Here is the scenario: You are the PM of a new T&M contract that has a $800,000 budget at completion (BAC) and a price of $1,000,000 and a one-year period of performance (POP). Scope is fluid, consistent with a T&M-type contract.
Approximately 30% in the POP, about three and half months in duration, you are overrunning your revenue and underrunning your costs, producing a 28% margin at that time and a 30% margin estimated at completion. At the current burn rate, you are projecting that you will hit the $1,000,000 funding level early, at the 80% mark of the period of performance.
So with two and half months remaining for which you will not have any more available funds to bill the client, and with the additional 10% in margin that you are accruing, and with fluid scope, what would be your course of action with the client?
If the client was private sector?
If the client was public sector?
I think, in reality, there is a canonical answer to this question but, as well, there are likely many different practices out there to handle this type of scenario. I am hoping this generates a few common practices out there.