How do you leverage a cost performance index over 1 to negotiate better contracts and resources?

2 Adjust your budget and forecast accordingly

The second step is to update your budget and forecast based on your CPI over 1. You may need to revise your estimates, reallocate your funds, or request a change order to reflect the actual cost performance of your project. You may also need to adjust your contingency reserve, your management reserve, or your profit margin to account for the uncertainties and opportunities in your project. By adjusting your budget and forecast accordingly, you can ensure that you are not leaving money on the table, overcommitting yourself, or compromising your quality.

3 Negotiate better contracts and resources

The third step is to leverage your CPI over 1 to negotiate better contracts and resources for your project. You can use your CPI over 1 as a bargaining chip to secure more favorable terms, conditions, and prices from your suppliers, subcontractors, and vendors. You can also use your CPI over 1 as a competitive edge to attract more clients, sponsors, and investors for your future projects. You can showcase your cost efficiency, your value proposition, and your track record to demonstrate your credibility and reliability as a cost engineer.

4 Share your knowledge and best practices

The fourth step is to share your knowledge and best practices with your peers, colleagues, and industry partners. You can use your CPI over 1 as a learning opportunity to disseminate your insights, tips, and recommendations on how to achieve and maintain a high cost performance. You can also use your CPI over 1 as a recognition opportunity to acknowledge and reward your team members, stakeholders, and contributors for their efforts and contributions. By sharing your knowledge and best practices, you can foster a culture of cost excellence, collaboration, and innovation in your organization and sector.

5 Monitor and control your cost performance

The fifth step is to monitor and control your cost performance throughout the project lifecycle. You can use your CPI over 1 as a baseline to measure and compare your actual and planned costs, identify and resolve any variances, and implement any corrective or preventive actions. You can also use your CPI over 1 as a target to set and monitor your cost objectives, milestones, and deliverables, and ensure that you are meeting or exceeding your expectations. By monitoring and controlling your cost performance, you can avoid any surprises, pitfalls, or disputes that may jeopardize your project success.

6 Continuously improve your cost engineering skills

The sixth step is to continuously improve your cost engineering skills and competencies. You can use your CPI over 1 as a feedback to evaluate and improve your cost estimation, analysis, management, and control techniques and tools. You can also use your CPI over 1 as a motivation to pursue further education, training, certification, or mentoring in cost engineering. By continuously improving your cost engineering skills, you can enhance your professional development, career advancement, and marketability as a cost engineer.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?