The paper discusses a real-life application of concepts often referred to in project management articles, particularly the Budgeted Cost of Work Performed (BCWP). The project management system (PMS) described was patterned after that developed by the Department of Defense and adapted to the needs of the Federal research and development setting in which it was used. It spans 8 years of use, during which several stages of implementation led to successful functioning. This PMS requires contractors to prepare a Work Plan (WP), including establishing a performance baseline--the Budgeted Cost of Work Scheduled (BCWS); and a monthly cost/schedule status report, providing the BCWP and the Actual Cost of Work Performed (ACWP). Using these key concepts, the contractor calculates cost and schedule variances upon which the project officer bases decisions on additional funding, deletions of portions of work, and the like.