The Earned Value Analysis Systems (EVAS) descriptions are from the
Department of Defense Earned Value Management System Interpretation Guide.
Organization (Guidelines 1 – 5)
The Organization category focuses on the fundamental preparations for executing the program technical objectives to ensure effective management control of the program. The primary objectives of the five guidelines that comprise this category are to establish the basic framework for capturing all contractually authorized work to be accomplished, identify the functional organization hierarchy responsible for accomplishing that work, and create an integrated structure that allows for management control of all effort.
| Field | Description |
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| GL 1: Work Breakdown Structure (WBS)
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The use of a well-defined WBS facilitates communication between the government and the contractor and helps ensure the entire scope of work is captured, defined, and subsequently allocated to the organizations responsible for performance of the work. It facilitates data collection and traceability and provides a control framework for integrated program management, work authorization, tracking, and reporting purposes.
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| GL 2: Organizational Breakdown Structure (OBS)
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An effective program organization, defined at the onset of the contract, enhances management control of technical, schedule and cost execution. Establishing and maintaining an OBS helps management focus on forming the most efficient organization by taking into consideration availability and capability of management and technical staff, including subcontractors, to achieve the program objectives.
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| GL 3: Integration
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The integration of planning, scheduling, budgeting, work authorization, and cost accumulation management processes provides the capability for establishing the Performance Measurement Baseline (PMB), identifying work progress, and collecting actual costs, thereby facilitating management analysis and corrective actions. Having integrated management systems and common data elements helps ensure the availability of reliable program information needed to support all levels of management insight and control.
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| GL 4: Overhead
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Visibility into indirect costs is essential for successful management of a program. The impact of indirect costs on any program must be accounted for and managed. It is important, therefore, to have processes documented and organizations established specifically to manage and control indirect costs. This will help the program manager effectively manage and control execution of overall program objectives.
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| GL 5: Control Accounts
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The careful establishment of the control account structure ensures the proper level of management where one organization has clear responsibility for the effort. Establishment of control accounts should consider the complexity of the work and the efficiency of the organization. Control accounts are the optimal points in the EVMS where managerial control, performance measurement, and responsibility for corrective action exist.
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Planning, Scheduling, and Budgeting (Guidelines 6-15)
The focus of the Planning, Scheduling, and Budgeting category is to develop plans and strategies to achieve the desired program cost, schedule, and technical objectives. This includes the identification of short- and long-term resource needs. The ten guidelines that comprise this category set the foundation for integrating scope, schedule, and budgets into a baseline against which accomplishments will be measured. This baseline, called the Performance Measurement Baseline (PMB), is a dollarized time-phased plan established primarily at the control account level and reflects how the contractor intends to use its resources to accomplish all the authorized work (Guidelines 8 and 9). The PMB provides the government and the contractor a common reference point for discussing program progress and status (Guideline 15).
| Field | Description |
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| GL 6: Schedule
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A fully-integrated schedule facilitates the establishment of a valid Performance Measurement Baseline (PMB). Scheduling authorized work facilitates effective planning, statusing, and forecasting, which are critical to the success of a program. This is accomplished through a fully networked Integrated Master Schedule (IMS) and is a foundational component in the establishment of a valid PMB. This provides the ability to produce a critical and driving paths and allows program management to evaluate and implement actions designed to ultimately complete the program effort within contractual parameters. Adequately integrating schedule data enables program management to use the schedule for time-based analyses and schedule risk assessments (SRA), both of which are critical to the success of meeting program commitments. An integrated network schedule provides program management a comprehensive status of authorized work scope and facilitates the timely tracking and communication of program performance.
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| GL 7: Progress Assessment
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A key feature of the vertically and horizontally integrated network schedule is that it establishes and maintains the relationship between technical achievement and progress statusing through time. Interim measures are defined as the detailed schedule is established to ensure performance is measured as objectively as possible. Timely and accurate progress assessments lead to better management visibility into program progress and may be early indicators of program problems and/or opportunities. Identifying objective criteria, linked to technical progress indicators, ensures performance assessments reflect the true technical performance of the program. Early visibility results in management ability to effect timely actions to adjust program directions.
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| GL 8: PMB (Performance Measurement Baseline)
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The government and the contractor have a common reference point, the PMB, for discussing program progress and success. The accurate reporting of progress against a mutually recognized plan facilitates the implementation of actions by management to maintain or bring the program back on plan. The establishment of realistic budgets, directly tied to the authorized scope of work, is essential for each organization responsible for performing program effort. Also, the establishment and use of the PMB is indispensable to effective performance measurement and it should be in place as early as possible after contract award or Authorization to Proceed (ATP).
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| GL 9: Cost Elements
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The ability to allocate resources effectively and ensure all required resources are committed and available to the program is enhanced by segregating resource types. Ensuring control account budgets are authorized and planned by elements of cost (EOCs) facilitates management insight into program performance at the resource level. This enables the contractor to more effectively manage and control execution of the control account work scope within schedule and budget constraints.
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| GL 10: Work Authorization
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Work packages and planning packages contain authorized scope and budgets that include specific time-phased resource requirements in currency, hours, or other measurable units. Additionally, the selection of appropriate earned value techniques (EVTs) will allow for accurate and objective performance measurement. This provides program management accurate status and situational awareness of program execution for proactive resolution of issues impacting cost, schedule, and technical achievement of program objectives.
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| GL 11: CA to WP Budget Alignment
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The work package and planning package budgets accurately summarize to the control account (scope, schedule, resources/budgets) and are the same value that is time-phased into work packages and planning packages. The benefit of proper summarization results in a program plan that correlates with the contract requirements and, therefore, provides a common reference point for government-contractor discussions and for accurate progress assessments. It avoids the over or under allocation of program budgets.
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| GL 12: LOE (Level of Effort) Planning
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In every program there are tasks accomplished that, by their nature, are unmeasureable. Prudent use of Level of Effort (LOE) is necessary to minimize the distortion of performance data for effective program management. The need to look at each effort on the program and determine if there is a way to measure progress towards its completion leads to a Performance Measurement Baseline (PMB) that provides accurate information to management for program decision-making.
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| GL 13: Overhead
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The overall value of establishing indirect budgets lies in the ability of contractor management to manage costs that cannot be directly assigned to individual cost objectives. By comparing actual indirect expenses to established indirect budgets, the contractor can determine if the absorption of indirect expenses based on existing documented allocation schemes is on track or if allocation rates require adjustment. It is critical to the contractor that, at the end of the accounting year, all indirect expenses are allocated. The accurate assignment of indirect budgets, therefore, ensures that each program is allocated only its fair share of indirect costs.
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| GL 14: Management Reserve (MR) and Undistributed Budget (UB)
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The ability to establish MR allows program management to react to unforeseen in-scope situations that arise during the life of a program. MR is budget for handling program risk and in-scope unanticipated events. MR is not a source of funding for additional work scope or for the elimination of performance variances.
UB is budget that is applicable to specific contractual effort that has not yet been distributed to control accounts or Summary Level Planning Packages (SLPPs). UB may also contain scope subject to removal from the distributed baseline due to contractual changes. Identification of the program’s UB, facilitates program management’s ability to account for and report on all authorized scope and budget. UB is a transitional budget that should be distributed in a timely manner.
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| GL 15: Target Costs
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By ensuring that the target cost value is traceable to the sum of the internal budgets and Management Reserve (MR), a common point of reference is established that is fully understood by all parties and supports both performance assessments and funding requirements.
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Accounting (Guidelines 16-21)
The Accounting Considerations category focuses on ensuring that all direct and indirect costs associated with accomplishing the complete scope of work contained in the contract are properly transferred to the Earned Value Management System (EVMS) at the level of detail required for performance analysis and reconcilable to contract performance reports.
| Field | Description |
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| GL 16: Record Direct Costs
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To support program management, direct costs must be charged to a program consistent with the corresponding budgets in order to achieve effective performance management and Estimate at Completion (EAC).
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| GL 17: Direct Cost by WBS
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Accurate cost summarization by WBS element provides management visibility into the current cost of products and services being procured. Accurate accumulation and summarization of direct costs supports effective analysis of performance measurement information and forecasting of potential future costs.
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| GL 18: Direct Cost by OBS
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Accurate cost summarization by OBS element provides management visibility into current costs incurred by organizational elements in production of the products and/or services. Confirmation that direct costs are accurately accumulated and summarized supports management’s effective analysis of performance measurement information and forecasting of potential future resource requirements and their costs.
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| GL 19: Indirect Costs
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The potential negative cost impact of poor indirect cost performance to a program mandates that the contractor manage these costs as effectively as possible. The availability of auditable actual indirect costs supports management’s efforts in this critical area. A documented process established specifically to provide visibility into the management/control of indirect costs is essential for successful program management.
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| GL 20: Unit and Lot Costs
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Program management and other stakeholders (such as cost estimators) use unit and lot cost information for program cost estimates and to ensure funding is sufficient for the current contract. The periodic evaluation of actual and projected unit and lot costs facilitates this funding assessment. Unit and lot cost information is also used to predict the acquisition cost of future procurements and support budget development. In both cases, the benefit is the continuing ability to acquire the required quantities. For the contractor, this information facilitates the preparation of future bids for like items.
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| GL 21: Material Costs and Qty
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The establishment of accurate cost accumulation, performance measurement, and identification of residual inventory is essential since material may comprise a large portion of a contract’s costs. Material management must be accomplished in a manner which provides maximum identification of critical or high value material for effective management visibility. To support program management, direct costs for material items must be assigned to a program consistent with the corresponding budgets for that material. This provides the basis for realistic evaluation of cost variances and ultimately facilitates Estimate at Completion (EAC) projections.
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Analysis and Management Reporting (Guidelines 22-27)
The Analysis and Management Reporting category focuses on management use of the Earned Value Management System performance data to detect and act upon early technical, schedule, and/or cost deviations from the Performance Measurement Baseline.
| Field | Description |
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| GL 22: Calculate Variance
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The use of data that is traceable through the Earned Value Management System (EVMS) subsystems helps to ensure that the variances calculated each month are a valid reflection of progress. Calculating and analyzing cost and schedule variances allows program management to assess the impact of deviations from the Performance Measurement Baseline (PMB) and to determine the necessity for corrective action(s) in order to achieve program objectives.
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| GL 23: Analyze Significant Variances
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The ability to analyze deviations from the established Performance Measurement Baseline (PMB) permits management, at all levels, to rapidly and effectively implement corrective actions in an effort to regain contract objectives. Insight into future cost and schedule performance, based on the analysis of cost, schedule, and at complete variances, will be facilitated. The communication of programmatic earned value performance status enables program management to manage and control execution of the program and assess whether deviations from the technical, schedule, and budget baselines require management action. Without this visibility into and the understanding of plan deviations, the success of the contract is jeopardized.
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| GL 24: Analyze Indirect Cost Variances
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The overall value to the contractor is visibility into the absorption of indirect costs that cannot be directly applied to a contract. Managing indirect costs on a continuing basis enables the contractor to adjust rates in a timely manner so as to complete an accurate estimate at completion for individual programs/contracts. Program management must understand that ongoing indirect cost analysis provides visibility into potential indirect cost overruns or underruns and the opportunity to develop and implement management action plans. This effect must be considered when developing and analyzing the Estimate to Complete (ETC).
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| GL 25: Summarize for Management
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The availability of summarized Earned Value Management System (EVMS) data allows the government and the contractor to make management decisions based on the same information derived from the EVMS subsystems. Summarizing performance measurement data and variances allows program management to focus on potential or realized problem areas.
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| GL 26: Implement Corrective Actions
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A formal approach to preparing root cause analysis, determining impacts, establishing corrective action plans, and tracking their resolution ensures management’s visibility into program execution on a continuing basis. Early identification of cost, schedule, and technical risks permits program management to implement corrective action plans in a timely fashion. Analysis of timely and accurate data facilitates effective assessment and decision-making at all levels of program management.
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| GL 27: Maintain Estimate at Completion
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A properly established and maintained Estimate at Completion (EAC) ensures continuing visibility into the cost, schedule, risks and opportunities, as well as the resource requirements (e.g., funding, labor resources, facilities, etc.) and contributes to program success for both the government and the contractor. The Control Account Manager’s (CAM) ability to communicate the control account EAC is supported by and traceable from the work package level where resources for remaining work exists. Timely, accurate, reliable, and auditable estimates support the government’s ability to sufficiently fund the program and enhance internal management’s visibility into critical resource requirements (labor resources, facilities, etc.).
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Revisions and Data Maintenance (Guildelines 28-32)
The Revisions and Data Maintenance category focuses on maintaining an accurate and reliable Contract Budget Base (CBB) and Performance Measurement Baseline (PMB) throughout its period of performance. The guidelines ensure that the PMB reflects the most current plan for accomplishing the effort thus providing credible performance measurement data that management can rely on to make program-related decisions.
| Field | Description |
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| GL 28: Incorporate Changes
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A properly maintained CBB is crucial to effective program management. The timely and accurate incorporation of contractual changes ensures that the information generated from the execution of the baseline plan provides an accurate picture of progress and facilitates appropriate management actions and decisions.
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| GL 29: Baseline Maintenance
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The need for accurate performance measurement requires that the CBB maintain a traceable relationship to the contract. As changes are made to the contract, the CBB must be adjusted by the amount of change in order for the communication between the customer and contractor to remain valid.
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| GL 30: Control Retro Changes
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Controlling retroactive changes to budgets or costs for completed work maintains the validity of historic Earned Value Management System (EVMS) cost and schedule variance trends and reflects true program performance. A stable baseline and performance information against that baseline are essential to both internal and external management if informed decisions are going to be made based on the analysis of the system-generated information. Establishment of internal controls over retroactive budget and/or performance adjustments will help maintain visibility of overall project variance from plan. Uncontrolled changes to the PMB limits the ability to conduct predictive analysis.
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| GL 31: Prevent Unauthorized Revisions
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Disciplined baseline change control helps maintain the relationship between the Total Allocated Budget (TAB) and contract value. This ensures the program manager is managing with performance measurement data that accurately reflects only the authorized contractual scope of work. In order to prevent unauthorized increases to the TAB, causing it to exceed the CBB value, prior approval is required between the contractor and the government for implementation of an Over Target Baseline (OTB). This reinforces the mutual management of the program.
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| GL 32: Document PMB Changes
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Effective implementation ensures programmatic control and traceability for maintaining the PMB and performing the authorized scope, schedule, and budget. This enhances internal and external management confidence in the performance data that is used to make programmatic decisions. Using a disciplined, systematic change control process to document PMB changes provides assurance that all program stakeholders are using the same technical, schedule, and cost baselines to measure contract performance.
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