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©2010 Paladin Project Management Consultants, LLC

Earned Schedule

James C. Blair, PhD, PMP

Project Management Institute May 19, 2010

Earned Schedule

Earned Value Management Background and Context

Earned Value Management Fundamentals (Review)

Agenda

Earned Schedule Management

Earned Value BackgroundThe Earned Value concept can be traced back to the factory floor in the late 1800s

The industrial engineers did then what many executives fail to do today

h l d “ h di i l” h h iThey employed a “three dimensional” approach to measure their performance efficiency for work done in the factory

Earned Value for projects is simply applying the concept to our one-time-only project developments

1

Earned Value BackgroundThe Program Evaluation and Review Technique (PERT) was introduced to industry by the Navy in 1958

PERT was initially a network scheduling and risk management tool

However it heavily relied upon statistical probabilities, which were l i lcostly to implement

In 1962 the advocates of PERT expanded the concept to include costs in what was called PERT/Cost in addition to PERT/Time

While PERT/Time and PERT/Cost did not survive past the mid-1960s, what did survive was the Earned Value concept:

The actual costs to date were compared to the contract estimate for the work actually performed in order to show whether the work was being performed as planned

Earned Value BackgroundIn 1965 the United States Air Force (USAF) took the lead to set new standards that would allow industry project performance oversight

Without specifically prescribing what needed to be done, they merely required that contractors to satisfy broadly defined “criteria” with their current control systemscurrent control systems

In 1966 the Department of Defense (DOD) formally issued the Cost/Schedule Control Systems Criteria or C/SCSC

The C/SCSC carefully incorporated the earned value concept in the form of thirty-five (35) criteria

The concept of earned value management as a part of the C/SCSC was largely restricted to acquisition of major systems by the government

2

Earned Value BackgroundBy the 1980s, a sort of cultist society of C/SCSC professionals emerged

A self defeating aspect of the C/SCSC for project managers in the private sector was the need to learn and adopt a new terminology associated with the formal doctrine

l h d d d d “ ” ld b d iFor example: the dreaded word “overrun” could not be used in discussions, instead of cost overrun the term of “over target baseline” or OTB had to used

The new language that was required and unnatural did not go well with private industry

In spite of the overall impressive results from earned value within C/SCSC, there was a concern from both private industry and the DOD th t h d d t b dthat changes needed to be made

Earned Value BackgroundIn 1995 the a subcommittee of the National Defense Industrial Association (NDIA) began the task of re-examining the DOD’s formal earned value criteria

They called the new industrial version the “Earned Value Management System” (EVMS) criteriaSystem (EVMS) criteria

The EVMS contained thirty-two (32) criteria and each of them was rewritten in a more palatable form

In 1996 the Under Secretary of Defense for Acquisition and Technology accepted the new criteria which was later incorporated into the next revision of the DODs instructions

3

Earned Value BackgroundThe NDIA went further and had the 32 EVMS criteria formally issued as an American National Standard Institute/Electronic Industry Association (ANSI/EIA) standard

In 1998 the ANSI/EIA-748 Guide was officially issued to the public

hi k d h i ifi hif i h S ibili fThis marked the significant shift in the EVMS responsibility from a government mandate to ownership by private industry

EVM became a viable best-practice tool as opposed to a government requirement

Earned Value BackgroundThe 32 EVMS criteria is divided into 5 basic groups:

Group 1 – Organization Criteria (1-5)

Group 2 – Planning, Scheduling and Budgeting Criteria (6-15)

Group 3 – Accounting Criteria (16-21)

Group 4 – Analysis Criteria (22-27)

Group 5 – Revisions Criteria (28-32)

4

Earned Value ManagementEarned Value Management integrates scope (work), cost and schedule measures to help assess project performance

Earned Value compares three key values for each work package of the WBS:

l d l ( ) l k d d C f k Planned Value (PV), also known as Budgeted Cost of Work Scheduled (BCWS), is that portion of the approved cost estimate planned to be spent during a given period

Actual Cost (AC), also known as Actual Cost of Work Performed (ACWP), is the total of costs incurred in accomplishing work during a given period

Earned Value (EV), also known as Budgeted Cost of Work P f d (BCWP) i th l f th k f d kPerformed (BCWP), is the value of the work performed or work completed

These three values are used in combination to provide measures of whether work is being accomplished as planned, similarly to what industrial engineers did as early as the late 1800s using a standard cost system

Standard Cost System

EarnedStandards

The industrial engineers compared their planned standards with the earned standardsand actual costs

ActualCosts

PlannedStandards

and actual costs

5

EarnedStandards

Standard Cost System

Standard CostActual Quantity

CostVariance

QuantityVariance

ActualCosts

PlannedStandards

Actual CostActual Quantity

Standard CostStandard Quantity

Total Material Variance

Standard CostActual Quantity

Earned Value Management

Budgeted CostWork Performed

EV

CostVariance

QuantityVarianceSchedule

Actual CostActual Quantity

Standard CostStandard Quantity

EV

Actual CostWork Performed

Budgeted CostWork Scheduled

AC

Cash Flow Variance

PV

6

Earned Value ManagementIn order to determine the Earned Value (EV) a measure for the work completed is needed

One important measure would be the portion of worked planned (or scheduled) that actually has been completed

f l h i f k l d i f hIf we apply the same portion of work completed as a portion of the Budget (PV or BCWS), we have the “Budget of Work Performed” (EV or BCWP)

For the entire project the Budget at Completion (BAC) is the sum of all the work package budgets (PV) allocated to the project

If we know the overall Percent Complete (%Complete) of the project then the EV for the project is %Complete * BAC

Earned Value ManagementIn a detailed project some work packages will be completed, others only partially complete and still others not started

If a work package is complete then EV = PV

If a work package has not started EV = 0

There are at least four (4) methods of assigning the EV value for a partially complete work package Fixed formula (30/70, 50/50, 75/25, etc.) Percent complete estimates Milestones with weighted values Percent complete with milestone gates

The method used will depend on company policies/guidelines, project size and the structure of the worksize and the structure of the work

So if we know the percentage of the work completed for each work package, we can calculate the Earned Value (EV or BCWP) as the percentage of the Planned Value (PV or BCWS)

7

Earned Value ManagementThe variance (PV – AC) represents a cash flow cost variance but does not take into consideration the work done represented by the AC

The Earned Value Cost Variance (CV = EV – AC) indicates whether the project is under or over the budget from the perspective of the work accomplished or earnedaccomplished or earned

The Cost Performance Index (CPI = EV / AC) is the most commonly used cost-efficiency indicator and is used also for comparing the performance of multiple projects

The Cost Variance and Cost Performance Index indicate whether the project is under or over the budget as follows:

Budget Status

Under CV > 0 CPI > 1

Over CV < 0 CPI < 1

Earned Value ManagementThe Schedule Variance (SV = EV – PV) indicates whether the project is ahead of or behind schedule in terms of the work accomplished

The Schedule Performance Index (SPI = EV / PV) is sometimes used in conjunction with the CPI to forecast completion estimates and also for comparing the performance of multiple projectsfor comparing the performance of multiple projects

The Schedule Variance and Schedule Performance Index indicate whether the project is ahead of or behind schedule as follows:

Schedule Status

Ahead SV > 0 SPI > 1

Behind SV < 0 SPI < 1

8

Earned Value ManagementEarned Value

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Earned Value Analysis - Example 1

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AC (ACWP)

EV (BCWP)

AC (ACWP)PV (BCWS)

EV (BCWP)

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Months


EXAMPLE 1

MONTH 0 1 2 3 4 5 6 7 8 9 10MONTH 0 1 2 3 4 5 6 7 8 9 10

PV $0 $2,000 $6,000 $15,000 $30,000 $50,000 $65,000 $76,000 $86,000 $91,000 $95,000

AC $0 $2,500 $8,000 $20,000 $38,000 $70,000

EV $0 $1,500 $4,000 $13,000 $23,000 $40,000

SV $0 -$500 -$2,000 -$2,000 -$7,000 -$10,000

SPI 0.00 0.75 0.67 0.87 0.77 0.80

CV $0 -$1,000 -$4,000 -$7,000 -$15,000 -$30,000

Behind Schedule

Over Budget

CPI 0.00 0.60 0.50 0.65 0.61 0.57

9


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AC (ACWP)

EV (BCWP)

EV (BCWP)

AC (ACWP)

PV (BCWS)

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Months

EXAMPLE 2

MONTH 0 1 2 3 4 5 6 7 8 9 10


MONTH 0 1 2 3 4 5 6 7 8 9 10

PV $0 $2,000 $6,000 $15,000 $30,000 $50,000 $65,000 $76,000 $86,000 $91,000 $95,000

AC $0 $1,500 $4,000 $13,000 $23,000 $40,000

EV $0 $2,500 $8,000 $20,000 $38,000 $70,000

SV $0 $500 $2,000 $5,000 $8,000 $20,000

SPI 0.00 1.25 1.33 1.33 1.27 1.40

CV $0 $1,000 $4,000 $7,000 $15,000 $30,000

Ahead of Schedule

Under Budget

CPI 0.00 1.67 2.00 1.54 1.65 1.75

10


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AC (ACWP)PV (BCWS)

EV (BCWP)

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Months

EXAMPLE 3

MONTH 0 1 2 3 4 5 6 7 8 9 10


MONTH 0 1 2 3 4 5 6 7 8 9 10

PV $0 $2,000 $6,000 $15,000 $30,000 $50,000 $65,000 $76,000 $86,000 $91,000 $95,000

AC $0 $3,000 $10,000 $25,000 $45,000 $70,000

EV $0 $2,500 $8,000 $20,000 $38,000 $60,000

SV $0 $500 $2,000 $5,000 $8,000 $10,000

SPI 0.00 1.25 1.33 1.33 1.27 1.20

CV $0 -$500 -$2,000 -$5,000 -$7,000 -$10,000

Ahead of Schedule

Over Budget

CPI 0.00 0.83 0.80 0.80 0.84 0.86

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$ ,

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AC (ACWP)

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Data Source: Chris Hanson, PMPGA Sullivan Consulting

Earned Value ManagementEarned Value - Control Chart

1.601.701.801.902.00

0 100.200.300.400.500.600.700.800.901.001.101.201.301.401.50

Per

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UCL

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0.000.10

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Earned Value ManagementThe Cost-Schedule Index (CSI) is often used as a single number for the comparison of various projects

CSI = CPI * SPI

The CSI is sometimes referred to as the Critical Ratio (CR)

Basically the CSI is the Cost Performance Index (CPI) weighted by the Schedule Performance Index (SPI)

The smaller the value of the CSI which is less than 1.0 indicates the less likely that the project can be recovered

Earned Value ManagementForecasting includes making estimates or predictions of conditions in the project’s future based on information and knowledge available at the time of the forecast

The Budget at Completion (BAC) is the sum of all the budgets (PV) allocated to the project or the project baselineallocated to the project or the project baseline

Forecasting techniques help to assess:

The cost or amount of work to complete the scheduled work packages, which is called the Estimate at Completion (EAC)

The estimate for completing the remaining work packages, which is called the Estimate to Complete (ETC)

Hence the EAC = AC + ETC

The Variance at Completion (VAC = BAC – EAC) provides the best estimate of the total cost variance at the completion of the project, and can be expressed as a percentage (VAC% = VAC / BAC)

13

Earned Value ManagementAn Estimate at Completion (EAC) is a forecast of the most likely costs based on the project performance and risk quantification

There are several techniques for determining the EAC: EAC = Actual Costs to date plus a new estimated cost for the

l ti f ll i i kcompletion of all remaining work EAC = AC + ETC

EAC = Actual Costs to date plus the remaining budget, which is the Budget at Completion minus the Earned Value EAC = AC + (BAC – EV) EAC = BAC – CV

EAC = Actual Costs to date plus the remaining project budget modified by the cost performance to date (the cumulative CPI)modified by the cost performance to date (the cumulative CPI) EAC = AC + ((BAC – EV) / CPI), which is the same as EAC = BAC / CPI

EAC = Actual Costs to date plus the remaining project budget modified by a efficiency rate that considers both cost and schedule EAC = AC + ((BAC – EV) / (CPI * SPI))

Earned Value ManagementThe To-Complete Performance Index (TCPI) indicates the efficiency that must be achieved for the remaining work of the project to meet the specified targeted Budget at Completion (BAC) or the revised Estimate at Completion (EAC)

The TCPI is calculated by dividing the work remaining by the fundsThe TCPI is calculated by dividing the work remaining by the funds remaining, which can be either based on the BAC or the EAC: TCPI = (BAC – EV) / (BAC – AC) TCPI = (BAC – EV) / (EAC – AC)

Also the overall Percent Complete can be calculated as: %Complete = EV / BAC

And the Percent Money Spent can be calculated as:%S t AC / BAC %Spent = AC / BAC

14

Earned Schedule ManagementTo confidently apply Earned Value Management (EVM) data for outcome prediction and project planning, the numbers must reflect the real performance of the project

The schedule indicators (SV and SPI) are useful indicators and predictors of performance and results to a pointpredictors of performance and results

However, since they are expressed in terms of cost rather than time, they can behave in ways that are not normally expected of schedule indicators and predictors

It has been known that the schedule indicators fail to provide the information expected by stakeholders, particularly over the last third of a project

Si th h d l i di t b d t b EV l

to a point

Since the schedule indicators use budget numbers, EV always converges to the PV toward the end of a project

The schedule indicators absolutely breakdown if the project is executing past its planned completion date

Earned Schedule ManagementBecause the problems with the schedule indicators are well known to EVM practitioners, over time the application of EVM has evolved to become a management method focused primarily on cost

The schedule indicators are not relied upon to the same extent as the cost indicatorscost indicators

There is an emerging practice in EVM, which uses time-based measures of schedule variance and performance as an alternative or supplement to the traditional cost-based measures (PMI’s Practice Standard for Earned Value Management page 18)

The traditional cost based method compares the cost of work performed and the cost of work planned (or scheduled) at a particular point in timepoint in time

The time based method compares the time of the work performed and the time of the work scheduled

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$100

Earned Schedule Analysis - Example 1

Earned Schedule ManagementEarned Schedule

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Earned ValueCost Variance

Earned ValueSchedule Variance

AC (ACWP) PV (BCWS)

EV (BCWP)

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ProjectionOf

EV on PV

AC (ACWP) PV (BCWS)

EV (BCWP)

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Months AT(Actual Time)

ES(Earned Schedule)

Earned ScheduleVariance

16

Earned Schedule ManagementIn 2003 Walt Lipke published his seminal article “Schedule Is Different”

The basic concept was not really new as can be seen in this diagram taken from Quentin Fleming & Joel Hoppleman’s book “Earned Value Project Management” on page 109 of the first edition published in 1996

A similar diagram has occurred in all later editions of their book

Earned Schedule ManagementPrior to Lipke’s article tracking of schedule performance has been based more on analysis of the critical path than the earned value calculations

The concept of Earned Schedule (ES) is analogous to Earned Value (EV)

The planned duration (PD) of the project is when the project is planned b l h l d f h j d Ato be complete at the planned cost of the project or Budget At

Completion (BAC)

Earned Schedule uses the time that a particular EV is achieved (ES) as opposed to EV which is the Planned Budget (PV) achieved at that time

Comparing the Actual Time (AT) on the schedule to the Earned Schedule (ES) or time that the EV is achieved produces analogous performance indicators

17

Earned Schedule ManagementThe Schedule Variance (SV(t) = ES – AT) determines whether the project is ahead of or behind schedule in terms of the work accomplished

The Schedule Performance Index (SPI(t) = ES / AT) is used in for comparing the performance of multiple projectscomparing the performance of multiple projects

The Schedule Variance and Schedule Performance Index behave more as expected for schedule indicators and indicate whether the project is ahead of or behind schedule as follows:

Schedule Status

Ahead SV(t) > 0 SPI(t) > 1

Behind SV(t) < 0 SPI(t) < 1

Earned Schedule ManagementTo calculate the ES we must first determine the latest complete time period for which the EV is greater than PV for that period

Find time period t such that EV ≥ PVt and EV < PVt+1

Then the ES is equal the cumulative time to the beginning of the time i d l f i f i i d di h i fperiod t plus a fraction of time period t corresponding to the portion of

EV achieved in the next time period

ES = t + (EV – PVt) / (PVt+1 – PVt)

(EV – PVt) is the portion of the earned value actually earned in the next time period

(PVt+1 – PVt) is the total amount of planned value for the next time period

The ratio of the two is the percentage of the planned value earned in the next time period

The same percentage can be used for the proportion of the time period

18

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AC (ACWP) PV (BCWS)

EV (BCWP)

ProjectionOf

EV on PV

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Months AT(Actual Time)

ES(Earned Schedule)

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AC (ACWP) PV (BCWS)

EV (BCWP)

EV – PV4 PV5 – PV4

Percentage

$0

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0 1 2 3 4 5 6 7 8 9 10

Months

ES = 4 + ((EV – PV4) / (PV5 – PV4))+

PercentageEarned

19

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EV – PV6

PV7 – PV6

Percentage

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Months

PercentageEarned

ES = 6 + ((EV – PV6) / (PV7 – PV6))

20

Earned Schedule ManagementSimilar to the EAC cost forecast there is an earned schedule Estimate at Completion (EAC(t)) or Estimated Duration (ED) forecast based on time

There are also several techniques for determining the ED: ED = Actual Time to date plus a new estimated time for the

l ti f ll i i kcompletion of all remaining work ED = AT + ETC(t)

ED = Actual Time to date plus the remaining schedule, which is the Planned Duration minus the Earned Schedule ED = AT + (PD – ES) ED = PD – SV(t)

ED = Actual Time to date plus the remaining schedule modified by the schedule performance to datethe schedule performance to date ED = AT + ((PD – ES) / SPI(t)), which is the same as ED = PD / SPI(t)

ED = Actual Time to date plus the remaining schedule modified by a efficiency rate that considers both cost and schedule ED = AT + ((PD – ES) / (CPI * SPI(t)))

Earned Schedule ManagementThe To-Complete Schedule Performance Index (TSPI) indicates the schedule efficiency that must be achieved for the remaining work of the project to meet the specified targeted completion date (PD) or the revised Estimate at Completion (EAC(t))

The TSPI is calculated by dividing the planned schedule remaining byThe TSPI is calculated by dividing the planned schedule remaining by the actual schedule remaining, which can be either based on the BAC or the EAC: TSPI = (PD – ES) / (PD – AT) TSPI = (PD – ES) / (ED – AT)

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1.601.701.801.902.00

0 100.200.300.400.500.600.700.800.901.001.101.201.301.401.50

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1.601.701.801.902.00

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Earned Schedule ManagementIn conclusion let me share some comments from a presentation by Walt Lipke & Kym Henderson at the 17th Annual International Integrated Program Management Conference (IPMC) in 11/2005

Actual project data using Earned Schedule was presented by the Air Force Acquisition (SAF/AQX) Lockheed Martin Boeing and severalForce Acquisition (SAF/AQX), Lockheed Martin, Boeing, and several Belgium international contracts

What is Known about ES to Date (2005)

Derived from EVM data…only

Provides time-based schedule indicators

Indicators do not fail for late finish projects

Application is scalable up/down, just as EVMpp p j

Schedule prediction is better than any other EVM method presently used

SPI(t) behaves similarly to CPI

EAC(t) = PD / SPI(t) behaves similarly to EAC = BAC / CPI

Earned Schedule ManagementConcluding remarks by Lipke & Henderson:

“Whatever can be done using EVM for Cost Analysis can also be done using Earned Schedule

for Schedule Analysis”

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References (Books)Practice Standard for Earned Value Management ©2005 PMI

Earned Value Project Management, Fleming & Koppelman ©1996 2000 2005 PMI ©1996, 2000, 2005, PMI

A Practical Guide to Earned Value Management, Budd & Budd ©2005, 2010 Management Concepts

Cost/Schedule Control Systems Criteria, Fleming ©1988 Probus

References (Articles)Lipke, “Schedule is Different”, The Measurable News (3/2003)

Anbari, “The Earned Value Analysis Method: Extensions and Simplifications”, Proceedings of IPMA 17th World Congress on Project Management 6/2003Project Management, 6/2003

Anbari, “Earned Value Project Management Method and Extensions”, Project Management Journal (12/2003)

Henderson, “Further Developments in Earned Schedule”, The Measurable News (Spring 2004)

Lipke & Henderson, “Earned Schedule…an emerging h t t EVM” C T lk 11/2006enhancement to EVM”, Cross Talk, 11/2006

Henderson, “Earned Schedule: A Breakthrough Extension to Earned Value Management”, Proceedings of PMI Global Congress Asia Pacific, 1/2007

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References (Articles)Lipke, “Connecting Earned Value to the Schedule”, Cross Talk (6/2004)

Henderson, “Earned Schedule in Action”, The Measurable News (Spring 2005)News, (Spring 2005)

Vanhoucke & Vandevoorde, “Measuring the Accuracy of Earned Value / Earned Schedule Forecasting Predictors”, The Measurable News, (Winter 2007/2008)

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EARNED VALUE MANAGEMENT SYSTEM CRITERIA Organization

1. Define the authorized work elements for the program. A work breakdown structure (WBS), tailored for effective internal management control, is commonly used in this process.

2. Identify the program organizational structure including the major subcontractors responsible for accomplishing the authorized work, and define the organizational elements in which work will be planned and controlled.

3. Provide for the integration of the company's planning, scheduling, budgeting, work authorization and cost accumulation processes with each other, and as appropriate, the program work breakdown structure and the program organizational structure.

4. Identify the company organization or function responsible for controlling overhead (indirect costs).

5. Provide for integration of the program work breakdown structure and the program organizational structure in a manner that permits cost and schedule performance measurement by elements of either or both structures as needed.

Planning and Budgeting

6. Schedule the authorized work in a manner which describes the sequence of work and identifies significant task interdependencies required to meet the requirements of the program.

7. Identify physical products, milestones, technical performance goals, or other indicators that will be used to measure progress.

8. Establish and maintain a time-phased budget baseline, at the control account level, against which program performance can be measured. Budget for far-term efforts may be held in higher level accounts until an appropriate time for allocation at the control account level. Initial budgets established for performance measurement will be based on either internal management goals or the external customer negotiated target cost including estimates for authorized but undefinitized work. On government contracts, if an over target baseline is used for performance measurement reporting purposes, prior notification must be provided to the customer.

9. Establish budgets for authorized work with identification of significant cost elements (labor, material, etc.) as needed for internal management and for control of subcontractors.

10. To the extent it is practical to identify the authorized work in discrete work packages, establish budgets for this work in terms of dollars, hours, or other measurable units. Where the entire control account is not subdivided into work packages, identify the far term effort in larger planning packages for budget and scheduling purposes.

11. Provide that the sum of all work package budgets plus planning package budgets within a control account equals the control account budget.

12. Identify and control level of effort activity by time-phased budgets established for this purpose. Only that effort which is unmeasurable or for which measurement is impractical may be classified as level of effort.

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13. Establish overhead budgets for each significant organizational component of the company for expenses which will become indirect costs. Reflect in the program budgets, at the appropriate level, the amounts in overhead pools that are planned to be allocated to the program as indirect costs.

14. Identify management reserves and undistributed budget.

15. Provide that the program target cost goal is reconciled with the sum of all internal program budgets and management reserves.

Accounting Considerations

16. Record direct costs in a manner consistent with the budgets in a formal system controlled by the general books of account.

17. When a work breakdown structure is used, summarize direct costs from control accounts into the work breakdown structure without allocation of a single control account to two or more work breakdown structure elements.

18. Summarize direct costs from the control accounts into the contractor's organizational elements without allocation of a single control account to two or more organizational elements.

19. Record all indirect costs which will be allocated to the contract.

20. Identify unit costs, equivalent units costs, or lot costs when needed.

21. For EVMS, the material accounting system will provide for: (1) Accurate cost accumulation and assignment of costs to control accounts in a manner consistent with the budgets using recognized, acceptable, costing techniques. (2) Cost performance measurement at the point in time most suitable for the category of material involved, but no earlier than the time of progress payments or actual receipt of material. (3) Full accountability of all material purchased for the program including the residual inventory.

Analysis and Management Reports

22. At least on a monthly basis, generate the following information at the control account and other levels as necessary for management control using actual cost data from, or reconcilable with, the accounting system:

(1) Comparison of the amount of planned budget and the amount of budget earned for work accomplished. This comparison provides the schedule variance. (2) Comparison of the amount of the budget earned the actual (applied where appropriate) direct costs for the same

23. Identify, at least monthly, the significant differences between both planned and actual schedule performance and planned and actual cost performance, and provide the reasons for the variances in the detail needed by program management.

24. Identify budgeted and applied (or actual) indirect costs at the level and frequency needed by management for effective control, along with the reasons for any significant variances.

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25. Summarize the data elements and associated variances through the program organization and/or work breakdown structure to support management needs and any customer reporting specified in the contract.

26. Implement managerial actions taken as the result of earned value information.

27. Develop revised estimates of cost at completion based on performance to date, commitment values for material, and estimates of future conditions. Compare this information with the performance measurement baseline to identify variances at completion important to company management and any applicable customer reporting requirements including statements of funding requirements.

Revisions and Data Maintenance

28. Incorporate authorized changes in a timely manner, recording the effects of such changes in budgets and schedules. In the directed effort prior to negotiation of a change, base such revisions on the amount estimated and budgeted to the program organizations.

29. Reconcile current budgets to prior budgets in terms of changes to the authorized work and internal replanning in the detail needed by management for effective control.

30. Control retroactive changes to records pertaining to work performed that would change previously reported amounts for actual costs, earned value, or budgets. Adjustments should be made only for correction of errors, routine accounting adjustments, effects of customer or management directed changes, or to improve the baseline integrity and accuracy of performance measurement data.

31. Prevent revisions to the program budget except for authorized changes.

32. Document changes to the performance measurement baseline.

Source: Defense Contract Management Agency (DCMA)

(http://guidebook.dcma.mil/79/criteria.htm) Office of the Under Secretary of Defense for Acquisition, Technology and Logistics

(http://www.acq.osd.mil/pm/faqs/criteria.htm)

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Blair Vita

Dr. James C. Blair (Jim) received his Ph.D. in Computer Science from Purdue University where he did research and development in the areas of hierarchical storage systems and interactive debugging. He has over 20 years of executive level experience spanning corporations in computer technology, manufacturing, distribution, finance, publishing and health services.

In addition to his executive experience, Dr. Blair has been an Adjunct Professor at Washington University in St. Louis since 1991. Most recently his emphasis has been on project management within the business world. He is the founder and president of Paladin Project Management Consultants, LLC, which is a consulting firm specializing in coaching, supporting and training in project management. Currently he is the Director of Project Management Graduate Studies in The Sever Institute of Continuing Studies at Washington University. He combines his executive experience with his teaching and consulting experience to provide a holistic and integrative perspective for implementing positive business change and improving business effectiveness by means of improved project management. In 2001 he received his Project Management Professional (PMP®) certification from the Project Management Institute. He has taught various project management classes for over 15 years including several versions of the PMP Preparation class both publicly and under contract (using the 2nd, 3rd and 4th editions of the PMBOK).

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