What is the difference between cumulative and current-period CPI?

Cumulative CPI uses all data from program start to now: total EV ÷ total AC. It is stable and reliable — the 'iron law' says cumulative CPI rarely changes more than ±0.10 after the 20% completion point. Current-period CPI uses only this month's data: monthly EV ÷ monthly AC. It is volatile but shows recent trends — is performance getting better or worse?

Can CPI recover once it drops?

Research by the DoD and Rand Corporation shows that cumulative CPI almost never recovers once it drops below 1.0 after the 20% completion point. The 'Christle study' found that final CPI is typically within 0.10 of the CPI at the 20% completion milestone. This means: if your cumulative CPI is 0.85 at 20% complete, your final CPI will likely be between 0.75 and 0.95 — plan accordingly.

What reporting thresholds should I use?

Common thresholds: Green (CPI/SPI ≥ 0.95), Yellow (0.90-0.95), Red (<0.90). Many defense contracts specify variance thresholds that trigger formal Variance Analysis Reports (VARs): typically ±10% or ±$100K at the control account level, whichever is less. Government program offices often require corrective action plans when cumulative CPI falls below 0.95.

CPI & SPI Analysis: What the Indices Really Mean

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We recommend reading these guides first to get the most out of this one:

Earned Value Metrics

1.0

On-Plan Target

±0.10

CPI Stability Range

20%

Prediction Point

0.90

Red Threshold

Cumulative vs. Current-Period Indices

Index Type	Formula	Behavior	Use For
Cumulative CPI	ΣEV ÷ ΣAC	Stable, smooths out monthly variation, converges over time	EAC prediction, program health assessment, trend direction
Current-Period CPI	Monthly EV ÷ Monthly AC	Volatile, sensitive to monthly events (large procurements, milestone completions)	Detecting recent changes, identifying emerging problems, validating recovery claims
Cumulative SPI	ΣEV ÷ ΣPV	Stable but converges to 1.0 at program end (all planned work eventually done)	Mid-program schedule assessment. Less useful near program end.
Current-Period SPI	Monthly EV ÷ Monthly PV	Volatile but reveals current execution rate	Monthly performance assessment, recovery tracking

💡 SPI Converges to 1.0 — Use Schedule Variance Instead

At program completion, all planned work is done, so cumulative EV = BAC = cumulative PV, and SPI = 1.0 regardless of whether the program was 2 years late. This makes SPI less useful for schedule assessment in the program’s final third. Use time-based schedule metrics (slip in months, critical path analysis) alongside SPI for schedule health assessment.

The CPI Stability Rule

The most important empirical finding in EVMS research: cumulative CPI stabilizes after the 20% completion point and rarely improves by more than 0.10 thereafter.

📊 CPI Trend Scenario Program Alpha

Month	% Complete	Cum CPI	Cum SPI	Assessment
6	10%	1.05	0.92	Early — CPI looks good but SPI showing schedule pressure. Indices still volatile.
12	22%	0.94	0.88	At the 20% point. CPI 0.94 = expect final CPI between 0.84–1.04. SPI declining.
18	38%	0.91	0.85	CPI continuing to decline. Now expect final CPI 0.81–1.01. Trend is negative — not recovering.
24	55%	0.88	0.82	Red flag. CPI 0.88 at 55% complete = EAC will be ~14% over budget. Recovery is statistically improbable.

Action at month 24: With CPI at 0.88 and declining, the program team should: (1) develop a realistic EAC using multiple methods, (2) identify the root causes of cost overrun (are we inefficient, or was the baseline wrong?), (3) present management with options: rebaseline, descope, or accept the overrun.

Reading the Trend

Pattern	What It Means	Action
Stable CPI > 0.95	Program is executing on or near budget	Maintain. Monitor for emerging issues.
CPI declining month-over-month	Getting worse. New cost drivers are emerging or existing ones are growing.	Root cause analysis. Variance Analysis Report on largest CA contributors.
CPI stable at 0.85–0.95	Program has a structural efficiency problem. Will not self-correct.	Management intervention required. Realistic EAC. Corrective action plan with measurable milestones.
CPI < 0.85	Severe overrun. Recovery extremely unlikely without scope or baseline change.	Formal rebaseline assessment. Scope trade study. Customer notification.
Current CPI improving but cumulative flat	Recent performance is better but not enough to move the cumulative needle.	Validate improvement is real (not timing). Check if recovery rate is sufficient to change EAC trajectory.
SPI < 1.0 with CPI > 1.0	Behind schedule but under budget. May be “buying schedule” with less work than planned.	Examine whether under-budget means underperformance. Check if work is being deferred.

Reporting Thresholds

Level	Threshold	Action Required
Green	CPI/SPI ≥ 0.95	Normal reporting. Monitor trends.
Yellow	CPI/SPI 0.90–0.95	Variance analysis required. Identify root causes. Corrective action plan within 30 days.
Red	CPI/SPI < 0.90	Formal CAR/VAR. Management review. Customer notification. Recovery plan or rebaseline assessment.

⚠️ Don’t Manage Indices — Manage the Work

A common dysfunction: program teams focus on “improving CPI” by manipulating earned value claims (claiming more % complete than warranted) or deferring cost recognition. This makes the indices look better temporarily but does not change the reality. Manage the work: reduce rework, improve productivity, control scope. The indices will follow.

🎯 The Bottom Line

CPI and SPI are the vital signs of your program. Cumulative CPI stabilizes early and predicts the future: if it is 0.88 at the 20% point, plan for a final CPI of 0.78–0.98. Current-period indices reveal whether you are getting better or worse. Use both together: cumulative for prediction, current-period for trend detection. And remember — the indices are symptoms, not causes. When they signal a problem, the response is root cause analysis and corrective action on the work, not manipulation of the numbers. Next: Variance Analysis & Reporting — turning index signals into actionable root cause narratives.

Keep Learning

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Variance Analysis & Reporting

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Estimate at Completion Methods

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Guide

Earned Value Metrics

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