AACE® International

Project Risk Management Professional™ (PRMP™)

Certification Study Guide
First Edition

Diego Nicolás Guevara, Editor

2021

PRMP Certification Study Guide

First Edition
Copyright © 2021
by
®
AACE International
726 East Park Avenue #180, Fairmont, WV 26554 USA
Phone: +1.304.2968444 | Fax: +1.304.2915728 | E-mail: education@aacei.org | Web: www.aacei.org

© 2021, AACE International (All Rights Reserved)

 A Publication of

PRMP™ Certification Study Guide

First Edition

A continuing project of the AACE International Education Board

The 2020-2021 AACE International Education Board is grateful to the following individuals and companies
who have assisted in the development of the PRMP Certification Study Guide, First Edition:

Editor: Diego Nicolás Guevara; Education Board Contributing Member

Primary Contributor:
David A. Norfleet, CCP, CFCC, DRMP; Chair PRMP/DRMP Certification Committee

2021/2022 Education Board Members:

Shoshanna Fraizinger, CCP (Chair) Ken Cressman, CCP EVP
Marina Sominsky, PSP (Co-Chair) Steven Feng II
Brian Payne, PE CCP CFCC Mohammed Rafiuddin, CCP PSP, FAACE

2021/2022 Education Board Contributing Members:

Haith Al-Hayari, CCP Donald McDonald, CCP PSP, FAACE
Nelson Bonilla, CCP, FAACE Ann Marie Cox, EVP
Clive Francis, CCP, FAACE Andrea Georgopoulos, EVP
Diego Nicolas Guevara Varan Karunakaran
Hendrik Louw, CEP Igor Matos
Cokey Mills, CCP Jeffrey Milo, PSP
Akinlolu Oni, CCP Neil Opfer, CCP CEP PSP, FAACE
Lucio Provenzani, CCP Alexandre Rodrigues
Oscar Siles Sankar Subrahmaniyam
Ramapriya Valmiki, CCP Srinivasa Reddi Vanga, CCP

AACE International and the Education Board would like to give special thanks to Sagar Khadka, DRMP,
PSP, FAACE who currently serves as the DRM Subcommittee Chair and Larry Dysert, CCP, CEP, DRMP,
FAACE Hon. Life who is a current member of the Technical Board for the time and support they
provided to the writers and editors of this document. Additionally, James Arrow, DRMP previously
served as the DRM Subcommittee Chair and helped lay the initial groundwork and conceptual planning
for this new PRMP certification.

© 2021, AACE International (All Rights Reserved)

 SPECIAL NOTE: Regarding this initial version of the PRMP Study Guide:

This Study Guide is for the sole purpose of supporting the Project Risk Management
Professional Certification Beta Exam and is not to be distributed beyond those Beta
Examination candidates and those individuals who are participating in development of the Beta
Examination.

© 2021, AACE International (All Rights Reserved)

 Table of Contents

Introduction to the PRMP™ Certification Study Guide ................................................................... 1

What is Project Risk Management and a Project Risk Management Professional? ....................... 6
PRMP Certification Examination Structure ................................................................................... 10

Chapter 1.0 Supporting Skills and Knowledge ............................................................................. 12

Section 1.1 Elements of Costs................................................................................................... 14
Section 1.2 Elements of Cost Estimating .................................................................................. 20
Section 1.3 Elements of Planning and Scheduling .................................................................... 26
Section 1.4 Elements of Analysis .............................................................................................. 36
Section 1.5 Enabling Knowledge............................................................................................... 41

Chapter 2.0 Risk Management Skills and Knowledge................................................................... 53

Section 2.1 Overall Risk Management Terminology and Concepts .......................................... 56
Section 2.2 Processes and General Practices for Risk Management ........................................ 64
Section 2.3 Specific Risk Management ..................................................................................... 74

Chapter 3.0 Other Important Items ............................................................................................ 80

Section 3.1 Total Cost Management ........................................................................................ 81
Section 3.2 Procurement Planning (Including Contract Management).................................... 84

Appendices................................................................................................................................ 88
Appendix A: Project Risk Management (PRM) Terms and Glossary of Special Interest to Risk
Management Professionals ................................................................................... 89
Appendix B: AACE International Canons of Ethics ..................................................................... 95
Appendix C: Example of a Risk Management Plan Table of Contents ....................................... 96
Appendix D: Example of a RASCI Matrix..................................................................................... 97

PRMP Certification Study Guide 2021 i

 List of Figures

Figure 1―The Outline Structure of AACE’s TCM Framework (TCM Figure 1.3-1) ................................ 1
Figure 2― Summary of PRMP Required Skills and Knowledge ............................................................. 2
Figure 3―The TCM Framework Process Map for Risk Management (Section 7.6) .............................. 3
Figure 4―PRM Body of Knowledge Diagram for 1.0 Supporting Skills and Knowledge ..................... 13
Figure 5―Influence Curve ................................................................................................................... 16
Figure 6―Planning Elements from PSP Study Guide, 2nd Edition ....................................................... 28
Figure 7―Baseline Plan ....................................................................................................................... 29
Figure 8―Example of Fishbone Diagram ............................................................................................ 75
Figure 9—The Place of Total Cost Management (TCM) in the Cost Management Spectrum ............. 81
Figure 10―Structure of the TCM Framework Text and Chapters....................................................... 82
Figure 11 – Plan-Do-Check-Assess Cycle ............................................................................................. 83

List of Tables
Table 1 – Generic Cost Estimate Classification Matrix ........................................................................ 21

PRMP Certification Study Guide 2021 ii

 PREFACE
AACE International developed the “Project Risk Management Professional (PRMP) Certification Study
Guide” for two reasons. First, to aid professionals studying for AACE International’s (AACE) specialty
certification in project risk management (PRM). Second, to assemble and summarize various topics
considered essential for Project Risk Management Professional knowledge, as outlined in AACE
International’s Recommended Practice 11R-88, “Required Skills and Knowledge of Cost Engineering” and
included in the current edition of AACE International’s “Skills and Knowledge of Cost Engineering."

The “Project Risk Management Professional Certification Study Guide” (Study Guide) serves the needs
of PRM professionals who are preparing to take the AACE International PRMP certification examination.
It is organized in a concise and easy-to-follow format and covers the major skills and knowledge used by
a PRM professional.

The chapters and topics presented in this Study Guide are similar to specific chapters in the Skills and
Knowledge of Cost Engineering (current edition). The reader should use this Study Guide in conjunction
with S&K current edition. Together, these publications provide readers with the knowledge base
expected of a cost-engineering professional as outlined in Recommended Practice 11R-88, Required Skills
and Knowledge of Cost Engineering and the TCM Framework, 2nd Edition. This Study Guide has two
primary objectives:

1. To provide a summary of specific knowledge and competency areas and the associated key terms
that a Project Risk Management professional should comprehend, at a minimum, when
preparing for the Project Risk Management Professional (PRMP) certification exam.
2. To provide sample problems and questions for each topic area, as well as the associated answers,
to exercise the reader’s understanding of the concepts and skills presented in S&K-6.

To further assist in preparation, the reader should visit the AACE International website at
www.aacei.org for updates to the PRMP certification as well as related Recommended Practices.

Readers should begin their examination preparation by first studying the material presented in S&K
(current edition) and then working out the sample problems and questions in the Study Guide. The
summary and key terms found in each chapter offer a checklist of the comprehensive knowledge and
competencies needed to fully prepare for the examination. Readers may have to go back and forth
between the two publications to gain a full understanding of the subject matter as they attempt the
exercise problems and questions. Please note that the actual certification examination questions are
likely to address skills and knowledge from multiple chapters; therefore, a thorough understanding of
the material is vitally important. In addition, the Study Guide includes several key appendices such as:
(1) Project Risk Management (PRM) Terms and Glossary of Special Interest to Risk Management
Professionals, (2) Example of a Risk Management Plan Table of Contents, and (3) an example of a RASCI
Matrix.

Most terms and phrases incorporated in the Study Guide are generic to the profession; where
applicable, however, professionals should understand the definitions provided in the latest version of
AACE International’s Recommended Practice 10S-90 and the terms found in the glossary of this Study

PRMP Certification Study Guide 2021 iii

Guide. The terms and phrases used in industry and applicable risk management software may not
conform to the readers’ understanding, so consult the PRMP glossary found in Appendix A.

The goal of the AACE International Education Board is to continually improve this publication, making it
a living document that will be revised as needed to support the PRMP exam, while maintaining its
strengths. AACE’s Education Board encourages everyone to offer comments and suggestions for
improvements to future editions; please forward comments to the AACE International Education Board
(tjefferson@aacei.org Education Board Manager).

PRMP Certification Study Guide 2021 iv