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    Home > Skip Navigation LinksCommunities of Practice > Earned Value Management

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Acquisition Community Connection

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Earned value is a management technique that relates resource planning to schedules and to technical cost and schedule requirements. All work is planned, budgeted, and scheduled in time-phased "planned value" increments constituting a cost and schedule measurement baseline. There are two major objectives of an earned value system: to encourage contractors to use effective internal cost and schedule management control systems; and to permit the customer to be able to rely on timely data produced by those systems for determining product-oriented contract status.

 

Latest Knowledge in the Community

[Response] This issue has been bumped up recently, and I am hoping that you can provide one further layer of understanding. A colleague notes this scenario: "From a corporate perspective, the money from an early pay discount is being credited to the project, forcing the project to record the transaction in project reports. Also, when some of the contracts being managed are lump sum, are we not obliged to reduce the ACWP since this is part of the negotiated price?" Your time is appreciated and I look forward to your response.

Wed, 05 Dec 2012

[Response] as of September 10, 2012 the latest version of the guide is dated May of 2011 and is located on the NDIA site. http://www.ndia.org/Divisions/Divisions/Procurement/Pages/Program_Management_Systems_Committee.aspx#documents

Mon, 10 Sep 2012

[Response] The following answer is provided by Roberta Tomasini (Roberta.Tomasini@dau.mil), Professor of Financial Management, Defense Acquisition University. The answer is NO as long as the scope of the work in the exercised contract option is part of the scope of work agreed to in the "program of record" via the approved acq strategy, ADM, and embedded in the APB cost/schedule/performance.  Thus, it would be included in the APB cost numbers.  If so, it is only cost growth, if the funding to exercise the option is more than what was expected as the basis for the APB costs for the effort.

Thu, 23 Aug 2012

[Response] Brian, There are a couple of articles in the ACQuipedia written by a faculty member that might help clarify the differences a bit. The first is the one on Budget at Completion and can be found at https://acc.dau.mil/CommunityBrowser.aspx?id=241394. The second is on Total Allocated Budget and that one is located at https://acc.dau.mil/CommunityBrowser.aspx?id=236960. Hopefully a SME will jump in on your question with a more detailed reply, but I thought those two articles might help. I checked the current Defense Acquisition Guidebook and didn't seen anything there that provided any more details.

Mon, 13 Aug 2012

[Tools & Forms] DAU White Card

Thu, 09 Aug 2012

[Question] What's the difference between TAB and BAC with respect to Earned Value Management?

Mon, 13 Aug 2012

[References] DAU Gold Card - July 2012

Mon, 23 Jul 2012

[Highlight] New Integrated Program Management Report (IPMR) Combines CPR and IMS into one Report

Tue, 03 Jul 2012

[Announcement] New Integrated Program Management Report (IPMR) Combines CPR and IMS into one Report

Tue, 03 Jul 2012

[Announcement] Run!AzTech by AzTech International

Tue, 03 Jul 2012
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