# Using the Same Rate for BCWS and BCWP

by Humphreys & Associates | November 6, 2014 3:37 pm There is often an EVMS project managers debate regarding which rates to use for common budget costing EVMS data elements. For Actual Cost of Work Performed (ACWP), it is fairly obvious as the most recently approved actual rates are applied. A planning rate is generally used for BCWS and BCWP, but many in the EVM project management industry use incorrect rate application for the BCWP calculation. In some cases EVM contractors use a weighted average rate; the percent complete in hours multiplied by the dollarized BAC to derive the BCWP in dollars. This method is noncompliant with the EIA-748 Guideline 22 which states that if work is planned on a measured basis, then the BCWP must be calculated on a measured basis using the same rates and values. In other words, the rate and methods used to calculate BCWS and BCWP must be the same. As shown in Example #1, it can be seen that work planned in hours (BCWS) was performed as scheduled (BCWP) each month. Each hour was planned at a rate of \$100/hour until the end of the calendar year when the rate increased to \$105/hour. In this example, the rates used to calculate BCWS and BCWP are the same.

Example #2 below illustrates a very common scenario. In this example work that was planned in November and December was not completed until the next year. In January, the rate increased from \$100 to \$105. What should the BCWP in dollars be for both January and February?

For both January and February, the original 10 hours planned was earned at \$105/hour equaling \$1,050. The work that was planned in November and December, but completed late in January and February, was earned at its planned rate of \$100/hour resulting in \$1,000 of BCWP.  The sum (\$1,050 + \$1,000) equals the BCWP of \$2,050 in each month. See the Example #3 graphic below: