Project Manager case manual Study Series [13] -- Progress Payment and Earned Value Analysis

1. Background information about progress payment

A key factor in risk management is the ability to define a work instruction that is non-invasive. This definition must be implemented only for internal budgets, but also for subcontracting.

The choice of contract type should be based on the right factors. For both parties to the contract, the most important factor is how much cost risk the buyer wants to transfer to the seller, and how much risk the seller is willing to bear.

Correct management of progress payment starts before the subcontract is signed.

2. What is progress payment?

In the simplest way, the progress payment can be considered as a temporary interest-free loan from the buyer to the seller.

3. Concepts of Progress Payment and Earned Value (C/SCSC)

Value: the total cost of completing the work under the Summary item.