What is a commitment?

    A commitment is money the project has agreed to spend, such as an awarded contract or purchase order, that hasn't yet been incurred as cost.

    Tracking commitments gives early warning: once most of a budget is committed, the room to absorb surprises is small even if little has been spent.

    Actual cost plus open commitments plus the cost of uncommitted remaining work gives a forecast that doesn't rely only on performance indices.

    Related terms

    Actual cost

    AC

    The cost actually incurred for the work performed up to a given date.

    Estimate at completion

    EAC

    The forecast total cost of the work when it's finished, based on performance so far and what's left to do.

    Formula and example

    Variation

    A formal change to a contract's scope, price or time.

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