Using the Earned Value Approach for Controlling Overhead Cost in Construction Projects
Direct Overhead Cost (DOC) includes all support infrastructure required to complete a construction project. Although it is a dominant factor in every project, very little has been published about ways to manage it. This paper presents an Earned Value approach used for overhead control. It is based on the project’s desired profit and the notion that the Earned Value of the money spent on overhead should be proportional to the volume of completed work packages, out of the amount of completed work planned. Using this notion of earned value helps to better control and manage overhead expenses.