Earned Value Management System (EVMS) Reference Guide

1 Earned Value Management System (EVMS) Reference Guide Project Management Office Lawrence Berkeley National Laboratory March 2009 Revision 0 Purpose and Scope This Reference Guide is designed to provide LBNL Control Account Managers (CAMs) and other project staff with a quick Reference tool to key Earned Value Management System (EVMS) terms and processes. This Reference Guide is a supplement to the LBNL EVM System Description and implementing procedures maintained by LBNL s Project Management Office (PMO). The LBNL EVMS complies with the criteria for project cost and sched-ule control as required by DOE Order , DOE Manual , and the ANSI/ EIA-748 industry standard for EVM. The LBNL EVMS applies to the following work: Capital line item projects with a total project cost greater than $20M All large and/or high-risk projects for which LBNL Management determines that EVM is appropriate. The EVMS provides for effective project planning and control and is designed around the integration of technical scope, schedule, and budget with existing LBNL policies and procedures as defined in the Earned Value Management System (LBNL-EVMS) Description.

2 The primary objective of the EVMS is to verify that all elements of a project are planned, authorized, monitored, and controlled in a consistent, flexible, and cost-effective manner. This Reference Guide should be useful to all project personnel, including CAMs, Project Managers, Functional Managers, and project office staff. However, EVMS users are responsible for being familiar with and following the LBNL EVM System Description and applicable procedures, which take precedence over this Reference Guide . The System Description and implementing procedures are available on the EVMS website ( ) 40 Quick Reference EVMS Formulas Cost-Related Calculations: Cost Variance (CV) CV = BCWP ACWP CV% CV% = CV x 100 BCWP Cost Performance Index (CPI) CPI = BCWP ACWP Schedule-Related Calculations: Schedule Variance (SV) SV = BCWP BCWS SV% SV% = SV x 100 BCWS Schedule Performance Index (SPI) SPI = BCWP BCWS Other Calculations: % Spent % Spent = ACWP(cum) x 100 BAC EAC may be substituted in the denomina-tor to determine the % of EAC spent (total funds required).

3 % Complete % Complete = BCWP(cum) x 100 BAC To-Complete Performance Index (TCPI) TCPI = BAC BCWP(cum) BAC ACWP(cum) EAC may be substituted for BAC in the denominator to determine efficiency needed to complete within the EAC. Definitions: ACWP Actual Cost of Work Performed BAC Budget at Completion BCWP Budgeted Cost of Work Performed BCWS Budgeted Cost of Work Scheduled EAC Estimate at Completion 39 Appendix B - DOE EVMS Gold Card Contents LBNL s Earned Value Management LBNL s Applicable Documents ..6 Organization ..8 Planning, Scheduling, and Budgeting ..12 Accounting Considerations ..16 Analysis and Management Revisions and Data Appendix A ..26 Acronyms ..26 EVMS Scheduling Terminology ..35 Appendix B - DOE EVMS Gold Card ..39 Quick Reference EVMS Formulas ..40 1 LBNL s Earned Value Management System LBNL is committed to establishing and maintaining project Management systems that provide LBNL Management and our customers with reliable information related to the status of technical scope, schedule, and budget over the life of all projects.

4 LBNL s EVMS is defined around the following seven principles (as illustrated in the following figures): 1. Plan all work scope for the project to completion. 2. Break down the project work scope into finite pieces that can be assigned to a responsible person or organization for control of the technical, schedule, and cost objectives. 3. Integrate the project work scope, schedule, and cost objectives into a performance measurement baseline against which accomplishments may be measured. Control changes to the baseline. 4. Objectively measure actual progress, performance, and cost against a detailed project plan, including critical-path analysis of the schedule 5. Consistently report project status to Management 6. Analyze significant variances from the plans, forecast impacts, and prepare an estimate at completion based on performance to date and work to be performed. 7. Use EVMS data to Guide Management decisions and implement Management actions to mitigate risk and manage cost and schedule performance objectives.

5 These principles are integrated into a comprehensive System that develops and maintains the baseline; tracks project cost, schedule, and scope; and provides for the generation of timely performance measurement data and reports. Performance measurement reports provide Management with objective project information critical to monitoring progress, identifying significant issues, and implementing corrective actions as needed. 38 Float or Total Float. The amount of time an activity can slip before it affects another activity s finish date. It is the difference between when an activity can happen and when an activity must happen. Free Float. The amount of time that the early start of an activity can be delayed without delaying the early start of a successor activity. Lag. An offset or delay from an activity to its successor. Late Dates. Late start and finish dates are the latest dates an activity can be performed without delaying a successor activity.

6 Milestone. A schedule event marking the due date for accomplishment of a specified effort (work scope) or objective. A milestone may mark the start, an interim step or interface point, or the end of one or more activities. Original Duration. The planned estimate of the number of work periods required to accomplish an activity. Predecessor. An activity that must occur before another activity. A predecessor activity controls the early start or early finish date of its successors. An activity can have multiple predecessors, each with a different relationship type. Relationship (Logic) Type. The condition that controls how an activity is related to its predecessors or successors. Remaining Duration. The number of work periods forecasts to complete the activity. Schedule Contingency. Duration added to a schedule to allow for the probability of possible or unforeseen events. Start-to-Finish Relationship (SF). A relationship in which the start of the predecessor activity controls the Finish of a successor activity.

7 Start-to-Start Relationship (SS). A relationship in which the start of the predecessor activity controls the start of a successor activity. Successor. An activity that occurs after another activity. An activity can have multiple successors, each with a different relationship type. 37 Baseline Schedule. The version of the schedule that reflects all formally authorized scope and schedule changes. Critical Activity. Activity on the project s critical path. Critical Path. The series of tasks in a network schedule representing the longest duration for a project. Any slippage of tasks along the critical path increases the duration of the project. In a project network diagram, the series of logically linked activities that determine the earliest completion date for the project. The Critical Path might change from time to time, as activities are completed ahead of or behind schedule. Although normally calculated for the entire project, the Critical Path can also be determined for a milestone or a subproject.

8 The Critical Path is usually defined as those activities with float less than or equal to a specified Value , often zero. Critical Path Method (CPM). A network analysis technique used to predict project duration by analyzing which sequence of activities (which path) has the least amount of scheduling flexibility (the least amount of float). Early dates are calculated by means of a forward pass using a specified start date. Late dates are calculated by means of a backward pass starting from a specified completion date to result in zero total float for each activity. Current Schedule. The schedule that reflects the actual start and finish dates plus forecasted start and finish dates from today forward. Duration. The number of work periods (not including holidays or other nonworking periods) required to complete an activity or other project element, and usually expressed as workdays or workweeks. Sometimes incorrectly equated with elapsed time.

9 Due Date. The date by which a milestone or task is scheduled to be completed. Early Dates. Indicate the earliest start and finish dates when an activity can be performed if all preceding activities have been completed. Finish-to-Finish Relationship (FF). A relationship in which the finish of a predecessor activity depends on the finish of its predecessor activity. Finish-to-Start Relationship (FS). A relationship in which the predecessor activity must finish before its successor activity can start. 2 Earned Value Management SystemPrinciples No. 1, 2 and 3: Organization, Planning Budgeting and SchedulingScopeScopeScheduleScheduleBudg etBudgetWBSWBSWBS DictionaryWBS DictionaryOBSOBSR esponsibility Assignment Matrix (RAM)Responsibility Assignment Matrix (RAM)Signed WorkAuthorizationSigned WorkAuthorizationEstablish Performance Measurement Baseline Establish Performance Measurement Baseline Planning DocumentsProject PlanningProject PlanningCAP/WA ScopeCAP/WA ScopeBasis of EstimateBasis of EstimateProject IDsProject IDsLevel 1, 2 or 3 MilestonesLevel 1, 2 or 3 MilestonesDetail Schedule and logic tiesDetail Schedule and logic tiesTime Phased BudgetsTime Phased BudgetsProject Execution PlanProject Execution Plan Earned Value Management SystemPrinciple No.

10 4: Objectively Measure Progress and Performance EVMSD atabaseExecutive Summary ReportExecutive Summary ReportCost Performance ReportCost Performance ReportActual Cost ReportActual Cost ReportVariance Analysis ReportVariance Analysis ReportTime-Phased DataTime-Phased DataMilestone and Detail Schedule ReviewMilestone and Detail Schedule ReviewProgress Status ReportsEAC UpdatesEAC UpdatesSchedule UpdatesSchedule UpdatesAccrualsAccrualsAccountingDownloa dAccountingDownloadProgressUpdatesProgre ssUpdatesSubcontractor InformationSubcontractor InformationSchedules UpdatesSchedules UpdatesBaseline ChangesBaseline Changes 3 Earned Value Management SystemPrinciples No. 5 and 6:Analyzing and Reviewing Monthly DataCost Performance ReportCost Performance ReportProject Cost ReportProject Cost ReportProgress ReportsProgress ReportsPerformance CurvesPerformance CurvesSchedule AnalysisSchedule AnalysisVariance Analysis ReportsVariance Analysis ReportsEAC AnalysisEAC AnalysisCost/Schedule Action ItemListCost/Schedule Action ItemListManagement ApprovalProject Status DataManagement ApprovalProject Status DataFinal Trend & AnalysisReports IssuedFinal Trend & AnalysisReports IssuedProject Review & Analysis Process Earned Value Management SystemPrinciple No.