ABSTRACT
The lifecycle of project management is defined by the triple constraint: cost, schedule, and scope. This chapter helps Project Managers (PjM) manage the cost dilemma. PjMs need to be aware of several key factors such as contract type, ceiling and funding amount, statement of work (SOW), the period of performance, Contract Data Requirements Lists (CDRLs), and governing documents. Awards are received under different contract types depending on the amount of risk the customer is willing to absorb and how much risk the customer prefers to pass on to the contractor. The Level of Effort (LOE) contract is based on delivering a certain number of labor hours. Management reserve is budget held back from the project by the PjM in order to cover any unforeseen events that may be realized for in scope work and to help mitigate risks. Project closeout involves sending a final invoice, which may be delayed depending on the final acceptance of indirect cost rates.
