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1 In this lesson you will learn what the performance measurement baseline (PMB) is and examine the components that comprise the PMB. The terminal learning objective for this lesson is to explain key points about the performance ~-~----.,,.----.,~-----., measurement baseline in Earned Value Management Reserve Management (EVM). This lesson includes two t opics: Total Allocated ~~ Topic 1: PMB in EVM S in M Topic 2: Key Components ~ I Page1of J2 I ~ Back Next

2 In this lesson you will learn what the performance measurement baseline (PMB ) is and examine the components that comprise the PMB. The terminal learning obj to explain key points abo measurement baseline in Management (EVM). This lesson includes two Topic 1: PMB in EVM Topic 2: Key Components Long Description Chart representing a performance measurement baseline, or PMB, over time, from contract start to contract end. The total allocated budget, or TAB, includes the PMB's budget at completion, or BAC, and the management reserve. S in M Total Allocated Budget (TAB) Contract Start Time Contract End... I Page1of 32 I... Back Next

3 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Topic 1 Learning Objectives Topic 1 - PMB in EVM In this topic, you will: Recognize the purpose of the performance measurement baseline (PMB) in Earned Value Managemen t (EVM ) Compare the role o f the contractor and the Government with regard to the PMB... I P ge2of32 I... Back Next

4 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP The Purpose of the PM B in EVM The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured. The PMB is the resourced budgeted cost for work scheduled (BCWS ) for the contract. A good baseline is fundamental to the effective use of EVM in managing a contract. A good baseline has the following characteristics: Management Reserve Total Allocated Budget (TAB) Accurately represents all the authorized work on the contract Includes a realistic network schedule Includes a realistic time-phased spread of budget/resources to the baselined schedule Is established and maintained through disciplined baseline development and change procedures S in M Contract Start Time Contract End...illll I Page3of 32,... Back Iii ) Next

5 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP The Purpose of the PM B in EVM The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured. The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract. A good baseline is fund Long Description use of EVM in managing baseline has the followi Chart representing a performance measurement baseline, or PMB, over time, from contract start to contract end. The total allocated budget, or T AB, includes the PMB's budget Accurately repres at completion, or BAC, and the management reserve. work on the contrr r--"l'" ,..-f!l Includes a realistic network schedule Includes a realistic time- phased spread of budget/resources to the baselined schedule S in M Total Allocated Budget (TAB) Is established and maintained through disciplined baseline development and change procedures Contract Start Time Contract End...illll I Page3of 32,... Back Iii ) Next

6 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review Which of the following best describes the purpose of the performance measurement baseline (PMB) in Earned Value Management (EVM)? ~ It provides a time-phased budget plan for accomplishing work, against which contract performance is measured. LJ It collects measurements of work the contractor has actually accomplished on a program. Formed as work progresses on a program, it documents work the contractor has actually accomplished. It is a clear1y distinguished unit of work that should be planned to its logical technical scope c onclusion As an estimate of a realistic level of work to be accomplished with regard to technical capabilities acquired, budget spent, and schedule expended, the PMB provides a time- phased budget pla n for accom plis hing work, against which contract or performance is measured to determine earned value....ii I Paige 4 of32 I... Back ii Next 1

7 EVMlOl Fundam entals of Earned Value Managem e nt Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP PMB Contractor Role Establishing the PMB The contractor begins to create the PMB immediately after contract award. Maintaining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work. The contractor uses documented, disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner. Requesting Ov er-target Approval If, during con tract execution, the contractor determines the schedule and/ or CONTRACTOR budget for the remaining work is no longer realistic, the contractor may prepare an over target baseline (OTB) and/ or over target schedyle COTS) request, which must be approved by the Government.... I P ge Sof32 I... Back W 1 Next

8 EVMlOl Fundam entals of Earned Value Managem e nt Lesson 3.1 Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP PMB Contractor Role Establishing the PMB The contractor begins to create the PMB immediately after contract award. Maintaining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work. The contractor uses documented, disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner. Requesting Ov er-target Approval If, during contract execution, the contractor determines the schedule and/ or budget for the remaining work is no longer realistic, the contractor may prepare an over target baseline (OTB) and/ or over target schedyle COTS) request, whi..._.~...~~~...~~~~~~~~~~~--. over target baseline (OTB) CONTRACTOR An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contract's negotiated cost. An OTB increases the performance budget without modifying the work scope or other constraints of the contract.... I P gesof32 I... Back W 1 Next

9 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP PMB Contractor Role Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award. Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work. The contractor uses documented, disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner. Request ing Over-Target Approval If, during contract execution, the contractor determines the schedule and/ or CONTRACTOR budget for the remaining work is no longer realistic, the contractor may prepare an over target baseline (OTB ) and/ or over target schedule COTS) request, which must be approved by the Gove,rr "ll over t arget schedule (OTS) An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates. This new schedule also becomes the basis for the performance budgets. While it is possible to have an OTS without a corresponding increase in cost, normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB )....illll I PageSof 32,... Back lijjii ) Next

10 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP PM B Government Role Ev aluating the PMB T he Government conducts an Integrated Baseline Review (IBR) within 180 days of contract award to ensure the contractor's PMB is realistic. T he Government uses the IBR process to understand the contractor's PMB and the risks inherent in it, and may schedule additional IBR events as necessary throughout contract execution. Maintaining the PMB The PMB can and does change during the life of the contract. The Government provides contractual modifications/ engineering change proposals (ECPs ) to the contractor. The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve. The Government reviews the updated baseline in the Integrated Program Management Report (IPMR) Format 6, Integrated Master Schedule (IMS), as well as IPMR Formats 1-5. T he Government also reviews ongoing PMB changes, such as contractor replanning, via the IPMR Formats 3 and 5. GOVERNM ENT Approving Ov er-target Requests When indicated by contract performance, the contractor shall submit a request for approval to initiate an OTB or OT S to the contracting officer. T he request shall include a top-level projection of cost and/ or schedule grow th, a determination of whether or not performance variances will be retained, and a schedule of implementation for the rebaselining. T he Government will acknowledge receipt of the request in a timely manner ( generally within 30 calendar days). Generally no formal contract modifications are required from the Government to implement an OTB or OT S. For Department of Defense (DoD ) contracts, the Government must provide formal approval of the implementation of an OTB/ OT S. You can find more information in the Over Target Baseline and Over Target Schedule Guide....illll I Page6of 32,... Back liiii ) Next

11 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)? Create the PMB immediately after contract award ~ Conduct an Integrated Baseline Review (!BR) D Adjust the PMB to accommodate changes that occur as the program progresses Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractor's PMB is realistic. The contractor creates the PMB immediately after contract award, adjusts the PMB to accommodate changes that occur as the program progresses, and ensures the PMB re flects the ac tual plan for per forming the remaining work.... I P ge7of32 I... Back Next

12 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Topic 2 Learning Objectives Topic 2 - Key Com ponents In this topic, you will: Given contract information and a graphic depicting the decomposition of the program contract price into key components of the performance measurement baseline (PMB), define the key components Define the purpose of the contractor management reserve... I P ge 8of32 I... Back Next

13 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Total Allocated Budget The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB. The T AB reflects the budget for all authorized work scope. For the Lightweight, Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee ( CPJF ) contract, as shown in the graphic, the negotiated contract price was $72.SM. The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort. Contract Price $72.SM Profit/Fee $7.7M/ll.9% Total Allocated Budget $64.SM At contract start: TAB =NCC =CBB Throughout the project, the T AB will be equal to the contrac t budget base CCBB l with one exception, and that is when the Government has approved an OTB. The CBB consists of the negotiated contrac t cost (NCC) plus the value of all authorized unpriced work CAUWl. As a contract is executed, circumstances may arise that cause a change in the dollar value of the T AB, such as negotiated contract modifications or AUW. There are also situations in which program managers (PMs ) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB, and approve an OTB. The LAR contract has been recently negotiated, so there is no AUW or OTB at this time. Thus, while at the beginning of a contract the T AB, NCC, and CBB are typically equal, they may differ during execution of the contract.... I Page9of 32 I... Back Next

14 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Total Allocated Budget The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB. The T AB reflects the budget for all authorized work scope. For the Lightweight, Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee ( CPJF ) contract, as shown in the graphic, the negotiated contract price was $72.SM. The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort. Long Descript ion Chart breaking down a Contract Price of 72.5 million dollars into two separate components. Profit/fee is 7. 7 million dollars, or 11.9 percent. Total allocated budget is 64.8 million dollars. At contract start, T AB equals NCC equals CBB. Throughout the project, the T AB will be equal to the contrac t budget base CCBB l with one exception, and that is when the Government has approved an OTB. The CBB consists of the negotiated contrac t cost (NCC) plus the value of all authorized unpriced work CAUWl. As a contract is executed, circumstances may arise that cause a change in the dollar value of the T AB, such as negotiated contract modifications or AUW. There are also situations in which program managers (PMs ) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB, and approve an OTB. The LAR contract has been recently negotiated, so there is no AUW or OTB at this time. Thus, while at the beginning of a contract the T AB, NCC, and CBB are typically equal, they may differ during execution of the contract.... I Page9of 32 I... Back Next

15 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Total Allocated Budget The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB. The T AB reflects the budget for all authorized work scope. For the Lightweight, Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee ( CPJF ) contract, as shown in the graphic, the negotiated contract price was $72.SM. The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort. Contract Price $72.SM Profit/Fee $7.7M/ll.9% Total Allocated Budget $64.SM At contract start: TAB =NCC =CBB Throughout the project, the T AB will be equal to the contrac t budget base CCBB l with one exception, and that is when the Government has approved an OTB. The CBB consists of the negotiated contrac t cost (NCC) plus the value of all authorized unpriced work CAUWl. As a contract b udget base (CBB) such ( PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets. Thus, the CBB represents the current value of the project. Included in the negc CBB will be any budget set aside for management reserve. Contract overruns or underruns NCC are determined by comparing the final cost of the contract with the contract budget base. AB, ers AB,... I Page9of 32 I... Back Next

16 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Total Allocated Budget The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB. The T AB reflects the budget for all authorized work scope. For the Lightweight, Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee ( CPJF ) contract, as shown in the graphic, the negotiated contract price was $72.SM. The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort. Contract Price $72.SM Profit/Fee $7.7M/ll.9% Total Allocated Budget $64.SM At contract start: TAB =NCC =CBB Throughout the project, the T AB will be equal to the contrac t budget base CCBB l with one exception, and that is when the Government has approved an OTB. The CBB consists of the negotiated contrac t cost (NCC) plus the value of all authorized unpriced work CAUWl. As a _,,...,..,..._;.,..._...,...,_,.,.,,..,,,..,,._,...,_,"-...,.,_ oo!f!a,ib, such OTB (PM scop In exceptional cases, the contractor may establish a PMB with budgets that exceed the neg CBB. This is called an over target basline (OTB ). Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval. ers... I Page9of32 I... Back Next

17 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Total Allocated Budget The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB. The T AB reflects the budget for all authorized work scope. For the Lightweight, Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee ( CPJF ) contract, as shown in the graphic, the negotiated contract price was $72.SM. The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort. Contract Price $72.SM Profit/Fee $7.7M/ll.9% Total Allocated Budget $64.SM At contract start: TAB =NCC =CBB Throughout the project, the T AB will be equal to the contrac t budget base CCBB l with one exception, and that is when the Government has approved an OTB. The CBB consists of the negotiated contrac t cost (NCC) plus the value of all authorized unpriced work CAUWl. As a contract is executed, circumstances may arise that cause a change in the dollar value of the T AB, such......,..,. cc o =r - -..~ -_...;.-.;... - ""'.., ers (PM scop neg NCC negotiated contract cost (NCC) The total cost for the original contract and all negotiated contract changes. It does not include fee or profit.... I Page9of 32 I... Back Next

18 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Total Allocated Budget The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB. The T AB reflects the budget for all authorized work scope. For the Lightweight, Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee ( CPJF ) contract, as shown in the graphic, the negotiated contract price was $72.SM. The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort. Contract Price $72.SM Profit/Fee $7.7M/ll.9% Total Allocated Budget $64.SM At contract start: TAB =NCC =CBB Throughout the project, the T AB will be equal to the contrac t budget base CCBB l with one exception, and that is when the Government has approved an OTB. The CBB consists of the negotiated contrac t cost (NCC) plus the value of all authorized unpriced work CAUWl. _,...._._;.,..._...,.,,.,,..,,,... _,.,,._.._,"---"--_.,.,moo!f!a,ib, As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated. AUW may also be known as change orders, not-to-exceed NCC (NTE) price agreements, undefinitized contract actions (UCAs), or letter contracts.... I Page9of 32 I... Back Next

19 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Authorized Unpriced Work (AUW) AUW comes into play when a contract change is time critical. The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated. Although authorized contractually, the AUW is not part of the NCC until after de finitization and negotiations are complete. However, the T AB and the PMB should include the contracting officer's best estimate of the authorized scope. The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue, including AUW. Once the AUW is definitized, the PMB is adjusted to reflect changes made during negotiations. If the contracting officer authorized AUW of $3M, the LAR T AB would increase from $64.BM to $67.BM. Contract Price $72.SM Profit/Fee $7.7M/ll.9% Total Allocated Budget $64.SM Adding AUW changes TAB and CBB: NCC ($64.SM) + AUW ($3M) = CBB ($67.SM)... I Page10of 32 I... Back Next

20 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Authorized Unpriced Work (AUW) AUW comes into play when a contract change is time critical. The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated. Although authorized contractually, the AUW is not part of the NCC until after de finitization and negotiations are complete. However, the T AB and the PMB should include the contracting officer's best estimate of the au aving a performance meas Long Descript ion ' Once the AUW is definitized, Reprised chart breaking down a Contract Price of 72.5 million dollars If the contracting into two separate components. Profit/fee is 7. 7 million dollars, or \/I to $67.8M percent. Total allocated budget is 64.8 million dollars. Adding AUW changes T AB and CBB. NCC of million dollars, plus AUW of 3 million dollars equals CBB of 67.8 million dollars Profit/Fee $7.7M/ll.9% Total Allocated Budget $64.SM Adding AUW changes TAB and CBB: NCC ($64.SM) + AUW ($3M) = CBB ($67.SM)... I Page 10 of 32 I... Back Next

21 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Authorized Unpriced Work (AUW ) AUW comes into play when a contract change is time critical. The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated. Although authorized contrac tually, the AUW is not part of the NCC until after definitization and negotiations are complete. However, the TAB and the PMB sho1 estimate of the au thorized scope. The reason for this is that gc definitization performance measurement plan before work starts and actual c AUW is defini tized, the PMB is adjusted to reflect changes mad< The agreement on or determination of contrac t terms, specifications, and price, If the contracting officer authorized AUW of $3M, the LAR T AB which converts an undefinitized contract Contract Price $72.SM action to a definitive con tract. Profit/Fee Total Allocated Budget S7.7M/ l l.9% S64.8M Adding AUW changes TAB and CBB: NCC ($64.SM) + AUW ($3M) = CBB ($67.SM)... I P ge 10of32 I... Back Next

22 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Management Reserve As a best practice, contractors normally set aside a management reserve (MR) from the T AB. MR is an amount of the total contract budget withheld for management control purposes and for unplanned events ( within the scope of the contract). It is not part of the PMB. The amount of MR needed for a project varies depending on the risks identified for the specific project, so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project. Contract Price $72.SM Total Allocated Budget $64.SM Performance Measurement Baseline $G3.2M Management Reserve $1.GM (23) For the LAR contract, the contractor has allocated $1.6 Million for MR. The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR.... I Page 11 of 32 I... Back Next

23 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Management Reserve As a best practice, contractors normally set aside a management reserve (MR) from the T AB. MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract). I t is not part of the PMB. The amount of MR needed for a project varies depending on the risks identified for the specific project, so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p Long Description Reprised chart breaking down a Contract Price of 72.5 million dollars into two separate components. Profit/fee is 7. 7 million dollars, or 11.9 percent. Total allocated budget is 64.8 million dollars. Total allocated budget is further broken down into two separate components: performance measurement baseline of 63.2 million dollars and management reserve of 1.6 million dollars, or 2 percent. Performance Measurement Baseline M anagement Reserve $G 3 _ 2 M $1.GM (23) For the LAR contract, the contractor has allocated $1.6 Million for MR. The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR.... I Page 11 of 32 I... Back Next

24 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review Which of the following describes the purpose of the contractor management reserve (MR)? ~ Budget set aside to pay for unexpected, unplanned work arising within authorized scope for risk mitigation Budget set aside to offset or minimize existing cost variances D Incentive funds awarded to Government personnel for excellent performance Incentive funds awarded t o the contractor program manager for excellent performance Check Answer The contractor MR holds budget set aside to pay for unexpected, unplanned w ork arising within authorized scope for risk mitigation.... I P ge 12of32 I... Back Next

25 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP The PM B The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB. The PMB is fundamental to EVM. I t establishes a baseline against which progress can be measured. The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people, materials, and budget) assigned. The PMB will represent the contractor's path for executing the program and assessing the program's progress in terms of cost and schedule performance at the appropriate level of detail. Total Allocated Budget (TAB) Management Reserve Total Allocated Budget $64.SM S in M Performance Measurement Baseline $63.2M Management Reserve $1.GM (2%) Contract Start Time Contract End... I Page13of 32 I... Back Next

26 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP The PM B The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB. The PMB is fundamental to EVM. I t establishes a baseline against which progress can be measured. The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people, materials, and budget) assigned. The PMB will represent the contractor's path for executing performance at the app Long Description Total Allocated Budget Reprised chart breaking down a Contract Price of 72.5 million dollars into two (TAB) separate components. Profit/fee is 7.7 million dollars, or 11.9 percent. Total allocated budget is 64.8 million dollars. Total allocated budget is further broken down into two separate components: performance measurement baseline of 63.2 million dollars and management reserve of 1.6 million dollars, ==::I or 2 percent. Reprised chart representing a performance measurement baseline, or PMB, over time, from contract start to contract end. The total allocated budget, or T AB, includes the PMB's budget at completion, or BAC, and the management reserve. Contract Start Time Contract End... I Page13of32 I... Back Next

27 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP I PMR Format 1 All the elements just reviewed are reported in the JPMR in various formats. For example, here is some of the LAR Engineering and Manufacturing Development (EMO ) contract data shown on JPMR Format 1. *Note: IPMR Format 1 values are in t housands of dollars ($). 8. Perfom1ance Data f. Management Reserve g. Total Select to enlarge the graohic. TAB MR = PMB $64.8M $1.6M = $63.2M... I Page14of 32 I... Back Next

28 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP IPMR Format 1 All the elements just reviewed are reported in the JPMR in various formats. For example, here is some of the LAR Engineering and Manufacturing Development (EMO ) contract data shown on JPMR Format 1. I Long Descript ion!ab.equals the target price minus *Note: IPMR Format 1 values ~---~~...,.;,..,.,,. ~~,~..._...t.,..""'i!:il. IPMR Format 1. Section 5, contract data, with sub-sections a through h. A: Quantity PROD: 0. B: Negotiated Cost $64, C: Estimated Cost Authorized Unpriced Work $0.00. D: Target Profit/Fee $7,708.5 or 11.9 percent. E: Target Price $72, F: Estimated Price $71, G: Contract Ceiling $0.00. H: Estimated Contract Ceiling: no value. T AB equals the target price minus the target fee: $72.5 Million minus $7. 7 Million equals $64.8 Million. Section 8, performance data, with subsections: e through g. E: Subtotal Performance Measurement Baseline; F: Management Reserve; and G: Total. PMB subtotals and totals for the current period are: BCWS 1,960.8; BCWP 2,429.2; ACWP 2,288.5; Schedule variance 468.4; and Cost Variance Cumulative to date PMB subtotals and totals are: BCWS 34,527.1; BCWP 32,382.4; ACWP 35,060.8; Schedule variance negative 2, 144.7; and Cost Variance negative 2, BAC subtotal at completion is 63, Management Reserve is 1, BAC total at completion is 64, T AB minus MR equals PMB: $64.8 Million minus $1.6 Million equals $63. 2 Million. g. Total lt 960.s l l 22ss.s I I t4o.7 l I I3506o.s l I I Select to enlarge the graohic.... I Page14of32 I... Back Next TAB MR = PMB $64.SM $1.6M = $63.2M

29 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review The Integrated Program Management Report (IPMR) shows a target price of approximately S72M and a target fee of approximately $7M. It also shows that the contractor has decided to put S6M in management reserve (MR). How much budget at completion (BAC} has the contractor decided to allocate to the performance measurement baseline (PMB)? $72 million LJ $66 million $79 million Tota l Allocated Budget $65M Performance Measurement Baseline Management Reserve ~ $59 million $GM $ Check Answer The BAC available for the PMB equals the target price minus the target fee minus the management reserve. Therefore, $72M - $7M - $6M = $59M.... I P ge15of32 I... Back Next

30 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review The Integrated Program Management Report (IPMR) shows a target price of approximately $72M and a target fee of approximately $7M. It also shows that the contractor has decided to put $6M in management reserve (MR). How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB )? 0 $72 million 0 $66 million Long Description Chart breaking down a Contract Price of 72 million dollars 0 $79 million into two separate components. Profit/fee is 7 million dollars. Total allocated budget is 65 million dollars. Total allocated budget is further broken down into two separate components: management reserve of 6 million dollars, and the performance measurement baseline which is blank. ~ $59 million Check Answer The BAC available for the PMB equals the target price minus the target fee minus the management reserve. Therefore, $7 2M - $7M - $6M = $59M.... I Page1Sof 32 I... Back Next

31 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Developing the PMB Contractors allocate the BAC into the following PMB components using a worl</budget authorization process: Undistribyted budget {UB) Summary leyel planning packages {SLPPs) Control Accoynts { CAs ) Note, MR is not part of the PMB.... I P ge 16of32 I... Back Next

32 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Developing the PMB Contractors alloc ate the BAC into the following PMB components using a worl</budget authorization proc ess: Undistribyted budget {UB) Summary leyel planning packages {SLPPs) Control Accoynts { Long Description Note, MR is not part o f t Chart breaking down a performance measurement baseline of 63.2 million dollars into three separate components: control accounts; summary level planning packages; and undistributed budget.... I P ge 16of32 I... Back Next

33 Lesson Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP Developing the PMB Contractors allocate the BAC into the following PMB components using a work/budget authorization process: Undjstrjbuted budget (UB) Summary level planning packages (SLPPs Con trol Accounts (CAs) Note, MR is not part of the PMB. Undistributed b udget Performance A temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or summary level planning package level. Control Level Undistributed Accounts Planning Budget Packages... I Page16of 32 I... Back Next

34 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Developing the PMB Contractors allocate the BAC into the following PMB components using a work/budget authorization process: Undistributed budget (UB) Perfor mance Summary lev el planning packages Symmary level planning packages (SLPPs An aggregation of work for far-term efforts, not Control Accounts (CAs) able to be identified at the control account level, which Note, MR is not part of the PMB. can be assigned to reporting level WBS elements (and is therefore not "undistributed budget"). ~ I Page16ofJ2 I ~ Back Next

35 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Developing the PMB Contractors allocate the BAC into the following PMB components using a work/budget authorization process: Undistributed budget (UB) Control accounts Perfor mance Symmary level planning packages (SLPPs A management control point at which budgets (resource Control Accounts (CAs) plans) and actual costs are accumulated and compared Note, MR is not part of the PMB. to earned value for management control purposes. A control account is a natural management point for planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element. ~ I Page16of J2 I ~ Back Next

36 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review Which of the following are components of the performance measurement baseline {PMB)? Select all that apply. ~ Undistributed budget {UB) ~ Summary level planning packages {SLPPs) ~ Control accounts {CAs) Management reserve Check Answer UB, SLPPs, and CAs are components included in the PMB. The PMB does not include the management reserve.... I P ge 17 of 32 I... Back Next

37 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Control Account Manager Role Control account managers {CAMs) play a key role in defining the PMB. The contractor PM will allocate budgets to CAMs in work authorization documents. The CAMS will build their portions of the PMB (budgeted cost for work scheduled, or BCWS) using these budgets. They break their work down into work packages and/or planning packages. The sum of all work package budgets plus planning package budgets within a control account equals the control account budget. WBS Element.. Contract Personnel +... I P ge18of32 I... Back Next

38 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Control Account Manager Role Control account managers (CAMs ) play a key role in defining the PMB. The contractor PM will allocate budgets to CAMs in work authorization documents. The CAMs will build their portions of the PMB (budgeted cost for work scheduled, or BCWS) using these budgets. They break their work down into work packages and/ or planning packages. The sum of all work package budgets plus planning package budgets within a control account equals the control account budget. Long Descript ion WBS elements and contract personnel make up control accounts. CAMs divide the work in their control accounts into near-term work packages and far-term planning packages. WBS Element..... I Page 18 of32 I... Back Next

39 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Work Pa ckages and Planning Pa ckages Jn order for the PM to effectively manage execution of the program within budget and schedule constraints, discrete w ork packages must be established and objectively measured. Work packages re flect the ac tual way the work is done and are a clearly distinguishable subdivision of a control account, assignable to a single organizational element. Work packages are where the work is planned in detail, technical progress is measured, and earned value is determined. Pt.tU1f $7 7Mll l <l'jt When authorized control account work scope cannot be planned in detail, planning packages may be used. A planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level. Typically, near term work is detail planned into work packages, and future effort is aggregated in planning packages. The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package. Planning packages do not have EVM measures of progress identified yet. ~,~-P-a- ~ ge-19_o_f_j_2~1 Back Next

40 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Work Packages and Planning Packages In order for the PM to effectively manage execution of the program within budget and schedule constraints, discrete work packages must be established and objectively measured. Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of a control account, assignatr.._, "'T-t organizational element. Long Description the work is planned in de measured, and earned va Reprised chart breaking down a Contract Price of 72.5 million dollars into two separate components. Profit/fee is When authorized control 7. 7 million dollars, or 11.9 percent. Total allocated budget cannot be planned in det is 64.8 million dollars. Total allocated budget is further may be used. broken down into two separate components: performance measurement baseline of million dollars and A planning package is a I management reserve of 1.6 million dollars, or 2 percent. work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components: control accounts; Typically, near term wo summary level planning packages; and undistributed packages, and future eff budget. Control accounts is further broken down into two planning packages. components: near- term work packages and far- term planning packages. The planning package is dll'l!!"',,...,m'l!!!!'"l'l'i''""""'"!!""' known schedule requirements and detail planned into Planning Packages (far term) prior to any work performed on the scope contained in the planning package. Planning packages do not have EV M measures of progress identified yet. work package(s) at the earliest practicable point... r1- P- -ge-1a-o""'f'"3-2--.i... Back Next

41 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Characteristics of a Work Package Recall that a work package is a task/activity or grouping of work within a control account. Characteristics of work packages include: Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion Work packages are developed for at least near- term effort in control accounts Shorter- term work packages (ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished Work packages have a schedule and a budget expressed in terms of dollars, labor hours, or other measurable units Work packages have an identified EVM measure of progress The work package's earned value (budgeted cost for work performed, or BCWP) contributes to (or is "rolled up" into) its control account's earned value; this is how its earned value (BCWP) is reported in the IPMR Work packages may be referred to by different terms in different companies and functions. Examples are: a design job, a tool design package, a build- to- package, a shop order, a part number, a purchase order or any other definable work.... I Page20of 32 I... Back Next

42 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Characteristics of a Planning Package Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level. Characteristics of a planning package include: Planning packages are normally used for the far-term effort that can be identified, budgeted, and time-phased, but not yet detail planned The planning package is time-phased with the known schedule requirements Planning packages are detail-planned into work package( s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning package budgets must be identified specifically with the work for which it is intended Planning packages are time-phased, periodically reviewed for validity, and not used to perform other scopes of work.... I Page21of 32 I... Back Next

43 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review Which of the following are characteristics of a work package? Select all that apply. ~ It is a de tailed task LJ Detailed planning has not yet been performed to identify the budget, schedule, and resources allocated to the work package ~ Work packages have an identified Earned Value Management (EVM) measure of progress ~ Its earned value is rolled up into the earned value of the control account it supports achieving Check Answer A work package is a detailed task. Work packages have an identified EVM measure of progress. The work package's earned value is rolled up into the earned value of the control account it supports achieving.... I P ge22of32 I... Back Next

44 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Work Packages Control accounts can inc lude a variety of different types of w ork packages and planning packages. The follow ing is an example of a control account for the LAR EMO contract. As show n in the table below, this control account has nine w ork packages, all representing w ork necessary to complete the Engine Critical Design. This particular control account has no planning packages. $187,092 Work Package l l Requirements Analysis 2 Engineers 8/ 29/ 2014 $14,112 Work Package l.l Trade Studies 3 Engineers / 29/ 2014 $5,760 Work Package Functional Flow Analysis 2 Sr. Engineers 8/ 18/ / 15/ 2014 $13,440 Work Package Functional Block Diagram 2 Sr. Engineers 9/ 2/ / 30/ 2014 $14,112 Work Package Functional Allocation 4 Jr. Engineers 9/ 22/ / 20/ 2014 $6,900 Work Package TimingAnalysis 2 Sr. Engineers 10/ 1/ / 31/ 2014 $14,784 2 Sr. Engineers Work Package Test Requirements 3 Engineers 10/ 1/ / 23/ 2014 $64,704 Work Package Engineering Su port 4 Jr. Engineers / 31/ 2014 $49,920 Work Package Finalize Design 2 Sr. Engineers 12/ 24/ / 31/ 2014 $3, I Page 23of 32 I... Back Next

45 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Work Packages Control accounts can include a variety of different types of work packages and planning packages. The following is an example of a control account for the LAR EMO contract. As shown in the table below, this control account has nine work packages, all representing work necessary to complete the Engine Critical Design. Long Description Sample control account breakdown for LAR EMO contract. In power package engine critical design control account consists of nine work packages broken out as follows requirements analysis work package requires 2 engineers, starts August 1, 2014, finishes August 29, 2014, and has a BAC of $14, trade studies work package requires 3 engineers, starts August 18, 2014, finishes August 29, 2014, and has a BAC of $5, functional flow analysis work package requires 2 senior engineers, starts August 18, 2014, finishes September 15, 2014, and has a BAC of $13, functional block diagram work package requires 2 senior engineers, starts September 2, 2014, ends September 30, 2014, and has a BAC of $14, functional allocation work package requires 4 junior engineers, starts September 22, 2014, finishes October 20, 2014, and has a BAC of $6, timing analysis work package requires 2 senior engineers, starts October 1, 2014, finishes October 31, 2014, and has a BAC of $14, test requirements work package requires 2 senior engineers and 3 engineers, starts October 1, 2014, finishes December 23, 2014, and has a BAC of $64,704. l.l.3.l-8engineering support work package requires 4 junior engineers, starts August 4, 2014, finishes December 31, 2014, and has a BAC of $49, finalize design work package requires 2 senior engineers, starts December 24, 2014, finishes December 31, 2014, and has a BAC of $3, I Page23of 32 I... Back Next

46 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review Which of the following is the definition of a planning package? ~ Within control accounts, a place for holding the scope, schedule, and budget until the work is detail planned into work packages The point at which work is planned, progress is measured, and earned value is computed D The time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated Check Answer Planning packages are, within control accounts, a place for holding the scope, schedule, a nd budget unt il t he work is detail planned into work packages.... I P ge24 of32 I... Back Next

47 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Types of Cost in the PM B T ypical types of cost found in CA work packages and planning packages are: Labor : personnel ( for example, systems engineers or software engineers) Control Accounts Materials: raw materials, purchased parts, or other items ( for example, bolts, widgets, or processors) Other Direct Costs: any other expenses ( for example, office supplies or computer equipment) Work Packages (near term) Planning Packages (far term) These three categories of costs can either be direct, meaning that they are specifically identified with a particular final cost objective, or indirect. Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level. An example of an indirect cost is "Engineering Overhead", which contains costs for engineering managers who spread their time among numerous contracts. Those costs are typically allocated to a direct cost base such as engineering labor.... I Page2Sof 32 I... Back Next

48 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Types of Cost in the PMB T ypical types of cost found in CA work packages and planning packages are: Labor: personnel ( for example, systems engineers or software engineers) Control Accounts Materials: raw ma -:...-.i =--..-.,._.._..._..._...~~ _.! Work Packages example, bolts, wid Long Descript ion (near term) Ot her Direct Cost supplies or comput Reprised chart breaking down control accounts into two components: near-term work packages and far-term planning packages. Planning Packages (far term) These three categories of costs can either be direct, meaning that they are specifically identified with a particular final cost objective, or indirect. Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level. An example of an indirect cost is "Engineering Overhead", which contains costs for engineering managers who spread their time among numerous contracts. Those costs are typically allocated to a direct cost base such as engineering labor.... I Page2S of 32 I... Back Next

49 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Knowledge Review Which of the following are key cost elements typically included in the performance measurement baseline (PMB)? Select all that apply. The management reserve ~ Labor ~ Other direct costs ~ Materials Check Answer The cost elements that make up the PMB budget are contained within control accounts. Those cost elements can be either direct or indirect, and include la bor, other direct costs, and materials.... I P ge 26of32 I... Back Next

50 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Summary Level Planning Packages SLPPs are an aggregation of work for far-term efforts, not able to be identified at the control account level, which can be assigned to reporting level WBS elements (and are therefore not UB). SLPPs are, essentially, high level holding accoun ts for budget that is identified to some authorized work scope and is time-phased for interim resource planning, but which, for business reasons, has not yet been allocated to control accounts. These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific element begins. ~ I Page27ofJ2 I ~ Back Next

51 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Summary Level Planning Packages SLPPs are an aggregation of work for far-term efforts, not able to be identified at the control account level, which can be assigned to reporting level WBS elements (and are therefore not UB). SLPPs are, essentially, high level holding accounts for budget that is identifi work scope and is time-p Long Description planning, but which, for yet been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 63.2 million dollars into three separate appropriate control acco components: control accounts; summary level planning and before the actual wo packages; and undistributed budget. Summary level element begins. planning packages is emphasized.... I P ge27of 32 I... Back Next

52 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Rolling Wave Planning CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages. Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages. As the work within a control account is planned in more detail, the budget to support those detailed tasks is moved from planning packages to work packages. As the work associated with SLPPs is planned in more detail, budget to support that more detailed work is moved into control accounts.... I P ge 28of32 I... Back Next

53 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Rolling Wave Planning CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages. Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages. Long Description Reprised chart breaking down a performance measurement baseline of 63.2 million dollars into three separate components: control accounts; summary level planning packages; and undistributed budget. Control accounts is further broken down into two components: near-term work packages and far-term planning packages. As the work within a control account is planned in more detail, the budget to support those detailed tasks is moved from planning packages to work packages. As the work associated with SLPPs is planned in more detail, budget to support that more detailed work is moved into control accounts.... I P ge28of32 I... Back Next

54 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Rolling Wave Planning CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning As a contract progresses, the contractor should periodically plan the next increment of work into detailed work packages from planning packages. This is known as rolling wave planning. Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope. The contractor should establish procedures and a timetable for rolling wave planning. The contractor's EVM System Description Document (EVM SDD ) is the common place to find the processes and procedures for rolling wave planning. The Government generally is not involved in the planning or approving of the rolling wave planning, however the Contract Management Office (CMO ) and Program Management Office (PMO ) should be aware of the contractor's schedule for rolling wave planning. As the work within a control account is planned in more detail, the budget to support those detailed tasks is moved from planning packages to work packages. As the work associated with SLPPs is planned in more detail, budget to support that more detailed work is moved into control accounts.... I Page28of32 I... Back Next

55 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Undistributed Budget UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level. UB is not used as a substitute for adequate contract planning, so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time, preferably within the next reporting period. Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planning/work packages within two reporting periods.... I P ge2pof32 I... Back Next

56 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Undistributed Budget UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level. UB is not used as a substitute for adequate contract planning, so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time, preferably within the next reporting period. Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planning/w Long Descript ion Reprised chart breaking down a performance measurement baseline of 63.2 million dollars into three separate components: control accounts; summary level planning packages; and undistributed budget. Undistributed budget is emphasized.... I Page29of32 I... Back Next

57 EVMlOl Fundam entals of Earned Value Managem e nt Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary Congratulations! You have completed the I ntroduction t o t he Performance Measuremen t Baseline lesson. You should now know the following key points about the PMB: Purpose of t he PMB: The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured. The PMB is the resourced BCWS for the contract. The contractor creates the PMB and adjusts it to accommodate changes that occur as the contract progresses to ensure that the baseline re flects the actual plan for performing the remaining work. The Govemment conducts an!br within 180 days of contract award to ensure the contractor's PMB is realistic. The Government uses the IBR process to S ill M understand the contractor's PMB and the risks inherent in it. Management Reserve Total Allocated &ldget (TAB) Contract Start Time Contr'l!ct End... I P ge30of 32 I... Back Next

58 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary Congratulations! You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson. You should now know the following key points about the PMB: Purpose o f t he PMB: The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured. The PMB is the resourced BCWS for the contract. The contractor creates t.--~~~~~~~~~~~~~~~~~~~~~~...,... adjusts it to accommoda ~ Long Descript ion Total Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB) actual plan for performin baseline, or PMB, over time, from contract start to work. contract end. The total allocated budget, or TAB, includes the PMB's budget at completion, or BAC, and the The Government conduc management reserve. 180 days of contract a wj!ir!"l'l'!"!!~l!i'!~--., ,--. the contractor's PMB is realistic. The Government uses the!br process to S in M understand the contractor's PMB and the risks inherent in it. Contract Start Time Contract End... I Page30 of 32 I... Back Next

59 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary, Cont. The PMB has the following key components: CAs, comprised of: Work packages Plannjng packages SLPPs UB Note, MR is not part of the PMB. Ty pical types of cost found in CA work packages and planning packages are: Labor : personnel (for example, systems engineers or software engineers) Materials: raw materials, purchased parts, or other items (for example, bolts, widgets, or processors) Other Direct Costs: any other expenses (for example, office supplies or computer equipment) These three categories of costs can either be direct, meaning that they are specifically identified with a particular final cost objective, or indirect, meaning that they are a grouping of incurred costs identified with two or more cost objectives.... I P ge 31 of 32 I... Back Next

60 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary, Cont. The PMB has the following key components: CAs, comprised of: SLPPs UB Work packages Plannin Note, MR is not part of t Long Descript ion Reprised chart breaking down a performance measurement baseline of 63.2 million dollars into three separate components: control accounts; summary level planning packages; and undistributed budget. Control accounts is further broken down into two components: near-term work packages and far-term planning packages. T ypical types of cost fou and planning packages ar & Clar -terml - Labor: personnel (for example, systems engineers or software engineers) Mat erials: raw materials, purchased parts, or other items (for example, bolts, widgets, or processors) Ot her Direct Cost s : any other expenses (for example, office supplies or computer equipment) These three categories of costs can either be direct, meaning that they are specifically identified with a particular final cost objective, or indirect, meaning that they are a grouping of incurred costs identified with two or more cost objectives.... I Page31of32 I... Back Next

61 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary, Cont. The PMB has the following key components: CAs, comprised of: Work packages Planning packages SLPPs UB Note, MR is n ot part of the PMB. Performance CAs All EVM is done at the control account level. Work is planned and budgeted, actual costs are accumulated, and earned value is credited or " earned" at this level. CAs are broken down into near- term work packages and far- term planning packages. T ypical types of cost found in CA work packages and planning packages are: Lab or : personnel ( for example, systems engineers or software engineers) Mat erials: raw materials, purchased parts, or other items ( for example, bolts, widgets, or processors) Other Direct Costs: any other expenses ( for example, office supplies or computer equipment) These three categories of costs can either be direct, meaning that they are specifically identified with a particular final cost objective, or indirect, meaning that they are a grouping of incurred costs identified with two or more cost objectives.... I Page31of 32 I... Back Next

62 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary, Cont. The PMB has the following key components: CAs, comprised of: SLPPs UB Work packages Planning packages Note, MR is not part of the PMB. Work packages Performance Work packages are natural subdivisions of a control account. A work package is simply a task/activity or grouping of work. I t is the point at which work is planned, progress is measured and earned value is computed. I t can be translated into different terms in different companies and functions: a design job, a tool design package, a build- to- package, a shop order, a part number, a purchase order or any other definable work. T ypical types of cost found in CA work packages and planning packages are: Clar -terml - Labor : personnel (for example, systems engineers or software engineers) Mat erials: raw materials, purchased parts, or other items (for example, bolts, widgets, or processors) Other Direct Costs: any other expenses (for example, office supplies or computer equipment) These three categories of costs can either be direct, meaning that they are specifically identified with a particular final cost objective, or indirect, meaning that they are a grouping of incurred costs identified with two or more cost objectives.... I Page31of 32 I... Back Next

63 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary, Cont. The PMB has the following key components: CAs, comprised of: Work packages Planning packages SLPPs UB Note, MR is not part of the PMB. T ypical types of cost found in CA work packages and planning packages are: Planning packages Performance Planning packages are holding accounts (within control accounts) for budget for future work that is not yet feasible to plan at the work package level. The planning package budget is time- phased in accordance with due dates for resource planning. Plans are refined as detailed requirements become clearer and time to begin work draws nearer. Work Packages!near terml Planning Packages Clar terml Labor : personnel (for example, systems engineers or software engineers) Mat erials: raw materials, purchased parts, or other items (for example, bolts, widgets, or processors) Other Direct Costs: any other expenses (for example, office supplies or computer equipment) These three categories of costs can either be direct, meaning that they are specifically identified with a particular final cost objective, or indirect, meaning that they are a grouping of incurred costs identified with two or more cost objectives.... I Page31of 32 I... Back Next

64 Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRI NT I HELP Lesson Summary, Cont. The PMB has the following key components: CAs. comprised of: Work packages Planning packages SLPPs UB Note, MR is not par t of the PMB. SLPPs SLPPs are an aggregation of work for far- term efforts, not able to be identified at the control account level, which can be assigned to reporting level WBS elements (and are are engineers) therefore not undistributed budget"). SLPPs are, essentially, high level holding accounts for budget that is identified to some authorized work scope and is time for example, bolts, widgets, or e supplies or computer equipment) phased for interim resource planning, but which, for business reasons, has not yet been allocated to control accounts. t they are specifically identified with a These budget dollars must be distributed to the appropriate a grouping of incurred costs identified control accounts as soon as possible and before the actual work for that specific element begins. ~ I Page31of32 I ~ Back Next

65 EVMlOl Fundam entals of Earned Value Managem ent Lesson Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP Lesson Summary, Cont. The PMB has the following key components: CAs, comprised of: Work packages Plannjng packages SLPPs UB Note, MR is not part of the PMB. UB UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level. are engineers) UB is not time-phased, therefore us for near- term authorized for example, bolts, widgets, or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible. e supplies or computer equipment) Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planning/work packages t they are specifically iden tified with a within two reporting periods. a grouping of incurred costs identified {lll'!m'"m'!l"'m"tm~~~~~ I P ge 31 of 32 I... Back Next