The Budget at Completion (BAC) represents the sum of all planned expenditures for a project. It’s the total budget approved for the project and serves as the baseline against which project performance is measured. For example, if a project is estimated to require $100,000 in labor, $50,000 in materials, and $25,000 in other costs, the BAC would be $175,000.
Establishing a clear and accurate BAC is foundational for effective project cost management. This figure provides a crucial benchmark for evaluating project progress, forecasting potential overruns or underruns, and making informed decisions throughout the project lifecycle. A well-defined budget allows stakeholders to understand the total financial commitment required and facilitates transparent communication regarding resource allocation. Historically, cost overruns have plagued projects across various industries, emphasizing the critical need for accurate budgeting and diligent cost control, which begins with a reliable BAC.
