How Do You Use Earned Value on a Construction Job?

By Wyatt Cooper · Published October 22, 2026 · 6 min read

Key takeaways

Earned value compares three numbers for the same date: the budget for work planned (planned value), the budget for work actually done (earned value) and what that work cost (actual cost).
CPI is earned value divided by actual cost and SPI is earned value divided by planned value; below 1.0 means over cost or behind plan.
Measure percent complete in installed quantities, never in money spent or hours used, or earned value just repeats actual cost.
In the worked example, a $240,000 concrete scope 40% complete at week 4 has a CPI of 0.89 and an SPI of 0.80, and forecasts $270,000 at completion.

To use earned value on a construction job, set a budget and a time-phased plan for a scope, then at each status date compare three numbers: planned value (the budget for work scheduled so far), earned value (the budget for work actually installed) and actual cost. Earned value divided by actual cost is the cost performance index; earned value divided by planned value is the schedule performance index. Below 1.0, the scope is over cost or behind.

Why spending alone misleads

Comparing what you planned to spend with what you have spent says nothing about how much work you got for it. GAO's cost guide gives the classic case: four miles of track budgeted at $4 million look under budget three weeks in, with $2 million spent, until you see that only one mile is down, and "EVM can alert program managers to potential problems sooner than expenditures alone can" (GAO-20-195G). Earned value adds the missing number: the budgeted value of the work actually done.

On a construction job, earned value fits best where the GC carries the cost risk line by line: self-performed concrete, carpentry or site work. A lump-sum subcontract caps what the GC pays, so for subcontracted trades earned value mostly tells you whether the sub is keeping pace. Cost on those lines is tracked against the commitment instead; see tracking a budget against commitments.

The terms and formulas

Earned value terms as GAO-20-195G defines them, with the construction reading
Term	Also called	Formula	On a construction scope
Budget at completion	BAC	Sum of the budgets for the scope	The line's budget
Planned value	BCWS (PV)	Budget for work scheduled to date	Budget × percent planned by the status date
Earned value	BCWP (EV)	Budget for work performed to date	Budget × percent installed, by quantity
Actual cost	ACWP (AC)	Cost incurred for the work performed	Labor, material and equipment booked to date
Cost variance	CV	BCWP − ACWP	Negative: the work done cost more than its budget
Schedule variance	SV	BCWP − BCWS	Negative: less work done than planned, in dollars
Cost performance index	CPI	BCWP ÷ ACWP	Below 1.0: over cost
Schedule performance index	SPI	BCWP ÷ BCWS	Below 1.0: behind plan
Estimate at completion	EAC	ACWP + (BAC − BCWP) ÷ efficiency index	The forecast final cost of the scope

GAO notes that "Schedule variance in EVM analysis is expressed in dollar units, not time" (GAO-20-195G, PDF), so a negative SV says the crew is behind, not by how many days. The critical path in the schedule answers that.

Steps to run it on one scope

1Project managerSets the scope's budget and spreads it over the schedule: the planned value curve
2SuperintendentReports installed quantities at the status date
3Project accountantCloses actual cost for the scope to the same date
4Project managerComputes earned value, CV, SV, CPI and SPI
5Project managerForecasts the estimate at completion and acts on the cause: crew, method or sequence

Earned value on one self-performed scope, each status date

A worked example: fictional self-performed foundations

The job is fictional. A GC self-performs foundations: 1,500 cubic yards of concrete placed, budget $240,000, planned evenly over eight weeks ($30,000 of planned value a week). At the end of week four, 600 cubic yards are in place and $108,000 has been booked.

Foundations, self-performed: status at week 4 of 8

Budget at completion (BAC): $240,000
Planned value (BCWS): 4 of 8 weeks: 50% × $240,000 = $120,000
Percent complete: 600 ÷ 1,500 cubic yards = 40%
Earned value (BCWP): 40% × $240,000 = $96,000
Actual cost (ACWP): $108,000
Cost variance: $96,000 − $108,000 = −$12,000
Schedule variance: $96,000 − $120,000 = −$24,000
CPI: $96,000 ÷ $108,000 = 0.89
SPI: $96,000 ÷ $120,000 = 0.80
EAC at the current CPI: $108,000 + ($240,000 − $96,000) ÷ 0.8889 = $108,000 + $162,000 = $270,000
Variance at completion: $240,000 − $270,000 = −$30,000
To-complete index to finish on budget: ($240,000 − $96,000) ÷ ($240,000 − $108,000) = 1.09

Earned value status for a fictional foundations scope, end of week 4

The CPI is exactly 96 ÷ 108 = 0.8889, so the remaining $144,000 of budgeted work costs $144,000 × 108 ÷ 96 = $162,000 at the same efficiency. To finish on budget, the crew would have to do the rest at 1.09 against a 0.89 so far. GAO's rule of thumb is that "if the TCPI is more than 5 percentage points higher than the CPI, the EAC is too optimistic": here it is 20 points higher, so on-budget is not a real forecast. A rough time read, at the same pace, is 8 ÷ 0.80 = 10 weeks instead of 8.

GAO also recommends more than one EAC. Using CPI × SPI as the index (0.8889 × 0.80 = 0.7111) gives $108,000 + $144,000 ÷ 0.7111 = $108,000 + $202,500 = $310,500, a worst case if the crew stays slow and keeps falling behind. The cause decides which one to believe: a pump truck that showed up late twice is not the same problem as a crew that is too small.

Mistakes that make earned value meaningless

Measuring percent complete as money spent ÷ budget, so earned value equals actual cost and CPI is always 1.0.
Changing the budget to match actual cost, which erases the variance you are trying to see.
Reading SPI as a schedule: it is in dollars, and a crew can be ahead on easy work while the critical path slips.
Running it monthly on a scope that lasts eight weeks: status it weekly.
Forecasting the end with a CPI from the first week, before the crew is up to speed.

Earned value is one input to the job's cost-to-complete forecast; the budget it measures against comes from the estimate built from sub bids and your own unit costs. More for GCs is in the general contractor's guide and the project lifecycle.

The bottom line

Earned value asks one question spending cannot: how much budgeted work did that money buy? Measure installed quantities, compare the three numbers at each status date, and read CPI and SPI together.

Use it on the scopes where your own crews carry the cost risk, weekly, and forecast the finish more than one way.

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Sources

GAO-20-195G, Cost Estimating and Assessment Guide (March 2020) — U.S. Government Accountability Office. Read October 22, 2026.
GAO-20-195G full report (PDF), Chapters 18 and 19: Earned Value Management — U.S. Government Accountability Office. Read October 22, 2026.

Questions

What is a good CPI in construction?

1.0 means the work done cost exactly its budget; above 1.0 is under cost and below is over. What matters is the trend over several status dates and the cause, not one reading.

What is the difference between planned value and earned value?

Planned value is the budget for the work you scheduled by the status date. Earned value is the budget for the work you actually installed. The gap between them is schedule variance, in dollars.

How do you measure percent complete for earned value?

By installed quantities against the total: cubic yards placed, linear feet of wall framed, fixtures set. Hours or dollars spent cannot be used, because they are the cost side of the comparison.

Can earned value be used on subcontracted work?

For pace, yes: the sub's billed percent complete against the plan. For cost, the subcontract amount caps what you pay, so track it against the commitment and pending changes instead.