Below you will find an overview of the most important terms in Earned Value Management, which I used on this website and in my books. This is the place where you will quickly get an explanation for a specific term.
Actual Cost (AC) – The costs actually incurred and recorded in accomplishing the work. Former name was Actual Cost of Work Performed (ACWP).
ACWP – Actual Cost of Work Performed , see Actual Cost (AC)
EIA-748 – American standard called “Earned Value Management System (EVMS)”, which describes the implementation and use of EVM.
Apportioned Effort –Work that is not directly definable and measurable. It is proportionally dependent on the performance and progress of another related activity. The activities of quality assurance is an example for this.
Authorized Unpriced Work (AUW) – The authorized work for which no definite budget has been set. This is typically due to negotiations not being completed on contract changes.
Authorized Work – The work for which authority to proceed has been given; in an Earned Value situation this implies that a budget has been approved for it and it is contained within the project plan.
BAC – see Budget at Completion (BAC)
Baseline – An agreed plan against which all changes will be recorded and all progress and costs will be measured. see also Performance Measurement Baseline (PMB).
Baseline Freeze Date (BFD) – The date when initial baseline planning is completed, and the baseline becomes subject to change control procedures.
Baseline Change Control – The system used to establish, analyze, communicate, and record approved changes to the program baseline.
Baseline Review (BR) – A review which is carried out by the customer or sponsor. It checks on a sample basis, whether the contractor has implemented the contractually agreed project monitoring systems and the baseline.
BCWP – Budgeted Cost of Work Performed, see Earned Value (EV)
BCWS – Budgeted Cost of Work Scheduled, see Planned Value (PV)
Budget – Total resources (measured in dollars, man-hours, or other definitive units) that are formally allocated for the accomplishment of a specific task or group of tasks.
Budget at Completion (BAC) – The total budget established for the completion of the Program, Control Account, Work Package, or task.
Burden – Overhead expenses that are allocated to the appropriate direct staff costs and/or material costs. see also Indirect cost
C/SCSC – see Cost/Schedule Control System Criteria
C/SSR – see Cost/Schedule Status Report
CA – see Control Account
CAM – see Control Account Manager
CAP – see Control Account Plan
CBB – see Contract Budget Base
CFSR – see Contract Funds Status Report
CPI – see Cost Performance Index
CPR – see Cost Performance Report
CTC – see Contract Target Cost
CTP – see Contract Target Price
CV – see Cost Variance
CWBS – see Contract Work Breakdown Structure
Charge Number – The account number for work at the lowest level to which a performing organization charges direct or indirect labor, materials, and other costs.
Contract Budget Base (CBB) – The CBB is the sum of the negotiated contract cost plus the Authorized unpriced Work (AUW). This is equal to the sum of all control account budgets, undistributed budgets, summary Level planning budgets and the management reserve.
Contract Data Requirements List (CDRL) – An element of the contract that specifies the data submittal requirements.
Contract Funds Status Report (CFSR) – A DoD financial report that provides funding information necessary to update and forecast contract fund requirements.
Contract Target Cost (CTC) – The negotiated cost for the defined original contract incl. all defined, negotiated changes, however without the estimated cost of all authorized but not yet negotiated costs. The CTC is equal to the value of the BAC plus the management or contingency reserve.
Contract Target Price (CTP) – he negotiated estimated cost (CTC) plus profit or fee.
Contract Work Breakdown Structure (CWBS) – The WBS for a specific Government contract that is product-oriented and developed in accordance with MIL-HDBK-881 (Latest Revision). The CWBS provides for the subdivision of contract work into major elements.
Control Account (CA) – (former cost account) The focal point for planning, monitoring, and controlling tasks. The Control Account represents work within a single WBS element, and it is the responsibility of a single organizational unit.
Control Account Manager (CAM) – Person responsible for the Control Account, which often corresponds to the sub-project leader. He manages the provision of services: resources, technology, schedule and cost aspects of his accounts and reports periodically to the project manager.
Control Account Plan (CAP) – A plan for all of the work and effort to be performed in a control account. Each CAP has a definitive scope of work, schedule and time-phased budget.
Cost Account – An outdated name for a control account.
Cost Performance Index (CPI) – The CPI is the cost-related performance figure in EVM. It is the ratio between Earned Value (EV) and the recorded Actual Cost (AC). A CPI greater than 1 is positive (cost underrun), a CPI less than 1 is negative (cost overrun).
Cost Performance Report (CPR) – A US DoD defined report format for reporting cost and schedule progress data for contracts that require EVMS compliance.
Cost/Schedule Control Systems Criteria (C/SCSC) – 35 standards defined by the American Government which has been used since 1967 for private contractors to ensure that specific types of contracts (reimbursable and incentive type) are managed correctly. The 35 C/SCSC standards were replaced by the 32 “Earned Value Management System Criteria” in December 1996
Cost/Schedule Status Report (C/SSR) – A performance measurement report established to capture information on smaller contracts, primarily in U.S. government contracts
Cost Variance (CV) – Is the difference between the Earned Value (EV), and Actual Cost (AC)D
Direct Costs – Personnel costs, material costs and other direct costs which specific, executed project work can be assigned. Direct costs reflect the indirect costs such as overhead and office costs, which are charged as a flat rate to the project.
Discrete Effort – Expenditure for an activity that creates a specific, measurable end product or result. Discrete effort is an ideal work category in EVM.
Earned Value (EV) – Value for the physically or intellectually work performed or performance to the status date, expressed in the budgeted cost. Also known as budgeted cost of work performed (BCWP).
ES – Earned Schedule – Value for the planned time of work physically done so far. Corresponds to the period in which the produced amount of Earned Value would have to be worked out.
Estimate at Completion (EAC) – The EAC calculates the estimated total costs of a work package, group of work packages or the project when the defined scope of work is done. The EAC meets the currently allocated costs plus the estimated cost for the completion of the remaining work.
Estimate at Completion EAC(t) – The EAC(t) calculates the total estimated duration of the project upon completion. The EAC(t) corresponds to the Actual Time plus the estimated duration for the completion of the remaining work.
Estimate to Complete (ETC) – The estimated cost for the completion of the remaining authorized work. The ETC equals the BAC minus EV.
IBR – see Integrated Baseline Review
Indirect Costs – Any costs that cannot be assigned directly to a specific contract, project, product or service, such as Management salaries, insurance, heating, rent, etc.
Integrated Baseline Review (IBR) – Review process for contractors of the DoD which must comply with EVMS requirements. It checks whether planning and budgeting on Control Account level is correctly defined and that a realistic budget is available to complete all planned work.
Integrated Master Schedule (IMS) – Is an overall schedule containing the detailed tasks necessary to ensure successful (DoD) program/contract execution. The IMS is used to verify attainability contract objectives, to evaluate progress toward meeting program objectives.
Latest Revised Estimate (LRE) – The most recent estimate of the final cost of a project, or part of a project, based on known work. Note, this term is sometimes used interchangeably with the Estimate At Completion (EAC)
Level of Effort (LOE) – A method of costing work which is time dependent rather that associated with any definitive output, for example, support services such as project management or maintaining the project accounts. Value is accrued according to the elapsed time and resources employed rather than observed progress.
Management Reserve (MR) – The MR is a budget of the CBB and serves as security for unidentified risks that could lead to unexpected problems. It is under the control of the client or senior management and is only part of the Performance Measurement Baseline (PMB), if it is effectively distributed.
Master Project Schedule – Project plan at the highest level, which provides an overview of the phases of the project, the main interfaces, key milestones and significant work elements.
Organizational Breakdown Structure (OBS) – Hierarchical organization structure of the company or an area of the contractor, which executes the project or specific parts of it.
Over Target Baseline (OTB) – New baseline or “recovery budget” that results from a formal reprogramming of the project when the project objectives with the original budget can no longer be achieved. The OTB exceeds the Contract target cost and is authorized by the client.
Performance Measurement Baseline (PMB) – The PMB is the sum of all Summary Level Planning Package (SLPP), Control Accounts (CA) and undistributed budget (UB), exclusive of the Management Reserve (MR). The PMB is the time-phased budget, to which the project is measured with Earned Value management indicators.
Planned Value (PV) – The Planned Value describes at any moment the project, the budgeted cost (effort) of the planned work. Former name was Budgeted Cost of Work Scheduled (BCWS).
Planning Package – Planning packages reflect a segment of future work within a control account, which has not yet been broken down further into detailed work packages. A planning package has a defined budget, an estimated start and end date and a work job description.
Replanning – A change in the original plan, to meet the contractually authorized requirements. There are two types of Replanning:
- InternalReplanning – Achange in the originalplan, whichis within the contractually defined project scope. Thisto compensate forcost, schedule, or technical problems thathave made theoriginalplanunrealistic.
- External Replanning – Changes desired by the customer in form of a change request, which causes a change in the original plan.
Reprogramming – A comprehensive replanning of the remaining project effort, which is normally completed in a revised Total Allocated Budget that exceeds the defined Contract Budget Base (CBB).
Responsibility Assignment Matrix (RAM) – Representation of the relationship between the WBS elements and the responsible corporate organization, which carries out the relevant work.
Rolling Wave Planning – Is the process of project planning in waves as the project proceeds and later details become clearer.
Schedule Performance Index (SPI) – The SPI is the ratio between the budgeted cost of work performed (Earned Value) and the budgeted cost of work scheduled (Planned Value)
Schedule Performance Index SPI(t) – The SPI(t) is the time-based variant of the SPI. It is the ratio between the planned time of work performed (Earned Schedule) and the Actual Time (AT) at the reporting date.
Schedule Variance (SV) – The SV is the difference between the Earned Value (EV) and Planned Value (PV) at the reporting date.
Schedule Variance SV(t) – Die SV(t) is the time-based variant of the SV. It is the difference between the planned time of work performed (Earned Schedule) and the Actual Time (AT) at the reporting date..
To Complete Performance Index (TCPI) – The TCPI is the necessary cost-performance figure to complete the remaining work within the given total cost.
To Complete Schedule Performance Index TSPI(t) – The TSPI (t) shows the efficiency factor necessary to complete the remaining work in the planned project duration.
Total Allocated Budget (TAB) – The TAB is the summary of all budgets for the creation of contractually, authorized work. The TAB includes the performance measurement baseline plus the management reserve. The TAB must always represent the Contract Budget Base (CBB).
Technical Performance Measurement (TPM) – TPM is used for monitoring the attainment of the technical degree and the technical risks. It provides early warning signs of deviations from specified requirements, which might end up with some probability in higher costs or scheduling problems.
Undistributed Budget (UB) – The UB is a project budget, which was only roughly defined and not clearly associated with a control account or work package. The UB is a temporary budget and should be assigned as early as possible a Control Account and a Work Package.
Variance at Completion (VAC) – The VAC is the difference between the budget at completion (BAC) and the Estimate at Completion (EAC). A negative result indicates that the project must expect a budget overrun at the end of the project.
Work Authorization Document (WAD) – The WAD authorizes and documents the responsibilities and competencies within the specified time schedule, budget and the specifications for all individuals or organizations that work on the project.
Work Breakdown Structure (WBS) – The WBS shows the full hierarchical arrangement of all deliverables and all major activities that must be performed by the project. The WBS can be designed product, phase, or mixed-oriented and contains at the lowest level the work packages. It is hierarchically so deep, respectively detailed structured so that the project can be effectively planned and controlled.
Work Breakdown Structure Dictionary – The WBS dictionary documents the tasks, content, work and results for each work package, which are necessary to execute the WBS element. It includes often also deadlines, costs and technical performance.
Work Packages (WP) – It is the smallest, not further decomposed element in the work breakdown structure, which can be located on any project structure level. Each work package is provided with a work description, plan values, effort, duration, verifiable results (performance), resources and quality.
Work Remaining (WR) – Remaining work to the end of the project. The WR is equal to the budget at completion (BAC) minus Earned Value (EV).