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TOPIC: Cost Gain from execution

Cost Gain from execution 2 months 2 weeks ago #22741

  • Gbemi
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If a project makes a cost gain from execution, where does the gain go to?

Cost Gain from execution 2 months 2 weeks ago #22795

  • Devin
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The PMBOK (pg. 265), "...when opportunities are captured and resulting in cost savings, funds may be added to the contingency amount, or taken from the project as margin/profit."

Again, the PMBOK is not prescriptive (telling you what to do), but rather descriptive (what could happen). The other option is to simply run a budget surplus and depending upon how large the delta is this might be a fine way to go (if the savings is 5% or so). If it's a small project and the delta is large as a percentage of the project, you would probably add it as a catch-all contingency because running 40% under-budget is just not a meaningful way to run a project IMHO.

Hope this helps.
Last edit: by Devin.
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