Committed Cost
A cost that has become legally obligated, through a signed subcontract, purchase order, or executed change order, whether or not the associated work has actually happened yet, distinct from an [[concept-actual-cost|actual cost]], which reflects only what has genuinely been spent or invoiced so far.
Why it matters
A budget can look healthy by committed cost alone while hiding real risk, since committed cost only shows what's been legally locked in, not whether the work underlying it will actually come in on, under, or over that committed number. Tracking committed cost separately from actual cost is what lets a project team catch a budget problem while there's still time to react to it.
On a real project
A general contractor signs a $400,000 drywall subcontract in March, committing that cost immediately, even though the drywall crew won't actually start work, and begin generating actual cost, until June.
Who this matters most to
A Cost Engineer tracks committed cost the moment a subcontract or purchase order is executed, so the project's true financial exposure is visible well before any of that work is actually performed. A Contracts Administrator is often the one whose subcontract execution is what actually creates a committed cost in the first place.
Where this goes wrong
A project team tracks only actual cost, spent-to-date, and assumes the budget is fine because spending looks on pace. They miss that several large subcontracts have already been signed for amounts well above what was budgeted, committed cost nobody's watching, and the overage only becomes visible once that work actually starts and the invoices begin arriving.