draft memo recommendation for a compressor replacement project. The draft currently says, “Select the no-cost option and explain that the delay can be absorbed later.” Current controls data:

• Approved mechanical completion: 30 Sep; the startup outage window begins 7 Oct and cannot move.
• No recovery: vendor skid arrives 15 workdays late; startup benefit deferral is estimated at $900,000.
• Recovery plan: premium freight and supplier overtime cost $260,000, keep 30 Sep, and retain the required factory acceptance test.
• Bypassing the factory acceptance test saves 10 workdays and $40,000, but the approved quality plan has no waiver and the quality manager identifies material field-rework risk.
• The project manager can approve up to $100,000; larger recovery spend or a schedule impact over 5 workdays must be escalated to the owner by Friday.

Which recommendation should the memo make?

• A. Escalate by Friday for owner approval of the $260,000 recovery plan, retain the factory acceptance test, and state that it avoids a 15-workday slip and estimated $900,000 benefit deferral.
• B. Accept no recovery for now and monitor float, because it avoids immediate cost growth and keeps the action within the project manager’s approval limit.
• C. Request a new mechanical-completion date and explain that the vendor delay is outside the project team’s control.
• D. Bypass the factory acceptance test, because it is the lowest-cost recovery path and restores most of the lost time without owner escalation.

Best answer: A

What this tests: Communication Competency

Explanation: A strong cost-engineering memo recommendation connects the requested decision to the consequences that matter to the audience. The no-recovery position is not supportable because the delay is 15 workdays and the outage window cannot move. The impact is not only schedule variance; it threatens an estimated $900,000 startup-benefit deferral. The low-cost factory acceptance test bypass is also weak because it conflicts with the approved quality plan and creates material field-rework risk with no waiver. The recovery plan costs $260,000, exceeding the project manager’s authority, so the memo should request owner action by Friday and clearly state the cost, schedule, quality, risk, and stakeholder consequences.

This recommendation addresses the cost approval threshold, schedule constraint, quality requirement, risk exposure, and owner decision need using the supplied data.

Question 2

Topic: Communication Competency

A cost engineer reviews a draft memo for the project manager on recovery of a late process-unit turnover. The draft recommends immediate approval of a $900,000 second-shift field labor plan and states that it is the lowest-cost way to protect the milestone.

Relevant facts:

• The executive steering group needs a funding recommendation tomorrow and expects material alternatives and uncertainty to be identified.
• The current approved cost baseline does not include recovery work; any recovery budget requires an approved change.
• The latest integrated schedule shows mechanical work is 10 days behind, but the turnover milestone is currently driven by unapproved vendor drawings for the control panels.
• Procurement has a valid expediting quote for the drawings and panels of $350,000, with schedule benefit estimated as 7-14 days; the draft memo does not mention it.

Which action should the cost engineer take before the memo is issued?

• A. Revise the memo to compare second-shift labor with expediting, reconcile the schedule driver, state the 7-14 day range, and identify the needed change approval.
• B. Limit the memo to baseline variance reporting, since recovery work is not in the approved cost baseline.
• C. Replace the recommendation with expediting, since its quoted cost is lower and it addresses the current schedule driver.
• D. Issue the memo as drafted to meet the deadline, noting that second-shift labor is the lowest field recovery cost.

Best answer: A

What this tests: Communication Competency

Explanation: A professional cost memo should support the decision being requested, not simply advocate a convenient recovery action. Here, the draft recommendation is weak because it omits a material alternative, conflicts with the current schedule driver, and fails to disclose schedule-benefit uncertainty. The second-shift plan may help mechanical work, but the milestone is being driven by vendor drawings for control panels. The lower expediting quote is therefore decision-relevant and must be compared with the labor recovery plan. Because neither recovery action is in the approved baseline, the memo also needs to identify the change approval required. The deadline supports concise communication, not unsupported certainty.

The recommendation is not supportable until it addresses the material alternative, conflicting schedule fact, uncertainty range, and approval need.

Question 3

Topic: Communication Competency

A cost engineer is closing a memo to the project manager after a control-account forecast review. The project manager may sponsor a change request, but only the change control board can approve a cost baseline change.

Which closing paragraph provides the most professional handoff supported by the exhibit?

• A. The account should be closed by attaching the full CBS variance build-up, vendor data extract, and acceleration model so readers can reconcile the technical details before any management handoff or decision.
• B. The account requires a USD 1.03 million budget increase. Please approve the rebaseline today, direct the board to accept the vendor trend, and instruct scheduling to use the overtime recovery alternative.
• C. The approved-scope forecast is USD 0.50 million above the current baseline, and the vendor trend and recovery alternative are not approved. Please advise whether to sponsor change-control review and which recovery path to analyze; I will maintain the forecast and change log pending the board decision.
• D. The account has possible cost pressure, but the amount is still uncertain. I will close the memo with no recommendation and wait for procurement and scheduling to resolve the vendor trend and recovery alternative before updating the project manager.

Best answer: C

What this tests: Communication Competency

Explanation: A professional cost-engineering handoff converts the cost record into a clear management decision without overstating authority. The approved-scope forecast is USD 5.50 million against a USD 5.00 million control budget, so the report should identify a USD 0.50 million forecast overrun. The vendor trend and recovery alternative are separate, unapproved items that may affect the path forward. Since the project manager may sponsor a change request but cannot approve a baseline change, the closing should ask for direction on sponsorship and analysis, then state how the cost engineer will maintain the forecast and change log. Evasive wording hides the decision need, unsupported directives imply authority that is not held, and excessive technical detail buries the handoff rather than helping the project manager act.

This wording states the supported cost condition, identifies the decision needed, preserves approval authority, and commits to a clear follow-up action.

Question 4

Topic: Communication Competency

You are the project controls lead for a refinery turnaround project. A memo must open with a clear problem frame for the Capital Project Steering Committee. The committee must decide before bid validity expires on July 10 whether to authorize the exchanger bundle award. The approved cost baseline is $48.0 million; current vendor bids are $1.9 million above the procurement allowance, while only $1.2 million of project contingency remains. If award is delayed, the outage will likely slip three weeks and add about $2.25 million in indirect costs.

Which memo opening is most appropriate?

• A. The vendor pricing problem should be escalated because the current bids are higher than expected and could affect the turnaround plan if not resolved soon.
• B. Project Manager, procurement has received unacceptable exchanger bundle bids, and the cost team recommends negotiating with suppliers before making any funding decision.
• C. The exchanger bundle package is over its allowance by $1.9 million, and the project may exceed the approved baseline unless management releases additional funds.
• D. Capital Project Steering Committee, this memo requests your July 10 decision on authorizing the exchanger bundle award because bids exceed the allowance by $1.9 million, contingency remaining is $1.2 million, and delay could slip the outage three weeks with about $2.25 million in added indirect costs.

Best answer: D

What this tests: Communication Competency

Explanation: An effective cost-engineering memo opening should quickly orient the decision maker. It should state the stakeholder audience, the project problem, the decision required, and the likely impact on cost, schedule, or baseline control. Here, the Steering Committee is the audience because it must authorize the award or funding action before bid validity expires. The issue is not merely that bids are high; the bids exceed the procurement allowance by more than remaining contingency. The project impact is also material because delaying the award could shift the outage by three weeks and add indirect costs. The best opening therefore combines audience, decision context, cost baseline implication, timing, and project impact without blame or vague escalation language.

It identifies the audience, issue, decision deadline, baseline-related cost gap, and project impact in one decision-oriented opening.

Question 5

Topic: Communication Competency

An owner’s operations vice president must decide whether to authorize a recovery plan for a process-unit expansion. You are drafting the opening section of the memo. Constraints:

• The vice president understands operations impacts but has limited cost-engineering background.
• The meeting packet allows a two-page memo, and the opening section is most likely to be read first.
• The approved control budget is $18.0 million; the current forecast is $19.4 million after a vendor delay.
• A $0.6 million recovery plan is available, but it has not been approved; the schedule analyst reports no remaining float to the required startup date.

Which information should be included early in the memo to best orient the vice president?

• A. A recommendation to approve the recovery plan immediately, with variance details and assumptions placed in an appendix to keep the opening short.
• B. A chronological summary of vendor correspondence and procurement history, with the cost and schedule impact explained after the background narrative.
• C. A concise problem statement linking the cost growth and exhausted float to the startup decision, with the approved budget, current forecast, unapproved recovery cost, key assumption, and authorization needed.
• D. A detailed earned value table with cost account codes, CPI and SPI formulas, and all supporting calculations before any business impact or decision request.

Best answer: C

What this tests: Communication Competency

Explanation: For a stakeholder without detailed cost-engineering background, the memo should begin by orienting the reader to the business problem, the decision required, and the practical impact. Early content should translate cost-control data into clear terms: approved budget versus current forecast, whether the recovery cost is approved or pending, how schedule float affects the required startup date, and any key assumption or uncertainty that limits the recommendation. Detailed formulas, account coding, and source records can support the memo later, but they should not delay the reader’s understanding of the issue and decision context.

This gives a nontechnical stakeholder the issue, impact, baseline comparison, uncertainty, and decision need before detailed support.

Question 6

Topic: Communication Competency

A cost engineer is preparing a memo for the project sponsor before a funding review. The current cost report shows the forecast at completion is 6% above the approved control budget. The main driver is a pending design trend that has not yet been approved as a baseline change. The sponsor has asked for a two-page memo and must decide whether to authorize contingency use or defer scope until the next review. What is the best professional approach for the memo?

• A. Recommend revising the control budget to the current forecast so the report aligns with the expected final cost.
• B. State that the project is over budget and request additional funding, leaving detailed assumptions for later discussion.
• C. Begin with detailed variance tables and earned value calculations so the sponsor can infer the main issue from the data.
• D. Open with the cost issue, budget impact, and decision needed, then summarize the supporting analysis, assumptions, and approval status.

Best answer: D

What this tests: Communication Competency

Explanation: Professional cost-engineering communication should first orient the decision maker. A strong memo identifies the issue, explains the cost or schedule impact, and states the decision needed before presenting detailed analysis. In this case, the sponsor needs to decide on contingency use or scope deferral, so the memo should immediately connect the 6% forecast overrun to that decision. Because the design trend is pending, the memo should also distinguish the approved control budget from the forecast and disclose the approval status and assumptions. Detailed variance tables and calculations are useful, but they should support the framed problem rather than force the reader to discover it.

This structure gives the sponsor the decision context first while keeping the analysis traceable and honest about baseline and approval status.

Question 7

Topic: Communication Competency

You are reviewing a one-paragraph memo summary for the project sponsor. The sponsor must decide whether to authorize mitigation funding now or wait for the next control cycle.

Constraints for the summary:

• Use only validated cost and schedule data through the July 31 data date.
• Separate pending items from the approved control budget.
• Do not assign responsibility because the engineering/procurement review is incomplete.
• Do not omit material conflicting indicators.

Project controls facts:

• Current approved control budget for piping installation: USD 8.40 million, including approved changes.
• Earned value: USD 4.10 million; actual cost plus accruals: USD 4.55 million.
• Current forecast at completion: USD 9.05 million if overtime continues; no recovery option has been approved.
• Contractor submitted an unapproved USD 0.30 million productivity claim.
• Field reports cite late isometrics in two areas; engineering logs also show contractor crew shortages in the same period.
• Schedule update shows piping is 10 working days behind; procurement reports remaining valves are on site.

Which memo summary is most appropriate for the project sponsor?

• A. Piping is expected to finish USD 0.95 million over budget because late isometrics caused productivity loss, so the sponsor should approve the contractor’s claim and overtime recovery now.
• B. Piping is behind schedule, but procurement is complete and remaining valves are on site, so the forecast should be held to the approved budget until the next control cycle.
• C. The forecast at completion is USD 9.05 million, but the cost issue should not be raised with the sponsor until responsibility for the contractor’s claim is determined.
• D. As of July 31, piping is over budget and late: actual cost plus accruals exceed earned value by USD 0.45 million, forecast at completion exceeds the approved budget by USD 0.65 million, and schedule is 10 working days behind. The unapproved productivity claim and unresolved cause should be disclosed separately.

Best answer: D

What this tests: Communication Competency

Explanation: A professional memo summary should be traceable to the available project-controls record and should not turn unresolved evidence into a conclusion. The validated data support a cost and schedule concern: actual cost plus accruals exceed earned value by USD 0.45 million, the forecast exceeds the approved control budget by USD 0.65 million, and piping is 10 working days late. The contractor’s USD 0.30 million claim is pending, so it should not be treated as an approved baseline change or added to the control budget. The cause is also not settled because the record includes both late isometrics and contractor crew shortages. The best summary gives the sponsor decision-quality information without overstating certainty, hiding unfavorable indicators, or assigning responsibility before the review is complete.

This summary uses the validated data, preserves the approved budget boundary, discloses the pending claim, and acknowledges the conflicting cause evidence.

Question 8

Topic: Communication Competency

A cost engineer is reviewing a draft closing paragraph for a cost memo to the project manager. The memo will support a funding and recovery decision at the next steering meeting. Which revised closing statement should replace the draft closure?

Draft closure: “I recommend closing the report at $13.4M because CR-17 should be approved soon. The variance is manageable, so no steering decision is needed now.”

• A. Report only the $13.2M low estimate while identifying the productivity recovery plan, because the pending change and high case could unnecessarily alarm stakeholders.
• B. Report a $13.4M net exposure by assuming CR-17 approval, note the variance as manageable, and defer steering action until productivity data improves.
• C. State that commitments remain under the approved budget, attach the range as backup, and close with no action unless the startup date is formally missed.
• D. State the $14.0M most-likely EAC versus the $12.0M approved budget, disclose the $13.2M-$15.1M range, keep CR-17 pending, and request mitigation/funding direction.

Best answer: D

What this tests: Communication Competency

Explanation: Professional cost-engineering communication should distinguish approved budget, forecast cost, pending changes, assumptions, and uncertainty. The exhibit shows an approved control budget of $12.0M and a most-likely EAC of $14.0M, with a wider $13.2M-$15.1M range. CR-17 is submitted but not approved, so it should not be treated as budget relief or used to reduce the stated exposure. The productivity recovery assumption and startup schedule risk are material because they affect forecast credibility and stakeholder decisions. A fair memo closure should make the overrun, uncertainty, limitation, and decision need visible rather than presenting a single optimistic number or delaying escalation.

Fair communication requires separating the approved budget from the forecast, disclosing uncertainty and assumptions, and identifying the stakeholder decision needed.

Question 9

Topic: Communication Competency

A cost engineer is preparing a one-page memo for an owner’s project sponsor before a funding gate. The sponsor must decide by Friday whether to authorize a $2.4 million draw from management reserve for a vendor acceleration plan. The approved cost baseline is $48.0 million; the current forecast is $50.1 million, including the pending acceleration request and $0.6 million of remaining risk exposure. The draft memo says:

CPI/SPI volatility by cost account indicates stochastic exposure. The controls team was not responsible for late design releases, so Finance should not question our numbers.

What is the best action before sending the memo?

• A. Keep the defensive wording because it documents that the cost variance was caused by late design releases.
• B. Remove the risk exposure from the memo until the acceleration request has been formally approved.
• C. Attach the detailed earned value backup so the sponsor can verify the CPI and SPI calculations independently.
• D. Rewrite it around the sponsor’s decision, showing baseline versus forecast, pending approval status, uncertainty, and a recommendation.

Best answer: D

What this tests: Communication Competency

Explanation: Professional cost-engineering communication should be concise, factual, and aligned to the recipient’s decision. The sponsor needs to decide whether to authorize use of management reserve, so the memo should state the decision required, the cost impact against the approved baseline, the approval status of the acceleration request, the remaining uncertainty, and a clear recommendation. The draft fails because it uses technical shorthand, sounds defensive, and does not frame the funding decision. A better memo translates the analysis into decision-ready language without hiding assumptions or overstating certainty.

This directly addresses the executive decision need while translating project-controls data into a clear, supportable cost impact summary.

Question 10

Topic: Communication Competency

A cost engineer must provide the recommendation sentence in a memo to the project manager for an owner review. The owner wants the lowest supported forecast cost while maintaining approved scope.

• The piping control account is 2 weeks behind on the integrated schedule.
• The contractor proposes a weekend overtime premium of $150,000.
• The scheduler confirms overtime can recover 1 week; the remaining week is driven by late vendor drawings.
• Site indirects are $95,000 per week of delay, and no approved baseline change exists.

Which concise recommendation is best supported by the facts?

• A. Approve the overtime and rebaseline the control account because reducing the delay by one week improves the schedule.
• B. Defer the owner memo until vendor drawings are received because the final cost of the delay is not yet known.
• C. Carry the $150,000 overtime premium as contingency until invoices are paid because it has not been approved.
• D. Do not approve the overtime as submitted; it recovers one week but adds $55,000 net cost, so pursue vendor-drawing recovery and leave the baseline unchanged.

Best answer: D

What this tests: Communication Competency

Explanation: A strong cost-engineering recommendation should combine the decision, evidence, and next action. Here, the proposed overtime costs $150,000 but avoids only one week of site indirects worth $95,000, creating a net adverse forecast impact of $55,000. It also cannot recover the full delay because the remaining week is controlled by late vendor drawings. Since no approved baseline change exists, the baseline should not be revised merely to reflect a recovery idea. The concise and supportable recommendation is to reject the overtime as submitted, identify the net cost impact, and redirect attention to the constraint that is actually driving the remaining delay.

The recommendation uses the cost trade-off, schedule constraint, and baseline approval status to support a clear owner decision.

Continue with full practice

Use the AACE CCP Practice Test page for the full PM Mastery practice path, mixed-topic practice, timed mock exams, explanations, and web/mobile app access.

Related focused pages

• Free AACE CCP Full-Length Practice Exam
• AACE CCP: Cost Management
• AACE CCP: Interfacing with Other Disciplines
• AACE CCP: Performance Analysis

Free review resource

Read the AACE CCP guide on PMExams.com, then return to PM Mastery for timed practice.