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Budget at Completion (BAC)

Budget at Completion (BAC) is the total authorized budget for a project, representing the sum of all planned values. Learn how BAC is established, how it differs from EAC, and its role in earned value calculations.
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By ClickUp Editorial Team·Staff Writers at ClickUp

How BAC Works

Budget at Completion is the total planned budget for the project: the sum of all work packages in the work breakdown structure, each valued at their budgeted cost. It represents the performance measurement baseline against which all earned value metrics are calculated. BAC is set during planning, approved by the sponsor, and does not change unless a formal budget revision is processed through change control.

BAC is the anchor point of the entire EVM system. Planned Value at any point in time is a portion of BAC. Earned Value accumulates toward BAC as work is completed. CPI, SPI, EAC, and TCPI all reference BAC in their calculations. If BAC is wrong (the budget was unrealistic from the start), every metric derived from it is misleading.

How BAC Is Established

BAC is built bottom up from the WBS. Each work package is estimated (using analogous, parametric, or three point techniques), the estimates are summed to produce the total project budget, and contingency reserves are added based on the risk analysis. The sum of work package budgets plus contingency reserves equals the BAC. Management reserves (for unknown risks) sit above BAC and are not included in the performance measurement baseline.

BAC = Sum of all work package budgets + contingency reserves. The distinction between contingency reserves (within BAC, controlled by the PM) and management reserves (outside BAC, controlled by the sponsor) is critical for accurate EVM measurement.

BAC vs EAC

BAC is the original approved budget. EAC is the forecasted final cost based on actual performance. When a project is on track (CPI near 1.0), EAC and BAC are close. When performance deteriorates, EAC rises above BAC, signaling a projected overrun. The difference (EAC minus BAC) is the Variance at Completion (VAC), the projected budget overrun or underrun in dollar terms.

When BAC Changes

BAC only changes through formal change control when approved scope changes add or remove work from the project. If the scope increases and the sponsor approves additional budget, BAC increases. If scope is reduced, BAC decreases. BAC does not change because the project is over budget. Cost overruns are reflected in EAC, not BAC. Changing BAC to match current spending would destroy the baseline comparison that makes EVM valuable.

Commonly Confused With

TermKey Difference
EAC (Estimate at Completion) BAC is the original approved budget set during planning. EAC is the forecasted final cost based on actual performance. BAC is fixed unless scope changes. EAC changes as performance data accumulates.
Total Project Cost BAC includes work package budgets and contingency reserves but excludes management reserves. Total project funding may include management reserves above BAC. The distinction matters for EVM calculations.
Planned Value (PV) PV is the portion of BAC allocated to work scheduled through a given date. BAC is the total. PV is a time phased subset. At project end, cumulative PV equals BAC.
Define BAC with Goals, track budget consumption with Custom Fields, and compare BAC to EAC on Dashboard charts.
Set Budget Targets in ClickUp

Common Questions About Budget at Completion (BAC)

What is Budget at Completion?
Budget at Completion is the total authorized budget for a project, calculated as the sum of all work package budgets plus contingency reserves. It serves as the fixed baseline against which all earned value performance metrics (CPI, SPI, EAC, TCPI) are calculated.
Does BAC include management reserves?
No. BAC includes work package budgets and contingency reserves (controlled by the PM). Management reserves (for unknown risks, controlled by the sponsor) sit above BAC and are not part of the performance measurement baseline. This distinction is important for accurate EVM calculations.
When should BAC be changed?
BAC changes only through formal change control when approved scope changes add or remove work from the project. BAC does not change because the project is over budget. Cost overruns are reflected in EAC, not BAC. Changing BAC to match spending would destroy the baseline that makes EVM performance measurement meaningful.