What Is Contract Budget Base (CBB)? EVM Budget Structure

<div class="ge-article-wrapper"><article class="ge-article-body"><p>The Contract Budget Base (CBB) is the total authorised budget for a project, comprising the <a href="/en/earned-value/definitions/performance-measurement-baseline">Performance Measurement Baseline</a> (<a href="/en/earned-value/definitions/budget-at-completion">BAC</a>) plus <a href="/en/earned-value/definitions/management-reserve">Management Reserve</a> (MR). It represents the ceiling of what the project is authorised to spend.</p><p>This term is part of the <a href="/en/earned-value/definitions">earned value definitions glossary</a>.</p><h2>The Formula</h2><div class="ge-formula-box ge-anim"><span class="ge-formula-label">Formula</span><code>CBB = BAC + Management Reserve</code></div><pre class="ge-ascii-diagram ge-anim">CONTRACT BUDGET BASE STRUCTURE ┌───────────────────────────────────┐ │ CBB (Contract Budget Base) │ │ │ │ ┌───────────────────────┐ ┌─────┐ │ │ │ BAC (£40M) │ │ MR │ │ │ │ │ │(£2M)│ │ │ │ Work packages £36M │ │ │ │ │ │ UB £1.5M │ │ │ │ │ │ Contingency £2.5M │ │ │ │ │ └───────────────────────┘ └─────┘ │ │ CBB = £40M + £2M = £42M │ └───────────────────────────────────┘</pre><h2>CBB on NEC4</h2><p>On NEC4 Option C, CBB maps to the target total of the Prices plus any management reserve held at programme level. The target is BAC. MR sits above it for unknown risks.</p><h2>Worked Example</h2><span class="ge-worked-label">Worked Example</span><div class="ge-callout ge-anim"><p><strong>Scenario:</strong> A £40M NEC4 Option C programme with £2M management reserve. CBB = £42M.</p><p>At month 12, an unforeseen interface issue requires £600K from MR. New BAC = £40.6M. MR reduces to £1.4M. CBB remains £42M.</p></div><h2>Common Mistakes</h2><ol><li><strong>Confusing CBB with BAC.</strong> BAC is the measurement baseline. CBB includes MR on top.</li><li><strong>Exceeding CBB without authorisation.</strong> If EAC exceeds CBB, you need an <a href="/en/earned-value/definitions/over-target-baseline">Over-Target Baseline</a>.</li></ol><div class="ge-product-note ge-anim"><p><strong>How Gather helps.</strong> Gather tracks your budget structure from site diary data. <a href="https://gatherinsights.com/contact">Book a demo</a>.</p></div><h2>Frequently Asked Questions</h2><h3>What happens when EAC exceeds CBB?</h3><p>An Over-Target Baseline (OTB) is needed. This formally acknowledges the project will cost more than authorised and resets the measurement framework.</p></article></div>