forProject Encyclopedia

0/100 Method

The 0/100 Method is an earned value method or technique that earns no value for a Work Package or task until it's fully complete. At that point, it earns 100% of its planned value at once.

50/50 Method

The 50/50 Method is an earned value method or technique that earns 50% of a Work Package's or task's budgeted value when it starts, and the remaining 50% when it's completed.

Accrual

An Accrual is the recording of actual costs for work that has been performed but not yet posted or paid in the accounting system. Sometimes called "Estimated Actual Costs."

Actual Cost

Actual Cost is another name for Actual Cost of Work Performed (ACWP) — the cost incurred and recorded in accomplishing the work performed within a given time period, including all recorded incurred costs plus estimated actuals.

Actual Cost of Work Performed (ACWP)

Actual Cost of Work Performed (ACWP) is the cost incurred and recorded in accomplishing the work performed within a given time period, including all recorded incurred costs plus estimated actuals.

Apportioned Effort (AE)

Apportioned Effort is an earned value method or technique that is applied in cases where accomplishment is measured in relation to a related, directly measurable task.

Authorized Unpriced Work (AUW)

Authorized Unpriced Work (AUW) is new work scope the customer has formally authorized and has been estimated, but hasn't yet negotiated a final, definitized price for.

Baseline

In Earned Value Management (EVM), the Baseline is the approved plan for a project's cost, schedule, and technical scope. Performance is measured against it throughout the project.

Baseline Change Control

Baseline Change Control is the formal process for reviewing, approving, recording, and communicating changes to the Baseline.

Baseline Change Request (BCR)

A Baseline Change Request (BCR) is the formal document that proposes a change to the Baseline. It explains why the change is needed and how it affects scope, cost, and schedule.

Basis of Estimate (BOE)

A Basis of Estimate (BOE) is the documented reasoning behind a cost or resource estimate for a specific piece of project scope.

Bill of Material (BOM)

A Bill of Material (BOM) is a list of the material items, and their quantities, needed to build a product or assembly.

Budget

In Earned Value Management (EVM), a Budget is the approved resource estimate for a defined scope of work. At any level, the Budget at Completion (BAC) is the sum total of the time-phased Budgeted Cost for Work Scheduled (BCWS) for that work.

Budget at Completion (BAC)

Budget at Completion (BAC) is the total budget of an element of the project, e.g., a Work Breakdown Structure (WBS) Element, Control Account, or Work Package.

Budget Log

The Budget Log is a log that tracks changes to the Contract Budget Base (CBB) and other important values over the life of the project.

Budgeted Cost for Work Performed (BCWP)

Budgeted Cost for Work Performed (BCWP), also called Earned Value, is the budgeted value of the work performed. It can be measured for a single period or cumulative to date.

Budgeted Cost for Work Scheduled (BCWS)

Budgeted Cost for Work Scheduled (BCWS), also called Planned Value, is the budget for a project element, spread over time according to when the work is scheduled to be done.

Budgeted Cost of Work Remaining (BCWR)

Budgeted Cost of Work Remaining (BCWR) is the budget for the work not yet performed: Budget at Completion minus cumulative Budgeted Cost for Work Performed (BCWR = BAC − BCWP cum).

Charge Number

Charge Number is a general term for the identifying code that serves as the collection point for costs on a specific piece of work.

Contract Budget Base (CBB)

The Contract Budget Base (CBB) is the total budget authorized under a contract: the Negotiated Contract Cost plus the estimated cost of any Authorized Unpriced Work.

Contract Target Cost (CTC)

Contract Target Cost (CTC) is another name for Negotiated Contract Cost (NCC): the negotiated cost of the original contract plus all negotiated contract changes.

Contract Target Price (CTP)

Contract Target Price (CTP), for Government contracts, is the negotiated contract cost plus the target profit or fee.

Contract Type

Contract Type refers to the various forms a contract can take for acquiring goods or services, such as Cost Plus Fixed Fee, Cost Plus Incentive Fee, Firm Fixed Price, Fixed Price Incentive Fee, or Unit Price.

Control Account (CA)

A Control Account (CA) is the key management point where scope, schedule, cost, and risk are managed together, and where Earned Value data is typically collected.

Control Account Manager (CAM)

The Control Account Manager (CAM) is the individual directly responsible for managing a Control Account, including its scope, schedule, cost, and technical performance.

Control Account Plan (CAP)

A Control Account Plan (CAP) is a document or electronic plan that compiles a Control Account's scope, schedule, and budget information into a single, integrated plan of performance.

Cost Performance Index (CPI)

The Cost Performance Index (CPI) is a measure of cost efficiency: the ratio of Earned Value, or Budgeted Cost for Work Performed (BCWP), to Actual Cost of Work Performed (ACWP).

Cost Variance (CV)

Cost Variance (CV) is the difference between Earned Value, or Budgeted Cost for Work Performed (BCWP), and Actual Cost of Work Performed (ACWP). It is a measure of cost performance.

Direct Costs

Direct Costs are costs that can be specifically identified with a particular contract or project and are charged to it directly — for example materials, labor, subcontractor charges, or other direct costs such as travel.

Discrete Effort

Discrete Effort is a classification that identifies work that will earn value based on objective or measurable outputs or work products.

Discrete Milestone Method

The Discrete Milestone Method is a way of applying the Weighted Milestone Method in which each milestone is all or nothing — its full weight is earned when it's complete, and nothing is earned before.

Distributed Budget

Distributed Budget is the sum of the budgets, direct and indirect, that have been allocated to Control Accounts and Summary Level Planning Packages through the Control Account planning and Work Authorization process.

Earned Standards Complete Method

Earned Standards Complete is an earned value method or technique that earns value based on pre-established labor-hour standards for each unit of work completed.

Earned Value (EV)

Earned Value (EV) is another name for Budgeted Cost for Work Performed (BCWP) — the value of work actually performed, expressed in terms of its original budget.

Earned Value Management (EVM)

Earned Value Management (EVM) is a management approach that integrates a project's scope, schedule, and cost to give objective, data-driven performance measurement and more realistic forecasting.

Earned Value Management System (EVMS)

An Earned Value Management System (EVMS) is the combination of processes, people, and information and tools that enables an organization to practice effective Earned Value Management.

Earned Value Method

An Earned Value Method (EV Method) is the specific technique chosen in advance to control how earned value, or Budgeted Cost for Work Performed (BCWP), is calculated as work progresses.

Elements of Cost (EOC)

Elements of Cost (EOC) are the major categories — such as labor, material, subcontract, and overhead — into which a project's direct and indirect costs are planned and recorded.

Equivalent Units Method

The Equivalent Units Method is a less common name for the Units Complete Method.

Estimate at Completion (EAC)

Estimate at Completion (EAC) is the projected total cost of all authorized work, equal to actual costs incurred to date plus the estimated cost to complete the remaining work.

Estimate to Complete (ETC)

Estimate to Complete (ETC) is the projected cost of finishing all remaining authorized work from this point forward.

Estimated Actual Costs

Estimated Actual Costs are reasonable estimates of costs already incurred for work performed that haven't yet been posted or paid in the formal accounting system.

EV Milestone

An EV Milestone is a subdivision of a Work Package, defined so that earned value can be measured at a finer level than the Work Package as a whole.

General & Administrative (G&A)

General & Administrative (G&A) is an indirect cost category that allocates a company's corporate home office and administrative expenses across all of its contracts.

Independent Estimate at Completion (IEAC)

An Independent Estimate at Completion (IEAC) is a cost forecast calculated using a standard formula based on past performance, used to sanity-check the manager's own Estimate at Completion (EAC).

Indirect Costs

Indirect Costs are costs incurred for common or shared business objectives that can't be traced to a single specific contract or project. Examples of Indirect Costs include Labor Overhead, Material Burden, General & Administrative (G&A), and Cost of Money.

Integrated Master Plan (IMP)

The Integrated Master Plan (IMP) is an event-based project plan: a hierarchy of events, each supported by accomplishments, with each accomplishment tied to criteria that show it's complete.

Integrated Product Team (IPT)

An Integrated Product Team (IPT) is a multidisciplinary team given management responsibility for one or more elements of a project.

Internal Re-planning

Internal Re-planning is any change to a project's budgets that stays within the existing contract scope and keeps the Total Allocated Budget (TAB) under the Contract Budget Base (CBB).

IPT Leader

An Integrated Product Team (IPT) Leader is the individual identified as responsible for that team.

Latest Revised Estimate (LRE)

Latest Revised Estimate (LRE) is another name for the Estimate at Completion (EAC): the current forecast of what the work will cost when it's finished.

Level of Effort (LOE)

Level of Effort (LOE) is work of a general or supportive nature — such as supervision or contract administration — that doesn't produce a definite end product.

Management Reserve (MR)

Management Reserve (MR) is budget the contractor holds back from the Performance Measurement Baseline for management control: to cover risks and unplanned in-scope effort — work that will be needed but can’t be identified in advance.

Measured Milestone

Measured Milestone is a way of applying the Weighted Milestone Method in which partial progress can be claimed within a milestone, rather than waiting for it to be fully complete.

Negotiated Contract Cost (NCC)

Negotiated Contract Cost (NCC) is the negotiated cost of the original contract plus all negotiated contractual changes, not counting any authorized but unpriced work.

Organizational Breakdown Structure (OBS)

The Organizational Breakdown Structure (OBS) is the organizational structure — including major subcontractors — responsible for accomplishing a project's authorized work.

Other Direct Cost (ODC)

Other Direct Costs (ODC) are costs charged directly to a project that don't fall under the main direct cost categories of labor or material.

Overhead

Overhead is a category of Indirect Cost covering shared costs that support a particular function, facility, or business unit rather than any single project.

Percent Complete

Percent Complete is a general measure of progress on a task or Work Package, expressed in various ways depending on what's being measured.

Percent Complete (EV Method)

Percent Complete (EV Method) is an earned value method or technique in which a Work Package or task earns value based on an assessment of how much of its work is complete.

Percent Spent

Percent Spent measures how much has been spent on a task so far compared to its total expected cost.

Performance Measurement Baseline (PMB)

The Performance Measurement Baseline (PMB) is the time-phased budget plan that Earned Value performance is measured against. It includes all budgets, direct and indirect, allocated to Control Accounts and Summary Level Planning Packages, plus any Undistributed Budget.

Performing Organization

The Performing Organization is the functional organization or department assigned to perform a defined scope of work, such as a Control Account or Work Package.

Physical Percent Complete

Physical Percent Complete is the assessed progress of actual work accomplished on a task, independent of the passage of time against its schedule.

Planned Value (PV)

Planned Value (PV) is another name for Budgeted Cost for Work Scheduled (BCWS): the time-phased budget for the work scheduled to be performed.

Planning Package

A Planning Package is a future portion of work within a Control Account that hasn't yet been broken down into detailed Work Packages.

Program Manager (PM)

The Program Manager (PM) is the individual with overall responsibility for the cost, schedule, and technical performance of a program or project, including making the tradeoffs necessary to meet these objectives.

Quantifiable Backup Data (QBD)

Quantifiable Backup Data (QBD) is documented, traceable support for a manager's percent complete assessment.

Rebaselining

Rebaselining is the general term for revising the remaining baseline plan. Whether a rebaseline counts as Internal Re-planning or Formal Reprogramming depends on the result: if the Total Allocated Budget stays within the Contract Budget Base and the schedule stays within the contract dates, it's Internal Re-planning; if the TAB exceeds the CBB, or the baseline schedule extends beyond the contract dates, it's Formal Reprogramming.

Responsibility Assignment Matrix (RAM)

The Responsibility Assignment Matrix (RAM) is a chart showing how Work Breakdown Structure (WBS) elements map to the organizations responsible for completing them.

Responsible Organization

The Responsible Organization is the organization or Integrated Product Team (IPT) assigned full responsibility for the scope, schedule, and cost performance of a Control Account or Summary Level Planning Package (SLPP).

Schedule Performance Index (SPI)

The Schedule Performance Index (SPI) is a measure of schedule efficiency: the ratio of Earned Value, or Budgeted Cost for Work Performed (BCWP), to Planned Value, or Budgeted Cost for Work Scheduled (BCWS). It measures how much work has been accomplished in comparison with the baseline plan.

Schedule Variance (SV)

Schedule Variance (SV) is the difference between Earned Value, or Budgeted Cost for Work Performed (BCWP), and Planned Value, or Budgeted Cost for Work Scheduled (BCWS).

Start/Finish Method

The Start/Finish Method is an earned value method or technique where a set percentage of a Work Package's or task's value is earned when it starts, and the remainder is earned when it finishes.

Statement of Work (SOW)

A Statement of Work (SOW) is the document that defines the work scope of a project or a specific element such as a Work Breakdown Structure (WBS) element, Control Account, or Work Package.

Summary Level Planning Package (SLPP)

A Summary Level Planning Package (SLPP) represents defined far-term work that isn't yet practical to plan in Control Accounts.

To Complete Performance Index – BAC (TCPI)

To Complete Performance Index - BAC, or TCPI (BAC), shows whether the original Budget at Completion (BAC) is still achievable. It's the cost efficiency needed on the remaining work to finish within that budget.

To Complete Performance Index – EAC (TCPI)

To Complete Performance Index - EAC, or TCPI (EAC), calculates the cost efficiency that must be achieved on the remaining work to finish at the current Estimate at Completion.

Total Allocated Budget (TAB)

The Total Allocated Budget (TAB) is the sum of all budget allocated to a contract, made up of the Performance Measurement Baseline (PMB) plus Management Reserve (MR).

Undistributed Budget (UB)

Undistributed Budget (UB) is budget authorized to the contract, and so part of the Contract Budget Base, that is held temporarily until it can be distributed to Control Accounts or Summary Level Planning Packages (SLPPs).

Units Complete Method

The Units Complete Method is an earned value method or technique that measures progress as the ratio of units completed to date over the total number of units required.

Variance Analysis Thresholds

Variance Analysis Thresholds are the amount and percentage criteria that determine when a Cost or Schedule Variance is significant enough to require formal written analysis rather than routine tracking.

Variance at Completion (VAC)

Variance at Completion (VAC) is the difference between the Budget at Completion (BAC) and the current approved Estimate at Completion (EAC). It shows whether the work is expected to finish over or under budget.

WBS Dictionary

The Work Breakdown Structure (WBS) Dictionary is a document that gives a brief narrative definition of each element of the Work Breakdown Structure, describing its work scope and deliverables.

Weighted Milestone Method

The Weighted Milestone Method is an earned value method or technique that breaks a Work Package into several milestones, each assigned a weight — a share of the Work Package's budget — earned as that milestone is achieved.

Work Authorization (WA)

Work Authorization is the process of reaching agreement between the Project Manager and the manager of the performing organization on a defined element of work, together with its schedule, budget, and Statement of Work. The agreement is recorded in a Work Authorization Document (WAD).

Work Breakdown Structure (WBS)

The Work Breakdown Structure (WBS) is a product-oriented, hierarchical breakdown of all the work to be performed on a project, organizing hardware, software, services, and other deliverables into a single unifying structure.

Work Package (WP)

A Work Package (WP) is a natural subdivision of the tasks within a Control Account, and the point at which work is planned, progress is measured, and earned value is computed.