Concept of Project Cost Control

The concept behind project cost control is simple

A. COMMITMENTS - or firm allocations to project participants

Plus
B. NOT YET COMMITTED - including any available contingency funds

1. Commitments in process but not yet confirmed

- Such as Change Orders in process, if work is under contract
2. Expected Commitments but not yet activated
3. Allowance for any unidentified work needed to complete
4. Allowance for fair settlement value of possible or known claims

Equals TOTAL ESTIMATED COST
Compared to BUDGET
To give VARIANCE
KEY to control is CHANGE in VARIANCE since LAST REPORT

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