Cost Control & Overrun Prevention
An overrun is rarely a surprise to the people closest to the work. It is a trend that was visible for months and was not acted on. Everything on this page exists to shorten the distance between the moment a trend becomes visible and the moment someone with authority responds to it.
The Customer Hears It From Us
Notification of an emerging cost problem is not a negotiating decision. Where the contract establishes a notification duty, that notice is issued within the required window. Where it does not, the institution notifies anyway at the point the trend is understood. A partner who learns of an overrun from an invoice has been failed twice.
Performance Measurement Baseline
At award the estimate becomes a time-phased baseline: scope, budget, and schedule joined at the cost account. Performance is measured against that baseline and nothing else, so a slipping program cannot quietly re-benchmark itself against its own latest forecast.
- Budgets time-phased to the work, not spread evenly across the period of performance
- Cost account managers named and accountable for scope, budget, and schedule together
- Work authorization issued before charging begins on any account
- Undistributed budget and management reserve tracked separately and visibly
- Baseline reconciled to the contract value and to the funding actually obligated
Change Control
Baselines move only through documented change. Every change carries a cause, a scope statement, a cost and schedule impact, and an authorized approval, so the record always shows why today's number differs from the award number.
- Configuration and change control board reviewing every baseline change request
- Distinction maintained between customer-directed change, internal replanning, and rate or escalation effects
- Retroactive change prohibited except where a documented error correction requires it
- Constructive-change and out-of-scope work identified and raised to the contracting officer, never absorbed silently
- Change log retained as part of the contract record and available for audit
Earned Value and Variance Analysis
Cost and schedule are measured together. Budgeted cost of work scheduled, budgeted cost of work performed, and actual cost of work performed produce cost and schedule performance indices that expose a trend long before the funding runs short.
- Objective earned value techniques for discrete work; level of effort reserved for genuinely level work
- Cost and schedule variance computed at the cost account and rolled up by WBS element
- Defined variance thresholds that mandate written analysis rather than discretionary comment
- Variance analysis reports naming root cause, impact, corrective action, owner, and date
- Practices structured against EIA-748 guidelines; no EVMS validation is claimed
Estimate at Completion
The estimate at completion is re-forecast on a fixed cadence using actual performance rather than held at the original number for institutional comfort. A forecast that ignores a persistent efficiency trend is not a forecast.
- Comprehensive EAC revised at a defined interval and whenever a threshold variance occurs
- Independent EAC calculated from performance indices as a cross-check on the bottom-up EAC
- Divergence between bottom-up and index-based EAC explained in writing
- Estimate to complete reconciled against remaining funding and remaining period of performance
- Cost Review Board endorsement of any EAC revision reported to the customer
Funding Runway and Statutory Notification
Funding is monitored as a distinct quantity from contract value. Cost-reimbursement work carries statutory notification duties, and those notices are issued on time as a matter of policy rather than negotiated internally.
- Burn rate tracked against obligated funding with projected exhaustion date maintained continuously
- Limitation of Cost and Limitation of Funds notices under FAR 52.232-20 and 52.232-22 issued within the required window
- Incremental funding tracked by increment with the associated scope identified
- Invoicing reconciled to the accounting system and to the funded ceiling before submission
- Work not continued beyond funded value in expectation of later coverage
Corrective Action and Recovery
A variance is a management event with a defined response, not a reporting line item. The response starts with root cause and ends with verification that the recovery actually held.
- Root cause analysis distinguishing estimating error, execution inefficiency, scope growth, and external cause
- Written recovery plan with named owners, dated milestones, and the expected performance recovery
- Customer notification within the contract's framework at the point the trend is understood, not after
- Recovery effectiveness verified against subsequent performance data before the item is closed
- Lessons fed back into the estimating data set so the same error is not priced into the next bid
Reporting and Executive Review
Cost performance is reviewed at a fixed cadence by people with the authority to act, and reported outward in the format the contract requires.
- Monthly program cost review with the chief executive and the finance function
- Contract-required reporting formats produced from the accounting system of record
- Board oversight committee reporting on significant variances and their disposition
- Consistency enforced between internal cost reporting and what the customer is told
- Cost performance considered in program leadership assessment
Where This Connects
Cost control operates inside program execution and is escalated through enterprise risk management. The accounting records that make measurement possible are described in accounting system and internal controls. Subcontracted cost is controlled through the procurement and supply chain program.
Alignment Disclosure
Monarch Space Systems describes its cost estimating, accounting, and cost control practices as aligned with the cited federal regulations, agency guidance, and consensus standards. Alignment is not a determination. The institution does not claim an approved or audited accounting system, an approved estimating or purchasing system, an EVMS validation, a Cost Accounting Standards coverage determination, negotiated forward pricing or final indirect rates, or a completed incurred cost audit. Rate values, pricing data, and cost performance figures are not published; they are furnished to a contracting officer or auditor through the channel the acquisition requires.
Cost policy documentation, procedures, and control descriptions are available to customers and prospective teammates through the confidential engagement pathway or by request through institutional contact.