Copyright
Wideman Comparative Glossary of Common Project Management Terms v3.1 is copyright by R. Max Wideman, March 2002.

Please feel free to point to this document. For non-profit purposes you may copy this page, either whole or as whole definitions provided the above copyright notice is attached. For inclusion in for-profit works, please contact the author at max_wideman@sfu.ca

File: PMG_C11.htm generated 12/19/2002 9:25:34 AM
Generated by program: PMGlosGen v1.33 Program Author: Graham Wideman

Introduction | What's New in Version 5.5 | International Recognition
About the Author | Sources and References
Content Index |
Order Your V5.5 Copy Here!

Cost Element - to - Cost Plus Percentage of Cost Contract

***  prev

Term
Definition     Editor's Choice
 
Source
Cost Element
A unit of costs, typically in the form of direct labor, direct materials, other direct costs, and indirect or burdened costs. [D04625]

 QWF
A unit of costs to perform a task or to acquire an item. The cost estimated may be a single value or a range of values. [D00394]

 WST
Cost Engineering
An area of engineering principles where engineering judgment and experience are used in the application of scientific principles and techniques to problems of cost estimation, cost control, business planning and management science. [D04954]

 43
Technique for planning and controlling costs. [D00395]

 NPMT
Cost Envelope
The area bounded by a cost curve based on early start dates of activities and a cost curve based on late start dates of activities. [D03822]

 PNG
Cost Estimate
The expected costs to perform a task or to acquire an item. Cost estimates may be a single value or a range of values. [D04626]

 QWF
Cost Estimate Classification System
A five-level cost estimate system based on the amount of project information available developed by the American Association of Cost Engineers, Class 5 is the least definitive. [D04955]

 48
Cost Estimating
The process of assembling and predicting the costs of a project. It includes economic evaluation, project investment cost and the prediction of future trends and costs. [D00396]

 PMK87
The process of predicting the costs of a project. [D00397]

 WST
Cost Estimating Relationship
A technique used to estimate a particular cost or price by using an established relationship with an independent variable. See also Parametric Estimating. [D03481]

 GAT
Cost Forecast
An estimate of an expected future expenditure. [D02582]

 RMW
Cost Forecasting
The activity of predicting future trends and costs within the project duration. These activities are normally marketing oriented. However, such items as sales volume, price and operating cost can affect the project profitability analysis. Items that affect the cost management functions are: predicted time/cost, salvage value, etc. [D00398]

 PMK87
Cost Growth
The net change of an estimated or actual amount over a base figure previously established. [D02297]

 DSMC
Cost Incurred
Costs identified through the use of the accrued method of accounting or costs actually paid. Costs include direct labor, direct materials, and all allowable indirect costs. [D00399]

 WST
Cost Index
An offeror listing of all cost or pricing data and information accompanying or identified in a proposal for purposes of establishing a cost reference baseline for subsequent adjustments. [D03483]

 RMW
Cost Indices
Tables of unit costs compiled on a regular basis that indicate cost trends, especially for estimating purposes. [D02583]

 RMW
Cost Input
The cost, except general and administrative (G&A) expenses, which for contract costing purposes is allocable to the production of goods and services during a cost accounting period. [D03482]

 GAT
Cost Management
The effective financial control of the project through evaluating, estimating, budgeting, monitoring, analyzing, forecasting and reporting the cost information. [D00402]

 WST
The function required to maintain effective financial control of the project throughout its life cycle. [D00400]

 FWH
The function required to maintain effective financial control of the project through the processes of evaluating, estimating, budgeting, monitoring, analyzing, forecasting, and reporting the cost information. [D00401]

 PMK87
Cost Model
A tabulated presentation of logical element cost estimates summed to a total estimate for the whole. [D02298]

 RMW
Subdivides the total construction cost into costs for functional facility elements and systems, for example: Building Exterior Envelope. This leads to fewer sub-divisions than the UCI trade subdivisions, since several trades make up the typical enclosure. Useful in value management since it enables complete systems of various types to be compared in linear, square or cubic units of measure. [D00403]

 CCCP
Cost of Money
A form of indirect cost incurred by investing capital in facilities employed on government contracts. [D00404]

 WST
Cost of Quality
Those costs associated with:
  1. quality management activities (prevention and appraisal); and
  2. correcting deviations.
It does not include the normal costs of performing the work.
Editor's Note: But it may include the cost of catch-up following rework. [D00408]

 02 10-2
QMPP
The cost of quality planning, control, assurance and rework. [D00405]

 WST
The costs incurred to ensure quality. The cost of quality includes quality planning, quality control, quality assurance, and rework. [D00406]

 PMK96
The total price of all efforts to achieve product or service quality. This includes all work to build a product or service that conforms to the requirements as well as all work that results from non-conformance to the requirements. The cost of quality is divided into internal, i.e. those costs associated with building the product or service, and external, i.e. the costs associated with the product or service after it leaves the originating activity or company. [D00407]

 PMK87
QMPP
Cost Overrun
The amount by which actual costs exceed the baseline or approved costs. [D02299]

 RMW
The amount by which a contractor exceeds or expects to exceed the estimated costs, and/or the final limitations (the ceiling) of a contract. [D00409]

 WST
Cost Performance Baseline
See Cost Baseline. [D04362]

  
Cost Performance Index ("CPI")
The cost efficiency factor representing the relationship between the actual costs expended and the value of the physical work performed. [D04627]

 QWF
Ratio of work accomplished versus work cost incurred for a specified time period. The CPI is an efficiency rating for work accomplished for resources expended. [D00410]

 WST
The ratio of budgeted costs to actual costs (BCWP/ACWP). CPI is often used to predict the magnitude of a possible cost overrun by dividing it into the original cost estimate (original cost estimate/CPI = projected cost at completion). See also earned value. [D00411]

 PMK96
Cost Performance Indicator ("CPI")
The ratio of BCWP to ACWP. A positive value (i.e. greater than 1) indicates that costs are running under budget. A negative value (i.e. less than 1) indicates that costs are running over budget i.e. CPI = BCWP / ACWP [D02245]

 PMST
Cost Performance Measurement Baseline
The formulation of budget costs, measurable goals, (particularly time and quantities). for the purposes of comparisons, analysis and forecasting future costs. [D00412]

 PMK87
Cost Performance Ratio ("CPR")
See Cost Performance Indicator. [D02246]

  
Cost Performance Report ("CPR")
A monthly cost report generated by the performing contractor to reflect cost and schedule status information for management. [D00413]

 WST
Cost Plan
Sub divides the total project budget into meaningful cost classes each with its own related outline specification or scope. It provides the first principal frame of reference required for a valid cost control system. [D00414]

 CCCP
A budget which shows the amounts and expected dates of incurring costs on the project or on a contract. [D04417]

 APM
Cost Plus
A form of contract for construction work in which the construction contractor is reimbursed for the costs it incurs in performing the work plus a lump sum or percentage fee; hence, cost-plus. This type of contract is favored where the scope of the work is indeterminate or highly uncertain and the kinds of labor, material and equipment needed are also uncertain. Under this arrangement complete records of all time and materials spent by the contractor on the work must be maintained. [D00433]

 CCCP
See Cost Plus Fixed Fee and Cost Plus Incentive Fee Contracts. [D02584]

  
Cost Plus Fixed Fee Contract ("CPFF")
A type of contract where the buyer reimburses the seller for the seller's allowable costs plus a fixed fee. [D00417]

 WST
A form of contractual arrangement in which the customer agrees to reimburse the contractor's actual costs, regardless of amount, and in addition pay a negotiated fee independent of the amount of the actual costs. [D00415]

 SPM 304-9
Provides reimbursement of allowable cost plus a fixed fee which is paid proportionately as the contract progresses. [D00416]

 PMK87
A cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract. This contract type permits contracting for efforts that might otherwise present too great a risk to contractors, but it provides the contractor only a minimum incentive to control costs. [D03486]

 GAT
Cost Plus Incentive Fee Contract ("CPIFC")
A type of Contract where the buyer reimburses the seller for the seller's allowable costs and the seller earns a profit if defined criteria are met. [D00420]

 WST
A form of contractual arrangement similar to CPFF except that the fee is not preset or fixed but rather depends on some specified result, such as timely delivery. [D00418]

 SPM 304-9
Provides the supplier for cost of delivered performance, plus a predetermined fee as a bonus for superior performance. [D00419]

 PMK87
A cost-reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. This contract type specifies a target cost, a target fee, minimum and maximum fees, and a fee adjustment formula. After contract performance, the fee payable to the contractor is determined in accordance with the formula. [D03489]

 GAT
Cost Plus Percentage of Cost Contract ("CPPC")
Provides reimbursement of allowable cost of services performed plus an agreed upon percentage of the estimated cost as profit. [D00421]

 PMK87
Definitions for page C11: 50


***  prev
next  ***

Home | Issacons | PM Glossary | Papers & Books | Max's Musings
Guest Articles | Contact Info | Top of Page