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7 - PROJECT COST MANAGEMENT

• Other units within the performing organization,
• Consultants,

• Stakeholders, including customers,
• Professional and technical associations, and

• Industry groups.

7.3.2.4 Historical relationships

Any historical relationships that result in parametric estimates or analogous estimates involve the use of project
characteristics (parameters) to develop mathematical models to predict total project costs. Such models may be
simple (e.g., residential home construction is based on a certain cost per square foot of space) or complex (e.g., one
model of software development costing uses multiple separate adjustment factors, each of which has numerous
points within it).

Both the cost and accuracy of analogous and parametric models can vary widely. They are most likely to be
reliable when:

• Historical information used to develop the model is accurate,
• Parameters used in the model are readily quantifiable, and

• Models are scalable, such that they work for large projects, small projects, and phases of a project.

7.3.2.5 Funding Limit reconciliation

The expenditure of funds should be reconciled with any funding limits on the commitment of funds for the project.
A variance between the funding limits and the planned expenditures will sometimes necessitate the rescheduling of
work to level out the rate of expenditures. This is accomplished by placing imposed date constraints for work into
the project schedule.

7.3.3 determine Budget: outputs

7.3.3.1 cost Baseline

The cost baseline is the approved version of the time-phased project budget, excluding any management reserves,
which can only be changed through formal change control procedures and is used as a basis for comparison to
actual results. It is developed as a summation of the approved budgets for the different schedule activities.

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