U.S. flag

An official website of the United States government

Dot gov

Official websites use .gov
A .gov website belongs to an official government organization in the United States.

Https

Secure .gov websites use HTTPS
A lock () or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Breadcrumb

  1. Home
  2. Cost Performance Index (CPI)

Cost Performance Index (CPI)

APMT 021
Alternate Definition

The Cost Performance Index (CPI) is computed by dividing the Budgeted Cost for Work Performed (BCWP) by the corresponding Actual Cost of Work Performed (ACWP). This metric is an EVM performance factor representing cost efficiency.

General Information

The Cost Performance Index (CPI) is an Earned Value Management (EVM) performance factor metric primarily used as an element of the Earned Value Management (EVM) Estimate at Completion (EAC) equation. It measures the cost efficiency, by dividing the Budgeted Cost for Work Performed (BCWP) by the Actual Cost of Work Performed (ACWP).

 

 

 

CPIs greater than 1.0 are favorable which means the contractor is performing with an efficiecy of great than 100%; CPIs less than 1.0 are unfavorable which means the contractor is performing at an efficiency of less thatn 100%. There should normally never be negative CPIs. Negative CPIs do on occasion occur when accounting adjustments are made. If observed, they should be further investigated. (Note: Unlike SPI, CPI does not trend toward 1.0 as the work is completed.)

 

Given a CPI of 1.1, the plain language definition is: for every dollar spent, a dollar and ten cents worth of work was earned or completed (or contractor is performing at 110% efficiency with respect to cost); likewise a CPI of 0.95 would be: for every dollar spent only 95 cents worth of work was earned or completed (or contractor is performing at 95% efficiency with respect to cost).

Courses