Earned Value Management NCMA Workshop_June08
-
Upload
ajayikayode -
Category
Documents
-
view
239 -
download
1
Transcript of Earned Value Management NCMA Workshop_June08
-
8/10/2019 Earned Value Management NCMA Workshop_June08
1/71
1
BASICS OF
EARNED VALUEMANAGEMENT
National Contract Management Association
Colorado Springs ColoradoJune 19, 2008
-
8/10/2019 Earned Value Management NCMA Workshop_June08
2/71
2
Earned Value Management(EVM) Training Objectives
Understand basic concepts What EVM is and basic terms
How to evaluate performance What does it all mean?
How to manage using Earned Value Now that we know what it is and what it means,
what do we do with it?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
3/71
3
Earned Value ManagementSystems measure progress
Progress = Movement Forward
to measure progress,there must be a standard
against which the forward
movement may be
compared
EVMS establishes a baseline
to measure progress
-
8/10/2019 Earned Value Management NCMA Workshop_June08
4/71
4
EVM can provide answers to the
following questions: How much have we spent?
How much did we get for our money?
How much more will be have to spend to complete thetasks we wanted to accomplish?
How much longer will it take?
How efficiently is the work being done?
What has happened? (Why are we off schedule/cost?) What is happening? (What are the impacts?)
What is going to happen? (What are we doing to fix it?)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
5/71
5
Why use Earned ValueManagement Systems?
The Bottom Line
EVM can focus program management attention oncritical issues and risks during the project life
cycle How are you doing, and how do you know how you
are doing? Early problem identification
Completion Estimates How far along are you? (64%, 50%, >40%) What is your productivity/efficiency? Work remaining
-
8/10/2019 Earned Value Management NCMA Workshop_June08
6/71
6
Earned Value ManagementIs Not:
Guarantee of profit
Restricted to projects for the production ofa products EVM can be used in servicecontracts
Solution for a poorly written statement ofwork
Magic Bullet
-
8/10/2019 Earned Value Management NCMA Workshop_June08
7/71
7
Five Basic Elements
BCWS Budgeted Cost of Work Scheduled
BCWP Budgeted Cost of Work Performed
ACWP Actual Cost of Work Performed
BAC Budget at Completion
EAC Estimate at Completion
-
8/10/2019 Earned Value Management NCMA Workshop_June08
8/71
8
5 Basic Performance Data
Questions & Answers
QUESTION ANSWER ACRONYM
How much work should Budgeted Cost for BCWSbe done? Work Scheduled
How much work is done? Budgeted Cost for BCWPWork Performed
How much did the is done Actual Cost of ACWPwork cost? Work Performed
What was the total job Budget at Completion BACsupposed to cost?
What do we now expect the Estimate at Completion EACtotal job to cost?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
9/71
9
What do we measure progress against?and Why?
Performance measurement baseline Budgetthat is spread over . . .
Time, to accomplish the scope of
Work, against which progress can be measured
Earned Value is key concept how much progress did I make against my original
plan?
expressed in dollars or hours Why? early warning
$
time
baseline
earned value
-
8/10/2019 Earned Value Management NCMA Workshop_June08
10/71
10
Why do we need
Early Warn ing?
Small course corrections areeasier when made early
If you wait until you reach
the Iceberg, its too late!!!
-
8/10/2019 Earned Value Management NCMA Workshop_June08
11/71
11
Terms and Definitions associated withEVM:
It starts with the Work Breakdown Structure(WBS)
Based on the WBS a total budget is assigned
Work packages are developed and priced
A process to measure the results of thosework packages is put into place
Work packages are tracked for both thedollars and time spent
The result of this effort is developing a Budget atcompletion (BAC)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
12/71
12
Work Breakdown Structure
1.0 Project New Marketing Campaign
for Dog Food
1.1 PrintedMedia
1.2 ElectronicMedia
1.3 Radio
1.3.1LocalSpots
1.3.2Regional
Spots
1.1.2Newspaper
inserts
1.1.1Magazines
1.2.2TV
1.2.1Website
First Level
Second Level
ThirdLevel
Systematic approach to ensuring all program work is recognized and defined intoa viable work plan should include labor and materials for complete picture
O i ti l B kd
-
8/10/2019 Earned Value Management NCMA Workshop_June08
13/71
13
Organizational BreakdownStructure
New Marketing Campaignfor Dog Food -
assign to the Western Division
ChucksDesignTeam
RegionalMedia
Support
CentralizedNationalSupport
StanIn
Accounting
RayBudget
Juan forCustomerinterface
SallyFor messageAnd theme
JoshAudio
John forComputerGraphics
Identifies the functions and/or people that will do the work
Beverlyin
NationalAccounts
Admin AsstChen
Tanya Print
-
8/10/2019 Earned Value Management NCMA Workshop_June08
14/71
14
Responsibility MatrixAssigns WBS work to OBS labor
design
graphics
accounting
1.1.1 1.1.2 1.2.1
AdminAsst
audio
budget
1.1 1.2
OBS WBS
- - - - - - - - - - - - - - - - - - - - - - - - - -
----------
-----------------------
- - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - -
----------
-----------------------
--------
--------------
-----------
-
8/10/2019 Earned Value Management NCMA Workshop_June08
15/71
15
CONTRACT BUDGETBASE
CONTRACT
PRICE
CONTRACT
BUDGET BASE
PROFITS AND
FEES
MANAGEMENT
RESERVE
PERFORMANCE
MEASUREMENT
BASELINE
WITHHELD
FOR
UNKNOWNS
UNDISTRIBUTED
BUDGET
DISTRIBUTED
(control accountS)
WITHHELD FOR
KNOWN EFFORT
AUTHORIZED,
UNPRICED
-
8/10/2019 Earned Value Management NCMA Workshop_June08
16/71
16
ORGANIZATION
BUDGET LEDGER
MASTER SCHEDULE
GENERAL WORKAUTHORIZATION
CONTRACT
Control AccountWBS # ______________ ORG # ______________
TASK DESCRIPTION________________________
SCHEDULE _______________________________
TOTAL BUDGET ________________
WORK PACKAGE
WP # ________ ORG # _________
DESCRIPTION ________________
______________________________
SCHEDULE _________________
BUDGET ___________________
WBS ELEMENT
ORGANIZATION
WORK AUTHORIZATION
SCHEDULE
BUDGET
COST ACCUMULATION
-
8/10/2019 Earned Value Management NCMA Workshop_June08
17/71
17
The Control AccountA Key Management Control Point
Specific functional responsibility
Specific WBS responsibility
Work planning and assignment
Performance measurement
Cost collection
Variance analysis
Corrective action
Basis of data summarization
-
8/10/2019 Earned Value Management NCMA Workshop_June08
18/71
18
CONTRACT BUDGETBASE
CONTRACT
PRICE
CONTRACT
BUDGET BASE
PROFITS AND
FEES
MANAGEMENT
RESERVE
PERFORMANCE
MEASUREMENT
BASELINE
WITHHELD
FOR
UNKNOWNS
UNDISTRIBUTED
BUDGET
DISTRIBUTED
(control accountS)
WITHHELD FOR
KNOWN EFFORT
AUTHORIZED,
UNPRICED
-
8/10/2019 Earned Value Management NCMA Workshop_June08
19/71
19
PERFORMANCE MEASUREMENT
DATA ELEMENTS
UNDISTRIBUTED BUDGET (UB)
Budget applicable to contract effortwhich has
not yet been identified to CWBS elements at orbelow the lowest level of reporting to the
Government.
KEY: Only used for the effort associated
with the contractual change.
-
8/10/2019 Earned Value Management NCMA Workshop_June08
20/71
20
PERFORMANCE MEASUREMENTDATA ELEMENTS
MANAGEMENT RESERVE (MR)An amount of the total allocated budget
withheld for management control purposesrather than designated for the
accomplishment of a specific task or set of
tasks.
KEY: There is no scope of work associated
with management reserve budget.
-
8/10/2019 Earned Value Management NCMA Workshop_June08
21/71
21
1. DEFINE THE WORK
PLANNING AND BUDGETING
ESTABLISH THE BASELINE - AN ITERATIVE, 3-STEP PROCESS
10040
60
15
25
30
30
2. SCHEDULE THE WORK
3. ALLOCATE BUDGETS
$
CONTRACT BUDGET BASE
TIME
MR
-
8/10/2019 Earned Value Management NCMA Workshop_June08
22/71
22
Work Budgeted and Earned
The value of the budgeted workis called:Budgeted Cost of Work Scheduled(BCWS)
The value of work earnedis called:Budgeted Cost of Work Performed(BCWP)
BCWP is also called Earned Value (EV)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
23/71
23
5 Basic Performance Data
Questions & Answers
QUESTION ANSWER ACRONYM
How much work should Budgeted Cost for BCWSbe done? Work Scheduled
How much work is done? Budgeted Cost for BCWPWork Performed
How much did the is done Actual Cost of ACWPwork cost? Work Performed
What was the total job Budget at Completion BACsupposed to cost?
What do we now expect the Estimate at Completion EACtotal job to cost?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
24/71
Budgeted Cost of Work Scheduled
(BCWS)
Total Budget = $5,000to be spent over 5 monthsI plan to lay 1 sectionof track each month at an
estimated cost of $1,000.BCWS each month = $1,000Total BCWS = $5,000
Month 1BCWS = $1,000
Month 4BCWS = $1,000
Month 3BCWS = $1,000
Month 5BCWS = $1,000
Month 2BCWS = $1,000
sum of all BCWS = performance baseline
-
8/10/2019 Earned Value Management NCMA Workshop_June08
25/71
25
5 Basic Performance Data
Questions & Answers
QUESTION ANSWER ACRONYM
How much work should Budgeted Cost for BCWSbe done? Work Scheduled
How much work is done? Budgeted Cost for BCWPWork Performed
How much did the is done Actual Cost of ACWPwork cost? Work Performed
What was the total job Budget at Completion BACsupposed to cost?
What do we now expect the Estimate at Completion EACtotal job to cost?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
26/71
26
Budgeted Cost of Wo rk Performed
(BCWP)
aka. Earned Value
Were at the end of
February, Track 1 is
complete and track 2 is done.
BCWS = $1,000
Track 1
Track2
BCWS = $1,00050% done
Value of workperformed = $1,500
-
8/10/2019 Earned Value Management NCMA Workshop_June08
27/71
27
Schedule Variance
BC WS
BC WP
of the work I scheduled to have done,how much did I budget for it to cost?
of the work I actually performed,how much did I budget for it to cost?
SCHEDULE VARIANCEis the difference between work scheduledand work performed (expressed in terms of budget dollars)
formula: SV $ = BCWP - BCWS
B
UDGETBASED
example: SV = BCWP - BCWS = $1,500 - $2,000SV= -$500 (negative = behind schedule)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
28/71
28
Schedule Variance
$
BCWSthe baseline
BCWPearned value
TIME
5,000
sv
-
8/10/2019 Earned Value Management NCMA Workshop_June08
29/71
29
5 Basic Performance Data
Questions & Answers
QUESTION ANSWER ACRONYM
How much work should Budgeted Cost for BCWSbe done? Work Scheduled
How much work is done? Budgeted Cost for BCWPWork Performed
How much did the is done Actual Cost of ACWPwork cost? Work Performed
What was the total job Budget at Completion BACsupposed to cost?
What do we now expect the Estimate at Completion EACtotal job to cost?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
30/71
30
Actual Cost of Work Performed(ACWP)
Value is earned as the work is completedand gauged against the schedule proposedfor the work
When all work is completedit will haveearned its full budgeted valuebut the actualcostof that work may be different that the
amount budgeted this is referred to asActual Cost of Work Performed (ACWP)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
31/71
ACTUAL COST FOR WORK PERFORMED (ACWP)
The costs actually incurred and recorded in accomplishingthe work performed (BCWP) within a given time period
Labor Material (Subcontractor/vendor)
Other, computer costs, etc.
Indirect Costs
PERFORMANCE MEASUREMENTDATA ELEMENTS
Actual Cost of Work Performed
-
8/10/2019 Earned Value Management NCMA Workshop_June08
32/71
32
Actual Cost of Work Performed(ACWP)
Track 1 Cost = $1,500!
Track 2 Cost = $750 cost todate
Total Cost to Date = $2,250
-
8/10/2019 Earned Value Management NCMA Workshop_June08
33/71
33
Cost Variance
BC WP
AC WP
of the work I actually performed,how much did I budget for it to cost?
of the work I actually performed,how muchdid it actually cost?
COST VARIANCEis the difference between budgeted costand actual cost
formula: CV $ = BCWP - ACWP
PERF
ORMANCE
BASED
example: CV = BCWP - ACWP = $1,500 - $2,250CV= -$750 (negative = cost overrun)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
34/71
34
Cost Variance
$
TIME
BCWPearned value
ACWPactual cost
5,000
cv
-
8/10/2019 Earned Value Management NCMA Workshop_June08
35/71
35
Variance Summary
The difference between the BCWP and theACWP is called a cost variance
The difference between the BCWP andBCWS is called schedule varianceand isprovided in terms of dollars
-
8/10/2019 Earned Value Management NCMA Workshop_June08
36/71
36
5 Basic Performance Data
Questions & Answers
QUESTION ANSWER ACRONYM
How much work should Budgeted Cost for BCWSbe done? Work Scheduled
How much work is done? Budgeted Cost for BCWPWork Performed
How much did the is done Actual Cost of ACWPwork cost? Work Performed
What was the total job Budget at Completion BACsupposed to cost?
What do we now expect the Estimate at Completion EACtotal job to cost?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
37/71
37
Budget at Completion (BAC)
$
time
BAC
$
$
$
$
$
$
$
when all work has been phased, cumulative BCWS = BAC
-
8/10/2019 Earned Value Management NCMA Workshop_June08
38/71
38
Est imate at Complet ion
(EAC)
Just a few littleglitches. We should
be able to do thecomplete job.ack
lets see, for about
$7,000
-
8/10/2019 Earned Value Management NCMA Workshop_June08
39/71
39
Variance at Completion (VAC)
B AC what the total job is supposedto cost
E AC what the total job is expected
to cost
VARIANCE AT COMPLETIONis the difference between what the totaljob is supposed to cost and what the total job is now expected to cost.
FORMULA: VAC = BAC - EAC
Example: VAC = $5,000 - $7,000VAC = - $2,000 (negative = overrun)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
40/71
40
Earned Value Management(EVM) Training Objectives
Understand basic concepts What EVM is and basic terms
How to evaluate performance What does it all mean?
How to manage using Earned Value Now that we know what it is and what it means,
what do we do with it?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
41/71
41
Formulas
Cost varianceBCWP ACWP
Schedule variance
BCWP BCWS
Cost variance inpercentage
BCWP ACWP x 100
BCWP
Schedule variance inpercent
BCWP BCWS x 100
BCWS
Negat ive var iance = cos t overrun or behin d sch edule
Posit ive var iance = cost und errun or ahead of sch edule
d l
-
8/10/2019 Earned Value Management NCMA Workshop_June08
42/71
42
Trend Analysis
Cost Performance Index (CPI) measure of cost efficiency
CPI = Value of Work Completed (BCWP)Cost of Work Completed (ACWP)
Schedule Performance Index (SPI) measure of schedule efficiencySPI = Value of Work Completed (BCWP)
Value of Work Planned (BCWS)
Closer to 1 the better
Less than 1 = overrun (CPI); behind schedule (SPI)
Greater than 1 = underrun (CPI); ahead of schedule (SPI)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
43/71
43
DO I THINK THE CONTRACTOR WILL COME IN ON BUDGET?
COST PERFORMANCE INDEX:
CPI = cost efficiency for work performed to date(The value of work accomplished for each dollar spent)
SCHEDULE PERFORMANCE INDEX:
SPI = schedule efficiency with which work has been accomplished
(The rate at which work is being accomplished)
Performance Eff iciencies
WORK= ACCOMPLISHED
ACTUALS
WORK= ACCOMPLISHED
WORKSCHEDULED
WORK
BCWP ACCOMPLISHED $1500
= BCWS = WORK = $2000 = .75
SCHEDULED
WORK
BCWP ACCOMPLISHED $1500
= ACWP = ACTUAL = $2250 = .67
COST
-
8/10/2019 Earned Value Management NCMA Workshop_June08
44/71
44
EXERCISES
Attendees Go to your ExercisePacket
EVM E i
-
8/10/2019 Earned Value Management NCMA Workshop_June08
45/71
45
EVM Exercise
BAC = 500BCWS = 300BCWP = 320ACWP = 330
What is the cost variance? What is the Schedule variance?
What is the Cost Performance Index? What is the Schedule Performance Index? How would you describe this project?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
46/71
46
Solution
BAC = 500
BCWS = 300
BCWP = 320
ACWP = 330
What is the cost variance?
BCWPACWP = -10 What is the Schedule variance?
BCWPBCWS = +20
-
8/10/2019 Earned Value Management NCMA Workshop_June08
47/71
47
Solution
BAC = 500
BCWS = 300
BCWP = 320
ACWP = 330
What is the Cost Performance Index?
BCWP/ACWP = .97
What is the Schedule Performance Index?BCWP/BCWS = 1.07
-
8/10/2019 Earned Value Management NCMA Workshop_June08
48/71
48
Solution
Cost Variance = -10
Schedule Variance = + 20
CPI= .97SPI= 1.07
How would you describe this project?Over budget, ahead of schedule
-
8/10/2019 Earned Value Management NCMA Workshop_June08
49/71
The table that follows presents keyinformation for several elements of the
contract WBS
Example Of PerformanceAnalysis By WBS Element.
What can it tell us?
-
8/10/2019 Earned Value Management NCMA Workshop_June08
50/71
50
Cost Performance Report Work reakdown Structure
Budget
Baseline
Cumulative Cost To Date (in $000) Cost At Completion (in $000)
$1.5 mil Budgeted Cost ActualCost
Variance
WBSElement
WorkScheduled
WorkPerformed Schedule Cost Budgeted Estimated Variance
1.1 250 250 260 0 (10) 250 260 (10)
1.2 90 85 84 (5) 1 100 100 01.3 130 150 155 20 (5) 330 340 (10)
1.4 200 200 185 0 15 250 235 15
1.5 300 310 320 10 (10) 400 415 (15)
1.6 120 120 140 0 (20) 120 140 (20)
Subtotal 1,090 1,115 1,144 1,450 1,490 (40)
Mgt. Reserve 50 50
Total 1,090 1,115 1,144 1,500 1,490 10
-
8/10/2019 Earned Value Management NCMA Workshop_June08
51/71
Graphical Depictions of EVM
-
8/10/2019 Earned Value Management NCMA Workshop_June08
52/71
PERFORMANCE MEASUREMENTDATA ELEMENTS
TIME
$
BUDGET
Contract
Complete
-
8/10/2019 Earned Value Management NCMA Workshop_June08
53/71
TIME
$
BUDGET
CV
PERFORMANCE MEASUREMENTDATA ELEMENTS
Contract
Complete
BCWP All I l ti f
-
8/10/2019 Earned Value Management NCMA Workshop_June08
54/71
BCWP Allows Isolation ofSchedule and Cost Variances
schedule variance = BCWP - BCWS = negative numbercost variance = BCWP - ACWP = negative number
behind schedule,over cost
BCWS
BCWP
ACWP
TIME
5,000
sv
cv$
Budget at Complete (BAC), Estimate at Complete (EAC)
-
8/10/2019 Earned Value Management NCMA Workshop_June08
55/71
55
Budget at Complete (BAC), Estimate at Complete (EAC)and Variance at Complete (VAC)
$
TIME
BAC= Sum of BCWS
(Planned cost of all work)
BAC = $5,000
EAC(kr)*= ACWP plus estimated
to complete (ETC)(Actual cost to date plus expected
cost to finish all work)
EAC = $7,000
BAC
EAC
ETC
VAC= BAC-EAC
VAC = $5,000-$7,000
VAC = -$2,000
VAC
Schedule
Delay
* EAC(kr) = Contractor EAC
-
8/10/2019 Earned Value Management NCMA Workshop_June08
56/71
PERFORMANCE MEASUREMENTDATA ELEMENTS
TIME
$
BUDGET
CV
VAC
Contract
Complete
SV
T d A l i U i
-
8/10/2019 Earned Value Management NCMA Workshop_June08
57/71
57
Trend Analysis UsingPerformance Indexes
Time
Time
Time
1.0
1.0
1.0
CPI
CPI
CPI
SPISPI
SPI
Trend Analysis Using Performance
-
8/10/2019 Earned Value Management NCMA Workshop_June08
58/71
58
Trend Analysis Using PerformanceIndexes
Time
Time
Time
1.0
1.0
1.0
CPI
CPI
SPI
CPISPI
SPI
E d V l M t
-
8/10/2019 Earned Value Management NCMA Workshop_June08
59/71
59
Earned Value Management
Trend Analysis
Time
Time
Time
1.0
1.0
1.0
CPI
CPI
SPI
CPISPI
SPI
-
8/10/2019 Earned Value Management NCMA Workshop_June08
60/71
Sample combined numerical
and graphical display
-
8/10/2019 Earned Value Management NCMA Workshop_June08
61/71
61
Earned Value Management
-
8/10/2019 Earned Value Management NCMA Workshop_June08
62/71
62
Earned Value Management(EVM) Training Objectives
Understand basic concepts What EVM is and basic terms
How to evaluate performance What does it all mean?
How to manage using Earned Value Now that we know what it is and what it means,
what do we do with it?
Ways of Earning Value
-
8/10/2019 Earned Value Management NCMA Workshop_June08
63/71
63
Earned Value techniques Discrete
physical, tangible end product
Apportioned discrete, dependent on another discrete work package
example: quality assurance
planned as historical estimating factor (e.g., 7%)
Level of Effort no tangible end product
basis of measurement: time
when clock starts ticking, you automatically accumulate earned value
no schedule variance
example: management personnel
Should be a quantitative and discrete way to measurethe work
May tie in with success criteria or technical measure e.g., successful completion of a specific test, QPs
Ways of Earning Value
Contractor Reports
-
8/10/2019 Earned Value Management NCMA Workshop_June08
64/71
64
Contractor Reports
Cost Performance Report (CPR)
Format 1:cost and schedule progress byWBS(specified reporting level usually at level 3)
Format 2: cost and schedule progress byorganization
Format 3:changes to performance measurement
baseline
Format 4:manpower forecast
Format 5: variance analysis
Format 1 Block Descriptions
-
8/10/2019 Earned Value Management NCMA Workshop_June08
65/71
65
Block #
1. Contractor Information - Tells you name and address of contractor
2. Contract Information - Tells name, number, type and Share ratio of contract
3. Program Information- Name and Phase of program4. Report Period - Beginning and end dates of the report data
5. Contract Data - Includes quantities, prices, fees, profit, and ceilings
6. Estimated cost - Estimated cost at completion and variance
7. Contractor Representative - Name, Title, Signature, and Date signed
8. Broken in to sections a through g and in 4 groups of data
- Current period - BCWP, BCWS, ACWP, Cost and Schedule Variances- Cumulative to date - BCWP, BCWS, ACWP, Cost and Schedule Variances
- Reprogramming Adjustments - Cost Variances and Budget
- At Completion - Budgeted, Estimated, and Variance
8a WBS cost data
8b Cost of money
8c General and administrative cost8d Undistributed money
8e Subtotal (Total without Management Reserve)
8f Management Reserve
8g Total
9a Variance adjustments (Cumulative to Date)
9b Total Contract Variance (Cumulative to Date and At Completion)
Format 1 Block Descriptions
Format 2: Organizational
-
8/10/2019 Earned Value Management NCMA Workshop_June08
66/71
66
Format 2: OrganizationalCategories
Used when contractor organizationalstructure does not mirror the WBSstructure
Provides CPR data in an organizationalformat
-
8/10/2019 Earned Value Management NCMA Workshop_June08
67/71
67
Format 3: Baseline
Used to track changes to the performancebaseline and future authorized work Identifies all changes to authorized work
during the reporting period Identifies distribution of any undistributed
budget during the reporting period
-
8/10/2019 Earned Value Management NCMA Workshop_June08
68/71
68
Format 4: Staff ing
Provides planned staffing
Current Period
Cumulative to the end of Current Period
Staffing forecast's to end of authorized work
At Completion
Broken down into organizational
categories
Format 5: Explanation and
-
8/10/2019 Earned Value Management NCMA Workshop_June08
69/71
69
Format 5: Explanation andProblem Analysis
Also called Variance Analysis Report(VAR)
Provides explanations, impact, andcorrective actions of WBS that exceed
thresholds
-
8/10/2019 Earned Value Management NCMA Workshop_June08
70/71
70
Format 5 variance analysis shouldaddress: separate discussion of CV, SV (current and
cum) and VAC
clear description of reason for variance quantity variances (e.g., price vs. usage)
be specific, not general
corrective action
technical, schedule, and cost impacts impact to estimate at completion
Variance Exp lanat ions
A big hammer fora big variance!
Profit / Fees
Contract Price
Earned Value Management
-
8/10/2019 Earned Value Management NCMA Workshop_June08
71/71
TERMINOLOGYNCC Negotiated Contract Cost Contract price less profit / fee(s)AUW Authorized Unpriced Work Work contractually approved, but not yet negotiated / definitizedCBB Contract Budget Base Sum of NCC and AUWOTB Over Target Baseline Sum of CBB and recognized overrun TAB Total Allocated Budget Sum of all budgets for work on contract = NCC, CBB, or OTB BAC Budget At Completion Total budget for total contract thru any given levelPMB Performance Measurement Baseline Contract time-phased budget planMR Management Reserve Budget withheld by Ktr PM for unknowns / risk managementUB Undistributed Budget Broadly defined activities not yet distributed to CAsCA Control Account Lowest CWBS element assigned to a single focal point to plan & control
scope / schedule / budgetWP Work Package Near-term, detail-planned activities within a CAPP Planning Package Far-term CA activities not yet defined into WPsBCWS Budgeted Cost for Work Scheduled Value of work planned to be accomplished = PLANNED VALUEBCWP Budgeted Cost for Work Performed Value of work accomplished = EARNED VALUEACWP Actual Cost of Work Performed Cost of work accomplished = ACTUAL COSTEAC Estimate At Completion Estimate of total cost for total contract thru any given level;
may be generated by Ktr, PMO, DCMA, etc. = EACKtr / PMO / DCMALRE Latest Revised Estimate Ktrs EAC or EACKtrSLPP Summary Level Planning Package Far-term activities not yet defined into CAsTCPI To Complete Performance Index Efficiency needed from time now to achieve an EAC
EVM POLICY: DoDI 5000.2, Table E3.T2 . EVMS in accordance with ANSI/EIA-748 is required for cost or incentivecontracts, subcontracts, intra-government work agreements, & other agreements valued > $20M(Then-Yr$). EVMScontracts > $50M(TY $) require that the EVM system be formally validated by the cognizant contracting officer. Additional
Guidance in Defense Acquisition Guidebook and the Earned Value Management Implementation Guide (EVMIG). EVMS isdiscouraged on Firm-Fixed Price, Level of Effort, & Time &Material efforts regardless of cost.
EVM CONTRACTING REQUIREMENTS:Non-DoDFAR Clauses Solicitation 52.234-2 (Pre-Award IBR) or 52.234-3 (Post Award IBR)
Solicitation & Contract52.234-4
DoD( $20M) DFAR Clauses - 252.234-7001 for solicitations and 252.234-7002 for solicitations & contractsContract Performance Report DI-MGMT-81466A * 5 Formats (WBS, Organization, Baseline, Staffing & Explanation)
Integrated Master Schedule DI-MGMT-81650 * (Mandatory for DoD EVMS contracts)Integrated Baseline Review (IBR)- Mandatory for all EVMS contracts
* See the EVMIG for CPR and IMS tailoring guidance.
ManagementReserve
Work Packages Planning Packages
OVERRUNAUW
ControlAccounts
NCC
UndistributedBudget
OTBCBB
TAB Profit / Fees
PMB
Summary LevelPlanning Packages
DoD TRIPWIRE METRICS Favorable is > 1.0, Unfavorable is < 1.0
Cost Efficiency CPI = BCWP/ ACWPSchedule Efficiency SPI = BCWP/ BCWS
VARIANCES Favorable is Positive, Unfavorable is NegativeCost Variance CV = BCWP ACWP CV %
= (CV / BCWP) *100Schedule Variance SV = BCWP BCWS SV %
= (SV / BCWS) *100Variance at Completion VAC = BAC EACOVERALL STATUS
% Schedule = (BCWSCUM / BAC) *100% Complete = (BCWPCUM / BAC) *100% Spent = (ACWPCUM / BAC) *100
BASELINE EXECUTION INDEX (BEI) (Schedule Metric)BEI = # of Baseline Tasks Actually Completed / # of Baseline Tasks Scheduled for Completion
CPLI = (Critical Path Duration + Float Duration(to baseline finish)) / Critical Path DurationCRITICAL PATH LENGTH INDEX (CPLI) (Schedule Metric)
TO COMPLETE PERFORMANCE INDEX (TCPI) #
TCPIEAC = Work Remaining / Cost Remaining = (BACBCWPCUM)/ (EACACWPCUM)
ESTIMATE AT COMPLETION #
EAC = Actuals to Date+ [(Remaining Work) / (Efficiency Factor)]
EACCPI = ACWPCUM + [(BACBCWPCUM) / CPICUM ] BAC / CPICUM
Gold ard
Management Reserve
CostVariance
Schedule Variance
ACWP
BCWP
BCWS
$
EAC
TimeNow
CompletionDate
PMB
TAB
BAC
time