Budget at Completion (BAC) is a crucial project management measurement that determines the total cost of authorized work to complete a project. It is set at the beginning of the project and remains fixed unless the project scope significantly changes. The BAC serves as the project’s cost baseline, and it is used to compare against Earned Value (EV) to assess work performance.

To calculate BAC, project managers must first identify individual costs that make up the overall BAC estimate. This can be done through techniques like analogous estimating, parametric estimating, or expert analysis and judgment. Analogous estimating is based on mapping the major deliverables of the current project to those of a comparable past project. Using actual data from the comparable project, a project manager can then determine the corresponding cost estimates to produce the BAC for the current project. Parametric estimating is a more sophisticated technique that involves breaking down each project deliverable into components and assigning them specific cost estimates. These individual costs are then summed to derive the overall BAC estimate. Expert analysis and judgment is a more qualitative approach that requires consulting with subject matter experts to provide ideas and the probability of occurrence for each component.

Regardless of the method, effective budget management for a project is essential to avoid overruns and deliver on time and within budget. Using a contingency fund to account for unexpected costs and scope changes is also recommended. This will help mitigate waste, minimize the impact of potential budget cuts, and allow a project team to distribute resources more evenly throughout the project.