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.


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.


  1. Home
  2. Over Target Baseline (OTB)

Over Target Baseline (OTB)

APMT 050


Alternate Definition

An Over Target Baseline (OTB) is a new baseline for management when the original objectives cannot be met andnew goals are needed for management purposes. An overrun to the Contract Budget Base (CBB) which is formally incorporated into the Performance Measurement Baseline for management purposes. The difference between the Total Allocated Budget (TAB) and Contract Budget Base (CBB) is the amount of the overrun incorporated into the budget.
Source: DoD Earned Value Management System Interpretation Guide (EVMSIG)

Alternate Definition Source

DoD Earned Value Management System Interpretation Guide (EVMSIG)

General Information

An Over Target Baseline (OTB) is a Total Allocated Budget (TAB) that was formally reprogrammed to include additional performance management budget and therefore exceeds the contract target cost. It is determined by adding the Contract Budget Base (CBB) with any additional performance management budgets. Establishment of an OTB entails adding additional budget to either future work or in-process work. Once an OTB has been established, the TAB will equal the OTB. The EVMS guidelines define an OTB as “a recovery plan, a new baseline for management when the original objectives cannot be met and new goals are needed for management purposes.”


An over target baseline is best explained by understanding its relationship with the Total Allocated Budget (TAB). TheTAB is one of the most confusing concepts of earned value because its definition changes, as the contract evolves. In all cases, the TAB includes the budgets for all contractually authorized work. The TAB does not include profit or fee. Simply put the TAB represents the estimated budget for all work associated with a contract.


The contract price has two elements (see Figure 1). The first element is profit orfee; fixed price contracts include profit, cost reimbursement contracts include fee. The second element is the total allocated budget which represents the contract cost. It’s important to understand the difference between cost and price. Price includes profit or fee while cost does not. Earned Value Management (EVM) is always at cost. At the beginning of the contract, the TAB is equal to the Negotiated Contract Cost (NCC) and the Contract Budget Baseline (CBB).


Figure 1


For most contract changes, the need for the change is often time critical. When this occurs, the contracting officer may issue an undefinitized change order or Authorized Unpriced Work (AUW). This allows the contractor to start the work while a proposal and contract modification are being negotiated. At this point in time the TAB is equal to the CBB which is now equal to the NCC plus the AUW. Once the modification is negotiated, the NCC, CBB and TAB will all once again be equal. On some contracts, cost growth or cost overruns can reach a point where the negotiated contract cost becomes meaningless. At this point in time, an OTB may be established. The TAB is now equal to the OTB. The establishment of an OTB does not change the NCC or CBB.