49th Annual NCMA March Workshop
What Contracting Professionals Need to
Know About Earned Value Management
Presenters:
Frank Malsbury, CPCM, NCMA Fellow
Internal IBR Manager
Raytheon
Buddy Everage, PMP
Director Emergent IT Programs
MCR Federal, LLC
Agenda
• Speaker Introductions
• Background and Overview of EVMS
• What is it?
• ANSI/EIA 748 EVMS Guidelines
• Basic Principles
• An example of how an EVMS works (EVM
Data Analysis)
• Information for management decision
making
• EVM Policies and Directives
• OSD / OMB
• EVM in Federal Contracting
• Where to find EVM requirements in
Solicitations
• Proper response to EVM requirements
• Summary
Earned Value Management Definition
• Earned Value Management (EVM) is a project management technique
that objectively tracks physical accomplishment of work.
• EVM provides an early warning of performance problems while there
is time for corrective action.
• In addition, EVM improves the definition of project scope, prevents
scope creep, communicates objective progress to stakeholders, and
keeps the project team focused on achieving progress.
• Strategic alignment of program objectives with agency mission is
essential to obtaining program funding (OMB 300). Once strategic
alignment is established, EVM provides the visibility to ensure that
the program cost, schedule and technical objectives are met.
Very Effective When Used in Conjunction
with Other Management Techniques
Definitions – Clarification of Terms
• Earned Value (EV) – The value of completed work expressed in terms of the budget
assigned to that work, often referred to as Budgeted Cost of Work Performed (BCWP). It
provides an objective measure of the value of completed work expressed in terms of the
budget assigned to perform the work.
• Earned Value Management (EVM) – A management methodology that integrates a
program’s technical scope, schedule and resources with program risk in a baseline plan
against which progress is measured to produce metrics that highlight variances and
performance trends, thereby providing program managers, as well as high level
management, with objective visibility into program progress and enable more effective
management.
• Earned Value Management Systems (EVMS) – An integrated set of policies,
processes, procedures, systems and practices that meets an organization’s
implementation of ANSI/EIA-748.
The Language of EVM is Unique
EVMS History
• The first attempts to view the status of major projects was the DOD,
PERT/Cost, in the 1960’s
• Then came the DOD Cost Specification (CSpec) requirements
• In 1967 the DOD Cost/Schedule Control System Criteria (C/SCSC)
• In the late 1980’s the Earned Value Management System (EVMS)
became a project management methodology
• Currently, ownership of EVM criteria is maintained by industry with
adoption of ANSI EIA 748-B standard
EVM Has Evolved Over Many Years
ANSI/EIA 748 EVMS Guidelines
EVMS Guidelines
32 Guidelines establishes the framework within which an adequate
integrated Cost/Schedule/Technical Management System will fit
The
five
major
Aspects
of
an
Earned
Value
Management
System
are
required
to
“play”
together
Organization
5
Define the authorized work and assign responsibility for the
work. Integrate planning, scheduling, work authorization and
accounting systems.
Planning &
Budgeting
10
Plan, schedule, budget and authorize the work. Establish and
maintain a time-phased budget baseline.
Accounting
6
Accumulate costs for work and material
Analysis &
Management
Reports
6
Compare planned and actual costs, and analyze variances.
Identify management actions taken. Horizontal and vertical
communications and traceability. Develop revised estimates
of costs at completion.
Revisions &
Data Maintenance
5
Timely incorporation of contractual changes. Maintain
traceability from original budgets. Prevent retroactive
changes
The Questions that EVM Answers
• How can a Program Manager get an early warning of performance
problems while there is time for corrective action?
• How does a Program Manager improve the definition of project scope
& prevent scope creep?
• How does a Program Manager communicate objective progress to
stakeholders?
• How can a Program Manager forecast the cost at completion and the
end date for the project?
Used Correctly, EVM Aids Proactive
Management
10 March 2010
7
What is Earned Value Management?
Plan
Manage
Measure
EVM
Analyze
Collect
Costs
What is Earned Value Management?
• EVM is a technique that relates resource planning to schedules and to
technical performance requirements
• EVM integrates project cost, schedule, technical effort and risk in a
realistic, executable plan called the Performance Measurement Baseline
(PMB)
• Tracks performance/progress to the plan
• Provides early warning of developing problems/opportunities
• Enables early corrective action when deviating from the plan
• EVM is a repeatable process
• Standard and consistent methods for progress measurement
• Consistent use of performance metrics on all projects
• Enables management to easily assess health of the enterprise
• Provides project past performance data and lessons learned useful for
improving performance and in preparing future estimates for similar work
A Disciplined Earned Value Management System is Powerful
EVM is a Program Management Process
EVM is a Program Management process
 for integrating
Detailed Schedules
• Scope
Control Account
Subcontract Schedules
Plans
• Schedule
• Resources
• Cost
• Technical Requirements
 to measure program performance
 to determine if cost and schedule
performance are as planned
 to determine final program costs
EVM is a key factor in winning and managing federal
contracts
Cost Account Plan (CAP)
WBS Name
WBS: 1.2.1.1: Design, Fabricate, Test TT&E EDU
Task
Task
1.2.1.1a
EV Method
Weighted
Milestone
Item
J
F
M
A
M
J
J
A
S
FY97
FY 98
FY 99
FY 99
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
CAM: Morris Money
O N D TOTAL
N/A CONTRACT MILESTONES
PLAN
50
75
50
50
75
50
ATP
300
50
EARN
PDR
FCA
Lot 1 Lot 2 Lot 3
1.0 Total Contract
Task
PLAN
1.2.1.1b
Fixed Formula
100
1.1
Space Craft
5/9
8/15
EARN
Task
% Complete
Estimates
1.2.1.1c
1.2
PLAN
8/15
4/8
600
100 100 100 100 100 175
1.3
EARN
11/4
12/1
Task
1.2.1.1d
Equivalent
Units
PLAN
75
75
75
300
75
1.4
4/8
2/18
EARN
1.5
Task
1.2.1.1e
PLANNING
PACKAGE
1.2.1.1
TOTAL
COST
ACCOUNT
PLAN
100
225 225 150 150 150 100
1.6
EARN
PLAN
EARN
200 225 250 225 225 250 225 225 150 150 150 100
2/18
9/14
1000
2,300
1.7
The Program Manager Owns Earned Value Management
5/21
9/14
1/31
6/25
What Earned Value Management is Not
• It is not a software package
– Software vendors that tell you their product is ‘validated’ or ‘certified’, do not
understand
• It is not a set of reports (although reporting is important)
• It is not a financial system, but it is maintained by Finance
• It is not funds management (but it is an indicator of funds requirements)
Earned Value Management is a Program Management Tool
Earned Value Management System
(EVMS) Features
• A disciplined approach to work definition, work organization and assignment,
planning, performance measurement, monitoring and control
• Work is defined, assigned and planned; plans are approved before work is
authorized to begin
– Changes are incorporated, planned, approved, and authorized before work
begins on the change
• EV methods or measurement techniques provide objective assessment of
program progress
• Variance identification and analysis, summarized through the CWBS,
provides performance trends as well as the identification of developing
problems
– Problems are quickly and easily tracked to their source for immediate
corrective action
• Performance metrics predict where the program is going and are useful in
validating independent estimates or assessments; modern EVM adds use of
Technical Performance Metrics
The Earned Value Management
Process
Define the Work
Plan the Work
Work the Plan
Collect Results
Measure
Performance
Change Control
External
Changes
Analyze
Deviations
Take
Corrective Action
Earned Value Management is an Iterative Process
PMB and the Integrated Baseline?
Contract
Baseline
R
I
S
K
&
O
P
P
O
R
T
U
N
I
T
Y
•
•
•
•
Contract/Contract Letter
Statement of Work (SOW) OR of Objectives (SOO)
CDRLs and DIDs
System Specification …
Work
Authorizations
(planning)
• Primary Work Authorization (PWA)
• Secondary Work Authorizations (SWA)
• Including Subcontracts & IOTs
Program
Structure
Baseline
PMB
•
•
•
•
Work-Breakdown Structure (WBS)
Organizational Breakdown Structure (OBS)
Control Account Structure
Responsibility Assignment Matrix (RAM)
Program Plan
& Schedule
Baseline
EVMS
Baseline
• Master Phasing Plan
• Integrated Master Plan (IMP)
• Integrated Master Schedule (IMS)
• Control Account Plans
• Work Packages & EVTs
• Time-Phased Resource
Spreads / Staffing
Work
Authorizations
(execution)
14
Program Structuring and
EVMS Implementation
Work
Packages
BCWS
BCWP
ACWP
BAC
EAC
Planning
Packages
RAM Integrates Work Scope, Budgets & Organizational
Responsibility at the Control Account Level
15
IMS/EVMS Planning
Define E/A/C
(IMP Product
Section)
Define
Control Accts.
(RAM)
Define IMS
Tasks & SubTasks
Define & Plan
Work/ Planning
Packages
Sequence Work
/ Planning Pkg.
Activities
Control
Account
Planning
IMP/IMS
Planning
Define Task
Relationships
Plan WP & PP
Resources &
Durations
Plan IMS Task
Resources &
Durations
Assess
Resource Plan
Validate EVMS
Baseline
Assess Critical
Path &
Schedule Risk
Validate IMS
Baseline
16
EVM Data Analysis –
An Example
Earned Value Analysis
• % Complete vs. % Spent
• Analysis of Variances (SV, CV, VAC)
– Schedule Variance (BCWP – BCWS)
– Cost Variance (BCWP – ACWP)
– Variance At Complete (BAC – EAC)
• Graphical Trend Analysis
– BCWS/BCWP/ACWP line charts
– Cumulative SV and CV line charts
– SPi and CPi line charts
• To Complete Performance Index (TCPi)
– Budget At Complete (BAC)
– Estimate At Complete (EAC)
• Statistical Forecasting Techniques
• Technical Performance Metrics
• DCMA Trip Wires (DoD Programs)
Key Data Elements and Variances
Time Now
EAC
Forecast
Variance At
Complete
Value
BAC
Forecast
Schedule Slip
Schedule Variance
(BCWP – BCWS)
BCWP
Cost Variance
(BCWP – BCWS)
Time
BCWS – Budgeted Cost for Work Scheduled
BCWP – Budgeted Cost for Work Performed
ACWP – Actual Cost of Work Performed
BAC – Budget at Completion
EAC – Estimate at Completion
ETC – Estimate to Completion
Project Objectives
• Scope:
200 Drawings
• Schedule:
10 Months
• Budget:
30 Hours per Drawing
• BAC:
$300K (6000 hrs x $50/hr)
• Plan:
20 Drawings per Month
Month 5 Status
• 100 Drawings Planned
• 70 Drawings Completed
• 2450 Hours Spent
So, how are we doing?
• $52/Hour Average Cost
BCWS
BCWP
ACWP
SV
CV
BAC
EAC
VAC
Hours
3000
2100
2450
(900)
(350)
6000
6000
0
Dollars
150.0
105.0
127.4
(45.0)
(22.4)
300.0
300.0
0
Percent Variance: Schedule
SV Hours
BCWS Hours
X 100 = % SV
(900) Hours SV X 100 = ( 30.0% )
3000 Hours BCWS
22
Schedule Performance Index
Work Completed or
Work Planned
BCWP
BCWS
= SPI
2100 Hours BCWP = .70 SPI
3000 Hours BCWS
70% Efficiency to Schedule
23
Percentage Variance: Cost
$ Cost Variance X 100 = % CV
$ BCWP
($ 22.4) CV
X 100 = ( 21.3% )
$ 105.0 BCWP
24
Cost Performance Index
Work Completed or $ BCWP = CPI
Actual Cost
$ ACWP
$105.0 K BCWP = .82 CPI
$127.4 K ACWP
82% Cost Efficiency
25
Calculated EACs to Assess Realism
of Manager’s EAC
IEAC*
= ACWP
+
= ACWP +
Calculated ETC
BAC - BCWP
Performance Factor
*Independent EAC
Analysis Leads to Thresholds and Breach Thresholds require
Variance Analysis Reports
26
Current EVM Policies and Directives
Defense Spending Changes
Losers
F-22 Raptor
Future Combat
Systems
Nearly 7 in 10 major U.S. arms
programs over budget
WASHINGTON (Reuters) – 3/30/09
Nearly 70 percent of the Pentagon's
96 major weapons-buying programs
were over budget in 2008 for
combined cost growth of $296 billion
above original estimates,
congressional auditors said in
an annual report released on
Monday.
Marine 1
Pres. Helicopter
Littoral Combat
Ship
F-35 Joint Strike
Fighter
Reaper-Class
UAV
Winners
Source: Reuters, Popular Mechanics, CNN.com
10 March 2010
28
GAO: Hundreds of federal IT projects are poorly
planned and underperforming
NextGov.com – 7/31/08 - More than 400 federal information technology
projects valued at $25 billion have been poorly planned or performing
under expectations — or both, the Government Accountability Office
planned to tell a Senate hearing on Thursday
•352 projects valued at about $23.4 billion on the management
watch list to be poorly planned
•87 of their high-risk projects valued at about $4.8 billion were
poorly performing
•26 projects, valued at about $3 billion, were both poorly planned
and poorly performing
Earned Value Management is Expected to Help Programs
Deliver on Time and Within Cost
10 March 2010
29
Resulting Defense Spending Reform
WEAPON SYSTEMS ACQUISTION REFORM ACT OF 2009 - S.454 - A bill
to improve the organization and procedures of the Department of Defense
for the acquisition of major weapon systems…
May 22, 2009: Became Public Law No: 111-23
Section 207 Directs the Under Secretary to review existing (and if necessary,
prescribe additional) guidance governing implementation of the
Earned Value Management requirements and reporting for DOD
contracts.
Data Quality
EVM Education
Contract Execution
30
OSD EVM Policy/Guidance
Contracts Thresholds
Cost or
Incentive
Equal to
Or Above
Threshold
> $50M
Cost or
Incentive Less
Than Upper
Threshold but
Equal to
Or Above Lower
Threshold
< $50M
but
> $20M
Cost or
Incentive
Less Than
Threshold
< $20M
Requirements
- Compliance with industry EVM standard
- Formal validation of contractor’s EVM system
- Contract Performance Report
- Integrated Master Schedule
- Integrated Baseline Review
- Ongoing surveillance
- Compliance with industry EVM standard
- Formal system validation not required
- Contract Performance Report (tailored)
- Integrated Master Schedule (tailored)
- Integrated Baseline Review (tailored)
- Ongoing surveillance
- EVM optional (risk-based decision)
- Cost-benefit analysis required
OMB EVM Policy/Guidance
• Capital Programming Guide v 2.0
– Expands the explanation of concepts in the original guide that was not
fully developed, e.g., EVMS
• EVMS requirements in contracts or agency in-house project charter
• Compliance reviews of agency and contractor EVM Systems
• Periodic system surveillance reviews to ensure the EVMS continues to meet
the guidelines in ANSI 748 and
• Integrated Baseline Reviews (IBRs) to finalize the cost, schedule and
performance goals.
• NDIA Guides identified as the primary references for information
• EVM Federal Acquisition Regulation (FAR)
– EVMS identified and formerly linked with ANSI/EIA Standard 748 and
OMB Circular A-11, Part 7
– Identifies EVM’s role in the acquisition roadmap
– EVMS required for major acquisitions for development in accordance with
OMB Circular A-11
EVM in Federal Contracting
Fundamental Elements of Contracting
for EVM
• Identify application of Earned Value Management System in
solicitations and contracts
• Define reporting requirements and
electronic submission
• Define evaluation criteria for source
selections
• Evaluate EVMS
– Integration with Award/Incentive plans
– EVMS implementation plan for new contracts
– Evaluate for compliance with the standard
– Support conduct of an Integrated Baseline Review
– Contractor’s proposed EVMS
Carefully Read the Solicitation (RFP) and Every Attachment
(the SOW, CDRLs, DID); Reconcile w/ Contract Awarded
Addressing EVM in the Solicitation
• Section C – Performance Work Statement/ Statement
of Work
• CWBS/EVMS/IBR/EVMS Flowdown
• Section I – General Provisions
• Contract Clauses
• Section J – Exhibits and Attachments
• Section L - Instructions for Offerors*
• Section M- Evaluation Factors for Award*
* Note: Sections L and M are included in Solicitations only
Carefully Read Everything in the RFP, and Create
Spreadsheets and Matrices to Trace Every Requirement
Section C Statement of Work
• The Statement of Work should contain statements
requiring:
• Development of a contract work breakdown structure (CWBS) at a
level adequate for contract management and control
• The contracted technical effort to use an ANSI/EIA-748 compliant
EVMS that correlates cost and schedule performance with
technical progress
• The designation of critical subcontractors by name for EVM
compliance and flow down of EVMS compliance to subcontractors
• An Integrated Baseline Review (IBR)
• Reference to EVMS data items as part of Integrated Program
Management reporting and reviews
The SOW is the Tasking Document – Know the Tasks
Section I General Provisions
• New FAR Clauses – July 2006
– FAR 52.234-2 – Notice of EVMS – Pre-Award IBR
– FAR 52-234-3 – Notice of EVMS – Post Award IBR
– FAR 52-234-4 – EVMS – The Government will conduct an IBR if a pre-award
IBR has not been conducted
• FAR EVM clauses not tied to dollar thresholds
• DFARS Clauses
– Solicitation Provision: 252.234-7001 – Notice of Earned Value Management
System (Apr 2008)
– Contract Clause: 252.234-7002 – Earned Value Management System (Apr
2008)
Contracting Officers and Contractors Must Know Everything
in Every Clause
Section J Exhibits and Attachments
• Work Breakdown Structure - MIL-HDBK-881A common WBS for
CPRs and IMS through WBS Level 3
• EVM Related Data Item Descriptions (DIDs)
•
•
•
•
Contract Performance Report – DI-MGMT-81466A
Integrated Master Schedule – DI-MGMT-81650
Contract Work Breakdown Structure – DI-MGMT-81334B
Contract Funds Status Report – DI-MGMT-81468
• Contract Data Requirements List (CDRL) used to put
CPR and IMS reports on contract
• EVM CDRLs can and should be tailored within bounds of agency
policy
• Consider all risk factors when tailoring CPR and IMS DIDs
•
•
•
•
Type of contract (determined by cost risk)
Technology
Schedule
Past contractor performance
Section J –
CPR DID DI-MGMT-81466A
•
The CPR consists of five formats
•
Uses of CPR Data
•
The CPR provides timely, reliable
summary-level data with which to
access current and projected contract
performance.
•
•
•
•
•
Format 1 – Work Breakdown Structure
Format 2 – Organizational Categories
Format 3 – Baseline
Format 4 – Staffing
Format 5 – Explanations & Problem
Analyses
• Integrated Cost & Schedule EVM Data
• Identify the cost and schedule impact of
actual and potential problems
• Provide valid, timely program status info
for higher management
Section J –
IMS DID DI-MGMT-81650
•
IMS shall include all discrete
tasks/activities, work packages, and
planning packages identified in the
contract Performance Measurement
Baseline (PMB)
•
IMS shall identify “significant” external
dependencies (e.g., GFE, test facilities)
• Suppliers and government playing a
bigger role in producing products
•
IMS shall be statused and submitted
prior to or concurrently with Contract
Performance Report (CPR)
•
Standard scheduling definitions are to
be used
Section J Award Fee Plan
• Government Program managers often wish to tie Contractor award
fee to EVM performance
– Looks like a score and is advertized as an “objective” measure
• But...
– Data can be manipulated and may only be discerned by experienced
practitioners
– If you reward good data, you will get good data
• Care should be taken not to mis-incentivize the supplier (Contractor)
– Award fee criteria should reference effective management of cost and
schedule with EVM data
– Criteria should not reference specific values for CV, SV, CPI, SPI, or VAC
Award Fee is for Results / Deliveries, not for EVM Scores
Section L Instructions for Offerors
• Guidance to bidders for the assembly of their proposals
• Each offeror’s proposal shall include a description of the EVMS to be
used in accordance with the appropriate RFP FAR clauses
• Compliance with Validation requires:
– Reference to an Advance Agreement, Letter of Acceptance, etc. and a
copy of the approved EVM system description; or
– A plan to obtain EVM validation to include how and when the system will
be validated
– Compliance Only requires: a written summary of the proposed EVMS
reference in sufficient detail to show how it addresses all ANSI/EIA-748
guidelines
Contractor’s Proposed EVMS Addressing the EVMS RFP Requirement
• Describes system in sufficient detail to determine compliance
• Includes prior Certification/Acceptance
• If no EVMS in place, the Contactor must submit a comprehensive plan
for Compliance in accordance with FAR/DFARS
– Describe the EVMS the offeror intends to use in performance of the contract,
and how the proposed EVMS complies with ANSI/EIA 748
– Distinguish between the offeror’s existing management system and
modifications proposed to meet the EVMS guidelines
– Describe the management system and its application in terms of the EVMS
guidelines
– Describe the proposed procedure for administration of the EVMS as applied
to subcontractors
– Describe the process the offeror will use to determine subcontractor
compliance with ANSI/EIA 748
• Identify major subcontracts for application of criteria
– Verify baseline integrity is maintained
Section M Evaluation Factors for Award
• Evaluation of the proposed EVMS is normally undertaken as part of the
proposal evaluation process to determine the probability of the system
meeting the guidelines.
– For Existing Systems - evaluation may consist of a confirmation that the
referenced validation is accurate and current. The system should be currently
in use, and surveillance should not have identified significant, uncorrected
problems.
– For EVMS (without validation) - the EVM system description should be
evaluated for completeness against the guidelines in ANSI/EIA-748.
• An on-site examination of a proposed EVMS should not normally be
required during proposal evaluation. But if deficiencies are identified,
written communications or an on-site visit may be required when
approved by the Source Selection Board and Procuring Activity.
• The Cognizant Federal Agency should be requested to provide insight
regarding EVMS capability, quality, and past performance.
Post Award Responsibilities
• Assess System Surveillance
–Contractor surveillance plan in place
–Contractor surveillance is being periodically
conducted
–Monitor planned activities vs actual activities
• Ensure that program office is conducting
program analysis on a periodic basis
• Schedule, conduct and support
periodic Integrated Baseline Reviews
• Take corrective action when variances exist
EVM and Fixed Price Contracts
• OMB Circular A-11 and the FAR do not exempt specific types of
contracts from the EVM requirement
– Applies to fixed-price, time and material, as well as cost plus
• Fixed-price contracts are not a barrier to EVM
– Certain guidelines may be not applicable
• Indirect costs and material
– Actual Costs for fixed-price contracts are simply the prices the customer
pays for the work.
– Contractor should develop and coordinate a schedule of values that relate
performance to progress payments
– Will not have a cost variance because ACWP = BCWP
Subcontractors and Suppliers Must be Managed so they are
Successful
Summary
• EVM considerations must begin in the early stages of solicitation
planning.
• Should be addressed in the acquisition strategy and acquisition plan
• Post award activities (IBRs and EVMS certification) are especially
critical and directly impact the effectiveness of EVM throughout the
program lifecycle
EVM is a Key Factor in Winning and
Managing Federal Contracts
Questions?
BACKUP INFORMATION
EVM Analysis Formulas & Metrics
Metric
Formula
Purpose
Cost Performance Index
CPI = BCWP
ACWP
Measurement of cost efficiency of the work
accomplished (Cumulative, Average or Current
Period). DCMA expectation is => .95
Schedule Performance Index
SPI = BCWP
BCWS
Measurement of work accomplished to the plan
(Cumulative, Average or Current Period). DCMA
expectation is => .95
Cost Variance
CV = BCWP – ACWP
Work accomplished cost more or less to complete
than planned.
SV = BCWP - BCWS
Indication of more or less work accomplished than
planned.
Variance at Completion
VAC = BAC – EAC
The difference between what the job is planned to
cost versus the estimated cost at completion.
Percent Complete
% Comp = BCWP (cum)
EAC
Provides percentage of the estimate at completion
that has been accomplished
Percent Complete
% Comp = BCWP (cum ))
BAC
Provides percentage of the budget at completion
that has been accomplished
Percent Spent
% Spent = ACWP (cum ))
BAC
Provides percentage of the budget at completion
that has been spent to date
Baseline Execution Index
BEI = Total Tasks/Activities Completed
Total Tasks/Activities Planned
Measurement indicating efficiency of work
accomplished against the baseline plan. DCMA
expectation is => .95
Critical Path Length Index
CPLI = Critical Path Length + or – Total Float
Critical Path Length
Calculation that indicates the realism of the
program’s ability to complete the program (or major
milestones) on time. DCMA expectation is => .95
Schedule Variance
10 March 2010
EVM Analysis Formulas & Metrics
Metric
Formula
Purpose
To Complete Performance
Index BAC
TCPI BAC = (BAC – BCWP (cum ))
(BAC – ACWP (cum ))
Future efficiency necessary to complete on
budget
To Complete Performance
Index EAC
TCPI EAC = (BAC – BCWP (cum ))
(EAC – ACWP (cum ))
Future efficiency necessary to complete on
the current estimate at completion
IEAC = ACWP + (BAC – BCWP)
CPI Cum)
Statistical estimate of the lowest value. It
assumes that the remaining work will be
performed at the same cost efficiency as the
past cost efficiency
Independent Estimate at
Completion – Minimum
Independent Estimate at
Completion – Maximum
IEAC = ACWP + (BAC – BCWP)
SPI (Cum) X CPI (Cum)
Statistical estimate of the highest value. It
assumes that the remaining work will be
performed at a combination of the schedule
and cost efficiencies.
Weighted Independent Estimate
at Completion
IEAC =
In this formula, the EAC is weighted by 80%
of the CPI and 20% of the SPI.
10 March 2010
BAC
[0.8 (CPI) + 0.2 (SPI)]