How Cost-to-Complete is Used on Construction Projects
Project teams use cost-to-complete to track whether the project is staying within the project budget and to predict the final cost before work is finished. It is used throughout delivery to assess whether the project remains financially on track and where pressure is building.
Teams use CTC to manage ongoing decisions and required monthly reporting, including:
- Forecasting final project cost: The remaining cost is added to the actual spend to predict the expected final cost and flag budget pressure early.
- Identifying cost risk early: Productivity shifts, scope changes, and price movement appear in the forecast before costs are billed, giving teams time to respond.
- Supporting monthly cost reporting: Cost-to-complete feeds owner, lender, and executive reports by showing how much funding is still required to finish the project.
- Validating change and contingency decisions: Updated remaining cost forecasts help teams decide whether approved changes can be absorbed or require additional funding.
- Managing trade and package performance: Reviewing cost-to-complete by cost code or trade highlights where work is underperforming and where corrective action is needed.
💡 Pro tip: Review the cost-to-complete at the lowest practical cost code level during monthly reviews. Small overruns buried in large packages often explain budget pressure long before summary reports show a problem.
How to Calculate Cost-to-Complete?
Cost-to-complete is calculated by estimating the cost of all remaining work based on current project conditions. It is typically derived by subtracting costs incurred to date from the latest forecasted final cost, which is updated as estimates are replaced with actuals.
Formula: Cost-to-complete = Forecasted final cost − Costs incurred to date
Example: A project has a revised forecasted final cost of $8.2 million based on current productivity and open commitments. To date, $5.6 million has been incurred.
Cost-to-complete = $8.2M − $5.6M = $2.6M
The project team expects to spend another $2.6 million to finish the remaining work. If productivity improves or new costs are identified, the forecasted final cost changes, and the cost-to-complete must be recalculated.
Common Methods Used to Calculate Cost-to-Complete
Project teams calculate cost-to-complete using several established methods, each suited to different stages of a construction project. The right method depends on how much work is complete and how reliable the available cost and progress data are.
| Method |
How it works |
Formula |
| Basic forecast method |
Uses the latest forecasted final cost and subtracts costs already incurred to estimate remaining spend. |
Cost-to-complete = Forecasted final cost − Costs incurred to date |
| Bottom-up reforecast |
Re-estimates all remaining work by cost code using current quantities, rates, and productivity. |
Cost-to-complete = Σ (Remaining quantities × current unit rates) |
| Trend-based forecast |
Projects remaining cost using actual cost performance trends from completed work. |
Cost-to-complete = Original remaining budget ÷ Cost performance index |
| Earned value method |
Ties remaining cost to measured progress and cost efficiency. |
Cost-to-complete = (Budget at completion − Earned value) ÷ Cost performance index |
| Committed cost method |
Bases remaining cost on open contracts and forecasted uncontracted scope. |
Cost-to-complete = Open commitments + forecasted uncontracted work |
Each method carries trade-offs. Bottom-up forecasts are the most accurate, but they require more effort and time to produce. Trend-based methods are faster but can mask upcoming scope or productivity issues. Committed cost forecasts work well only when contract coverage is complete, and scope gaps are minimal.
💡 Pro tip: Use different methods at different levels. Apply bottom-up forecasting to high-risk trades and trend methods to stable packages. This keeps forecasts accurate without overloading the team.
Cost-to-Complete vs Related Construction Cost Terms
Cost-to-complete is one of several cost metrics used in construction cost tracking, and it is often mixed up with similar terms that serve different purposes. Each term addresses a specific question about the project's status and what it will take to complete it.
CTC vs Estimate to complete (ETC): A forecast of the remaining cost based on current assumptions. ETC is sometimes used interchangeably with cost-to-complete, but it is less formal and is updated less frequently.
CTC vs Cost at completion: The total expected cost of the project once all work is finished. Cost-to-complete represents only the remaining portion of that total.
CTC vs Remaining budget: The unused portion of the approved budget. Unlike Cost-to-complete, it does not reflect productivity issues, scope gaps, or forecast overruns.
CTC vs Actual cost: Costs that have already been incurred and recorded. Actual cost looks backward, while Cost-to-complete focuses on what is still ahead.
CTC vs Committed cost: Contracted costs that have not yet been incurred, such as open subcontracts or purchase orders. Committed cost forms part of the Cost-to-complete, but does not account for uncontracted or at-risk work.
CTC vs Forecasted final cost: The latest projection of total project cost based on current information. Cost-to-complete is derived by subtracting the actual cost to date from this forecast.
A clear distinction between these metrics is essential for accurate forecasting, timely decision-making, and maintaining cost control throughout project delivery.
FAQs About Cost-to-Complete
No. Contractors usually calculate CTC based on direct project costs and trade performance, while owners often view it at a higher level tied to total project funding. The underlying data may overlap, but the level of detail and purpose differ.
Most projects update cost-to-complete monthly, aligned with cost reporting cycles. High-risk projects or projects experiencing cost pressure may require more frequent updates to remain reliable.
Yes. Changes in productivity, sequencing, site conditions, or pricing can increase remaining cost even when the scope stays the same. Cost-to-complete reflects current execution, not just contract scope.
It depends on how the project is structured. Some teams include contingency within the forecasted final cost, while others track contingency separately to avoid masking performance issues.
Even with full contract coverage, cost-to-complete can change due to productivity shifts, rework, claims exposure, or unresolved risks. Contract values do not guarantee final cost performance.
