t h e ~~ ~- ----.,,.----.,~-----.,1- topic 1 : pmb in evm · fo rm ed as work progresses on a...

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In this lesson you will learn what the performance measurement baseline (P MB) is and examine the component s that comprise the PMB . Total Allocated The terminal learning objective for this lesson is to explain key points about the performance measurement baseline in Earned Value Management Reserve Management ( EVM). This lesson includes two t opics: Topic 1: PMB in EVM S in M Topic 2: Key Components Page1of J2 Back Next

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Page 1: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

In this lesson you will learn what the performance measurement baseline (PMB) is and examine the components that comprise the PMB

Total Allocated

The terminal learning objective for this lesson is ~~ to explain key points about the performance ~-~--------~-----1--measurement baseline in Earned Value Management Reserve Management (EVM)

This lesson includes two t opics

bull Topic 1 PMB in EVM S in M

bull Topic 2 Key Components

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In this lesson you will learn what the performance measurement baseline (PMB) is and examine the components that comprise the PMB

Total Allocated

Long Description The terminal learning obj Budget (TAB) to explain key points abo

Chart representing a performance measurement baseline measurement baseline in or PMB over time from contract start to contract end Management (EVM) The total allocated budget or TAB includes the PMBs budget at completion or BAC and the managementThis lesson includes two reserve

bull Topic 1 PMB in EVM S in M

bull Topic 2 Key Components

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 1 Learning Objectives

Topic 1 - PMB in EVM

In this topic you will

bull Recognize the purpose o f the performance measurement baseline (PMB) in Earned Value Managemen t (EVM)

bull Compare the role o f the contractor and the Government with regard to the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated Budget A good baseline is fundamental to the effective (TAB)

use of EVM in managing a contract A good Management Reserve baseline has the following characteristics

bull Accurately represents all the authorized work on the contract

bull Includes a realistic network schedule S in M

bull Includes a realistic time-phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated

A good baseline is fund use of EVM in managing baseline has the followi

Long Description

Chart representing a performance measurement baseline or

Budget (TAB)

PMB over time from contract start to contract end The total allocated budget or T AB includes the PMBs budget

bull Accurately repres at completion or BAC and the management reserve work on the contrr---------r--l----------fl

bull Includes a realistic network schedule S in M

bull Includes a realistic time- phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following best describes the purpose of the performance measurement baseline (PMB) in Earned Value Management (EVM)

~ It provides a time-phased budget plan for accomplishing work against which contract performance is measured

LJ It collects measurements o f work the contractor has actually accomplished on a program

Formed as work progresses on a program i t documents work the con tractor has actually accomplished

It is a clear1y distinguished unit of work that should be planned to its logical technical scope c onclusion

As an estimate of a realistic level of work to be accomplished with regard to technical capabilities acquired budget spent and schedule expended the PMB provides a time- phased budget pla n for accom plis hing work against which contract or performance is measured to determine earned value

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorpora ted in a timely and disciplined manner

Requesting Ov er-Target Approval I f during con tract execution the contractor determines the schedule and or CONTRACTOR

budget for the remaining work is no longer realistic the contrac tor may prepare an over target baseline (OTB) and or over target schedyle COTS) request which must be approved by the Government

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 2: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

In this lesson you will learn what the performance measurement baseline (PMB) is and examine the components that comprise the PMB

Total Allocated

Long Description The terminal learning obj Budget (TAB) to explain key points abo

Chart representing a performance measurement baseline measurement baseline in or PMB over time from contract start to contract end Management (EVM) The total allocated budget or TAB includes the PMBs budget at completion or BAC and the managementThis lesson includes two reserve

bull Topic 1 PMB in EVM S in M

bull Topic 2 Key Components

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 1 Learning Objectives

Topic 1 - PMB in EVM

In this topic you will

bull Recognize the purpose o f the performance measurement baseline (PMB) in Earned Value Managemen t (EVM)

bull Compare the role o f the contractor and the Government with regard to the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated Budget A good baseline is fundamental to the effective (TAB)

use of EVM in managing a contract A good Management Reserve baseline has the following characteristics

bull Accurately represents all the authorized work on the contract

bull Includes a realistic network schedule S in M

bull Includes a realistic time-phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated

A good baseline is fund use of EVM in managing baseline has the followi

Long Description

Chart representing a performance measurement baseline or

Budget (TAB)

PMB over time from contract start to contract end The total allocated budget or T AB includes the PMBs budget

bull Accurately repres at completion or BAC and the management reserve work on the contrr---------r--l----------fl

bull Includes a realistic network schedule S in M

bull Includes a realistic time- phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following best describes the purpose of the performance measurement baseline (PMB) in Earned Value Management (EVM)

~ It provides a time-phased budget plan for accomplishing work against which contract performance is measured

LJ It collects measurements o f work the contractor has actually accomplished on a program

Formed as work progresses on a program i t documents work the con tractor has actually accomplished

It is a clear1y distinguished unit of work that should be planned to its logical technical scope c onclusion

As an estimate of a realistic level of work to be accomplished with regard to technical capabilities acquired budget spent and schedule expended the PMB provides a time- phased budget pla n for accom plis hing work against which contract or performance is measured to determine earned value

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorpora ted in a timely and disciplined manner

Requesting Ov er-Target Approval I f during con tract execution the contractor determines the schedule and or CONTRACTOR

budget for the remaining work is no longer realistic the contrac tor may prepare an over target baseline (OTB) and or over target schedyle COTS) request which must be approved by the Government

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 1 Learning Objectives

Topic 1 - PMB in EVM

In this topic you will

bull Recognize the purpose o f the performance measurement baseline (PMB) in Earned Value Managemen t (EVM)

bull Compare the role o f the contractor and the Government with regard to the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated Budget A good baseline is fundamental to the effective (TAB)

use of EVM in managing a contract A good Management Reserve baseline has the following characteristics

bull Accurately represents all the authorized work on the contract

bull Includes a realistic network schedule S in M

bull Includes a realistic time-phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated

A good baseline is fund use of EVM in managing baseline has the followi

Long Description

Chart representing a performance measurement baseline or

Budget (TAB)

PMB over time from contract start to contract end The total allocated budget or T AB includes the PMBs budget

bull Accurately repres at completion or BAC and the management reserve work on the contrr---------r--l----------fl

bull Includes a realistic network schedule S in M

bull Includes a realistic time- phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following best describes the purpose of the performance measurement baseline (PMB) in Earned Value Management (EVM)

~ It provides a time-phased budget plan for accomplishing work against which contract performance is measured

LJ It collects measurements o f work the contractor has actually accomplished on a program

Formed as work progresses on a program i t documents work the con tractor has actually accomplished

It is a clear1y distinguished unit of work that should be planned to its logical technical scope c onclusion

As an estimate of a realistic level of work to be accomplished with regard to technical capabilities acquired budget spent and schedule expended the PMB provides a time- phased budget pla n for accom plis hing work against which contract or performance is measured to determine earned value

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorpora ted in a timely and disciplined manner

Requesting Ov er-Target Approval I f during con tract execution the contractor determines the schedule and or CONTRACTOR

budget for the remaining work is no longer realistic the contrac tor may prepare an over target baseline (OTB) and or over target schedyle COTS) request which must be approved by the Government

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated Budget A good baseline is fundamental to the effective (TAB)

use of EVM in managing a contract A good Management Reserve baseline has the following characteristics

bull Accurately represents all the authorized work on the contract

bull Includes a realistic network schedule S in M

bull Includes a realistic time-phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated

A good baseline is fund use of EVM in managing baseline has the followi

Long Description

Chart representing a performance measurement baseline or

Budget (TAB)

PMB over time from contract start to contract end The total allocated budget or T AB includes the PMBs budget

bull Accurately repres at completion or BAC and the management reserve work on the contrr---------r--l----------fl

bull Includes a realistic network schedule S in M

bull Includes a realistic time- phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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Knowledge Review

Which of the following best describes the purpose of the performance measurement baseline (PMB) in Earned Value Management (EVM)

~ It provides a time-phased budget plan for accomplishing work against which contract performance is measured

LJ It collects measurements o f work the contractor has actually accomplished on a program

Formed as work progresses on a program i t documents work the con tractor has actually accomplished

It is a clear1y distinguished unit of work that should be planned to its logical technical scope c onclusion

As an estimate of a realistic level of work to be accomplished with regard to technical capabilities acquired budget spent and schedule expended the PMB provides a time- phased budget pla n for accom plis hing work against which contract or performance is measured to determine earned value

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Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorpora ted in a timely and disciplined manner

Requesting Ov er-Target Approval I f during con tract execution the contractor determines the schedule and or CONTRACTOR

budget for the remaining work is no longer realistic the contrac tor may prepare an over target baseline (OTB) and or over target schedyle COTS) request which must be approved by the Government

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Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The Purpose of the PMB in EVM

The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced budgeted cost for work scheduled (BCWS) for the contract

Total Allocated

A good baseline is fund use of EVM in managing baseline has the followi

Long Description

Chart representing a performance measurement baseline or

Budget (TAB)

PMB over time from contract start to contract end The total allocated budget or T AB includes the PMBs budget

bull Accurately repres at completion or BAC and the management reserve work on the contrr---------r--l----------fl

bull Includes a realistic network schedule S in M

bull Includes a realistic time- phased spread of budgetresources to the baselined schedule

bull Is established and maintained through disciplined baseline development and change procedures

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following best describes the purpose of the performance measurement baseline (PMB) in Earned Value Management (EVM)

~ It provides a time-phased budget plan for accomplishing work against which contract performance is measured

LJ It collects measurements o f work the contractor has actually accomplished on a program

Formed as work progresses on a program i t documents work the con tractor has actually accomplished

It is a clear1y distinguished unit of work that should be planned to its logical technical scope c onclusion

As an estimate of a realistic level of work to be accomplished with regard to technical capabilities acquired budget spent and schedule expended the PMB provides a time- phased budget pla n for accom plis hing work against which contract or performance is measured to determine earned value

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorpora ted in a timely and disciplined manner

Requesting Ov er-Target Approval I f during con tract execution the contractor determines the schedule and or CONTRACTOR

budget for the remaining work is no longer realistic the contrac tor may prepare an over target baseline (OTB) and or over target schedyle COTS) request which must be approved by the Government

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 6: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following best describes the purpose of the performance measurement baseline (PMB) in Earned Value Management (EVM)

~ It provides a time-phased budget plan for accomplishing work against which contract performance is measured

LJ It collects measurements o f work the contractor has actually accomplished on a program

Formed as work progresses on a program i t documents work the con tractor has actually accomplished

It is a clear1y distinguished unit of work that should be planned to its logical technical scope c onclusion

As an estimate of a realistic level of work to be accomplished with regard to technical capabilities acquired budget spent and schedule expended the PMB provides a time- phased budget pla n for accom plis hing work against which contract or performance is measured to determine earned value

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorpora ted in a timely and disciplined manner

Requesting Ov er-Target Approval I f during con tract execution the contractor determines the schedule and or CONTRACTOR

budget for the remaining work is no longer realistic the contrac tor may prepare an over target baseline (OTB) and or over target schedyle COTS) request which must be approved by the Government

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 7: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorpora ted in a timely and disciplined manner

Requesting Ov er-Target Approval I f during con tract execution the contractor determines the schedule and or CONTRACTOR

budget for the remaining work is no longer realistic the contrac tor may prepare an over target baseline (OTB) and or over target schedyle COTS) request which must be approved by the Government

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 8: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 shy Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Establishing the PMB The contractor begins to create the PMB immediately after contract award

Mainta ining t he PMB The contractor adjusts the PMB to accommodate changes that occur as the contract progresses and ensures that the PMB reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Requesting Ov er-Target Approval I f during contract execution the contractor determines the schedule and or budget for the remaining work is no longer realistic the contractor may prepare an over target baseline (OTB) and or over target schedyle COTS) request whi _~~~~~~~~~~~~~~~--

CONTRACTOR

over target baseline (OTB)

An OTB is the condition created when the PMB has been formally replanned to include additional performance management budget in excess of the contracts negotia ted cost An OTB increases the performance budget without modifying the work scope or other constraints of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 9: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Contractor Role

Est ablishing t he PMB The contractor begins to create the PMS immediately after contract award

Maint aining t he PMB The contractor adjusts the PMS to accommodate changes that occur as the contract progresses and ensures that the PMS reflects the actual plan for performing the remaining work The contractor uses documented disciplined baseline change processes to ensure changes are incorporated in a timely and disciplined manner

Request ing Over-Target Approval If during contract execution the contractor determines the schedule and or CONTRACTOR budget for the remaining work is no longer realistic the contractor may prepare an over targe t baseline (OTB) and or over targe t schedule COTS) request which must be approved by the Goverr-- -----------------__ll

over t arget schedule (OTS)

An OTS is the condition created when the contractor replans the schedule to a schedule that exceeds the contract milestones or delivery dates This new schedule also becomes the basis for the performance budgets While it is possible to have an OTS without a corresponding increase in cost normally an OTS is accompanied by increased costs and therefore by an over target baseline (OTB)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 10: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

PMB Government Role

Ev aluating the PMB The Government conducts an Integrated Baseline Review ( IBR) within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to understand the contractors PMB and the risks inherent in it and may schedule additional IBR events as necessary throughout contract execution

Maintaining the PMB The PMB can and does change during the life of the contract The Government provides contractual modifications engineering change proposals (ECPs) to the contractor The contractor modifies their plan by replanning future work or adding in- scope work with the use of management reserve The Government reviews the updated baseline in the Integrated Program Management Report ( IPMR) Format 6 GOVERNMENT Integrated Master Schedule ( IMS) as well as IPMR Formats 1-5 The Government also reviews ongoing PMB changes such as contractor replanning via the IPMR Formats 3 and 5

Approving Ov er-Target Requests When indicated by contract performance the contractor shall submit a request for approval to initiate an OTB or OTS to the contracting officer The request shall include a top - level projection of cost and or schedule grow th a determination of whether or not performance variances will be retained and a schedule of implementation for the rebaselining The Government will acknowledge receipt of the request in a timely manner (generally within 30 calendar days) Generally no formal contract modifications are required from the Government to implement an OTB or OTS For Department of Defense (DoD) contracts the Government must provide formal approval of the implementation of an OTB OTS

You can find more information in the Over Targe t Baseline and Over Targe t Schedule Guide

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes an aspect of the role of the Government with regard to the performance measurement baseline (PMB)

Create the PMB immedia tely a fter contract award

~ Conduct an Integrated Baseline Review ( BR)

D Adjust the PMB to accommodate changes that occur as the program progresses

Prepare an over target baseline (OTB) request when the budget for the remaining work is no longer realistic

The DoD co nd ucts a n Integrat ed Baseline Review (IBR) to ensure the contractors PMB is realistic The contrac tor creates the PMB immediately after contract award adjusts the PMB to accommodate changes that occur as the program progresses and ensures the PMB re flects the ac tual plan for per forming the remaining work

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Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 12: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Topic 2 Learning Objectives

Topic 2 - Key Com ponents

In this topic you will

bull Given contract information and a graphic depicting the decomposition of the program contract price into key componen ts of the performance measurement baseline (PMB) define the key components

bull Define the purpose of the contractor management reserve

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 13: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 14: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Long Descript ion

Chart breaking down a Contract Price of 725 million dollars into two separate components Profitfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars At contract start T AB equals NCC equals CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such as negotiated contract modifications or AUW There are also situations in which program managers (PMs) may recognize the need for higher performance management budgets for the authorized work scope than what is reflected in the CBB and approve an OTB The LAR contract has been recently negotiated so there is no AUW or OTB at this time Thus while at the beginning of a contract the T AB NCC and CBB are typically equal they may differ during execution of the contract

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 15: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a cont ract b udget base (CBB) AB such ers (PMs The sum of the negotiated contract cost and the estimated cost of any authorized unpriced scop work budgets Thus the CBB represents the current value of the project Included in the negc CBB will be any budget set aside for management reserve Contract overruns or underruns AB NCC are determined by comparing the final cost of the contract with the contract budget base

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Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 16: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a __________________ __________ __-_ ____ oOfAIB

such OTB ers (PM scop In exceptional cases the contractor may establish a PMB with budgets that exceed the neg CBB This is called an over target basline (OTB) Acceptance of the OTB values in excess of NCC the CBB will be predicated on Government approval

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

As a contract is executed circumstances may arise that cause a change in the dollar value of the T AB such middot ____ __middotcc middot- omiddotmiddotmiddotmiddot middot =rmiddot-middot-middotshymiddot middot~middot-_-middot middot - -- ers

(PM negot iated cont ract cost (NCC) scop neg The total cost for the original contract and all negotiated contract changes It does not NCC include fee or profit

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 18: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Total Allocated Budget

The Total Allocated Budget (T AB) is an important concept to understand in building a realistic PMB The T AB reflects the budget for all authorized work scope For the Lightweight Assault and Reconnaissance (LAR) Vehicle cost plus incentive fee (CPJF) contract as shown in the graphic the negotiated contract price was $72SM The dollars left after fee is set aside from the negotiated price is the T AB available to allocate to the performance of the LAR contractual effort

Contract Price $72SM

Total Allocated Budget ProfitFee $64SM

$77Mll9 At contract start TAB =NCC =CBB

Throughout the project the T AB will be equal to the contrac t budget base CCBBl with one exception and that is when the Government has approved an OTB The CBB consists of the negotiated contrac t cos t (NCC) plus the value of all authorized unpriced work CAUWl

_____________________ __________bull_ _-----_moOfAIB As a such authorized u npriced work (AUW) ers (PM scop The estimated cost approved by the contracting officer for pending contract modifications neg that are still being negotiated AUW may also be known as change orders not-to-exceed NCC (NTE) price agreements undefinitized contract actions (UCAs) or letter contracts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 19: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the authorized scope The reason for this is that good management requires having a performance measurement plan before work starts and actual costs accrue including AUW Once the AUW is definitized the PMB is adjusted to reflect changes made during negotiations

If the contracting officer authorized AUW of $3M the LAR T AB would increase from $64BM to $67BM

Contract Price $72SM

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 20: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW)

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contractually the AUW is not part of the NCC until after de finitization and negotiations are complete However the T AB and the PMB should include the contracting officers best estimate of the au aving a performance meas Long Descript ion middot middot Once the AUW is definitized

Reprised chart breaking down a Contract Price of 725 million dollars If the contracting into two separate components Profi tfee is 7 7 million dollars or I to $678M

119 percent Total allocated budget is 648 million dollars Adding AUW changes T AB and CBB NCC of 648 million dollars plus AUW of _______________ 3 million dollars equals CBB of 678 million dollars __ __

ProfitFee Total Allocated Budget $77Mll9 $64SM

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67SM)

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 21: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Authorized Unpriced Work (AUW )

AUW comes into play when a contract change is time critical The contracting officer may issue an undefinitized change order or AUW to allow the contractor to start the work while a proposal and contract modification are negotiated

Although authorized contrac tually the AUW is not part of the NCC until after definitization and negotia tions are complete However the TAB and the PMB sho1 estimate o f the au thorized scope The reason for this is tha t gc definitization performance measurement plan before work starts and actual c AUW is de fini tized the PMB is adjusted to reflect changes madlt The agreement on or determination o f

contrac t terms specifica tions and price

If the contrac ting o fficer authorized AUW of $3M the LAR T AB which converts an undefinitized contrac t action to a definitive con tract

Contract Price $72SM

ProfitFee Total Allocated Budget S77M l l9 S648M

Adding AUW changes TAB and CBB

NCC ($64SM) + AUW ($3M) = CBB ($67 SM)

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the T AB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) It is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the project

Contract Price $72SM

Total Allocated Budget $64SM

Performance Management Reserve Measurement Baseline

$1GM (23)$G32M

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 23: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Management Reserve

As a best practice contractors normally set aside a management reserve (MR) from the TAB MR is an amount of the total contract budget withheld for management control purposes and for unplanned events (within the scope of the contract) I t is not part of the PMB

The amount of MR needed for a project varies depending on the risks identified for the specific project so it is important for the contractor PM to carefully evaluate MR in the context of overall risk management strategies on the p

Long Description

Reprised chart breaking down a Contract Price of 725 million dollars into two separate components Profi tfee is 7 7 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars or 2 percent

Performance M Measurement Baseline anagement Reserve

$G3_2M $1GM (23)

For the LAR contract the contractor has allocated $16 Million for MR The Government and contractor PMs should carefully compare the MR to the project risks and the PMB during the IBR

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following describes the purpose of the contractor management reserve (MR)

~ Budget set aside to pay for unexpected unplanned work arising within authorized scope for risk mitigation

Budget set aside to o ffset or minimize existing cost variances

D Incentive funds awarded to Government personnel for excellent performance

Incentive funds awarded t o the contractor program manager for excellent performance

Check Answer

The contractor MR holds budget set aside to pay for unexpected unplanned w ork arising within authorized scope for risk mitigation

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 25: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the T AB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing the program and assessing the programs progress in terms of cost and schedule performance at the appropriate level of detail Total

Allocated Budget (TAB)

Management Reserve

Total Allocated Budget S in M $64SM

Performance Management Reserve

Measurement Baseline $1GM (2)

$632M

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

The PMB

The budget that remains after MR is set aside from the TAB is the budget at completion (BAC) for the entire PMB The PMB is fundamental to EVM I t establishes a baseline against which progress can be measured

The PMB is a time- phased technical plan that represents the planned authorized work scope and the resources (people materials and budget) assigned The PMB will represent the contractors path for executing performance at the app Long Description Total

Allocated

Reprised chart breaking down a Contract Price of 725 million dollars into two Budget (TAB)

separate components Profi tfee is 77 million dollars or 119 percent Total allocated budget is 648 million dollars Total allocated budget is further broken down into two separate components performance measurement baseline of 632 million dollars and management reserve of 16 million dollars

==I or 2 percent

Reprised chart representing a performance measurement baseline or PMB over time from contract start to contract end The total allocated budget or TAB includes the PMBs budget at completion or BAC and the management reserve

Contract Start Time Contract End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 27: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

I PMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va lues are in t housands of dollars ($)

8 Perfom1ance Data

f Management Reserve

g Total 19608 24292 22885 4684 1407 345271 323824 350608 middot21447 middot26784

15987

647769

Select to enlarge the graohic TAB middot MR = PMB

$648M bull $16M =$632M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 28: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

IPMR Format 1

All the elements just reviewed are reported in the JPMR in various formats For example here is some of the LAR Engineering and Manufacturing Development (EMO) contract data shown on JPMR Format 1

Note IPMR Format 1 va luesABequals the target price minus ~---~~middot~~__~_ tiil

I Long Descript ion

IPMR Format 1 Section 5 contract data with sub-sections a through h A Quantity PROD 0 B Negotiated Cost $6477690 C Estimated Cost Authorized Unpriced Work $000 D Target ProfitFee $77085 or 119 percent E Target Price $7248540 F Estimated Price $7102150 G Contract Ceiling $000 H Estimated Contract Ceiling no value T AB equals the target price minus the target fee $725 Million minus $7 7 Million equals $648 Million Section 8 performance data with subshysections e through g E Subtotal Performance Measurement Baseline F Management Reserve and G Total PMB subtotals and totals for the current period are BCWS 19608 BCWP 24292 ACWP 22885 Schedule variance 4684 and Cost Variance 140 7 Cumulative to date PMB subtotals and totals are BCWS 345271 BCWP 323824 ACWP 350608 Schedule variance negative 2 1447 and Cost Variance negative 26784 BAC subtotal at completion is 631782 Management Reserve is 15987 BAC total at completion is 647769 T AB minus MR equals PMB $648 Million minus $16 Million equals $63 2 Million

g Total lt 960s l24292 l 22sss I 4684 I t4o7 l345271 I323824 I3506os l middot21447 Imiddot26784 I 647769

Select to enlarge the graohic TAB middot MR = PMB

$64SM bull $16M =$632M

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 29: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately S72M and a target fee of approximately $7M It also shows that the contractor has decided to put S6M in management reserve (MR) How much budget at completion (BAC has the contractor decided to allocate to the performance measurement baseline (PMB)

$72 million

LJ $66 million Tota l Allocated Budget

$65M

$79 million

Performance Management Reserve

Measurement Baseline~ $59 million $GM$__

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $72M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 30: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

The Integrated Program Management Report ( IPMR) shows a target price of approximately $72M and a target fee of approximately $7M It also shows that the contractor has decided to put $6M in management reserve (MR) How much budget at completion (BAC) has the contractor decided to allocate to the performance measurement baseline (PMB)

0 $72 million

Long Description

0 $66 million Chart breaking down a Contract Price of 72 million dollars into two separate components Profitfee is 7 million dollars Total allocated budget is 65 million dollars Total0 allocated budget is further broken down into two separate$79 million components management reserve of 6 million dollars and the performance measurement baseline which is blank

~ $59 million

Check Answer

The BAC available for the PMB equals the target price minus the target fee minus the management reserve Therefore $7 2M - $7M - $6M = $59M

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a worlltbudget authorization process

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts CAs)

Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors alloc ate the BAC into the following PMB components using a worlltbudget authorization proc ess

bull Undistribyted budget UB)

bull Summary leyel planning packages SLPPs)

bull Control Accoyn ts Long Descr iption

Note MR is not part o f t Chart breaking down a performance measurement baseline of 632 million dollars in to three separate components control accounts summary level planning packages and undistributed budget

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EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 33: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management

Lesson 3 1 - Introduction to the Per formance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance - bull Undjstrjbuted budget (UB)

Undistributed b udget bull Summary level planning packages (SLPPs

A temporary holding account for budget for authorized bull Con trol Accounts (CAs)

work that has not yet been planned in detail at the control account or summary level planning package level

Note MR is not part of the PMB Control Level Undistributed

Accounts Planning Budget Packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 34: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Summary lev el planning packages bull Symmary level planning packages (SLPPs

An aggregation of work for far-term efforts notbull Control Accounts (CAs) able to be identified at the control account level which

can be assigned to reporting level WBS elements (and is therefore not undistributed budget)Note MR is not part of the PMB

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 35: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Developing the PMB

Contractors allocate the BAC into the following PMB components using a workbudget authorization process

Performance-- - bull Undistributed budget (UB)

Control accounts bull Symmary level planning packages (SLPPs

A management control point at which budgets ( resource bull Control Accounts (CAs) plans) and actual costs are accumulated and compared

to earned value for management control purposes A control account is a natural management point forNote MR is not part of the PMB planning and control since it represents the work assigned to one responsible organizational element (or integrated work team) for a single program WBS element

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 36: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are components of the performance measurement baseline PMB)

Select all that apply

~ Undistributed budget UB)

~ Summary level planning packages SLPPs)

~ Control accounts CAs)

Management reserve

Check Answer

UB SLPPs and CAs are components included in the PMB The PMB does not include the management reserve

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 37: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMS will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages andor planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Contract Personnel

+ WBS Element

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 38: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Control Account Manager Role

Control account managers (CAMs) play a key role in defining the PMB

The contractor PM will allocate budgets to CAMs in work authorization documents The CAMs will build their portions of the PMB (budgeted cost for work scheduled or BCWS) using these budgets They break their work down into work packages and or planning packages The sum of all work package budgets plus planning package budgets within a control account equals the control account budget

Long Descript ion

WBS elements and contract personnel make up control accounts CAMs divide the work in their control accounts into near-term work packages and far-term planning packages

WBS Element

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Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 39: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

Jn order for the PM to effectively manage execution of the program within budget and schedule constrain ts discrete w ork packages must be established and objectively measured Work packages re flec t the ac tual way the work is done and are a clearly distinguishable subdivision of a control account assignable to a single organizational element Work packages are where the work is planned in detail technical progress is measured and earned value is determined

When authorized control account work scope cannot be planned in detail planning packages may be used

A planning package is a logical aggrega tion o f future work within a control account that cannot yet be planned in detail at the work package or task level Typically near term work is detail planned into work packages and future effort is aggregated in planning packages

The planning package is time-phased with the known schedule requirements and detail planned into work package(s) at the earliest practicable point prior to any work per formed on the scope contained in the planning package Planning packages do not have EVM measures of progress identified yet

PttU1f bullbull $7 7Mll l ltlJt

~ ~-P-a- ~ge-19_o_f_J_2~1

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Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages and Planning Packages

In order for the PM to effectively manage execution of the program within budget and schedule constraints discrete work packages must be established and objectively measured Work packages reflect the actual way the work is done and are a clearly distinguishable subdivision of acontrol account assignatr_________________________T-t

organizational element Long Description the work is planned in de measured and earned va Reprised chart breaking down a Contract Price of 725

million dollars into two separate components Profitfee is When authorized control 7 7 million dollars or 119 percent Total allocated budget cannot be planned in det is 648 million dollars Total alloca ted budget is further may be used broken down into two separate components performance

measurement baseline of 63 2 million dollars and A planning package is a I management reserve of 16 million dollars or 2 percent work within a control ace Performance measurement baseline is further broken down planned in detail at the into three separate components control accounts Typically near term wo summary level planning packages and undistributed packages and future eff budget Control accounts is further broken down into two planning packages components near - term work packages and far - term

planning packages The planning package is dlllmlllI_____ known schedule requirements and detail planned in to bull Planning Packages

(far term) work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package Planning packages do not have EVM measures o f progress identified yet

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Work Package

Recall that a work package is a taskactivity or grouping of work within a control account

Characteristics of work packages include

bull Work packages are clearly distinguished units of work that should be planned to their logical technical scope conclusion

bull Work packages are developed for at least near- term effort in control accounts

bull Shorter- term work packages ( ideally equal in length to the statusing interval) are preferred because they provide more accurate and reliable measures of work accomplished

bull Work packages have a schedule and a budget expressed in terms of dollars labor hours or other measurable units

bull Work packages have an identified EVM measure of progress

bull The work packages earned value (budgeted cost for work performed or BCWP) contributes to (or is rolled up into) its control accounts earned value this is how its earned value (BCWP) is reported in the IPMR

Work packages may be referred to by different terms in different companies and functions Examples are a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 42: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Characteristics of a Planning Package

Recall that a planning package is a logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level

Characteristics of a planning package include

bull Planning packages are normally used for the far-term effort that can be identified budgeted and time-phased but not yet detail planned

bull The planning package is time-phased with the known schedule requirements

bull Planning packages are detail-planned into work package(s) at the earliest practicable point prior to any work performed on the scope contained in the planning package

bull Planning package budgets must be identified specifically with the work for which it is intended

Planning packages are time-phased periodically reviewed for validity and not used to perform other scopes of work

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 43: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are characteristics of a work package

Select all that apply

~ It is a de tailed task

LJ Detailed planning has not ye t been performed to identify the budget schedule and resources allocated to the work package

~ Work packages have an identified Earned Value Management (EVM) measure of progress

~ Its earned value is rolled up into the earned value of the control account it supports achieving

Check Answer

A work package is a detailed task Work packages have an identified EVM measure o f progress The work packages earned value is rolled up into the earned value o f the control account it supports achieving

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

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Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can inc lude a variety of different types of w ork packages and planning packages The follow ing is an example of a control account for the LAR EMO contract As show n in the table below this control account has nine w ork packages all representing w ork necessary to complete the Engine Critical Design

This particular control account has no planning packages

$187092 Work Package 113lmiddotl Requirements Analysis 2 Engineers 8 29 2014 $14112 Work Package ll31middot2 Trade Studies 3 Engineers 8 18 2014 8 29 2014 $5760 Work Package 1131middot3 Functional Flow Analysis 2 Sr Engineers 8 18 2014 9 15 2014 $13440 Work Package 11314 Functional Block Diagram 2 Sr Engineers 9 2 2014 9 30 2014 $14112 Work Package 1131middot5 Functional Allocation 4 Jr Engineers 9 22 2014 10 20 2014 $6900 Work Package 1131middot6 Timing Analysis 2 Sr Engineers 10 1 2014 10 31 2014 $14784

2 Sr Engineers Work Package 1131middot7 Test Requirements 3 Engineers 10 1 2014 12 23 2014 $64704 Work Package 1131middot8 Engineering Su port 4 Jr Engineers 8 4 2014 12 31 2014 $49920 Work Package 1131middot9 Finalize Design 2 Sr Engineers 12 24 2014 12 31 2014 $3360

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Work Packages

Control accounts can include a variety of different types of work packages and planning packages The following is an example of a control account for the LAR EMO contract As shown in the table below this control account has nine work packages all representing work necessary to complete the Engine Critical Design

Long Description

Sample control account breakdown for LAR EMO contract In 113 power package 1131 engine critical design control account consists of nine work packages broken out as follows 1131-1 requirements analysis work package requires 2 engineers starts August 1 2014 finishes August 29 2014 and has a BAC of $14 112 1131-2 trade studies work package requires 3 engineers starts August 18 2014 finishes August 29 2014 and has a BAC of $5760 1131-3 functional flow analysis work package requires 2 senior engineers starts August 18 2014 finishes September 15 2014 and has a BAC of $13440 1131-4 functional block diagram work package requires 2 senior engineers starts September 2 2014 ends September 30 2014 and has a BAC of $14 112 1131-5 functional allocation work package requires 4 junior engineers starts September 22 2014 finishes October 20 2014 and has a BAC of $6900 1131-6 timing analysis work package requires 2 senior engineers starts October 1 2014 finishes October 31 2014 and has a BAC of $14784 1131-7 test requirements work package requires 2 senior engineers and 3 engineers starts October 1 2014 finishes December 23 2014 and has a BAC of $64704 ll3l-8engineering support work package requires 4 junior engineers starts August 4 2014 finishes December 31 2014 and has a BAC of $49920 1131-9 finalize design work package requires 2 senior engineers starts December 24 2014 finishes December 31 2014 and has a BAC of $3360

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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Page 46: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following is the definition of a planning package

~ Within control accounts a place for holding the scope schedule and budget until the work is detail planned into work packages

The point at which work is planned progress is measured and earned value is computed

D The time-phased plan for accomplishing the contrac tual scope of work against which con tract performance is measured

The estimated cost approved by the contracting officer for pending contract modifications that are still being negotiated

Check Answer

Planning packages are within control accounts a place for holding the scope schedule a nd budget unt il t he work is detail planned into work packages

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

~ I Page27ofJ2 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

I Pbull ge27of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge 28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

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EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 47: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw materials purchased parts or other items ( for Work Packages example bolts widgets or processors) (near term)

bull Other Direct Costs any other expenses ( for example office Planning Packages supplies or computer equipment) (far term)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

I Page2Sof 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

I Page2S of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

I Pbull ge 26of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

~ I Page27ofJ2 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

I Pbull ge27of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge 28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 48: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Types of Cost in the PMB

T ypical types of cost found in CA work packages and planning packages are

Control Accountsbull Labor personnel ( for example systems engineers or software

engineers)

bull Materials raw ma --i-----1 -=--- ____~~------_ Work Packages example bolts wid Long Descript ion (near term)

bull Ot her Direct Cost Reprised chart breaking down control accounts into two Planning Packagessupplies or comput components near-term work packages and far-term (far term)

planning packages

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect Program indirect costs are for common activities that cannot be identified specifically with a particular program or activity and are budgeted and controlled separately at the functional or organizational manager level

An example of an indirect cost is Engineering Overhead which contains costs for engineering managers who spread their time among numerous contracts Those costs are typically allocated to a direct cost base such as engineering labor

I Page2S of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

I Pbull ge 26of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

~ I Page27ofJ2 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

I Pbull ge27of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge 28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 49: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Knowledge Review

Which of the following are key cost elements typically included in the performance measurement baseline (PMB)

Select all that apply

The management reserve

~ Labor

~ Other direct cos ts

~ Materials

Check Answer

The cost elements that make up the PMB budget are contained within control accounts Those cost elements can be either direc t or indirect and include la bor other direct costs and materials

I Pbull ge 26of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

~ I Page27ofJ2 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

I Pbull ge27of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge 28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 50: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control accoun t level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accoun ts for budget that is iden ti fied to some au thorized work scope and is time-phased for interim resource planning but which for business reasons has not yet been allocated to control accounts These budget dollars must be distributed to the appropriate control accounts as soon as possible and before the actual work for that specific elemen t begins

~ I Page27ofJ2 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

I Pbull ge27of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge 28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Summary Level Planning Packages

SLPPs are an aggregation of work for far-term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are therefore not UB)

SLPPs are essentially high level holding accounts for budget that is identifi work scope and is time-p Long Description planning but which for ye t been allocated to co Reprised chart breaking down a performance Measurement budget dollars must be di baseline of 632 million dollars into three separate appropriate control acco components control accounts summary level planning and before the actual wo packages and undistributed budget Summary level element begins planning packages is emphasized

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge 28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge 28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave plannino to deconstruct work held in planning packages into detailed work packages Rolling wave planning is often used to move work from SLPPs to control accounts and from control account planning packages to control account work packages

Long Description

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistribu ted budget Control accounts is further broken down into two components near-term work packages and far-term planning packages

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more de tail budget to support that more detailed work is moved in to control accounts

I Pbull ge28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Rolling Wave Planning

CAMs may use a concept known as rolling wave planning to deconstruct work held in planning packages into detailed work packag accounts and from contr rolling wave planning

As a contract progresses the contractor should periodically plan the next increment of work into detailed work packages from planning packages This is known as rolling wave planning Rolling wave planning typically provides for more accurate planning as information is made known during the execution of the work scope The contractor should establish procedures and a timetable for rolling wave planning The contractors EVM System Description Document (EVM SDD) is the common place to find the processes and procedures for rolling wave planning

The Government generally is not involved in the planning or approving of the rolling wave planning however the Contract Management Office (CMO) and Program Management Office (PMO) should be aware of the contractors schedule for rolling wave planning

As the work within a control account is planned in more detail the budget to support those detailed tasks is moved from planning packages to work packages

As the work associated with SLPPs is planned in more detail budget to support that more detailed work is moved into control accounts

I Page28of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 55: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages within two reporting periods

I Pbull ge2Pof32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 56: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Undistributed Budget

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level

UB is not used as a substitute for adequate contract planning so any budget held in UB must be allocated into control accounts or SLPPs at the earliest possible time preferably within the next reporting period Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningw

Long Descript ion

Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separate components control accounts summary level planning packages and undistributed budget Undistributed budget is emphasized

I Page29of32 I Back Next

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 57: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem e nt

Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I ntroduction t o t he Performance Measurement Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates the PMB and adjusts it to accommodate changes Total

Allocated that occur as the contract progresses to ensure that the baseline re flec ts the actual plan for performing the remaining Management Reserve

ampldget (TAB)

work

The Govemment conducts an BR within 180 days of contract award to ensure the contractors PMB is realistic The Government uses the IBR process to S ill M

understand the contractors PMB and the risks inherent in it

Contract Start Time Contrlct End

I Pbull ge30of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

I Page30 of 32 I Back Next

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary

Congratulations You have completed the I n t roduction t o t he Performance Measurem ent Baseline lesson You should now know the following key points about the PMB

Purpose o f t he PMB The PMB is the time-phased plan for accomplishing the contractual scope of work against which contract performance is measured The PMB is the resourced BCWS for the contract

The contractor creates t--~~~~~~~~~~~~~~~~~~~~~~ Total

adjusts it to accommoda~ Long Descript ion Allocated that occur as the contra1 Budget to ensure that the baselit Reprised chart representing a performance measurement (TAB)

actual plan for performin baseline or PMB over time from contract start to work contract end The total allocated budget or TAB

includes the PMBs budget at completion or BAC and the The Government conduc management reserve 180 days of contract awJirll~lI~--------------- the contractors PMB is realistic The

S in M Government uses the BR process to understand the contractors PMB and the risks inherent in it

Contract Start Time Contract End

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EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 59: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundam entals of Earned Value Managem ent Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not part o f the PMB

Ty pical types of cost found in CA work packages and planning packages are

bull Labor personnel (for example systems engineers or software engineers)

bull Materia ls raw materials purchased parts or other items (for example bolts widgets or processors)

bull Other Direct Costs any o ther expenses (for example office supplies or computer equipment)

These three categories o f cos ts can either be direct meaning tha t they are specifically identified with a particular final cost objec tive or indirect meaning that they are a grouping of incurred costs identified with two or more cos t objec tives

I Pbull ge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

I Pbullge 31 of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

If you have closed or hidden the Table of Contents click the Show TOC button in the Atlas navigation bar at the top of the screen

I Pbull ge32of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

Pbullge 31 of 32 I Back Next

Page 60: t h e ~~ ~- ----.,,.----.,~-----.,1- Topic 1 : PMB in EVM · Fo rm ed as work progresses on a program, i t documents work the . con tractor h as actually accomplished. It is a clear1y

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannin

bull SLPPs Long Descript ion

bull UB Reprised chart breaking down a performance measurement baseline of 632 million dollars into three separateNote MR is not part of t components control accounts summary level planning packages and undistributed budget Control accounts is further broken down into two components near-term work packages and far-term planning packages Typical types of cost fou

and planning packages armiddotamp--------------- - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Cost s any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

CAsbull CAs comprised of

bull Work packages All EVM is done at the control account level Work is planned and budgeted actual costs are accumulated

bull Planning packages and earned value is credited or earned at this level CAs are broken down into near- term work packages

bull SLPPs and far- term planning packages

bull UB

Note MR is no t part of the PMB

T ypical types of cost found in CA work packages and planning packages are

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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Lesson Completion

You have completed the content for this lesson

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Work packagesbull CAs comprised of

bull Work packages Work packages are natural subdivisions of a control account A work package is simply a taskactivity or

bull Planning packages grouping of work I t is the point at which work is planned progress is measured and earned value is bull SLPPs computed

bull UB I t can be translated into different terms in different

Note MR is not part of the PMB companies and functions a design job a tool design package a build - to- package a shop order a part number a purchase order or any other definable work

Typical types of cost found in CA work packages and planning packages are - -Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components Performance

Planning packagesbull CAs comprised of

bull Work packages Planning packages are holding accounts (within control accounts) for budget for future work that is

bull Planning packages not yet feasible to plan at the work package level The planning package budget is time- phased in bull SLPPs accordance with due dates for resource planning

bull UB Plans are refined as detailed requirements become clearer and time to begin work draws nearer

Note MR is not part of the PMB

bull Work Packages near terml

Typical types of cost found in CA work packages Planning Packages and planning packages are

Clar terml

bull Labor personnel ( for example systems engineers or software engineers)

bull Mat erials raw materials purchased parts or other items ( for example bolts widgets or processors)

bull Other Direct Costs any other expenses ( for example office supplies or computer equipment)

These three categories of costs can either be direct meaning that they are specifically identified with a particular final cost objective or indirect meaning that they are a grouping of incurred costs identified with two or more cost objectives

I Page31of 32 I Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

Work packages

Planning packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

SLPPs

SLPPs are an aggregation of work for far- term efforts not able to be identified at the control account level which can be assigned to reporting level WBS elements (and are are engineers)therefore not bullundistributed budget)

for example bolts widgets or SLPPs are essentially high level holding accounts for budget that is identified to some authorized work scope and is timeshy e supplies or computer equipment)phased for interim resource planning but which for business reasons has not yet been allocated to control accounts t they are specifically identified with a These budget dollars must be distribu ted to the appropriate a grouping of incurred costs iden tified control accounts as soon as possible and be fore the actual work for that speci fic element begins

~ I Page31of32 I ~ Back Next

EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

To continue select another lesson from the Table of Contents on the left

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

UB

UB is a temporary holding account for budget for authorized work that has not yet been planned in detail at the control account or SLPP level are engineers)

UB is not time-phased there fore us for near- term authorized for example bolts widgets or work should be moved to control accounts and far- term UB should be moved to summary SLPPs as quickly as possible

e supplies or computer equipment)Most Earned Value Management System (EVMS) descriptions require the UB to be distributed to planningwork packages t they are specifically iden tified with a within two reporting periods a grouping of incurred costs identified lllmmlmTm~~~~~-----------

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

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You have completed the content for this lesson

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Completion

You have completed the content for this lesson

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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EVMlOl Fundamentals of Earned Value Management Lesson 31 - Introduction to the Performance Measurement Baseline RESOURCES I PRINT I HELP

Lesson Summary Cont

The PMB has the following key components

bull CAs comprised of

bull Work packages

bull Plannjng packages

bull SLPPs

bull UB

Note MR is not par t o f the PMB

MR

From the TAB the contractor sets aside a MR MR is a contingency account to account for risks and unplanned events that may arise within the project scope but that are are engineers) not included in the PMB MR is also a prudent reserve for management control purposes However it is important to for example bolts widgets or note that MR cannot be used to o ffset or minimize cost variances

e supplies or computer equipment)

The amoun t o f MR needed for a project varies depending on t they are specifically iden ti fied with a the risks iden tified for the speci fic project so it is important a grouping of incurred costs identified for the PM to care fully evaluate MR in the context o f overall risk management strategies on the project

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