Best Practice 3 - Assigning Resources to All Activities
We discuss fully loading the schedule with resources to provide the basis for the PMB in Best Practice 3. When a schedule is fully resource loaded, budgets for direct labor, travel, facilities, equipment, material, and the like are assigned to both work and planning packages so that total costs to complete the program are identified at the outset. Additionally, Best Practice 10 describes the importance of maintaining a baseline schedule. However, managers should consider additional best practices when developing a PMB because it forms the fundamental basis for measuring progress using EVM.
EVM Guidelines 3 and 8 discuss the actions to establish the PMB. It is important to establish and maintain a valid schedule baseline to ensure that EVM data being reported are reliable. Therefore, the entire schedule must be baselined because the IMS is the source of time-phasing for all control accounts and work packages that make up the project’s PMB. Similar to Best Practice 1, this requirement applies to contracted effort and may apply to the government effort as well, depending on the agency and the level to which EVM is assigned. For efforts under contract, the baselines for cost and schedules are required to support the integrated baseline review (IBR). In reality, to successfully prepare for the IBR, baselines must be set (either formally or informally) much earlier than the IBR deadline to ensure credibility. More detail regarding PMB development and IBRs is in Chapter 18 of the GAO Cost Guide.
In building the PMB, fully resource loading the schedule is the easiest way to adequately time-phase costs for performance measurement. If the schedule is not fully loaded, then determining how costs are phased over time will be much more complex and difficult and the auditor may not be able to trace the logic.
With regard to control accounts, Best Practice 1 states that the WBS should progressively deconstruct the deliverables of the entire effort through lower-level elements. In EVM Guideline 5, the control account is created at the intersection of the WBS and the organizational breakdown structure (OBS), and it is at this level that actual costs are collected and variances from the baseline plan are reported. The control account is the focal point for work authorization and performance measurement. Because several organizations can be working on the same WBS element, each WBS element may have multiple control accounts. Each control account has staff who are assigned responsibility for managing and completing the work.
Below the control account level, the effort is further broken down into work packages and planning packages. It is at the work package level that detail activities can be identified in a schedule. As we discuss in Best Practice 3, a schedule incorporates different levels of detail, depending on the information available. Under EVM, work packages and planning packages are assigned to control accounts. Detailed activities represent work packages that are typically near-term effort. Ideally, work packages are typically 4 to 6 weeks long and require specific effort to meet control account objectives. They are defined by the persons who authorize the effort and how the work will be measured and tracked.
Work packages may be represented by a single detail activity or they may be broken down into more well-defined, lower-level tasks. Effort beyond the near-term that is less well defined may be represented as planning packages. Planning packages are used specifically as budget holding accounts for future work within a control account that cannot be planned in detail. The planning package, while not planned in detail, is sequenced logically within the schedule network, associated with a WBS element, and assigned resources.
Another representation of effort may also reside in summary level planning packages (SLPP) which are not assigned to control accounts. SLPPs are temporary and identify scope, schedule, and associated budget that cannot be practically assigned to a control account. SLPPs should be assigned to control accounts at the earliest opportunity. Therefore, the auditor should be mindful that only near-term work packages will be detail planned and should represent short duration of discrete efforts. Planning packages and SLPPs are likely to be much longer in duration and will be detail planned as part of the rolling wave process.