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EVM CPI

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Farjad Hasan Project Controls & Risk Manager| Bin Quraya Company Ltd. Saudi Arabia
When you are a contractor so what you can provide to client when they ask for CPI since you cannot give AC to them?
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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Farjad -

You could distinguish your actual costs from the costs to them as a client. Use the actual amount (based on work completed) you have accrued to date as your AC and the budgeted amount for the work completed as your EV. This only really applies to non-firm fixed price contracts as with those, this type of AC calculation would always equal your EV, but since they are asking for CPI (and not SPI), my assumption is that they are concerned about a cost overrun which wouldn't be expected in a firm fixed price contract.

Kiron
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1 reply by Farjad Hasan
Apr 10, 2021 8:08 AM
Farjad Hasan
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Kiron. Our EV directly comes out from overall progress % so the EV could be our client's AC but I am not sure what will be their EV. If its the they will always get 1.0 CPI.
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Rami Kaibni
Community Champion
Senior Projects Manager | Field & Marten Associates New Westminster, British Columbia, Canada
Farjad

You should provide to the client the CTC = Cost to Complete which is based on your EVM parameters but at the same time it’s based on own intelligence based on how the project is going.

For example, your ETC could be $X based on EVM calculations but you know you might finish for less than that, so you CTC could be $Y which is based on actual on-site intelligence.

RK
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Sergio Luis Conte Helping to create solutions for everyone| Worldwide based Organizations Buenos Aires, Argentina
Question here is: CPI from the point of view of who? The client could create their own CPI based on their own indicators and you could create your own CPI based on your indicators. But in this schema you have not to publish your own CPI. What you must do is to provide to the customer the needed information for the creation of the client´s CPI. And that will not include your own costs. They have the costs you originally agree when the client contract your companies' service.
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Farjad Hasan Project Controls & Risk Manager| Bin Quraya Company Ltd. Saudi Arabia
Apr 08, 2021 8:53 AM
Replying to Kiron Bondale
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Farjad -

You could distinguish your actual costs from the costs to them as a client. Use the actual amount (based on work completed) you have accrued to date as your AC and the budgeted amount for the work completed as your EV. This only really applies to non-firm fixed price contracts as with those, this type of AC calculation would always equal your EV, but since they are asking for CPI (and not SPI), my assumption is that they are concerned about a cost overrun which wouldn't be expected in a firm fixed price contract.

Kiron
Kiron. Our EV directly comes out from overall progress % so the EV could be our client's AC but I am not sure what will be their EV. If its the they will always get 1.0 CPI.

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