Earned Value

CPI and SPI Formula: Cost and Schedule Performance in Construction

The Cost Performance Index and Schedule Performance Index are the two numbers that tell you whether a project is bleeding money, falling behind programme, or both. This guide explains the formulas, interpretation tables, and the four-quadrant health check that commercial teams actually use.

Will Doyle

28 February 2026 · 12 min read

CPI measures cost efficiency. SPI measures schedule efficiency. Two ratios, two questions answered. The formulas take 30 seconds to learn. Knowing what to do when CPI drops to 0.85 on a £60M infrastructure package - that's the part that actually matters.

If you need a refresher on the three base inputs (PV, EV, and AC), the earned value formulas page covers those first.

What Are CPI and SPI?

Cost Performance Index (CPI) tells you how much value you're getting for every pound spent. A CPI of 1.0 means you're spending exactly what you planned. Above 1.0, you're under budget. Below 1.0, you're burning cash faster than you're delivering work.

Schedule Performance Index (SPI) tells you how fast work is progressing against the baseline programme. Above 1.0, you're ahead. Below 1.0, you're behind. Simple as that.

On a £40M rail electrification package at the time midpoint, imagine you've earned £18M of value but spent £19.6M. That's a CPI of 0.92 - and a £1.6M cost overrun already baked in, with half the project still to go. That's not a rounding error. That's a conversation with the project director, and probably a difficult one.

The CPI Formula

Formula CPI = EV ÷ AC

Where EV is the budgeted cost of work actually completed, and AC is what you've actually spent to complete that work.

CPI Interpretation Table

CPI Value	What It Means	Action Required
CPI > 1.15	Significantly under budget	Check EV measurement - are you overclaiming progress? Or have you found genuine efficiencies?
CPI 1.01 to 1.15	Under budget	Healthy. Monitor for sustainability.
CPI 1.00	Exactly on budget	Rare in practice. Enjoy it.
CPI 0.90 to 0.99	Slightly over budget	Investigate root cause. Recoverable if caught early.
CPI 0.80 to 0.89	Over budget	Recovery plan needed. Calculate your Estimate at Completion.
CPI < 0.80	Severely over budget	Escalate immediately. On a £30M project, this means overspending by more than £6M against earned progress.

The CPI stability rule: Once a project's cumulative CPI drops below 0.90 by the 20% completion mark, it almost never recovers to 1.0. Research across hundreds of projects shows final CPI rarely deviates more than 10% from CPI at the 20% point. Construction is messier than that data suggests, but the principle holds. Early CPI predicts final CPI with uncomfortable accuracy. If your CPI is 0.85 at month 6 of a 30-month programme, don't plan your recovery around getting it back to 1.0. Plan around 0.88 at best.

The SPI Formula

Formula SPI = EV ÷ PV

Where EV is the budgeted cost of work completed, and PV is the budgeted cost of work scheduled to be completed by now.

SPI Interpretation Table

SPI Value	What It Means	Action Required
SPI > 1.15	Well ahead of schedule	Verify the baseline is realistic. Ahead of schedule is great - unless the baseline was sandbagged.
SPI 1.01 to 1.15	Ahead of schedule	Strong position. Check early works aren't masking delays in later packages.
SPI 1.00	On programme	Continue monitoring.
SPI 0.90 to 0.99	Slightly behind	Recoverable. Check which activities are slipping and whether they're on the critical path.
SPI 0.80 to 0.89	Behind schedule	Acceleration may be needed. Calculate recovery cost vs liquidated damages exposure.
SPI < 0.80	Severely behind	Programme recovery workshop required. This typically needs re-sequencing, extra resources, or both.

The SPI Convergence Problem

SPI has a big flaw, and it catches out teams who don't know about it.

As a project approaches completion, SPI always converges towards 1.0 - even if the project finishes 6 months late. Why? Because by the end, all planned work has been scheduled (PV = BAC) and all work has been completed (EV = BAC). So EV/PV = BAC/BAC = 1.0. Always.

This makes SPI most useful in the first 60-70% of a project. After that, it's increasingly misleading. If you need schedule performance data in the final third, use schedule variance in time units - SV(t) - or look directly at the programme.

Worked Example: £35M Highway Resurfacing Programme

Worked Example

A contractor wins a £35M highway resurfacing contract. The programme runs 24 months. At the end of Month 8, the commercial team runs the numbers.

Metric	Value	How It's Derived
BAC	£35,000,000	Total contract value
PV at Month 8	£12,600,000	36% of work was programmed to be complete
EV at Month 8	£10,920,000	31.2% physical completion measured on site
AC at Month 8	£13,100,000	Finance confirms £13.1M spent to date

Calculating CPI: CPI = EV / AC = £10,920,000 / £13,100,000 = 0.834. For every £1 spent, the project is only delivering £0.834 of value - a 20% cost overrun rate.

Calculating SPI: SPI = EV / PV = £10,920,000 / £12,600,000 = 0.87. The project has only completed 87% of the work it should have done by this point.

Both indicators are below 1.0. The project is over budget and behind programme. At this rate, EAC = £35,000,000 / 0.834 = £41,987,179 - that's a £7M overrun. The commercial team now has a clear picture: without intervention, this project overshoots its budget significantly and finishes late. Time to dig into the cost drivers and separate what's recoverable (compensation events, remeasurable quantities) from what's a genuine cost overrun.

Worked Example 2: £8M School Refurbishment

Worked Example

Not every project is a megascheme. Here's CPI and SPI on a smaller job. A contractor is 12 weeks into a 40-week, £8M secondary school refurbishment. The project uses NEC4 Option A.

Metric	Value
BAC	£8,000,000
PV at Week 12	£2,400,000 (30% of programme)
EV at Week 12	£2,640,000 (33% complete - strip-out phase finished ahead of programme)
AC at Week 12	£2,520,000

CPI = £2,640,000 / £2,520,000 = 1.05. SPI = £2,640,000 / £2,400,000 = 1.10. This project is in good shape - £1.05 of value delivered for every £1 spent, and 10% ahead of programme.

But the commercial team shouldn't relax yet. The strip-out was the easy part. Mechanical and electrical installation starts in Week 14, and that's where school refurbishments get complicated: restricted working hours, asbestos finds, service clashes. A CPI of 1.05 at Week 12 doesn't guarantee a CPI of 1.05 at Week 30. I've seen projects go from top-right quadrant to bottom-left in two reporting periods once M&E kicks in.

Using CPI and SPI Together: The Four-Quadrant Health Check

Individually, CPI and SPI are useful. Together, they're powerful. Plot CPI on one axis and SPI on the other and you get four quadrants that describe project health at a glance - and tell you which conversation to have next.

Quadrant	CPI	SPI	Status	What It Means
Top Right	> 1.0	> 1.0	Healthy	Under budget, ahead of schedule. Don't get complacent - check the measurement basis.
Top Left	> 1.0	< 1.0	Cost OK, Schedule Risk	Spending efficiently but behind programme. Acceleration will likely push CPI down.
Bottom Right	< 1.0	> 1.0	Schedule OK, Cost Risk	Ahead of schedule but overspending. Common when teams throw extra resource at a job.
Bottom Left	< 1.0	< 1.0	Trouble	Over budget and behind schedule. Recovery is expensive and painful.

Projects don't sit in one quadrant forever. They move. And the direction matters far more than the snapshot. A project at CPI 0.95, SPI 0.97 that was at CPI 0.91, SPI 0.93 last month is recovering. A project at CPI 1.02, SPI 1.01 that was at CPI 1.08, SPI 1.06 last month is deteriorating - even though the numbers still look healthy on paper.

Watch the trend. Plotting PV, EV, and AC on an S-curve makes these directional shifts visible at a glance.

The critical path warning: SPI doesn't distinguish between critical and non-critical activities. A project can show SPI = 1.05 while the critical path is actually 3 weeks behind - because the team blitzed through non-critical activities with float. Always cross-reference SPI with your critical path analysis.

Reporting CPI and SPI Effectively

Calculating the numbers is straightforward. Getting people to act on them? That's the hard part.

Most EVM reports are terrible. Forty pages of tables, no narrative, buried in a monthly pack that nobody reads past page 3. The best ones follow this structure:

Dashboard - CPI and SPI as headline numbers with traffic light colours (green > 0.95, amber 0.85-0.95, red < 0.85)
Trend chart - CPI and SPI plotted monthly since project start. The trend matters more than the snapshot.
Work package breakdown - CPI and SPI by package, sorted worst-first
Forecast - EAC using CPI, with a narrative explaining the main cost drivers
Actions - What's being done about any indices below threshold

Different stakeholders need different things. A project director wants the CPI trend plus EAC forecast on one page. A commercial manager wants CPI by work package plus recovery actions. A project manager wants SPI by work package plus programme comparison. See the earned value report template for a worked-up version of this structure.

Common Mistakes

Measuring EV by spend instead of progress - The most common error. If your valuation team reports EV based on what's been valued in interim applications rather than physical progress, your CPI and SPI will look fine while the project bleeds money underneath.
Ignoring the baseline - CPI and SPI are only meaningful against a realistic baseline. If the programme was sandbagged with excessive float, SPI will always look good. Ask: was the baseline credible?
Reporting without context - A CPI of 0.94 means different things at different stages. At 10% complete, it's a yellow flag. At 70% complete, it's almost certainly the final outturn. Always report alongside percentage complete and the 3-4 period trend.
Treating SPI as gospel in the final third - SPI converges to 1.0 regardless of actual schedule performance. Use cost and schedule variance metrics or time-based SPI(t) for late-stage reporting.
Forgetting CPI and SPI are lagging indicators - Both indices tell you what has happened. Use CPI to inform your EAC and ETC forecasts, but don't use it as a crystal ball.
Not breaking down by work package - A project-level CPI of 0.95 can mask a substructure package at 1.10 and an M&E package at 0.78. Always report at work package level, not just project level.

For a deeper dive into these and other measurement pitfalls, see the guide to common earned value mistakes in construction.

Quick Reference Table

Metric	Formula	Good	Acceptable	Concern	Crisis
CPI	EV / AC	> 1.05	0.95 to 1.05	0.85 to 0.94	< 0.85
SPI	EV / PV	> 1.05	0.95 to 1.05	0.85 to 0.94	< 0.85
CV	EV - AC	Positive	Near zero	Negative	Large negative
SV	EV - PV	Positive	Near zero	Negative	Large negative

Threshold guidance: CPI below 0.90 at 25% completion almost certainly won't recover to 1.0. SPI below 0.85 typically requires acceleration - budget the cost of recovery. Both below 0.90 should trigger a formal project review with the project director.

Try the calculations yourself with the earned value calculator.

CPI is only as good as your progress data. On construction sites, that data comes from daily records. Gather's AI reads site diary entries and extracts quantities for earned value measurement - so your CPI reflects what's actually happened on site, not a foreman's gut feel. If you're setting up EVM for the first time, the implementation guide covers measurement methods and team buy-in.

EVM Explained

CPI and SPI questions answered

What is CPI in earned value management?

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CPI (Cost Performance Index) measures cost efficiency. The formula is CPI = EV / AC, where EV is earned value and AC is actual cost. A CPI of 1.0 means the project is on budget. Above 1.0 means under budget. Below 1.0 means over budget. A healthy CPI typically sits between 0.95 and 1.05 on a well-managed construction project.

What is SPI in earned value management?

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SPI (Schedule Performance Index) measures schedule efficiency. The formula is SPI = EV / PV, where EV is earned value and PV is planned value. An SPI of 1.0 means the project is on programme. Above 1.0 means ahead. Below 1.0 means behind. SPI becomes less reliable after about 70% project completion due to the convergence problem where SPI trends towards 1.0 regardless of actual schedule performance.

What does a CPI of 0.85 mean?

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A CPI of 0.85 means the project is generating £0.85 of value for every £1.00 spent - an overspend rate of about 18% relative to progress. On a £20M project at 50% completion (EV = £10M), you'd have spent roughly £11.8M - a £1.8M overrun already. At this level, a formal recovery plan is required and the Estimate at Completion should be recalculated. See the EAC formulas for forecasting guidance.

Can SPI be greater than 1.0?

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Yes. An SPI greater than 1.0 means the project has completed more work than was planned at this point. This often happens in early phases when enabling works or demolition finishes faster than programmed. However, an SPI above 1.0 doesn't always mean the project will finish early - if the early progress was on non-critical activities, the completion date may still be at risk. Always cross-reference SPI with your critical path analysis.

How often should CPI and SPI be calculated?

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Monthly is standard on most construction projects, aligned with interim valuations and cost reporting cycles. On fast-paced or high-risk projects, fortnightly tracking adds value. Weekly is possible but requires disciplined progress measurement that few site teams maintain consistently. If you're setting up EVM tracking for the first time, the implementation guide covers measurement cadence in detail.

What's the difference between CPI/SPI and CV/SV?

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CPI and SPI are ratios (dimensionless numbers). Cost variance (CV) and schedule variance (SV) are absolute values in pounds. CV = EV - AC tells you how many pounds you're over or under. CPI = EV / AC tells you the rate of efficiency. Both are useful. CV gives you the pound figure for reports and governance thresholds. CPI gives you the rate for forecasting and cross-project comparison. Most commercial teams report both.

Do CPI and SPI work on NEC4 contracts?

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Absolutely. Earned value is contract-agnostic - it works on NEC4, JCT, FIDIC, or bespoke forms. On NEC4 Option C (target cost), CPI is particularly useful because the pain/gain share mechanism directly links cost performance to the Contractor's margin. A CPI below 1.0 on an Option C contract means you're eating into your share of the gain - or increasing your share of the pain. The key is updating BAC each time a compensation event is implemented.

Why does SPI converge to 1.0 at project end?

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Because SPI = EV / PV. At project completion, all work is done (EV = BAC) and all work was planned (PV = BAC). So EV / PV = BAC / BAC = 1.0, regardless of whether the project finished on time, late, or early. This mathematical quirk means SPI loses its usefulness in the final 30% of a project. For late-stage schedule tracking, use time-based SPI(t) or refer directly to programme float analysis.