It is important to note your duration type when progressing the schedule because Primavera P6 updates the remaining cost and At Complete cost differently depending on your selection.
When you are adding resources to your schedule, it is typically best to set the duration type to fixed duration and units/time. This option fixed the activity duration and the hours per day a labor resource will be working on the activity. This way your individual resource effort remains constant as additional resources are added and the budget adjusts accordingly.
In most situations, once your budget is known and approved it makes sense to switch the duration type to fixed duration and units (the activity duration and the overall cost in hours/dollars are fixed), because then your project becomes cost constrained. It generally is very difficult to have the budget increased after it has already been approved. And, Primavera P6 Professional computes the remaining cost and At Complete costs differently depending on the duration type.
This article explains why it is important to set the duration type to fixed duration and units before beginning to progress the schedule.
Below in Figure 1 is our demonstration project.
Figure 1
This schedule is for a piping repair and improvement effort. Each activity is performed at a fixed price that is specified in the budgeted non-labor cost column. Note that the performing contactor assumes the cost overruns for firm fixed price contracts. Before we progress the schedule, the duration type is set to fixed duration and units/time.
We enter the first week schedule status in Figure 2.
Figure 2
Observe for activities Drain Piping System and Remove Damaged Piping, that the budgeted total cost and at completion total cost fields are equivalent. However, when only partial (80%) progress is entered for Install Piping & Couplings the budgeted total cost and At Complete total cost columns differ.
The project records an actual cost of $4000, but the remaining non-labor cost stays at the budgeted cost $5000. This remains the situation when the when the data date is moved forward one week and the schedule recalculated, Figure 3.
Figure 3
So the remaining cost of partially progressed activities does not update when the duration type is fixed duration and units/time. This means our At Complete cost increases above the budgeted cost, which is not what we want. The budgeted and At Complete costs should be equivalent throughout the update progress process for cost constrained fixed price contracts.
In Figure 4 we have the same schedule and duration type set to fixed duration and units.
Figure 4
The activity durations and work are fixed. Again, we enter status for the first week, Figure 5.
Figure 5
This time the remaining cost adjusts according to the actual cost and decreases to $1000. The Budgeted Total Cost and At Complete total cost remain equivalent. Again, we update the data date and recalculate the schedule, Figure 6, and observe the Budgeted Cost and At Complete cost remain equivalent throughout the schedule update progress process.
Figure 6
Summary
When the project contract is firm fixed price, you can set the duration type in Primavera P6 to fixed duration and units before progressing the schedule. This way the remaining cost updates and is the difference between the budgeted and actual costs. And the budgeted cost remains equivalent to the At Complete cost throughout the schedule progression process.
So, with the proper Fixed Duration and Units duration type setting addition of the earned value cost and remaining non-labor cost equates to the at completion total cost throughout the schedule progression update process.