Performance-Based Earned Value
WSARA required DoD to submit a report to Congress on DoD implementation. In Sept. 2009, DoD submitted the DoD Defense Support Team EVM Report to Congress: DoD EVM Performance, Oversight, and Governance (DST). Link to PDF
DST excerpts follow: (Note: Source of highlighted excerpts is May 2004 article, "Integrating SE with EVM" in Defense AT&L Magazine)
"Utility of EVM has declined to a level where it does not serve its intended purpose."
Apply methodical discipline and objective measurement and analysis to cost, schedule and technical processes.
Early mitigation of cost, schedule, and technical problems improves the probability of achieving program budget and completion goals.
Significant Deficiency: Use of management reserve to alter internal and subcontract performance levels and overruns
Contractors may circumvent proper EVM practices to keep EVM metrics favorable and problems hidden.
Engineering community should establish technical performance measures (TPM) that enable objective confirmation that tasks are complete
EV process is reliable and accurate only if
TPMs are identified and associated with completion of appropriate work packages
Quality of work must be verified
Criteria must be defined clearly and unambiguously
The right things must be measured and they must be measured the right way.
Many instances of inappropriate changes·
Arbitrarily changing past variances·
Moving budgets to mask overruns·
Making changes that were not properly authorized
"End result: Many defense contractors cannot accurately predict outcomes that affect program costs or deliveries"
Programs could report 100 percent of earned value...even though behind schedule validating requirements, completing the preliminary design, meeting weight targets or delivering software releases that meet the requirements.
Program Manager should ensure that the EVM process measures the quality and technical maturity of technical work products instead of just the quantity of work performed.
Systems Engineering (SE): EV process is reliable and accurate only if:
- Augmented with a rigorous SE process
- SE products are costed and included in EVM tracking
• EVM can be an effective program management tool only if it is integrated with technical performance
• The engineering community should establish TPMs that enable objective confirmation that tasks are complete;
• If good TPMs are not used, programs could report 100% of earned value (or credit for work performed), even though they are behind schedule in terms of validating requirements, completing the preliminary design, meeting weight targets, or delivering software releases that meet he requirements.
• The EV completion criteria must be based on technical performance, the quality of work must be verified, and criteria must be defined clearly and unambiguously.
• The PM should ensure that the EVM process measures the quality and technical maturity of technical work products instead of just the quantity of work performed.
SE Process and Products
EVM can be an effective program management tool only if the:
• EVM processes are augmented with a rigorous SE process
• SE products are costed and included in EVM tracking.
If the SE lifecycle management method is integrated with the planning of the PMB, then EVM will accurately measure technical performance and progress.