EVM
Earned Value Management (EVM)
is a tool that allows both Government and contractor Program Managers (PMs) to have visibility into technical, cost, and schedule planning, performance, and progress on their contracts.
Cost Variance =
BCWP – ACWP
Schedule Variance =
BCWP – BCWS
Cost Performance Index =
BCWP/ACWP
Schedule Performance Index =
BCWP/BCWS
Contracts of _______ or more require a formal EVM system validation
$50M
Earned Value Management (EVM)
is an integrated management system; coordinates work scope, schedule, and budget goals, and objectively measures progress towards these goals.
The Defense Contract Management Agency (DCMA)
is the only organization recognized by DoD to perform EVMS Validation.
The Defense Contract Audit Agency (DCAA)
is responsible for conducting audit reviews of the contractor’s accounting system policies, procedures, and activities.
For contract’s awarded prior to July 1, 2012, the Contract Performance Report (CPR)
is a contractually required report, prepared by the contractor, containing performance information derived from the internal EVMS.
For contracts awarded after July 1, 2012 the Integrated Program Management Report (IPMR)
has replaced the Contract Performance Report (CPR) and Integrated Master Schedule (IMS) contractual requirements
The Defense Contract Audit Agency (DCAA) is
responsible for conducting audit reviews of the contractor’s accounting system policies, procedures, and activities.
For contract’s awarded prior to July 1, 2012,
the Contract Performance Report (CPR) is a contractually required report, prepared by the contractor, containing performance information derived from the internal EVMS.
For contracts awarded after July 1, 2012 the Integrated Program Management Report (IPMR)
has replaced the Contract Performance Report (CPR) and Integrated Master Schedule (IMS) contractual requirements
Cost Variance (CV) indicates how much
over or under budget the project is
Schedule Variance indicates how much
ahead or behind schedule the project is
Cost Performance Index (CPI) measures how efficiently
the contractor is performing the work based on the original planned budget.
the basic elements of performance measurement
is the comparison of actual performance against a baseline plan.
PMB development follows a 3 step process:
Define the work (WBS)
Schedule the work
Allocate budgets
Schedule the work
Allocate budgets
The Performance Measurement Baseline (PMB) is the sum of the time-phased BCWS
for all work, planning, and summary level packages.
The PMB is the contractor’s time-phased plan for accomplishing the work on the contract.
It establishes the scope, schedule, and budget targets for the program.
Control accounts are management points for planning and control since
they represent the work assigned to one responsible organizational element on one program WBS.
“Mini-Programs” having
defined scope, schedule, and budget.
Understand the difference in the methods to measure performance against the Performance Measurement Baseline
0-100 Method: Once job is finished, value is earned (short duration)
50/50 Method: Earn 50% when start, earn 50% when completed
Value Milestone Method: Assign budgets to milestones and earn as each milestone is reached
Completed or Equivalent Unit Method: Count units being fabricated or completed operations that go into a unit
Planning Package (Rolling Wave): Lock in budgets prior to beginning work.
50/50 Method: Earn 50% when start, earn 50% when completed
Value Milestone Method: Assign budgets to milestones and earn as each milestone is reached
Completed or Equivalent Unit Method: Count units being fabricated or completed operations that go into a unit
Planning Package (Rolling Wave): Lock in budgets prior to beginning work.
Labor Costs:
Occur at work package level, recording man-hours on time cards (or equivalent method).
The Integrated Baseline Review
Is a formal review conducted jointly between the Government and contractor
Assesses the validity of control account budgets, resources, and time phasing
Is mandatory for all EVMS contracts
Is a process, not an event
Ensures work package technical content consistent with contract SOW
Assesses the validity of control account budgets, resources, and time phasing
Is mandatory for all EVMS contracts
Is a process, not an event
Ensures work package technical content consistent with contract SOW
DCMA performs two major types of EVMS surveillance
System Surveillance
Program / Contract Surveillance
Program / Contract Surveillance
The 32 EVMS guidelines in ANSI/EIA-748
provide a framework to evaluate the adequacy of a contractor’s EVM system.
Recognize the nine management processes associated with EVM
Organizing
Scheduling
Work/Budget Authorization
Accounting
Indirect Management
Managerial Analysis
Change Incorporation
Materiel Management
Sub-contract Management
Scheduling
Work/Budget Authorization
Accounting
Indirect Management
Managerial Analysis
Change Incorporation
Materiel Management
Sub-contract Management
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