34 Items in a Cost Management Plan

Keeping project costs under control can feel like swimming against the current sometimes.

To prevent you from going up the creek without a paddle, a Cost Management Plan is the guiding document which allows you to take fast, decisive action when issues arise and the sharks are circling.

The Project Cost Management Plan is the component of the overall Project Management Plan which deals with project costs.  It provides details of how the project costs will be estimated, tracked, and controlled.

The project manager’s ability to influence project costs starts high and decreases as the project goes on.  Hence the planning stage is the right time to consider how project issues will be dealt with.

1. Labor rates
2. Material costs
3. Tools and Equipment costs
4. Subcontractor budgets
5. Services that must be procured
6. Strategies for contingencies
7. Strategies to prevent unnecessary cost escalation
8. Whether equipment will be financed:  Purchased, Leased, or Rented
9. Insurance requirements
10. Bonding
11. Financing and interest requirements
12. The person responsible for estimating
13. The person responsible for reviewing and/or approving estimates
14. Milestones at which the estimates will be revisited and re-approved
15. Source of the estimates. For example, published commercial information
16. The person who will approve the final project cost
17. The processes and procedures that will be used to produce the estimates
18. Any special circumstances under which the estimates will be revised
19. Processes and procedures to revise estimates
20. Communication with funding sources
21. Amount of contingency to include in each task
22. Quantity of Management Reserve
23. Project methodology, assumptions, and/or background information
24. How the project costs will be measured
25. Who will measure the costs
26. How often they will be measured and/or input into software
27. Person who will approve changes to project costs
28. How purchases will be made
29. Measurement of project performance
30. Production of status reports
31. Communication of performance reports
32. Which Earned Value variables will be reported
33. Who the earned value analysis will be reported to
34. Typical corrective actions based on earned value variables

Use this checklist to make sure you have a good handle on project costs, and don’t get stuck up the creek without a paddle too.

Related posts:

Project Cost Management Project Cost Management According to the PMBOK Project Cost Management According to the PMBOK Project Cost Estimation 101 Cost Performance Index – Earned Value Management 10 Parts of a Communications Management Plan