Secrets of Burn Rates and Estimates to Complete in Project Funding
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Written by: Lisa Akers
When it comes to managing project funding, burn rates and Estimates to Complete (ETCs) provide valuable insights. Think of burn rates as your rear-view mirror, showing you how your planned expenses compare to actual spending. On the other hand, ETCs act as your crystal ball, giving you a glimpse into the future by estimating the remaining work and associated costs.
To get a comprehensive understanding of your project's funding needs, it's crucial to consider both burn rates and ETCs together. With ever-changing priorities in our world and nation, the ability to adapt and allocate funds accordingly is vital for mission operations.
By looking backward and forward in terms of your contract funding, you can anticipate where funds can be reallocated to meet evolving needs. This adaptability is key.
Burn rate measures how efficiently your team manages time and budget, reflecting how well you're progressing toward your project objectives. If your burn rate deviates from the plan, it's a clear signal to review and make necessary adjustments to your project strategy.
Now, let's define ETCs. They represent the estimated cost of work yet to be completed before the contract period or fiscal year ends. Your ETC should be based on adjustments to your project plan, taking into account current priorities. It should cover the effort from the date of the contractor's last invoice to the end of the current contract period.
To facilitate effective tracking of ETC changes over time, we recommend that the Contractor provides the date of the ETC submission, the date of the last invoice period, the ETC amount, and the start and end dates of the ETC period. This information helps you analyze the version history of ETCs on a contract, allowing you to understand when and why changes occurred. By comparing the most recent ETC with the remaining funds, you can determine if additional funds are required or if reallocation is possible.
By linking burn rates with ETCs for your contract, you gain a clear picture of your journey so far and what it will take to reach your final project destination. Remember, changes are inevitable, and priorities may shift. Analyzing your burn rates and ETCs enables you to successfully anticipate and manage your financial resources accordingly.
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Ms. Lisa Akers brings 25 years of proven Federal and Industry leadership experience, as well as extensive functional expertise in acquisition, program management, assisted acquisition shared services and business operations management. As Executive Vice President of Solutions at Seventh Sense Consulting (SSC), Ms. Akers is responsible for developing and delivering innovative solutions to meet client requirements and objectives. Prior to joining Seventh Sense Consulting, Ms. Akers served as President (2013- 2016) for ASI Government’s Products and Solutions Division where she was responsible for managing the Virtual Acquisition Office (VAO) used by 25,000 federal acquisition professionals and as President (2010 – 2013) for ASI’s Consulting Division that had a $35M portfolio focused on acquisition and program management support services to federal government agencies. Prior to joining ASI Government, Ms. Akers spent over 16 years in the General Services Administration, Federal Systems Integration and Management Center (GSA FEDSIM) where she was the FEDSIM Director for her last five years and Deputy Director for the previous four years. FEDSIM is an assisted acquisition organization specializing in large information technology and services acquisitions with $1.4B annual obligations on behalf of 100+ other federal agencies. Ms. Akers received the 2011 FED100 award for her work as Industry Lead for the ACT-IAC 25 Points to IT Acquisition Reform and the 2006 FED100 award for industry outreach and stakeholder management for the ALLIANT and ALLIANT SB GWACs. She received the Meritorious Service Award while at GSA. She holds a bachelor's degree in Microbiology from Pennsylvania State University, and a master's degree in Information Technology Systems from George Washington University.