The authorized cost baseline for Project Catalyst — $99,000,000 over 36.5 months. This document is the single financial control point for the program: it presents the baseline three ways (by cost category, by contract year, by WBS workstream), sets out the quarterly spend plan and earned-value baseline against which performance is measured, and records the rate card, funding schedule, contingency ledger, and the assumptions the numbers rest on. Status date: 11 September 2026 (Week 4, Phase 0).
1 · Baseline by Cost Category
The Charter §13.1 cost structure. Labor accounts for $61.2M (61.8%) across three staffing models; cloud and AI platform infrastructure is the single largest non-labor line, reflecting a program whose core deliverable is a production AI platform.
| Cost Category | Basis | Amount | % of Total |
|---|---|---|---|
| Internal FTE Labor (ACME) | Loaded cost of ACME staff assigned to the program | $19,600,000 | 19.8% |
| Onshore Consultant Labor (Pulaski) | Billable onshore consulting staff at contracted rates | $27,400,000 | 27.7% |
| Offshore Consultant Labor (Pulaski) | Billable offshore engineering and QA capacity | $14,200,000 | 14.3% |
| Labor subtotal | $61,200,000 | 61.8% | |
| Cloud & AI Platform Infrastructure | Hyperscaler compute/storage, GenAI inference, MLOps tooling | $26,900,000 | 27.2% |
| Tooling & Licenses | Delivery tooling, QA/test automation, observability | $1,900,000 | 1.9% |
| Contingency Reserve | ESB-controlled, released against realized risk | $9,000,000 | 9.1% |
| Total Authorized Budget | $99,000,000 | 100.0% |
2 · Baseline by Contract Year (SOW Envelopes)
Each program year is contracted under a separate Statement of Work. Year 2 is the peak spend year, when BRD-02 and BRD-03 are delivered in parallel at maximum concurrent staffing.
| Year | Period | Scope Focus | Envelope | % of Total |
|---|---|---|---|---|
| Year 1 | Aug 2026 – Aug 2027 | Foundation, CoE & governance, platform build, BRD-01 to production | $27,720,000 | 28.0% |
| Year 2 | Sep 2027 – Aug 2028 | BRD-02 and BRD-03 parallel delivery (peak staffing) | $41,580,000 | 42.0% |
| Year 3 | Sep 2028 – Aug 2029 | Optimization, benefits realization, transition & closeout | $29,700,000 | 30.0% |
| Total | 36.5 months | $99,000,000 | 100.0% |
Envelopes tie exactly to SOW-01, SOW-02 and SOW-03 and to the investment schedule in the Cost-Benefit Analysis.
3 · Baseline by WBS Workstream
The same $99.0M allocated against the seven WBS elements — the view used for work-package cost control on the WBS Budget Rollup.
| WBS | Workstream | Type | Budget | % of Total |
|---|---|---|---|---|
| 1.0 | Program Management & PMO | Management | $12,600,000 | 12.7% |
| 2.0 | Data & Cloud AI Platform | Cross-cutting | $20,700,000 | 20.9% |
| 3.0 | AI Governance & Center of Excellence | Cross-cutting | $13,200,000 | 13.3% |
| 4.0 | BRD-01 · Claims & Prior Authorization AI | Delivery | $11,020,000 | 11.1% |
| 5.0 | BRD-02 · Member & Provider Experience AI | Delivery | $13,200,000 | 13.3% |
| 6.0 | BRD-03 · Underwriting & Risk AI | Delivery | $12,480,000 | 12.6% |
| 7.0 | Optimization, Benefits & Closeout | Sustain | $15,800,000 | 16.0% |
| Total | $99,000,000 | 100.0% |
4 · Quarterly Spend Plan & Cash-Flow Curve
Planned expenditure by program quarter. The curve shows the expected S-shape: a deliberately slow Phase-0 mobilization, steep ramp through BRD-01 delivery, a Year-2 plateau at peak concurrent staffing, then a Year-3 taper as delivery teams roll off and the program transitions to steady-state operations.
| Quarter | Period | Phase Focus | Planned Spend | Cumulative | Cum. % |
|---|---|---|---|---|---|
| Y1 Q1 | Aug – Nov 2026 | Phase 0 mobilization, readiness, vendor selection | $4,200,000 | $4,200,000 | 4.2% |
| Y1 Q2 | Dec 2026 – Feb 2027 | BRD-01 requirements, platform foundation build | $6,300,000 | $10,500,000 | 10.6% |
| Y1 Q3 | Mar – May 2027 | Platform live, BRD-01 model development | $8,100,000 | $18,600,000 | 18.8% |
| Y1 Q4 | Jun – Aug 2027 | BRD-01 test, IMV, UAT, production go-live | $9,120,000 | $27,720,000 | 28.0% |
| Year 1 | $27,720,000 | ||||
| Y2 Q1 | Sep – Nov 2027 | BRD-02 & BRD-03 mobilization and design | $9,500,000 | $37,220,000 | 37.6% |
| Y2 Q2 | Dec 2027 – Feb 2028 | Parallel build — peak staffing | $10,800,000 | $48,020,000 | 48.5% |
| Y2 Q3 | Mar – May 2028 | Parallel build & test — peak spend | $11,000,000 | $59,020,000 | 59.6% |
| Y2 Q4 | Jun – Aug 2028 | BRD-02 UAT and production preparation | $10,280,000 | $69,300,000 | 70.0% |
| Year 2 | $41,580,000 | ||||
| Y3 Q1 | Sep – Nov 2028 | BRD-02 production, BRD-03 validation & go-live | $9,600,000 | $78,900,000 | 79.7% |
| Y3 Q2 | Dec 2028 – Feb 2029 | Optimization and retraining cycles | $8,400,000 | $87,300,000 | 88.2% |
| Y3 Q3 | Mar – May 2029 | Benefits audit, knowledge transfer | $6,900,000 | $94,200,000 | 95.2% |
| Y3 Q4 | Jun – Aug 2029 | Steady-state transition and closeout | $4,800,000 | $99,000,000 | 100.0% |
| Year 3 | $29,700,000 | ||||
| Total | $99,000,000 | $99,000,000 | 100.0% |
5 · Earned Value Baseline
The spend plan above is the performance measurement baseline (PMB) against which earned value is calculated. Position at the 11 September 2026 status date:
| Measure | Definition | Value | Interpretation |
|---|---|---|---|
| BAC — Budget at Completion | Total authorized baseline | $99,000,000 | Unchanged since authorization |
| PV — Planned Value | Budgeted cost of work scheduled to date | $2,000,000 | Week-4 Phase-0 position |
| EV — Earned Value | Budgeted cost of work performed | $2,000,000 | Work performed matches plan |
| AC — Actual Cost | Actual cost of work performed | $2,000,000 | Spend matches earned value |
| SV — Schedule Variance (EV−PV) | Schedule position in cost terms | $0 | On schedule |
| CV — Cost Variance (EV−AC) | Cost position | $0 | On budget |
| SPI — Schedule Performance Index | EV ÷ PV | 1.00 | On baseline |
| CPI — Cost Performance Index | EV ÷ AC | 1.00 | On baseline |
| EAC — Estimate at Completion | BAC ÷ CPI | $99,000,000 | Forecast equals baseline |
| ETC — Estimate to Complete | EAC − AC | $97,000,000 | Remaining forecast spend |
| VAC — Variance at Completion | BAC − EAC | $0 | No forecast overrun |
Budget-weighted completion is 2.0% (EV ÷ BAC). The Resource-Loaded WBS reports schedule (duration-weighted) percent complete for the same status date — a different, complementary measure. EVM is reported monthly to the Executive Steering Board by Program Finance.
6 · Cost by Phase
| Phase | Period | Budget | % of Total | Principal Cost Drivers |
|---|---|---|---|---|
| Phase 0 — Foundation & Mobilization | Aug – Nov 2026 | $4,200,000 | 4.2% | Readiness assessment, governance stand-up, vendor selection |
| Phase 1 — BRD-01 Delivery | Dec 2026 – Aug 2027 | $23,520,000 | 23.8% | Platform foundation, BRD-01 build/test/IMV, first production go-live |
| Phase 2 — Expansion (BRD-02 & BRD-03) | Sep 2027 – Aug 2028 | $41,580,000 | 42.0% | Peak concurrent staffing, parallel delivery, scaled compute |
| Phase 3 — Optimization & Closeout | Sep 2028 – Aug 2029 | $29,700,000 | 30.0% | Retraining, benefits audit, knowledge transfer, transition |
| Total | $99,000,000 | 100.0% |
7 · Labor Rate Card
Blended rate structure underpinning the $61.2M labor baseline, drawn from the Resource Plan. Onshore-only staffing is contractually required for Legal, Compliance, SOX, executive, and PHI claims-decision roles; offshore capacity is concentrated in platform engineering and QA.
| Staffing Model | Roles Covered | Headcount | Rate Range | Blended |
|---|---|---|---|---|
| ACME Internal FTE (onshore) | Executive, business SME, clinical, operations, UAT, IT operations | 132 | $62 – $280/hr | $135/hr |
| Pulaski Consultant — onshore | Program leadership, architecture, AI/ML engineering, governance, IMV | 75 | $90 – $165/hr | $133/hr |
| Pulaski Consultant — offshore | Platform & data engineering, QA and test automation | 55 | $60 – $85/hr | $74/hr |
| Life-of-program roster | 262 | $60 – $280/hr | $122/hr |
Headcount is the life-of-program roster, not concurrent staffing; teams ramp on and off by phase. Rates are held firm for the life of each annual SOW, with escalation negotiated at renewal (see assumptions below).
8 · Funding & Authorization Schedule
Funding is authorized annually against SOW execution, not released as a single lump sum. Each authorization is contingent on the prior year's phase-gate outcome, giving the Executive Steering Board a genuine stage-gate on continued investment.
| Authorization | Trigger | Amount | Status |
|---|---|---|---|
| Year 1 funding (SOW-01) | Charter approval & SOW-01 execution | $27,720,000 | Authorized 17 Aug 2026 |
| Year 2 funding (SOW-02) | Year-1 close & BRD-01 production acceptance | $41,580,000 | Planned Sep 2027 |
| Year 3 funding (SOW-03) | Year-2 close & BRD-02/03 delivery acceptance | $29,700,000 | Planned Sep 2028 |
| Total program authorization | $99,000,000 |
Invoicing runs against milestone payment schedules defined in each SOW; Program Finance reconciles invoices to earned value monthly, and SOX/Financial Controls reviews any item affecting claims-payment or financial-reporting systems.
9 · Contingency Reserve Ledger
The $9.0M contingency (9.1% of baseline) is held by the Executive Steering Board and released only against realized risk, never to absorb scope growth — scope changes follow the change-control path and require their own funding decision.
| Date | Event | Linked Risk | Drawn | Balance |
|---|---|---|---|---|
| 17 Aug 2026 | Contingency established at Charter authorization | — | $0 | $9,000,000 |
| 11 Sep 2026 | Position at status date — no drawdowns to date | — | $0 | $9,000,000 |
Release authority
| Drawdown Amount | Approval Authority | Evidence Required |
|---|---|---|
| Up to $250,000 | Program Director | RAIDD entry, cost basis, PMO log |
| $250,000 – $500,000 | Program Director + Program Finance | Root cause, alternatives considered |
| $500,000 – $1,000,000 | Executive Steering Board | Formal presentation with root cause, alternatives, payback |
| Above $1,000,000 | Executive Sponsor (direct approval) | Full business case and re-baselining assessment |
10 · Budget Assumptions & Exclusions
Assumptions
- Rate stability — consultant rates are held firm within each annual SOW; escalation is negotiated at renewal and absorbed within the following year's envelope.
- Cloud cost escalation of 0.8% per year on committed infrastructure, consistent with the TCO model; GenAI inference cost is treated as variable and governed by FinOps guardrails.
- Staffing ramp follows the Resource Plan — the 262-person roster is a life-of-program figure with phase-based ramping, not concurrent headcount.
- ACME internal FTE cost is charged at loaded cost, not market rate, and is a real budget line rather than a notional allocation.
- No benefit offsets are netted against program cost; benefits are tracked separately in the CBA.
Exclusions
- CMS-0057-F baseline compliance — funded and delivered as a separate ACME project; only the coordination interface is in scope here.
- Steady-state run cost beyond program close — the $9.5M/year ongoing operating cost from Year 4 is modeled in the CBA and TCO, not in this baseline.
- Downstream business-unit change costs outside the program's change-management scope.
- Future AI use cases beyond BRD-01/02/03, which enter through the CoE intake process with their own funding.
11 · Budget Controls & Reporting
| Control | Cadence | Owner | Escalation |
|---|---|---|---|
| EVM calculation & variance analysis | Monthly | Program Finance (A. Rodriguez) | CPI or SPI < 0.95 → ESB |
| Actuals-to-invoice reconciliation | Monthly | Program Finance | Variance > 2% → Program Director |
| Forecast (EAC) refresh | Quarterly | Program Finance + PMO | VAC > $1M → ESB |
| Cloud/AI compute cost review (FinOps) | Monthly | Platform Lead + Program Finance | Run-rate breach → EARB & ESB |
| Contingency ledger review | Monthly | PMO (T. Valdez) | Per release-authority table above |
| SOX controls testing (payment-affecting scope) | Per release | SOX / Financial Controls | Control failure → Compliance & ESB |