Budget, Resource, and Vendor Management
The core idea
Trial budgets connect protocol activities to costs. Understand activity-based budgeting: each WBS activity (screening visit, monitoring trip, lab kit) carries a cost estimate. Know the difference between a sponsor budget and a site budget, and why per-patient/per-visit and pass-through costs are structured differently. Familiarize yourself with cost baseline, contingency reserve (for known risks) versus management reserve (for unknown unknowns), and earned value basics: planned value, earned value, actual cost, and cost/schedule variance.
Concepts to master
Resource management includes resource leveling (resolving over-allocation, often extending duration) versus smoothing (shifting within float). Vendor management requires procurement planning, clear statements of work, defined deliverables and acceptance criteria, and performance monitoring against contract terms. Know that scope changes outside the contract require a formal change order-not a verbal agreement. Understand invoice reconciliation: matching billed amounts to contracted units and completed work.
Traps
Distractors include paying invoices without reconciling to deliverables, treating contingency reserve as freely available for any overage, and assuming the lowest bid is the best vendor choice (quality, capacity, and compliance matter). Another trap: confusing resource leveling with smoothing. Also watch for questions where a vendor underperforms-the first step is usually documented performance review and communication per the contract, not immediate termination.
Rule of thumb
Every budget line should trace to an activity or deliverable. If you cannot name the activity a cost supports, question the cost.
Worked example
A CRO bills for 40 monitoring visits but the SOW specifies 30. The PM should reconcile against the contract, document the variance, and address it through contract administration-not approve and adjust the budget silently.