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Earned Value Management (EVM)

APMT 029

DAU GLOSSARY DEFINITION

A project management tool that effectively integrates the project scope of work with cost, schedule and performance elements for optimum project planning and control. The qualities and operating characteristics of an earned value management system are described in Electronic Industries Alliance Standard 748 (EIA-748), Earned Value Management Systems . (See OMB Circular A-11, part 7.)

Alternate Definition

Earned Value Management (EVM) is an integrated management system that integrates the work scope, schedule, and cost parameters of a program in a manner that provides objective performance measurement data. It measures progress objectively with earned value metrics; accumulates direct costs; allows for analysis of deviations from plans; facilitates forecasting the achievement of milestones and contract events; provides supporting data for forecasting of estimated costs; and fosters discipline in incorporating changes to the baseline in a timely manner.
(Source: PARCA EVM Glossary)

General Information

EVM is one of DoD’s and industry’s most powerful program planning and management tools. It is normally used in conjunction with cost plus and fixed-price incentive contracts with discrete work scope. The purpose of EVM is to ensure sound planning and resourcing of all tasks required for contract performance. It promotes an environment where contract execution data is shared between project personnel and government oversight staff and in which emerging problems are identified, pinpointed, and acted upon as early as possible. EVM provides a disciplined, structured, objective, and quantitative method to integrate technical work scope, cost, and schedule objectives into a single cohesive contract baseline plan called a Performance Measurement Baseline for tracking contract performance.

Earned Value Management (EVM) is applied on Cost Reimbusable or Incentive contracts, inclusive of options, with 18 months or greater period of performance and based on the nature of the work scope, that exceed $20M.  If EVM is required, the contractor is required to have an Earned Value Management System (EVMS) that complies with the guidelines of Electronic Industries Alliance (EIA) 748. 

If Earned Value Management (EVM) is required on a contract, the Integrated Program Management Data and Analysis Report (IPMDAR) (DID DI-MGMT-81861) should be used to report the EVM data.  The IPMDAR contains data for measuring cost and schedule performance on DoD acquisition contracts requiring EVM.   

For information on IPMDAR and its tailoring, refer to the DoD IPMDAR Implementation Guide.

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