Contracts › Contract Pricing

Contract Pricing

Part of your organization bidding on a contract is to determine the total cost of the work and profit or fee for the contract. The contract costs are aggregated based on industry-standard pricing categories, and the aggregated values display on the contract pricing properties page.

The pricing categories include:

Total Contract Price

Defines the total contract price based on the following formula:

Total Contract Price = Total Contract Cost + Profit/Fee

Total Contract Cost

Defines the sum of all budgets for work on a contract. The sum includes the negotiated contract cost (NCC) plus the estimated cost of Authorized Unpriced Work (AUW). The total contract cost (TCC) is always equal to the contract budget base (CBB), except where there is an over target baseline (OTB).

Contract Budget Base

Performance Management Baseline + Management Reserve. Defines the contract budget base based on the following formula:

Contract Budget Base = Negotiated Contract Cost (NCC) + the Authorized Unpriced Work (AUW).

Performance Measurement Baseline

BAC (burdened except for FEE) + Undistributed Budget (UB). The Performance Measurement Baseline (PMB) is a time-phased budget plan against which project performance is measured. The budgets that are assigned to scheduled control accounts and the applicable UB form the performance measurement baseline.

For future effort that is not planned to the control-account level, the PMB also includes budgets assigned to higher-level CWBS elements. The PMB is the sum of all the distributed budgets plus and UB. The sum does not include any management or contingency reserves, isolated above the PMB.

Distributed Budgets

BAC for all CWBS elements. Distributed budget is a time-phased budget distributed to control accounts (CA). Or to a higher level WBS element, or functional elements (also called summary level account budgets).

Undistributed Budgets

Defines the broadly defined activities not distributed to control accounts. Enter the value manually.

Management Reserve (MR)

Defines the amount held separately from your contract budget base for changes in the work going to be executed on the contract. Throughout the course of a contract, as scope changes occur, money is taken out of the Management Reserve (MR) and distributed to the control accounts. Each time money is taken out of the MR, a log entry is added. The log is provided to track the money earned and spent in the management of the contract. Enter the value manually.