Earned Value Management(EVM)
A project management methodology that integrates scope, schedule, and cost data to measure project performance and progress objectively.
Overview
Earned Value Management (EVM) is a disciplined approach to measuring project performance by comparing the planned value of work, the earned value of work actually completed, and the actual costs incurred. It answers three fundamental questions: How much work was planned? How much was accomplished? How much did it cost?
Why It Matters in GovCon
EVM is required on many DoD and civilian agency contracts above certain dollar thresholds. It provides early warning signals when projects are trending over budget or behind schedule, giving both the contractor and the government time to take corrective action before problems become critical.
Key Details
- Planned Value (PV): The budgeted cost of work scheduled to be completed by a given date.
- Earned Value (EV): The budgeted cost of work actually completed.
- Actual Cost (AC): The real cost incurred for the work completed.
- Key Metrics: Cost Performance Index (CPI = EV/AC) and Schedule Performance Index (SPI = EV/PV). Values below 1.0 indicate overruns or delays.
- ANSI/EIA-748: The standard that defines the 32 guidelines for a compliant EVM system.
Related Terms
- Acquisition Program Baseline (APB)
- Work Breakdown Structure (WBS)
- Cost Plus Fixed Fee (CPFF)
- Contract Line Item Number (CLIN)
More Management Terms
The government's plan for monitoring and evaluating contractor performance against the standards defined in the contract.
Integrated software systems that manage business processes such as finance, procurement, HR, and project management.
The 12-month period used by the government for budgeting and appropriations; the federal fiscal year runs October 1–September 30.
A measurable value used to evaluate how effectively a contractor or program is achieving strategic objectives and contract requirements.
The PMI-published guide that defines best practices and processes for project management, widely referenced in government contract management.
A contractor-developed plan describing how quality will be assured during contract performance, often required in solicitations.
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