Budgeted Cost of Work Scheduled (BCWS)

BCWS is the baseline against which actual progress is measured in Earned Value Management. It answers the question: according to the approved plan, how much work should have been completed and at what budget value by today's date?

What is Budgeted Cost of Work Scheduled (BCWS)?

BCWS, formally called Planned Value (PV) in PMI terminology, is the cumulative budget allocated to work that was scheduled to be completed through the status date. It is derived from the Work Breakdown Structure and the Integrated Master Schedule: for each control account, the time-phased budget is spread across the schedule according to when the work was planned to occur.

BCWS is the denominator in the Schedule Performance Index (SPI = BCWP / BCWS). When BCWP equals BCWS, the program is on schedule from a budget perspective. When BCWP is less than BCWS, the program is behind schedule. The Schedule Variance (SV) is simply BCWP minus BCWS.

At contract award, the total BCWS at program completion equals the Performance Measurement Baseline (PMB), which represents the contractor's entire budget for the authorized scope. The PMB excludes management reserve, which is held by the program manager for unplanned but in-scope work.

Why BCWS matters for government contractors

BCWS is the plan. Without a credible, time-phased BCWS, EVM cannot produce meaningful performance metrics. A BCWS that front-loads budget to make early SPI look good (hockey-sticking), or one that does not reflect the actual sequence of work in the IMS, will mislead both the contractor and the government about true schedule health.

Example

A contractor's 12-month software development contract has a $6M budget. By month 6, according to the baseline schedule, $3M of work should be complete. BCWS at month 6 is $3M. If only $2.4M of work has actually been completed (BCWP = $2.4M), the Schedule Variance is negative $600K and SPI is 0.80, indicating the program is 20 percent behind schedule.

Frequently Asked Questions

How is BCWS time-phased?

BCWS is distributed across time periods using the planned work schedule. For labor-intensive tasks, it is often spread proportionally to planned labor hours. For discrete deliverables, the budget may be assigned to the period when the deliverable is due.

Does BCWS change during contract performance?

The baseline BCWS should only change through formal baseline change requests approved by the government. Unauthorized changes to the time-phased budget (replanning without approval) is an EVM reporting violation.

What is the relationship between BCWS and the contract budget base?

The Performance Measurement Baseline (the sum of all BCWS through contract completion) plus management reserve equals the contract budget base. The contract budget base should equal the negotiated contract value for cost-type contracts.

Can BCWS go down over time?

No. BCWS is cumulative and only increases over time as new periods are added. A decrease in monthly planned value is normal (the rate of planned spending changes), but cumulative BCWS at any point in the contract is always greater than or equal to the prior period's cumulative BCWS.

Is BCWS the same as the budget?

Not exactly. BCWS is the time-phased portion of the budget scheduled through a specific date. The total budget (Budget at Completion, or BAC) equals BCWS at program completion. At any interim date, BCWS is the fraction of BAC that should have been spent.