VAC Calculator
Calculate Variance at Completion (VAC) to forecast the final cost variance vs. the original budget.
VAC = BAC − EACInterpretation Guide
- VAC > 0Project forecast to finish under budget.
- VAC ≈ 0Forecast on budget.
- VAC < 0Forecast over budget — recovery needed.
Example
BAC $500k, EAC $600k → VAC = −$100k.
Real-world use cases
- Executive forecasting
- Funding requests
- Portfolio rebaseline decisions
Common mistakes
- Reporting VAC without disclosing EAC method
Professional tips
- Show VAC trend over reporting periods
Frequently asked questions
When is VAC negative?
Whenever EAC exceeds BAC — the project is forecast to overrun the original budget.
What this tool does
Calculate Variance at Completion (VAC) to forecast the final cost variance vs. the original budget.
It applies the standard formula VAC = BAC − EAC so planners, schedulers and PMOs get a defensible number they can put in front of a steering committee.
Looking for the underlying terminology? Open the PM Glossary or the PM Cheat Sheet for quick references on EVM, scheduling and risk terms.
When to use it
- Executive forecasting
- Funding requests
- Portfolio rebaseline decisions
Typical owners: project managers, planning engineers, project controls leads and PMO analysts running weekly or monthly performance reviews on EPC, infrastructure, IT and construction projects.
How to interpret the result
Treat the number as a signal, not a verdict. Read it together with the trend over the last 3–6 reporting periods, the critical-path status, and the risk register before you change the plan.
- Compare against the baseline, not against another project.
- Investigate the drivers behind the value before reporting it up.
- Pair it with at least one complementary KPI (cost, schedule, risk or quality).
Worked example
BAC $500k, EAC $600k → VAC = −$100k.
In a real project review, document the inputs, the resulting value, the interpretation, and the corrective action you committed to. That audit trail is what turns a calculator output into a controls decision.
In-depth guide: VAC Calculator
Variance at Completion (VAC) is the forecast equivalent of CV. Where CV tells you the cost gap today, VAC tells you the cost gap at the finish line: VAC = BAC − EAC. It is the single number that finance, treasury, and sponsors care most about because it drives funding decisions, contingency releases, and — on listed companies — disclosure of expected losses on long-term contracts.
Because VAC inherits its value from EAC, it inherits EAC's assumptions about future performance. A VAC that quotes EAC = BAC / CPI is implicitly saying 'future cost efficiency will match the past'. A VAC that quotes the schedule-and-cost-pressured EAC is saying 'both pressures will continue'. Always report VAC with the EAC method in the footnote.
On programmes with multiple funding tranches, VAC is also the trigger for tranche release. A project with VAC > +5% of BAC typically releases the next tranche on schedule; a project with VAC worse than −10% goes to the investment committee for a tranche-by-tranche reassessment.
When to use it (and when not to)
Use VAC for any forward-looking financial conversation: funding requests, contingency drawdowns, contract-claim quantification, IFRS 15 / ASC 606 disclosure of expected losses, and portfolio prioritisation decisions.
Avoid VAC in the first one or two reporting periods, when EAC itself is too volatile to be useful. Wait for CPI to stabilise (typically after 15–20% completion) before relying on VAC for decision-making.
Related KPIs to read alongside
Pair VAC with EAC (the source forecast), TCPI (the required future efficiency), CV (current dollar variance), and the management-reserve burn rate. For programmes with multiple funding tranches, also track VAC%-of-BAC as the standard cross-project disclosure metric.
Worked example — data-centre build
A hyperscale data-centre build has BAC = $120M over 30 months. At month 18, EV = $66M, AC = $76M. CPI = 0.868; EAC = BAC / CPI = $138.2M.
VAC = 120 − 138.2 = −$18.2M, or −15% of BAC. That is past the −10% threshold for material overrun. The CFO requires a formal recovery plan plus a board-approved increase to the funding envelope.
The PMO presents a recovery plan that combines $4M of scope deferral (two ancillary buildings moved to phase 2), $6M of contract renegotiation on the MEP package, and a $10M draw on the management reserve. The post-recovery EAC is $128M, giving VAC = −$8M — inside the 10% material threshold but still requiring disclosure to the audit committee.
Decision table
| Signal | What it means | Recommended action |
|---|---|---|
| VAC ≥ 0 | Forecast under budget. | Hold; verify EAC inputs; consider releasing part of contingency. |
| −5% of BAC ≤ VAC < 0 | Minor forecast overrun. | Cover from contingency; no external escalation. |
| −10% of BAC ≤ VAC < −5% | Material forecast overrun. | Formal recovery plan; brief steering committee. |
| VAC < −10% of BAC | Severe forecast overrun. | Escalate to sponsor and board; consider rebaseline or scope reduction. |
Common pitfalls in the field
- Reporting VAC without disclosing the EAC method. The same project can produce VAC = −$5M or −$15M depending on which EAC formula is used. Always label the method.
- Anchoring on BAC long after the project is genuinely off-track. Once VAC has been negative for three consecutive periods, the conversation should move from 'how do we hit BAC?' to 'what is the realistic new target?'.
- Excluding known future risks from VAC. The CPI-based VAC only captures past trends. Add a separate risk-adjusted VAC line that reflects scope additions, regulatory changes, and risk-register exposure not yet realised.
Learn more on PMMilestone
Continue exploring
Upgrade to Enterprise-Level Project Intelligence
Discover the Elite Project Controls System — a professional intelligence framework for modern project controls, forecasting, executive reporting, AI PM workflows and risk management.
- ★Executive-grade KPI frameworks
- ★AI-powered project workflows
- ★Forecasting & risk intelligence
- ★PMO-ready reporting templates