BCWS (Budgeted Cost Of Work Scheduled)

What is BCWS (Budgeted Cost Of Work Scheduled)?

Budgeted Cost of Work Scheduled (BCWS), often referred to as Planned Value (PV), represents the approved budget allocated to complete a specific segment of work according to the project schedule. It serves as the baseline for measuring project performance against the initial plan, particularly within the context of Earned Value Management (EVM). Understanding BCWS is crucial for government contractors because it provides a benchmark for evaluating project progress and cost efficiency.

Definition

BCWS is a key component of Earned Value Management (EVM), a project management methodology used to measure project performance by integrating scope, schedule, and cost. BCWS quantifies the cost of work that should have been completed at a given point in time, based on the original project schedule and budget. It is calculated by summing the budgeted cost for each task or work package that was scheduled to be completed up to the reporting date. BCWS provides a baseline against which actual project performance can be compared, allowing government program managers and contractors to identify variances and take corrective action.

The use of BCWS is often driven by regulations and standards, particularly those related to EVM systems. Government contracts that require EVM (as outlined in standards like ANSI/EIA-748) will necessitate the tracking and reporting of BCWS. Accurate and consistent BCWS data is vital for providing transparency and accountability in government-funded projects.

Key Points

• Baseline for Performance Measurement: BCWS establishes the baseline against which actual project progress is measured, enabling comparison with Budgeted Cost of Work Performed (BCWP) and Actual Cost of Work Performed (ACWP).
• Schedule Adherence: It directly reflects the project's planned schedule, showing the monetary value of the work planned to be completed by a specific date.
• EVM Component: A core element of Earned Value Management, providing insight into potential schedule variances and cost overruns.
• Regulatory Compliance: Required for compliance with government regulations and standards relating to EVM on applicable contracts.

Practical Examples

1. Software Development Project: A software development company contracted by the Department of Defense has a task budgeted at $50,000 scheduled for completion by the end of week 4. The BCWS for week 4 is $50,000. If the task is not completed by week 4, the project is behind schedule.
2. Construction Project: A construction firm contracted to build a new facility has a budgeted cost of $100,000 for laying the foundation scheduled for month 2. The BCWS for month 2 is $100,000.
3. System Integration Project: A system integration company has a task to integrate a new module into an existing system. The approved budget for this activity is $25,000, scheduled to be completed by the end of the first quarter. The BCWS for the end of the first quarter is $25,000.