Appendix III: Scheduling and Earned Value Management

As we note throughout the schedule guide, the success of a program depends in part on having an integrated and reliable master schedule that defines when and how long work will occur and how each activity is related to the others. The scheduling best practices demonstrated in this guide apply to all schedules, but additional considerations apply when scheduling in an earned value management (EVM) environment. This appendix briefly discusses these considerations and the associated EVM terms.

Chapters 18-20 of the GAO Cost Guide address the details of EVM, a project management tool that integrates the technical scope of work with schedule and cost elements for planning and control.44 EVM is designed to integrate cost estimation, schedule development, system development oversight, and risk management. It compares the value of work accomplished in a given period with the value of the work planned for that period. It serves as a means of analyzing cost and schedule performance. By knowing what the planned cost is at any time and comparing that value to the planned cost of completed work and to the actual cost incurred, analysts can measure a program’s cost and schedule status.

Without knowing the planned cost of completed work and work in progress (that is, earned value), management cannot determine true program status. Earned value provides the information necessary for understanding the health of a program and provides an objective view of program status. Moreover, because EVM provides data in consistent units (usually dollars or labor hours), the progress of vastly different work efforts can be combined. For example, earned value can be used to combine feet of cabling, square feet of sheet metal, or tons of rebar with effort for systems design and development. That is, earned value can be employed as long as a program is broken down into well-defined and objectively measured tasks.

Federal Acquisition Regulation (FAR) Subpart 34.2 requires an EVM system for major acquisitions for development. The government may also require the use of EVM for other acquisitions, in accordance with agency procedures. When a program operates within an EVM environment, the EVM system should meet the intent of the 32 guidelines from American National Standards Institute/Electronics Industries Alliance ANSI/EIA-748, a national standard for EVM systems.

Below, for scheduling best practices that are affected, we discuss the applicable EVM guidelines and specific EVM practices for schedules used within this type of environment. Specifically, we address

  • work scope covered under EVM (Best Practice 1 and Guideline 1),

  • establishing budgets and developing a performance measurement baseline (Best Practice 3 and Guidelines 3 and 8-15),

  • control accounts (Best Practice 3 and Guideline 5),

  • updating durations and setting objective measures to claim earned value (Best Practice 9 and Guidelines 7 and 22), and

  • maintaining a baseline schedule and change control processes (Best Practice 10 and Guidelines 28-32)

  1. See Cost Guide, GAO-09-3SP.↩︎