what contracting professionals need to know about earned value management presenters: frank...
TRANSCRIPT
What Contracting Professionals Need to Know About Earned Value Management
Presenters:
Frank Malsbury, CPCM, NCMA Fellow
Internal IBR Manager
Raytheon
49th Annual NCMA March Workshop
Buddy Everage, PMP
Director Emergent IT Programs
MCR Federal, LLC
Agenda
• Speaker Introductions• Background and Overview of EVMS
• What is it?• ANSI/EIA 748 EVMS Guidelines• Basic Principles
• An example of how an EVMS works (EVM Data Analysis)
• Information for management decision making
• EVM Policies and Directives• OSD / OMB
• EVM in Federal Contracting• Where to find EVM requirements in Solicitations• Proper response to EVM requirements
• Summary
Earned Value Management Definition
• Earned Value Management (EVM) is a project management technique that objectively tracks physical accomplishment of work.
• EVM provides an early warning of performance problems while there is time for corrective action.
• In addition, EVM improves the definition of project scope, prevents scope creep, communicates objective progress to stakeholders, and keeps the project team focused on achieving progress.
• Strategic alignment of program objectives with agency mission is essential to obtaining program funding (OMB 300). Once strategic alignment is established, EVM provides the visibility to ensure that the program cost, schedule and technical objectives are met.
Very Effective When Used in Conjunction with Other Management
Techniques
Definitions – Clarification of Terms
• Earned Value (EV) – The value of completed work expressed in terms of the budget
assigned to that work, often referred to as Budgeted Cost of Work Performed (BCWP). It
provides an objective measure of the value of completed work expressed in terms of the
budget assigned to perform the work.
• Earned Value Management (EVM) – A management methodology that integrates a
program’s technical scope, schedule and resources with program risk in a baseline plan
against which progress is measured to produce metrics that highlight variances and
performance trends, thereby providing program managers, as well as high level
management, with objective visibility into program progress and enable more effective
management.
• Earned Value Management Systems (EVMS) – An integrated set of policies,
processes, procedures, systems and practices that meets an organization’s
implementation of ANSI/EIA-748.
The Language of EVM is Unique
EVMS History
• The first attempts to view the status of major projects was the DOD, PERT/Cost, in the 1960’s
• Then came the DOD Cost Specification (CSpec) requirements
• In 1967 the DOD Cost/Schedule Control System Criteria (C/SCSC)
• In the late 1980’s the Earned Value Management System (EVMS) became a project management methodology
• Currently, ownership of EVM criteria is maintained by industry with adoption of ANSI EIA 748-B standard
EVM Has Evolved Over Many Years
ANSI/EIA 748 EVMS Guidelines
Organization 5 Define the authorized work and assign responsibility for the work. Integrate planning, scheduling, work authorization and accounting systems.
Planning & Budgeting
10 Plan, schedule, budget and authorize the work. Establish and maintain a time-phased budget baseline.
Accounting 6 Accumulate costs for work and material
Analysis & Management Reports
6 Compare planned and actual costs, and analyze variances. Identify management actions taken. Horizontal and vertical communications and traceability. Develop revised estimates of costs at completion.
Revisions &
Data Maintenance
5 Timely incorporation of contractual changes. Maintain traceability from original budgets. Prevent retroactive changes
The
five major
Aspects of
an Earned
Value Management System
are required
to “play”
together
EVMS Guidelines32 Guidelines establishes the framework within which an adequate integrated Cost/Schedule/Technical Management System will fit
10 March 2010
The Questions that EVM Answers
• How can a Program Manager get an early warning of performance problems while there is time for corrective action?
• How does a Program Manager improve the definition of project scope & prevent scope creep?
• How does a Program Manager communicate objective progress to stakeholders?
• How can a Program Manager forecast the cost at completion and the end date for the project?
Used Correctly, EVM Aids Proactive Management
7
What is Earned Value Management?
EVM
What is Earned Value Management?
• EVM is a technique that relates resource planning to schedules and to technical performance requirements
• EVM integrates project cost, schedule, technical effort and risk in a realistic, executable plan called the Performance Measurement Baseline (PMB)
• Tracks performance/progress to the plan
• Provides early warning of developing problems/opportunities
• Enables early corrective action when deviating from the plan
• EVM is a repeatable process• Standard and consistent methods for progress measurement
• Consistent use of performance metrics on all projects
• Enables management to easily assess health of the enterprise
• Provides project past performance data and lessons learned useful for improving performance and in preparing future estimates for similar work
A Disciplined Earned Value Management System is Powerful
EVM is a Program Management Process
for integrating• Scope• Schedule• Resources• Cost• Technical Requirements
to measure program performance to determine if cost and schedule
performance are as planned to determine final program costsEVM is a key factor in winning and managing federal
contracts
EVM is a Program Management process
Space Craft
Total Contract
NameWBS
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
FY97
Q1 Q2 Q3 Q4
FY 98
Q1 Q2 Q3 Q4
FY 99
Q1 Q2 Q3 Q4
FY 99
Q1 Q2 Q3 Q4
5/9 8/15
8/15 4/8
11/4 12/1
4/8 2/18
2/18 9/14
5/21
6/259/14
1/31
CONTRACT MILESTONESN/AATP PDR FCA Lot 1 Lot 2 Lot 3
Detailed SchedulesDetailed SchedulesControl Account Plans Subcontract Schedules
Task EV Method Item J F M A M J J A S O N D TOTAL
1.2.1.1a WeightedMilestone
PLAN30050 75 75 50 50
EARN
Task
1.2.1.1b Fixed FormulaPLAN
10050 50
EARN
Task
1.2.1.1c % Complete Estimates
PLAN600100 100
EARN
100 100 100 175
Task
1.2.1.1d EquivalentUnits
PLAN300
EARN
75 7575 75
Task
1.2.1.1e PLANNING PACKAGE
PLAN1000
EARN
100
Task
1.2.1.1TOTAL COST
ACCOUNT
PLAN2,300
EARN
WBS: 1.2.1.1: Design, Fabricate, Test TT&E EDU CAM: Morris Money
200 225 250 225 225 250 225 225 150 150 150 100
225 225 150 150 150 100
Cost Account Plan (CAP)
The Program Manager Owns Earned Value Management
What Earned Value Management is Not
• It is not a software package
– Software vendors that tell you their product is ‘validated’ or ‘certified’, do not
understand
• It is not a set of reports (although reporting is important)
• It is not a financial system, but it is maintained by Finance
• It is not funds management (but it is an indicator of funds requirements)
Earned Value Management is a Program Management Tool
Earned Value Management System (EVMS) Features
• A disciplined approach to work definition, work organization and assignment, planning, performance measurement, monitoring and control
• Work is defined, assigned and planned; plans are approved before work is authorized to begin
– Changes are incorporated, planned, approved, and authorized before work begins on the change
• EV methods or measurement techniques provide objective assessment of program progress
• Variance identification and analysis, summarized through the CWBS, provides performance trends as well as the identification of developing problems
– Problems are quickly and easily tracked to their source for immediate corrective action
• Performance metrics predict where the program is going and are useful in validating independent estimates or assessments; modern EVM adds use of Technical Performance Metrics
Plan the Work
Work the Plan
ExternalChanges
Collect Results
Define the Work
Analyze Deviations
TakeCorrective Action
Measure Performance
Change Control
The Earned Value Management Process
Earned Value Management is an Iterative Process
PMB and the Integrated Baseline?
• Control Account Plans• Work Packages & EVTs• Time-Phased Resource
Spreads / Staffing
• Control Account Plans• Work Packages & EVTs• Time-Phased Resource
Spreads / Staffing
EVMS Baseline
• Primary Work Authorization (PWA)• Secondary Work Authorizations (SWA)• Including Subcontracts & IOTs
• Primary Work Authorization (PWA)• Secondary Work Authorizations (SWA)• Including Subcontracts & IOTs
Work Authorizations
(execution)
Program StructureBaseline
• Work-Breakdown Structure (WBS)• Organizational Breakdown Structure (OBS)• Control Account Structure• Responsibility Assignment Matrix (RAM)
• Work-Breakdown Structure (WBS)• Organizational Breakdown Structure (OBS)• Control Account Structure• Responsibility Assignment Matrix (RAM)
Program Plan & Schedule
Baseline
• Master Phasing Plan • Integrated Master Plan (IMP)• Integrated Master Schedule (IMS)
• Master Phasing Plan • Integrated Master Plan (IMP)• Integrated Master Schedule (IMS)
RISK
& OPPORTUNITY
PMB
Contract Baseline
Work Authorizations
(planning)
14
• Contract/Contract Letter• Statement of Work (SOW) OR of Objectives (SOO)• CDRLs and DIDs• System Specification …
• Contract/Contract Letter• Statement of Work (SOW) OR of Objectives (SOO)• CDRLs and DIDs• System Specification …
Program Structuring and EVMS Implementation
RAM Integrates Work Scope, Budgets & Organizational Responsibility at the Control Account Level
Control Account
John Smith
WorkPackages
PlanningPackages
BCWSBCWPACWPBACEAC
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IMS/EVMS Planning
IMP/IMSPlanning
Control AccountPlanning
DefineControl Accts.
(RAM)
Define & PlanWork/ Planning
Packages
Sequence Work / Planning Pkg.
Activities
Plan WP & PP Resources &
Durations
Assess Resource Plan
Validate EVMS Baseline
Define IMS Tasks & Sub-
Tasks
Define E/A/C (IMP Product
Section)
Define Task Relationships
Plan IMS Task Resources &
Durations
Assess Critical Path &
Schedule Risk
Validate IMS Baseline
16
EVM Data Analysis – An Example
Earned Value Analysis
• % Complete vs. % Spent• Analysis of Variances (SV, CV, VAC)
– Schedule Variance (BCWP – BCWS)– Cost Variance (BCWP – ACWP)– Variance At Complete (BAC – EAC)
• Graphical Trend Analysis– BCWS/BCWP/ACWP line charts– Cumulative SV and CV line charts– SPi and CPi line charts
• To Complete Performance Index (TCPi)– Budget At Complete (BAC)– Estimate At Complete (EAC)
• Statistical Forecasting Techniques• Technical Performance Metrics• DCMA Trip Wires (DoD Programs)
Key Data Elements and Variances
EAC
Value
BCWS – Budgeted Cost for Work ScheduledBCWP – Budgeted Cost for Work PerformedACWP – Actual Cost of Work PerformedBAC – Budget at CompletionEAC – Estimate at CompletionETC – Estimate to Completion
Time
Schedule Variance(BCWP – BCWS)
Cost Variance(BCWP – BCWS)
ForecastSchedule Slip
ForecastVariance AtComplete
ETCBAC
ACWP
BCWP
Time Now
BCWS
Project Objectives
•Scope: 200 Drawings
•Schedule: 10 Months
•Budget: 30 Hours per Drawing
•BAC: $300K (6000 hrs x $50/hr)
•Plan: 20 Drawings per Month
Month 5 Status
• 100 Drawings Planned
• 70 Drawings Completed
• 2450 Hours Spent
• $52/Hour Average Cost
Hours 3000 2100 2450 (900) (350) 6000 6000 0
Dollars 150.0 105.0 127.4 (45.0) (22.4) 300.0 300.0 0
BCWS BCWP ACWP SV CV BAC EAC VAC
So, how are we doing?
Percent Variance: Schedule
X 100 = % SVSV HoursBCWS Hours
(900) Hours SV3000 Hours BCWS
X 100 = ( 30.0% )
22
Schedule Performance Index
Work CompletedWork Planned
BCWPBCWS
or = SPI
2100 Hours BCWP3000 Hours BCWS
= .70 SPI
70% Efficiency to Schedule
23
Percentage Variance: Cost
X 100 = % CV$ Cost Variance$ BCWP
($ 22.4) CV$ 105.0 BCWP
X 100 = ( 21.3% )
24
Cost Performance Index
Work CompletedActual Cost
$ BCWP$ ACWP
or = CPI
$105.0 K BCWP$127.4 K ACWP
= .82 CPI
82% Cost Efficiency
25
Calculated EACs to Assess Realismof Manager’s EAC
= ACWP + Calculated ETC
= ACWP + BAC - BCWP
IEAC*
*Independent EAC
Performance Factor
Analysis Leads to Thresholds and Breach Thresholds require Variance Analysis Reports
26
Current EVM Policies and Directives
10 March 2010
Defense Spending Changes
28
Winners Losers
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Source: Reuters, Popular Mechanics, CNN.com
Nearly 7 in 10 major U.S. arms programs over budgetWASHINGTON (Reuters) – 3/30/09 Nearly 70 percent of the Pentagon's 96 major weapons-buying programs were over budget in 2008 for combined cost growth of $296 billion above original estimates, congressional auditors said inan annual report released on Monday.
10 March 2010
GAO: Hundreds of federal IT projects are poorly planned and underperforming
29
NextGov.com – 7/31/08 - More than 400 federal information technology projects valued at $25 billion have been poorly planned or performing under expectations — or both, the Government Accountability Office planned to tell a Senate hearing on Thursday
•352 projects valued at about $23.4 billion on the management watch list to be poorly planned
•87 of their high-risk projects valued at about $4.8 billion were poorly performing
•26 projects, valued at about $3 billion, were both poorly planned and poorly performing
Earned Value Management is Expected to Help Programs Deliver on Time and Within Cost
WEAPON SYSTEMS ACQUISTION REFORM ACT OF 2009 - S.454 - A bill to improve the organization and procedures of the Department of Defense for the acquisition of major weapon systems…
Resulting Defense Spending Reform
May 22, 2009: Became Public Law No: 111-23
Section 207 - Directs the Under Secretary to review existing (and if necessary, prescribe additional) guidance governing implementation of the Earned Value Management requirements and reporting for DOD contracts.
Data QualityEVM EducationContract Execution
30
OSD EVM Policy/Guidance
< $20M
< $50Mbut
> $20M
> $50M
Thresholds
Cost orIncentiveEqual to Or Above Threshold
Cost orIncentive Less Than Upper Threshold but Equal toOr Above LowerThreshold
Cost orIncentiveLess ThanThreshold
Contracts Requirements
- Compliance with industry EVM standard- Formal validation of contractor’s EVM system- Contract Performance Report- Integrated Master Schedule- Integrated Baseline Review- Ongoing surveillance
- EVM optional (risk-based decision)- Cost-benefit analysis required
- Compliance with industry EVM standard- Formal system validation not required- Contract Performance Report (tailored)- Integrated Master Schedule (tailored)- Integrated Baseline Review (tailored)- Ongoing surveillance
OMB EVM Policy/Guidance
• Capital Programming Guide v 2.0 – Expands the explanation of concepts in the original guide that was not
fully developed, e.g., EVMS• EVMS requirements in contracts or agency in-house project charter• Compliance reviews of agency and contractor EVM Systems• Periodic system surveillance reviews to ensure the EVMS continues to meet
the guidelines in ANSI 748 and• Integrated Baseline Reviews (IBRs) to finalize the cost, schedule and
performance goals.• NDIA Guides identified as the primary references for information
• EVM Federal Acquisition Regulation (FAR)– EVMS identified and formerly linked with ANSI/EIA Standard 748 and
OMB Circular A-11, Part 7
– Identifies EVM’s role in the acquisition roadmap
– EVMS required for major acquisitions for development in accordance with OMB Circular A-11
EVM in Federal Contracting
Fundamental Elements of Contracting for EVM
• Identify application of Earned Value Management System in solicitations and contracts
• Define reporting requirements and
electronic submission
• Define evaluation criteria for source
selections
• Evaluate EVMS– Integration with Award/Incentive plans
– EVMS implementation plan for new contracts
– Evaluate for compliance with the standard
– Support conduct of an Integrated Baseline Review
– Contractor’s proposed EVMS
Carefully Read the Solicitation (RFP) and Every Attachment (the SOW, CDRLs, DID); Reconcile w/
Contract Awarded
Addressing EVM in the SolicitationAddressing EVM in the Solicitation
• Section C – Performance Work Statement/ Statement of Work
• CWBS/EVMS/IBR/EVMS Flowdown
• Section I – General Provisions
• Contract Clauses
• Section J – Exhibits and Attachments
• Section L - Instructions for Offerors*
• Section M- Evaluation Factors for Award*
* Note: Sections L and M are included in Solicitations onlyCarefully Read Everything in the RFP, and Create
Spreadsheets and Matrices to Trace Every Requirement
Section C - Statement of Work
• The Statement of Work should contain statements requiring:• Development of a contract work breakdown structure (CWBS) at a
level adequate for contract management and control• The contracted technical effort to use an ANSI/EIA-748 compliant
EVMS that correlates cost and schedule performance with technical progress
• The designation of critical subcontractors by name for EVM compliance and flow down of EVMS compliance to subcontractors
• An Integrated Baseline Review (IBR) • Reference to EVMS data items as part of Integrated Program
Management reporting and reviews
The SOW is the Tasking Document – Know the Tasks
Section I - General Provisions
• New FAR Clauses – July 2006
– FAR 52.234-2 – Notice of EVMS – Pre-Award IBR
– FAR 52-234-3 – Notice of EVMS – Post Award IBR
– FAR 52-234-4 – EVMS – The Government will conduct an IBR if a pre-award IBR has not been conducted
• FAR EVM clauses not tied to dollar thresholds
• DFARS Clauses
– Solicitation Provision: 252.234-7001 – Notice of Earned Value Management System (Apr 2008)
– Contract Clause: 252.234-7002 – Earned Value Management System (Apr 2008)
Contracting Officers and Contractors Must Know Everything in Every Clause
Section J - Exhibits and Attachments
• Work Breakdown Structure - MIL-HDBK-881A common WBS for CPRs and IMS through WBS Level 3
• EVM Related Data Item Descriptions (DIDs)• Contract Performance Report – DI-MGMT-81466A• Integrated Master Schedule – DI-MGMT-81650• Contract Work Breakdown Structure – DI-MGMT-81334B• Contract Funds Status Report – DI-MGMT-81468
• Contract Data Requirements List (CDRL) used to put CPR and IMS reports on contract
• EVM CDRLs can and should be tailored within bounds of agency policy
• Consider all risk factors when tailoring CPR and IMS DIDs• Type of contract (determined by cost risk)• Technology• Schedule• Past contractor performance
• The CPR consists of five formats• Format 1 – Work Breakdown Structure • Format 2 – Organizational Categories• Format 3 – Baseline • Format 4 – Staffing• Format 5 – Explanations & Problem
Analyses
• Uses of CPR Data • Integrated Cost & Schedule EVM Data• Identify the cost and schedule impact of
actual and potential problems• Provide valid, timely program status info
for higher management
• The CPR provides timely, reliable summary-level data with which to access current and projected contract performance.
Section J – CPR DID DI-MGMT-81466A
• IMS shall include all discrete tasks/activities, work packages, and planning packages identified in the contract Performance Measurement Baseline (PMB)
• IMS shall identify “significant” external dependencies (e.g., GFE, test facilities)• Suppliers and government playing a
bigger role in producing products
• IMS shall be statused and submitted prior to or concurrently with Contract Performance Report (CPR)
• Standard scheduling definitions are to be used
Section J – IMS DID DI-MGMT-81650
Section J - Award Fee Plan
• Government Program managers often wish to tie Contractor award fee to EVM performance
– Looks like a score and is advertized as an “objective” measure
• But...– Data can be manipulated and may only be discerned by experienced
practitioners
– If you reward good data, you will get good data
• Care should be taken not to mis-incentivize the supplier (Contractor)– Award fee criteria should reference effective management of cost and
schedule with EVM data
– Criteria should not reference specific values for CV, SV, CPI, SPI, or VAC
Award Fee is for Results / Deliveries, not for EVM Scores
Section L - Instructions for Offerors
• Guidance to bidders for the assembly of their proposals
• Each offeror’s proposal shall include a description of the EVMS to be used in accordance with the appropriate RFP FAR clauses
• Compliance with Validation requires:– Reference to an Advance Agreement, Letter of Acceptance, etc. and a
copy of the approved EVM system description; or
– A plan to obtain EVM validation to include how and when the system will be validated
– Compliance Only requires: a written summary of the proposed EVMS reference in sufficient detail to show how it addresses all ANSI/EIA-748 guidelines
Contractor’s Proposed EVMS -Addressing the EVMS RFP Requirement
• Describes system in sufficient detail to determine compliance
• Includes prior Certification/Acceptance
• If no EVMS in place, the Contactor must submit a comprehensive plan for Compliance in accordance with FAR/DFARS
– Describe the EVMS the offeror intends to use in performance of the contract, and how the proposed EVMS complies with ANSI/EIA 748
– Distinguish between the offeror’s existing management system and modifications proposed to meet the EVMS guidelines
– Describe the management system and its application in terms of the EVMS guidelines
– Describe the proposed procedure for administration of the EVMS as applied to subcontractors
– Describe the process the offeror will use to determine subcontractor compliance with ANSI/EIA 748
• Identify major subcontracts for application of criteria– Verify baseline integrity is maintained
Section M - Evaluation Factors for Award
• Evaluation of the proposed EVMS is normally undertaken as part of the proposal evaluation process to determine the probability of the system meeting the guidelines.
– For Existing Systems - evaluation may consist of a confirmation that the referenced validation is accurate and current. The system should be currently in use, and surveillance should not have identified significant, uncorrected problems.
– For EVMS (without validation) - the EVM system description should be evaluated for completeness against the guidelines in ANSI/EIA-748.
• An on-site examination of a proposed EVMS should not normally be required during proposal evaluation. But if deficiencies are identified, written communications or an on-site visit may be required when approved by the Source Selection Board and Procuring Activity.
• The Cognizant Federal Agency should be requested to provide insight regarding EVMS capability, quality, and past performance.
Post Award Responsibilities
•Assess System Surveillance–Contractor surveillance plan in place
–Contractor surveillance is being periodically conducted
–Monitor planned activities vs actual activities
•Ensure that program office is conducting program analysis on a periodic basis
•Schedule, conduct and support
periodic Integrated Baseline Reviews
•Take corrective action when variances exist
EVM and Fixed Price Contracts
• OMB Circular A-11 and the FAR do not exempt specific types of contracts from the EVM requirement
– Applies to fixed-price, time and material, as well as cost plus
• Fixed-price contracts are not a barrier to EVM– Certain guidelines may be not applicable
• Indirect costs and material
– Actual Costs for fixed-price contracts are simply the prices the customer pays for the work.
– Contractor should develop and coordinate a schedule of values that relate performance to progress payments
– Will not have a cost variance because ACWP = BCWP
Subcontractors and Suppliers Must be Managed so they are Successful
Summary
• EVM considerations must begin in the early stages of solicitation planning.
• Should be addressed in the acquisition strategy and acquisition plan
• Post award activities (IBRs and EVMS certification) are especially critical and directly impact the effectiveness of EVM throughout the program lifecycle
EVM is a Key Factor in Winning and Managing Federal Contracts
Questions?
BACKUP INFORMATION
10 March 2010
EVM Analysis Formulas & Metrics
Metric Formula Purpose
Cost Performance Index CPI = BCWP ACWP
Measurement of cost efficiency of the work accomplished (Cumulative, Average or Current Period). DCMA expectation is => .95
Schedule Performance Index SPI = BCWP BCWS
Measurement of work accomplished to the plan (Cumulative, Average or Current Period). DCMA
expectation is => .95
Cost Variance CV = BCWP – ACWP Work accomplished cost more or less to complete than planned.
Schedule VarianceSV = BCWP - BCWS Indication of more or less work accomplished than
planned.
Variance at Completion VAC = BAC – EAC The difference between what the job is planned to cost versus the estimated cost at completion.
Percent Complete % Comp = BCWP (cum)EAC
Provides percentage of the estimate at completion that has been accomplished
Percent Complete % Comp = BCWP (cum) ) BAC
Provides percentage of the budget at completion that has been accomplished
Percent Spent % Spent = ACWP (cum) ) BAC
Provides percentage of the budget at completion that has been spent to date
Baseline Execution Index BEI = Total Tasks/Activities Completed Total Tasks/Activities Planned
Measurement indicating efficiency of work accomplished against the baseline plan. DCMA
expectation is => .95
Critical Path Length Index CPLI = Critical Path Length + or – Total Float Critical Path Length
Calculation that indicates the realism of the program’s ability to complete the program (or major milestones) on time. DCMA expectation is => .95
10 March 2010
Metric Formula Purpose
To Complete Performance Index BAC
TCPI BAC = (BAC – BCWP (cum)) (BAC – ACWP (cum))
Future efficiency necessary to complete on budget
To Complete Performance Index EAC
TCPI EAC = (BAC – BCWP (cum)) (EAC – ACWP (cum))
Future efficiency necessary to complete on the current estimate at completion
Independent Estimate at Completion – Minimum IEAC = ACWP + (BAC – BCWP)
CPI Cum)
Statistical estimate of the lowest value. It assumes that the remaining work will be performed at the same cost efficiency as the past cost efficiency
Independent Estimate at Completion – Maximum
IEAC = ACWP + (BAC – BCWP)
SPI (Cum) X CPI (Cum)
Statistical estimate of the highest value. It assumes that the remaining work will be performed at a combination of the schedule and cost efficiencies.
Weighted Independent Estimate at Completion
IEAC = BAC[0.8 (CPI) + 0.2 (SPI)]
In this formula, the EAC is weighted by 80% of the CPI and 20% of the SPI.
EVM Analysis Formulas & Metrics