Humphreys &Associates, Inc. 3111 N. Tustin Street, Suite 250 Orange, CA 92865 (714) 685-1730 (Phone) (714) 685-1734 (Fax) Email: humphreys@humphreys-assoc.com http://www.humphreys-assoc.com No portion of this material covered by the copyrights hereon may be duplicated, reproduced, distributed, or copied in any form, or by any means - graphic, electronic, or mechanical, including photocopying, recording, taping, printing, or information and retrieval systems without written permission of Humphreys & Associates, Inc. The following material is copyrighted by Humphreys & Associates, Inc. 1979 2012. Portions of the following material are also copyrighted by Arthur Andersen & Co. 1980-1981. All rights reserved.
Earned Value Management Refresher Gary C Humphreys Humphreys & Associates, Inc. January 21, 2012 Humphreys & Associates, Inc. 1979-2010
Earned Value Management System (EVMS) Guidelines ANSI/ EIA Standard 748-B Government-accepted, Industry-wide standard for Earned Value Management Systems The EVMS Guidelines set forth the capabilities that a good Earned Value Management System should possess Contractors internal systems must meet these guidelines to be considered acceptable by the procuring agency Humphreys & Associates, Inc. 1979-2012 0003
Planned Value Versus Actual $ Total PV Cost Time Now Planned Value Actual Cost TIME 4815
Overrun or Ahead of Schedule? Total PV Time Now Ahead of schedule? Planned Value $ Overrun? Actual Cost TIME 9277
What Has Been Accomplished? Tests performed Design review performed Lines of code designed/coded/tested Drawings completed Reports delivered Units delivered Humphreys & Associates, Inc. 1979-2007 0032
Planned Accomplishment Budget $ Called Planned Value (PV) TIME 9279
Earned Value 100 % Task 1 0 % Task 2? Task 3 Time 9280
Planned versus Actual Accomplishment $ Earned Value Time Now TIME Planned Value 9281
Planned versus Actual Accomplishment Time Now $ Planned Value Earned Value Time 9282
What s Been Accomplished? What Did It Cost? Time Now $ Actual Cost Earned Value TIME Humphreys & Associates, Inc. 1979-2012 0039
What s Been Accomplished? What Did It Cost? Time Now $ Earned Value Actual Cost TIME 0040
Earned Value Is A Good Approximation PV $ Planned Value Actual Cost Earned Value AC EV TIME 9283
Cost Variance Planned Value $ Actual Cost Earned Value Cost Variance Time 9284
Schedule Variance Planned Value $ Actual Cost Earned Value Schedule Variance Time 9286
Cost & Schedule Impacts Projected Cost Overrun EAC $ Actual Cost Planned Value Earned Value BAC Projected Schedule Slippage TIME Humphreys & Associates, Inc. 1979-2007 9289
Planned Value versus Actual Cost Technical: Build a brick wall six feet high, two feet wide, and sixteen feet long Schedule: Four days Cost: Four people at $250 each for four days $ 4,000 Materials $ 6,000 Total planned cost $10,000 9292
Planned Value versus Actual Cost Cost Element Labor Material Total Time (in days) One Two Three Four $1,000 $1,000 $1,000 $1,000 $6,000-0- -0- -0- $7,000 $1,000 $1,000 $1,000 The Plan Total $4,000 $6,000 $10,000 9293
PV $7,000 Planned Value versus Actual Cost Day One AC $7,200? PV $8,000 Day Two AC $8,500? Day Three Day Four PV $9,000 AC $9,500? PV $10,000 AC $10,500? 9294
Planned Value versus Actual Cost PV $10,000 Day Five AC $11,000 9295
A Comparison Between Planned Value versus Actual Cost and Earned Value Technical: Schedule: Cost: Build a brick wall six feet high, two feet wide, and sixteen feet long Four days Four people with hand tools assigned for four days at a planned cost of $250 per day per person: Total planned labor: $4,000 Materials for the brick wall delivered on site prior to the start of construction include mortar, bricks, reinforcing, lumber and concrete: 6,000 Total planned material $ Total planned cost $10,000 9296
Planning Using Earned Value Cost Element Labor Material Total Time (in days) One Two Three Four $1,000 $1,000 $1,000 $1,000 $500 $2,000 $2,000 $1,500 $1,500 $3,000 $3,000 $2,500 Material: $6,000 6.0 feet First day 0.5 feet = $ 500 Second day 2.0 feet = $2,000 Third day 2.0 feet = $2,000 Fourth day 1.5 feet = $1,500 Total $4,000 $6,000 $10,000 Total 6.0 feet = $6,000 0053
Detailed Planning For Day One Using Earned Value Task Schedule Excavate footing Labor 1/4 day PV 250 Form work and supports Labor 1/4 day Material $50 Pour foundation Labor 1/4 day Material $150 PV 300 PV 400 Construct 0.5 feet of brick wall Labor 1/4 day Material $300 Total planned value Labor $1,000 Material $ 500 $1,500 PV 550 9297
Earned Value After Day One Task Schedule Excavate footing Labor 1/4 day 250 (PV) 250 (EV) 300 (AC) Form work and supports Labor 1/4 day Material $50 Pour foundation Labor 1/4 day Material $150 Construct 0.5 feet of brick wall Labor 1/4 day Material $300 300 (PV) 400 (PV) 300 (EV) 300 (AC) Concrete curing 400 (EV) 650 (AC) 550 (PV) 0 (EV) 0 (AC) Planned Value (PV) Earned Value (EV) Actual Cost (AC) Excavate $ 250 $ 250 $ 300 Forms 300 300 300 Foundation 400 400 650 Brick Wall 550 0 0 Total $1,500 $ 950 $1,250 9299
Earned Value Day One Plan Actual Planned Value $1,500 Planned Value (PV) $1,500 Earned Value (EV) $ 950 Actual Cost (AC) $1,250 ($550) SV ($300) CV 9300
Earned Value $12,000 $10,000 Time Now Day 1 Graphics EAC BAC Target $8,000 PV $6,000 $4,000 $2,000 AC EV $0 Award One Two Three Four Five Six TIME (DAYS) 9301
Earned Value Day Two Plan Actual Planned Value $4,500 Planned Value (PV) $4,500 Earned Value (EV) $4,500 Actual cost (AC) $4,500 ($0) SV ($0) CV 9303
Earned Value $12,000 $10,000 EAC Day 2 Graphics Time Now Target BAC $8,000 $6,000 PV $4,000 $2,000 AC EV $0 Award One Two Three Four Five Six TIME (DAYS) 9306
Earned Value Plan Day Three Actual Planned Value $7,500 Planned Value (PV) $7,500 Earned Value (EV) $4,500 Actual cost (AC) $5,500 ($3,000) SV ($1,000) CV 9307
Earned Value $12,000 $10,000 Day 3 Graphics Time Now Target EAC BAC Projected $8,000 $6,000 $4,000 EV PV AC $2,000 $0 Award One Two Three Four Five Six TIME (DAYS) 9309
Earned Value Plan Day Four Actual Planned Value (PV) $10,000 Earned Value (EV) $ 7,500 Actual cost (AC) $ 8,500 ($2,500) SV ($1,000) CV 9310
Earned Value $12,000 $10,000 Day 4 Graphics Time Now EAC BAC Target Projected $8,000 $6,000 PV AC $4,000 EV $2,000 $0 Award One Two Three Four Five Six TIME (DAYS) 9311
Earned Value Day Five Planned $10,000 Actual $11,000 Planned Value (PV) $10,000 Earned Value (EV) $10,000 Actual cost (AC) $11,000 ($0) SV ($1,000) CV 9312
Earned Value $12,000 $10,000 Day 5 Graphics EAC BAC Target Time Now Projected $8,000 $6,000 PV AC $4,000 EV $2,000 $0 Award One Two Three Four Five Six TIME (DAYS) 9313
DOE project summary Work Breakdown Structure with contract WBS(s) WBS Element 1 1.0 Energistic Unit 1 2 3 4 1.1.1.1 Graded Land ~ 1.1.1.2 Roads and Walks 1.1.1 Improved Land 1.1.1.3 Fences ~ ~ 1.1.1.4 Parking Lots ~ ~ 1.1 Site 1.1.2 Buildings 1.1.2.1 Building # 1 1.2 Handling Equipment 1.1.3 Structures 1.1.2.2 Building # 2 1.3 Processing Equipment ~ ~ 1.1. Utilities ~ ~ 1.1.2.3 Building # 3 ~ ~ ~ ~ 5 6 1.1.2.1.1.1 Excavations 1.1.2.1.1.2 Piling 1.1.2.1.1 Foundation and Substructure 1.1.2.1.1.3 Sublevel Slabs 1.1.2.1.2 Superstructure and Finishing ~ 1.1.2.1.1.4 Ground Level Slabs 0087
600 Mw Fossil Unit Level 1 Boiler Plant Equipment Turbine Generator Equipment Accessory Electrical Equipment Level 2 Structures And Improvements Miscellaneous Power Plant Equipment Project Services Humphreys & Associates, Inc. 1979-2012 0787
Boiler Plant Equipment Level 2 Steam Generator Feed- Water System Wet Ash Handling System Level 3 Condensate System Plant Fire Protection Equipment Chemical Wash System Coal Handling System Nitrogen System Vent And Drain System 0823
Coal Handling System Level 3 Unloading System Conveying System Level 4 Storage and Preparation System Dust Collection System 0824
Storage and Preparation System Level 4 Stocking And Reclaiming Equipment Primary Crushers Level 5 Secondary Crushers Silos And Bunkers 0825
Work Definition Work Breakdown Structure WBS DICTIONARY Humphreys & Associates, Inc. 1979-2011 0091
WBS Dictionary Contract Work Breakdown Structure Index Program: RFP NO: Contract No.: Contract Plan No. DATE: CWBS CODE CWBS ELEMENT NAME CWBS DEFINITION Humphreys & Associates, Inc. 1979-2011 0095
Sample Organization Structure Resident Construction Manager Labor Relations Manager Of Technical Services Site Office Manager Project Construction Supervisor Quality Control Manager Chief Of Cost and Schedule Chief Construction Engineer Material Control Manager Construction Equipment Supervisor Boiler Superintendent Turbine Superintendent Accessory Electrical Superintendent Safety And Security Payroll And Accounting Welding Engineer Quality Control Inspectors Cost Engineer Boiler Engineer Field Procurement Scheduling Boilermaker Supervisor Mill Wright Supervisor Electrical Supervisor Planning and Scheduling Engineer Turbine Engineer Warehousing Maintenance Instrument Supervisor Instrument Supervisor Instrument Supervisor Accessory Electrical Engineer Receipts And Distribution Piping Supervisor Piping Supervisor Specialty Supervisor Civil Supervisor Civil Supervisor 0843
Responsibility Assignment Matrix and Control Account Structure Contract Work Breakdown Structure Contract Engine Training Fan Compressor Turbine Fan Assembly Full Scale Fan Rig Minor Fan Rig Dual Spool Compressor Rig Test Case Assembly Rotor Assembly Stator Assembly Company Engineering Design Mechanical Design Control Account Control Account Manufacturing Analytical Design Drafting and Checking Control Account Control Account Control Account Account Control Account Work Packages Planning Packages Humphreys & Associates, Inc. 1979-2012 0106
Planning & Budgeting Establish the baseline - an iterative 3 - step process 1. Define the Work Contract Budget Base Management Reserve 2. Schedule the work $ Performance Measurement Baseline (PMB) 3. Allocate budgets 100 40 60 15 25 30 30 Humphreys & Associates, Inc. 1979-2007 Time 0142
Estimating Is Tied To Scheduling $ $ $ $ $ $ $ $ Humphreys & Associates, Inc. 1979-2007 0148
Budget Summary Functional Organizations Work Breakdown Structure Functional Organizations 1.0 Total Program 1.1 1.2 1.3 1.1.1 1.1.2 1.1.3 1.2.1 1.2.2 1.2.3 1.3.1 1.3.2 Organization Budgets Top Level Organization Organization A1 1 5 14 20 Org. A Organization A2 12 7 14 33 Organization A3 4 4 Organization B1 3 12 15 Org. B Organization B2 4 2 3 9 Org. C Organization C1 3 1 4 WBS Element Budgets 8 4 14 8 12 10 14 15 85 Undistributed Budget (UB) 5 Performance Measurement Baseline (PMB) 90 Management Reserve (MR) 10 Contract Budget Base (CBB) 100 Humphreys & Associates, Inc. 1979-2012 0158
By Providing A Time-Phased Budget for Each Control Account Control Account Task 1 Schedule $ Resources $ 2 $ $ 3 $ $ Total $ $ Humphreys & Associates, Inc. 1979-2007 0147
Incremental Milestone---Planning 1 2 3 4 Milestone 1 2 3 4 Totals Planned Value 300 1,200 1,200 600 3,300 9932
Incremental Milestone---Status Milestone 3 Planned Value 4 Earned Value 1 2 3 4 Totals 300 1,200 1,200 600 3,300 300 1,200 0 0 1,500 9933
Units Complete---Planning Month January February March April Total Budget Feet Budget @ $100 per foot 1,500 2,000 2,200 1,000 6,700 $150,000 $200,000 $220,000 $100,000 $670,000 0184
Units Complete---Status Month January February March April Total Budget Feet Budget @ $100 per foot Quantity Installed Earned @ $100 per foot 1,500 2,000 2,200 1,000 6,700 $150,000 $200,000 $220,000 $100,000 $670,000 1,000 2,000 2,000 1,700 6,700 $100,000 $200,000 $200,000 $170,000 $670,000 0185
Percent Complete Month January February March April PV 150 185 250 200 BAC 785 Date 3 25 Status of work depends upon individual evaluation of work accomplished 9938
Example Of Apportioned Effort Inspection estimated as 10% of related production Control Account Planned Value Production Control Account Inspection Control Account Earned Value Production Control Account Inspection Control Account June July Aug 200 500 100 20 50 10 150 450 150 15 45 15 Total 800 80 750 75 9939
Level Of Effort (LOE)---Planning Month Jan Feb Mar April May Jun Jul PV 100 100 150 200 200 200 200 BAC 1150 Date 2 30 9941
WBS Summarize Costs $ $ ORGANIZATION $ $ $ $ $ $ $ Humphreys & Associates, Inc. 1979-2007 0217
Performance Measurement Approach Earned Value - Planned Value = Schedule Variance $70,000 - $76,000 = ($6,000) Earned Value - Actual Costs = Cost Variance $70,000 - $80,000 = ($10,000) Humphreys & Associates, Inc. 1979-2007 9945
WBS Level 2 Element Detail Work Breakdown Structure Total Contract WBS Level 1 WBS Level 3 Element 23 Detail Element variance 21 (1.2) 22 0.5 23 (10.0) 24 1.6 Element variance 31 (8.0) 32 (0.2) 33 (1.2) 34 (0.6) Variance Analysis Traceability Traceability Functional Organization Total Division Contracts variance X (12.0) Y 3.2 Z 6.3 Functions Variance MFG 2.1 ENG (14.0) Tool 0.9 QA (1.0) Contract Summary Contract X Functional Responsibility Detail WBS Level 4 Element 31 Element variance 45 0 46 (10.0) 47 0.8 48 1.2 Control Accounts Element 46 Detail Engineering Test Control Acct Var. C/A 302 (0.5) C/A 306 (1.5) C/A 308 (6.0) C/A 315 (0.6) Engineering Variance Systems (1.9) Design (0.1) Test (9.0) Research (3.0) Control Accounts Engineering Test Detail Contract X Engineering Departments Detail Humphreys & Associates, Inc. 1979-2007 To work package detail 0255
Title: Condensing System Number: 62-091-1-82-6 Report Period: July Planned Earned Actual Schedule VAR Cost VAR ($000) Value Value Cost Variance % Variance % Current 30 20 22 (10) (33) (2) (10) Cumulative 380 300 330 (80) (21) (30) (10) 1,200 1,300 (100) Budget At Complete Estimate At Complete Variance At Complete Problem Analysis Impact Corrective Action Plan Estimate At Completion Justification Variance Analysis Report Control Account Manager Approvals Signature Date Signature Date Title Title Humphreys & Associates, Inc. 1979-2007 9948
Estimate At Completion Now EAC $ AC Actual Costs Estimate To Complete ETC Humphreys & Associates, Inc. 1979-2007 Time 9949
Cost Performance Index (CPI) Earned Value Actual Cost CPIe = = = 0.875 Actual Cost Earned Value OR 70,000 80,000 80,000 70,000 CPIp = = = 1.142 Humphreys & Associates, Inc. 1979-2012 0301
To Complete Performance Index (TCPI) Planned Value for remaining work TCPI = = Estimate for remaining work BAC - EV EAC - AC Cum Cum 210,000-70,000 TCPI = = =.93 230,000-80,000 140,000 150,000 Humphreys & Associates, Inc. 1979-2007 9950
Performance Indices Comparison CPI E Performance to date 0.875 For every $1.00 of actual cost we earned $0.875 worth of work planned TCPI Projected performance.93 For every $1.00 of cost we estimate to earn $.93 worth of work planned to finish on EAC Humphreys & Associates, Inc. 1979-2012 0303
Effect Of Changes New Baseline New Budget At Completion $ Changes Original Baseline Original Budget At Completion Time Humphreys & Associates, Inc. 1979-2011 0330
Internal Replanning Time Now Revised Baseline BAC $ Original Baseline Humphreys & Associates, Inc. 1979-2012 Time Contract Completion Date (CCD) Planned Completion Date (PCD) 0334
Revisions Contract Budget Base (CBB) $ Budget at Completion (BAC) Performance Measurement Baseline (PMB) No. 1 The Original Plan Humphreys & Associates, Inc. 1979-2010 Time Contract Completion Date (CCD) Planned Completion Date (PCD) 9218
Internal Replanning CBB Time Now Revised PMB No. 2 BAC First Internal Replan $ Humphreys & Associates, Inc. 1979-2012 Time X Original PMB Contract Completion Date (CCD) Planned Completion Date (PCD) 9219
Internal Replanning CBB Revised PMB No. 3 Time Now X BAC $ X Second Internal Replan Time Contract Completion Date (CCD) Humphreys & Associates, Inc. 1979-2011 Planned Completion Date (PCD) 9220
Implementation Schedule Q 1 Q 2 Q 3 Q 4 1. Organization & Start up 2. Assessment 3. Design 4. Documentation 5. Training 6. Implementation 7. Review & Validation Humphreys & Associates, Inc. 1979-2007 0351
Sample Storyboard Slide Humphreys & Associates, Inc. 1979-2007 0358
Humphreys & Associates, Inc. 1979-2007
80 Legend Current Contract Performance First Measurement (Dollars In Millions) 70 60 50 40 30 20 10 0 x x - Planned Value40.0 - Earned Value 37.4 - Actual Cost 43.0 -Target 54.9 -EAC 56.4 - PM EST 58.5 Baseline Contract $58.5 PM EST $56.4 EAC $54.9 Target $43.0 AC $40.0 PV $37.4 EV 7 Months 0 Year 1 Year 2 Year 3 Year 4 Year 5 8514 Time Status x Original Contract Completion Date (CCD) ETC Revised CCD
(Dollars In Millions) 20 15 10 5 0-5 -10-15 -20 BAD GOOD Cost/Schedule Variance Trends LEGEND r r Schedule Variance Cost Variance t t Management Reserve 9 9 Tolerance Threshold Variance At Completion X Contractor Program Manager 9CV Threshold (10% = $3.7) t Management Reserve rschedule Variance 9 CV Threshold (10% = $3.7) Cost Variance First Measurement 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 0517 Time Status x Revised CCD
(Dollars In Millions) 80 Legend 70 60 50 40 30 20 10 0 x x Planned Value - Earned Value - Actual Cost -Target -EAC - PM EST Current 49.9 45.4 55.9 59.2 69.9 72.2 Contract Performance First Report 40.0 37.4 43.0 54.9 56.4 58.5 $49.9 PV 13 Months 0 Year 1 Year 2 Year 3 Year 4 Year 5 9246 Time Status x Second Measurement 5 months after 1 st report $72.2 PM EST $69.9 EAC $59.2 Target $55.9 AC $45.4 EV Original CCD ETC Revised CCD 2 nd Revision of CCD
(Dollars In Millions) 20 15 10 5 0-5 -10-15 -20 BAD GOOD Cost/Schedule Variance Trends LEGEND r r Schedule Variance Cost Variance t t Management Reserve 9 9 Tolerance Threshold Variance At Completion X Contractor Program Manager 9CV Threshold (10% = $4.5) Management Reserve t r9 Schedule Variance CV Threshold (10% = $4.5) Cost Variance Second Measurement 5 months after 1 st report 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 0519 Time Status x 2 nd Revision of CCD
(Dollars In Millions) 80 70 60 50 40 30 20 10 0 Legend x x - Planned Value - Earned Value - Actual Cost -Target -EAC - PM EST Current 54.5 51.5 60.9 60.9 67.8 74.3 Contract Performance Second First Report Report 49.9 40.0 45.4 37.4 55.9 43.0 59.2 54.9 69.9 56.4 72.2 58.5 $54.5 PV $51.5 EV 0 Year 1 Year 2 Year 3 Year 4 Year 5 9285 Time Status x Third Measurement 7 months after 1 st report $74.3 PM EST $67.8 EAC ETC $60.9 AC & Target Original CCD Revised CCD 2 nd Revision of CCD
(Dollars In Millions) 20 15 10 5 0-5 -10-15 -20 BAD GOOD Cost/Schedule Variance Trends LEGEND r r Schedule Variance Cost Variance t t Management Reserve 9 9 Tolerance Threshold Variance At Completion X Contractor Program Manager Third Measurement 7 months after 1 st report CV Threshold (10% = $5.2) Management Reserve t rschedule Variance CV Threshold 9 (10% = $5.2) Cost Variance 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 0521 Time Status 9 x 2 nd Revision of CCD
(Dollars In Millions) 80 70 60 50 40 30 20 10 0 Legend x x - Planned Value - Earned Value - Actual Cost -Target -EAC - PM EST Current 61.3 60.7 67.5 70.9 78.0 74.3 Contract Performance Third Report 54.5 51.5 60.9 60.9 67.8 74.3 Second First Report Report 49.9 40.0 45.4 37.4 55.9 43.0 59.2 54.9 69.9 56.4 72.2 58.5 $78.0 EAC Fourth Measurement 10 months after 1 st report ETC $74.3 PM EST $70.9 Target $67.5 AC $61.3 PV $60.7 EV 0 Year 1 Year 2 Year 3 Year 4 Year 5 9305 Original CCD Time Status Revised CCD 2 nd Revision of CCD
(Dollars In Millions) 20 15 10 5 0-5 -10-15 -20 BAD GOOD Cost/Schedule Variance Trends LEGEND r r Schedule Variance Cost Variance t t Management Reserve 9 9 Tolerance Threshold Variance At Completion X Contractor Program Manager Fourth Measurement 10 months after 1 st report CV Threshold (10% = $6.1) Management Reserve t r Schedule Variance CV Threshold 9 (10% = $6.1) Cost Variance 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 0523 Time Status 9 x 2 nd Revision of CCD
The End of Instruction CONTRACT TARGET COST Reporting Cutoff Date EAC BAC AC $ $ PV Humphreys & Associates, Inc. 1979-2007 EV TIME Thank You for your participation 8513