Your schedule says everything is fine. It is.

Start with the thing that almost everybody does wrong.

Nobody draws an S-curve

Ask a planner for the cost curve and watch what happens. Somebody opens a spreadsheet, takes the budget, applies a standard front-loaded distribution or a nice sigmoid, and produces a beautiful smooth line that goes from zero to $827,008.

It is fiction. It is the flat-spread sin from Week 4 wearing a better suit.

Planned value is not a shape you apply to a budget. It is a number that falls out of three things you already have.

The schedule says columns L2 and L3 finish in month six. The map from Week 4 says those two activities carry thirteen tonnes. The rate from Week 6 says a tonne of reinforcement, fixed in place, costs $1,123.40 of direct cost.

Thirteen times $1,123.40. $14,604.20. That is the planned value of month six, and there is not a single judgement anywhere in the calculation.

Do it ten times and the package is phased. Eighteen tonnes, thirty, twenty, twenty-five, eight, thirteen, twenty-two, twenty-one, twenty, twenty-three. Two hundred tonnes. $224,680. It closes, because it was never a guess.

That is what a baseline is: the schedule, priced. Nothing else.

What the curve says

Now go to the data date. Month six.

The plan said 114 tonnes by now. On site, 114 tonnes are in the ground. Planned value $128,067.60. Earned value $128,067.60.

SPI 1.00.

The reinforcement package is exactly, precisely, boringly on programme. If you were running this job from the schedule alone — and thousands of planners do — you would report green, you would go home, and you would sleep.

And the actual cost is $189,936. CPI 0.67.

Look at what happened here, because this is the whole reason Track 2 exists.

The gang was tying 2.5 tonnes a day against a rate that assumed five. That should have destroyed the dates. It did not — because they threw men and hours at it. The estimate allowed 22.8 gang-days to place those 114 tonnes. It took 45.6. There were about 120 working days available, so there was room to absorb it, and the site absorbed it, and every one of those extra gang-days was invoiced.

They bought the schedule with money. Nobody decided to. Nobody discussed it. It simply happened, one wet Tuesday at a time, and the programme stayed green all the way through.

A schedule report cannot see this. It is structurally incapable of seeing it, because a schedule measures whether the steel is in the ground, and the steel is in the ground. Only a cost system can tell you what it cost to put it there.

Track 1 gave you twenty-seven weeks on the schedule. This is the week you find out what the schedule cannot tell you.

Money does not move at one speed

One more thing, and it is the detail that separates a baseline that works from one that generates arguments every month for two years.

You cannot phase every kind of money the same way.

Labour and plant follow the activity. A man is paid on the day he works, a crane is hired on the day it stands there. If the activity runs from the fourth to the nineteenth, the money runs from the fourth to the nineteenth. Straightforward.

Material follows consumption — not delivery. This is the Week 1 rule, and here is where it bites. By month six, 126 tonnes of steel had been delivered and invoiced: $118,440. But only 114 tonnes are in the ground. Phase your material on the delivery note and you have built a baseline that a perfectly performing project can never match, because the difference is not a cost at all. It is a pile of steel in the laydown yard.

Preliminaries follow the calendar. $85,200 over twelve months is $7,100 a month, and it is $7,100 whether the gang lays two hundred tonnes that month or sits in the canteen watching the rain. The site engineer, the offices, the fence, the crane standing over an empty deck — that money burns by the clock.

The straight line that eats contractors

Now put those two facts together and look at what happens when the job runs late.

Three months over. The preliminaries have burned fifteen months at $7,100, not twelve. $106,500 spent against an $85,200 budget.

And the earned value of those three months is zero. Not small. Zero. There is no scope in them. Nobody built anything you can claim for. You have simply been there, paying for being there.

That is a $21,300 hole that no productivity improvement can ever fill, because it was never about productivity. You do not earn preliminaries by being late. You earn them by finishing.

Which is the moment cost control and schedule control stop being two disciplines. Every day of delay has a price, it is on your baseline, and you can read it off in about four seconds.

Practical insight

Ask for your project's planned value curve and then ask one question: which cell in which spreadsheet is this number coming from?

If the answer traces back to the schedule — activity dates, quantities, rates — you have a baseline. If it traces back to a distribution curve, a percentage spread, or the phrase “that's what we usually use”, you have a picture.

And then find your preliminaries line. Divide it by the number of months in the programme. Whatever comes out is the price of one month of delay, before you have paid a single day of liquidated damages or a single hour of acceleration.

Write that number on a card and put it in your wallet. It is the most useful number on the project.

Key takeaways

✔ Planned value is calculated, not drawn: schedule dates × mapped quantities × direct rates.
✔ The reinforcement package phases to $224,680 across ten months. It closes, because nothing in the chain was a guess.
✔ At month six: PV = EV = $128,067.60 — SPI 1.00. And AC = $189,936 — CPI 0.67.
✔ The gang was half as productive and the dates held anyway, because 22.8 gang-days became 45.6. They bought the schedule with money.
✔ A schedule report is structurally incapable of seeing this. Only cost can.
✔ Labour and plant phase with the activity. Material phases with consumption, never delivery.
✔ Preliminaries phase with the calendar: $7,100 a month, work or no work.
✔ Three months late = $21,300 of preliminaries with zero earned value against it. You earn prelims by finishing.

What is coming next

You have a baseline. It is honest, it is phased, and it tells you what the job should cost you.

Now you have to get paid.

And the document you get paid against is not your baseline. It is a different document, submitted to the client, with the same total and a very different shape — because a contractor who values his work in the same order he does it is a contractor who runs out of cash.

Next week: the schedule of values, front-loading, and the oldest game in construction.