What is a committed cost?

Question

In project cost management, what is a committed cost? Is it a cost that will be incurred on the project no matter what? Can you also give me an example of a committed cost, preferably in a construction project.

Answer 1

Yes, committed costs are those costs that will be incurred regardless of the status of the project (even if the project is killed, committed costs will still be incurred).

An example of a committed cost in a construction project is a legal commitment to buy concrete every 3 months from a vendor for the next 3 years. Even if the project is done before that time (or is canceled/killed/delayed), the costs will still be incurred.