Project Management (Prof. Barrese)

A Framework for Project Management
prof. Carlo Barrese

prof. Alessandra Pandolfi
SCHOOL OF
ARCHITECTURE,
URBAN PLANNING AND
CONSTRUCTION
ENGINEERING
Master of Science in
Master of Science in Architecture
Architecture
Course of Project Appraisal – Section A & B
Politecnico di Milano – School of Architecture, Urban planning and Construction Engineering
Milan, 11th March 2016
KEY FACTS ABOUT
THE COURSE
Introduction to Earned Value

Module 1 -
Introduction
The objective of this module is to introduce you to Earned Value and lay the
blueprint for the succeeding modules.
This module will include the following topics:
• Earned Value Management defined
• The differences between Traditional Management and Earned Value

Management SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• How Earned Value Management fits into a Program and Project ENGINEERING
environment Architecture
Project Appraisal
• The framework necessary for proper Earned Value implementation Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
What is Earned Value Management?

Module 1 -
Earned Value Management (EVM) is a systematic approach to the Introduction
integration and measurement of cost, schedule, and technical (scope)

accomplishments on a project or task. It provides both the government
and contractors the ability to examine detailed schedule information,
critical program and technical milestones, and cost data.
Earned Value Management is intended to provide data from a

contractor’s management system to the government in standard data
elements that…
– Relate time-phased budgets to contract tasks SCHOOL OF
ARCHITECTURE, URBAN
– Integrate cost, schedule, and technical performance PLANNING AND
CONSTRUCTION
– Indicate work progress objectively ENGINEERING
– Are valid, timely and auditable Master of Science in

Architecture
– Are from the internal system the contractor uses to manage Project Appraisal
– Are at a practical level of summarization Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Why use Earned Value Management?

By using Earned Value and implementing an Earned Value Management Module 1 -
System (EVMS), the following questions can be answered objectively: Introduction
• Where have we been?
• Where are we now?
• Where are we going?
Why use Earned Value? For one, it is mandated by some key DOE SCHOOL OF
ARCHITECTURE, URBAN
directives and guidance that Earned Value will be implemented. The PLANNING AND
CONSTRUCTION
following pages will discuss these. ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Traditional Management vs. Earned Value THE COURSE
Management
Module 1 -
Introduction
To better understand Earned Value Management, let’s take a look at
how earned value management compares with traditional
management.
There is an important and fundamental difference between the data

available for analysis in a traditional management environment as
compared to an environment using earned value.
Following pages will discuss and contrast the different between the two SCHOOL OF
ARCHITECTURE, URBAN
management approaches. PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Traditional Management
In Traditional management, there are two data sources, the budget (or
planned) expenditures and the actual expenditures. The comparison of Module 1 -
budget versus actual expenditures merely indicates what was planned Introduction
to be spent versus what was actually spent at any given time. But how
much has been produced?
As you can see, with this approach there in no way to determine the
physical amount of work performed. It does not indicate anything about
what has actually been produced for the amount of money spent nor
whether it is being produced at the rate, or according to the schedule,
originally planned. In other words, it does not relate the true cost
performance of the project.
70
As the graph shows, 60
SCHOOL OF
this comparison 50 ARCHITECTURE, URBAN
PLANNING AND
only represents the 40 CONSTRUCTION
ENGINEERING
relationship of what 30 Master of Science in
was budgeted 20 Architecture
Time Now
(planned) versus 10 Project Appraisal
what was actually 0

J F M A M J J A S O N D Milan
spent. Budget 5 10 15 20 25 30 35 40 45 50 55 60
11th March 2016
Actuals 10 20 30 40 50 60 prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value Management

In Earned Value Management, unlike in traditional management, there are Module 1 -
three data sources: Introduction
– the budget (or planned) value of work scheduled
– the actual value of work completed
– the “earned value” of the physical work completed
Earned Value takes these three data sources and is able to compare the
SCHOOL OF
budgeted value of work scheduled and compare it to the “earned value of ARCHITECTURE, URBAN
PLANNING AND
physical work completed” and the actual value of work completed. CONSTRUCTION
ENGINEERING
Architecture
Let’s take a closer look at how earned value appears in a graph. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Notice the three lines on the graph below. These lines correspond to the three Module 1 -
components of earned value: budget (in red), actual expenditures (in blue), and Introduction
the earned value of the production (in black). Note how the budget line is below
both the actual expenditures and the earned value lines. What does this
indicate?
First, it is obvious that the project is expending more (blue line) than it was
budgeted to spend, to date
(red line). Given the 150
125
progression of each line, it is
100
also apparent that this trend 75
has occurred since the 50 SCHOOL OF
beginning of the project. 25

ARCHITECTURE, URBAN
PLANNING AND
Time Now CONSTRUCTION
But what else can be 0
J F M A M J J A S O N D
ENGINEERING
interpreted from the graph? Budget 5 10 15 20 25 30 35 40 45 50 55 60

Architecture
Let’s take a closer look on the Actuals 10

Earned 8
20
15
30
25
40
30
50
35
60
45 Project Appraisal
next page. Forecast 70 80 90 100 110 120

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

In addition to tracking budget and actual expenditures, the graph indicates what Module 1 -
has been completed or “earned”. Introduction
By comparing the budget line (in red) to the earned value line (in black), it is
immediately apparent that the project is producing more than it was budgeted
to produce to date. Additionally, by comparing the actual expenditures (in blue)
to the earned value line (in black), it is immediately apparent that the project is
spending more then it was budget to date. So while the project is expending
more (blue line) than budgeted (red line), it is also producing more (black line)
than budgeted.
So what conclusions can be drawn from this graph? Let’s find out on the next
page. 150
SCHOOL OF
125 ARCHITECTURE, URBAN
PLANNING AND
100 CONSTRUCTION
ENGINEERING
75
50 Architecture
25 Project Appraisal
Time Now
0
J F M A M J J A S O N D Milan
Budget 5 10 15 20 25 30 35 40 45 50 55 60 11th March 2016
Actuals 10 20 30 40 50 60
Earned 8 15 25 30 35 45 prof. Barrese
Forecast 70 80 90 100 110 120 prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

There are two conclusions the earned value data will immediately let you make; Module 1 -
Introduction
they deal with schedule and cost variances.
Schedule Variance - the project is experiencing a schedule variance of 15. This

is derived from comparing the Earned (45) to the Budget (30). Another way of
stating this is that the project is ahead of schedule in comparison to what was
supposed to be done in the frame time measured.
150
125
100 SCHOOL OF
ARCHITECTURE, URBAN
75 PLANNING AND
CONSTRUCTION
50 ENGINEERING
25 Master of Science in
Time Now
Architecture
0
J F M A M J J A S O N D
Project Appraisal
Budget 5 10 15 20 25 30 35 40 45 50 55 60
Actuals 10 20 30 40 50 60 Milan
Earned 8 15 25 30 35 45 11th March 2016
Forecast 70 80 90 100 110 120

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Cost Variance - the project is experiencing a cost variance of -15. This is derived Module 1 -
Introduction
from comparing the Earned (45) to the Actual expenditures (60). Another way
of stating is that the project is experiencing an overrun of 15. This cost
variance is very important because history tells us that overruns in cost do not
correct themselves and need management intervention.
Along with the schedule and cost results discussed, earned value management
enables you to forecast the final results of the project (blue dashed line).
150
125
100
SCHOOL OF
PLANNING AND
50
CONSTRUCTION
ENGINEERING
25
Time Now
0 Master of Science in
J F M A M J J A S O N D Architecture
Budget 5 10 15 20 25 30 35 40 45 50 55 60 Project Appraisal

Actuals 10 20 30 40 50 60
Earned 8 15 25 30 35 45 Milan
Forecast 70 80 90 100 110 120 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Summarizing Traditional Management vs. THE COURSE

Module 1 -
In summarizing, Traditional management provides you with… Introduction
• How much money and time a particular job is likely to require prior to starting
and once stated, how much money was spent at any given time.
While Earned Value Management provides you with…
• How much money and time a particular job is likely to require prior to starting
and once stated, how much money was spent at any given time.
SCHOOL OF
ARCHITECTURE, URBAN
Plus PLANNING AND
CONSTRUCTION
ENGINEERING
• Once started, what work has been accomplished to date for the funds Master of Science in
Architecture
expended (what you got for what you spent) Project Appraisal
Milan
11th March 2016
• Once started, what the total job will cost at completion, and how long it will
take to complete prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value in a Management Environment

Module 1 -
Introduction
Understanding how Earned Value fits into the program and project
management environment is also essential.
On the following page we will discuss and define items such as project
vs. program, project management, program management and the
relationship between them.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
What is Program/Project Management?

Module 1 -
Program/Project Management is the application of knowledge, skills, tools, Introduction
and techniques to meet or exceed stakeholder needs and expectations.
Program/Project Management requires the ability to get the job done:

– On Time!
– Within Budget!
– According to Specifications!
– With a High Level of Customer Satisfaction
These requirements are know as the Scope

SCHOOL OF
“Triple Constraint”
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
So how do projects and programs differ? Master of Science in

Architecture
Take a look on the next page. Quality Project Appraisal
Milan
11th March 2016
Time Cost/Resources prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
What is a Project vs. Program

Module 1 -
Introduction
The Characteristics of a Project are:
• Temporary endeavor undertaken to create a unique product or
service
• Having a definite beginning and a definite end
The Characteristics of a Program are:

• A group of projects
• Managed in a corresponding way
SCHOOL OF
• To obtain benefits not available from managing them individually ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Earned Value Management vs Program/Project THE COURSE
Management
Earned Value is a Program/Project management technique used to objectively evaluate Module 1 -
cost and schedule efficiency, thereby facilitating better management of customer needs Introduction
and expectations.
Earned Value Management is a Program Management

subset of Program/Project Project Management
Budgeting
Management. Cost
As this hierarchy indicates, Proposals/Negotiations
Cost Collection
Earned Value Management is a Change Control
Earned Value
component of Project Management
Management, which in turn is a Forecasting
Funding SCHOOL OF
component of Program Resource ARCHITECTURE, URBAN
Management
PLANNING AND
Management. While many Reporting

CONSTRUCTION
ENGINEERING
components comprise Program Risk Master of Science in

Management
and Project Management, this Scheduling
Architecture
tutorial focuses on the Earned

Project Appraisal
Value Management component. Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Framework for an Earned Value Management THE COURSE
System (EVMS)
Module 1 -
Introduction
So far, we have discussed what Earned Value is, why to use it, and how it
fits into a program and project management environment. Next, we
need to discuss the framework needed to implement earned value.
The EVMS framework can be divided into three phases:
1. Inputs - what is needed to implement Earned Value
1. Earned Value Methods – formulas, metrics and performance SCHOOL OF

ARCHITECTURE, URBAN
measurements used PLANNING AND
CONSTRUCTION
ENGINEERING
1. Outputs – reporting requirements (structure, time-phases, details) Master of Science in

Architecture
Project Appraisal
On the following pages these three phases for developing an Earned Milan
11th March 2016
Value Management System (EVMS) will be discussed in more detail.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Inputs needed for Earned Value Management THE COURSE
System (EVMS)
As you recall, the first phase of Earned Value is inputs. The inputs required Module 1 -
for an EVMS include: Introduction
• Work Breakdown Structure (WBS)

• Organizational Breakdown Structure (OBS)
• Project Schedule
• Time-phased Baseline Budget WBS/OBS
Project
• Cost/Resource Control Plan Schedule
Resource Planning
• Change Control Plan Define/Assign
Schedule/Budget
Performance Measurement
Establish Baseline
Early Warning & Detection
These Items are covered in Modules Earned Value
Management
Informed Management Decisions SCHOOL OF
Corrective Actions
2 through 4 and Module 8 System
Recovering Planning
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Accounting ENGINEERING
System
$$$ Architecture
Project Appraisal
If any of these items are not completed or are not completed appropriately,
the use of Earned Value will be compromised and your outputs will not Milan
11th March 2016
properly represent the program/project current and future status.

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Earned Value Method needed for Earned Value THE COURSE
Management System (EVMS)

The second phase of Earned Value is the earned value method. The Earned Module 1 -
Value method required for an EVMS include: Introduction
• Planned Value (PV), Earned Value (EV) Actual Cost (AC)
• Metrics and Performance Measurements
• Forecasting
• Integrated Baseline Review WBS/OBS
Project
Schedule
Resource Planning
Define/Assign
Schedule/Budget
These Items are covered in Modules 5 Establish Baseline
through 7 Earned Value

Management
Informed Management Decisions SCHOOL OF
Corrective Actions
System ARCHITECTURE, URBAN
Recovering Planning PLANNING AND
CONSTRUCTION
Accounting ENGINEERING
System
$$$ Architecture
Project Appraisal
Once again, if any of these items are not completed or are not completed
appropriately, the use of Earned Value will be compromised and your outputs Milan
11th March 2016
will not properly represent the program/project current and future status.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Outputs needed for Earned Value Management THE COURSE
System (EVMS)
The last phase of Earned Value is the outputs. The outputs required for an Module 1 -
EVMS include: Introduction
• Reporting requirements
• Proper Analysis of Reports
WBS/OBS
• Correct Action taken Project
Schedule
Resource Planning
Define/Assign
Schedule/Budget
Establish Baseline
These Items are covered in Modules Earned Value
Informed Management Decisions
Management
9,10 & 12 System
Corrective Actions
Recovering Planning SCHOOL OF
ARCHITECTURE, URBAN
Accounting PLANNING AND
System CONSTRUCTION
ENGINEERING
$$$
Architecture
Even if the first two phases are completed appropriately, improper Project Appraisal
analysis of the outputs could cause inappropriate or inadequate
actions to be taken against the program/project and could either create Milan
11th March 2016
problems that otherwise would not exist or fail to fix the real problem
prof. Barrese
that does exist. prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review of Module 1
Module 1 -
“You cannot manage what you cannot measure…and what gets Introduction
measured gets done.”
--- Bill Hewlett, Hewlett Packard
Reviewing the major items of this module:

• Earned Value Management (EVM) is a systematic approach to the
integration and measurement of cost, schedule, and technical (scope)
accomplishments on a project or task
• DOE Order 413.3 is the approved policy
• In comparing Earned Value Management to Traditional Management, SCHOOL OF
Traditional Management does not allow for analysis of the physical amount ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
of work performed. Earned Value Management allows for both schedule ENGINEERING
and cost analysis against physical amount of work performed Master of Science in
Architecture
• Earned Value Management is a subset of Program/Project Management Project Appraisal
• EVMS can be divided into three phases (Inputs, Earned Value method, Milan
outputs) and all three most be completed appropriately for proper 11th March 2016
management of the program/project prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Work Breakdown Structure
The objective is to introduce you to Work Breakdown Structure (WBS) and other
supporting documents.
This module will include defining and illustrating the following topics:
• Work Breakdown Structure
• WBS dictionary
• Organizational Breakdown Structure (OBS)

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
• Responsibility Assignment Matrix (RAM) Master of Science in

Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
What is a Work Breakdown Structure?

Planning a project using earned value management is no different than the
initial planning necessary to implement any given project. There are basic
items that you need to know and understand as a project manager:
– What makes up my entire project (Scope)?

• What is the agreed upon work scope and what is additional work?
– What are my start and completion dates (Schedule)?
– How much is the project going to cost (Cost)?
Over the years, it was determined that project managers needed a tool to help SCHOOL OF
capture and control their project scope. This led to the development of a ARCHITECTURE, URBAN
PLANNING AND
Work Breakdown Structure (WBS). CONSTRUCTION

ENGINEERING
Architecture
On the following pages we will define and discuss a WBS. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The Work Breakdown Structure (WBS) is a tool that defines a project and
groups the project’s discrete work elements in a way that helps organize and
define the total work scope of the project. A WBS element may be a product,
data, a service, or any combination. WBS also provides the necessary
framework for detailed cost estimating and control along with providing
guidance for schedule development and control. Additionally the WBS is a
dynamic tool and can be revised and updated as needed BEST Management
by the project manager. Books
1.
Each descending level of the

WBS represents an increased Project Management
- An Introduction
1.1
level of detailed definition of the SCHOOL OF
ARCHITECTURE, URBAN
project work. As you can see in PLANNING AND
CONSTRUCTION
Writing Editing Publishing
this WBS for developing the Text Book
1.1.1
Text Book
1.1.2
Text Book
1.1.3
ENGINEERING
BEST Management Book, the Master of Science in

Architecture
work is broken down into all the Chapter 1

1.1.1.1
Chapter 2
1.1.1.2
Chapter 3
1.1.1.3
Editing
Chapter 1
Editing
Chapter 2
Editing
Chapter 3 Project Appraisal
1.1.2.1 1.1.2.2 1.1.2.3
discrete elements of work, the
Milan
total sum of which represents Project Project Project Budget & Scheduling Project Auditing Administrative
11th March 2016
Selection Organization Planning Cost 1.1.1.2.2 Controls 1.1.1.3.1 Closeout
all the work and products 1.1.1.1.1 1.1.1.1.2 1.1.1.1.3 1.1.1.2.1 1.1.1.2.3 1.1.1.3.2
prof. Barrese
necessary to produce the book. prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

After reviewing the WBS on the previous page, an important point needs to be
reviewed. Although a WBS can be depicted so as to look like an
organizational chart, it IS NOT an organizational chart.
BEST Management
Books
1.
Remember the WBS defines a Project Management

- An Introduction
project and groups the project 1.1
elements for managing a

Writing Editing Publishing
project. An organizational chart Text Book
1.1.1
Text Book
1.1.2
Text Book
1.1.3
SCHOOL OF
ARCHITECTURE, URBAN
describes the project team that PLANNING AND

CONSTRUCTION
will accomplish the project. Chapter 1

1.1.1.1
Chapter 2
1.1.1.2
Chapter 3
1.1.1.3
Editing
Chapter 1
1.1.2.1
Editing
Chapter 2
1.1.2.2
Editing
Chapter 3
1.1.2.3
ENGINEERING
Architecture
Project Project Project Budget & Scheduling Project Auditing Administrative

Closeout
Project Appraisal
Selection Organization Planning Cost 1.1.1.2.2 Controls 1.1.1.3.1
1.1.1.1.1 1.1.1.1.2 1.1.1.1.3 1.1.1.2.1 1.1.1.2.3 1.1.1.3.2
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Why is a Work Breakdown Structure needed?

Not all projects have a WBS, and it is true that some of these projects have
been successful. So why is a WBS needed? We have already looked at a
few reasons, but in review, the WBS:
– Provides a framework for organizing and managing the approved
project scope
– Helps ensure you have defined all the work that makes up the project
– Provides a framework for planning and controlling cost and schedule
information
– It’s better to be deliberate about planning than rely on luck!
Additionally, when you work for a company or organization that has many
projects being performed simultaneously, each of the projects is competing for SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
the limited resources available. The WBS enables you to review project CONSTRUCTION
details and distinguish one project’s needs from others within the company or
ENGINEERING
organization. Why is distinguishing one project from another important? It Architecture
enables you to identify resource requirements and allocate resources more Project Appraisal
effectively. Milan
11th March 2016
Now let’s look at preparing a WBS. prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
In preparing a WBS there are a number of steps that need to be taken to make
sure the WBS developed will help manage your project. Below and on the
following pages we will discuss these steps.
1. Identify final project products necessary for achieving project success. The
WBS should assist the project manager in developing a clear vision of the end
product. You need to answer the following question:
– What must be delivered to achieve project success?
• You may need to review the project scope documents for guidance.
SCHOOL OF
2. Identify the major deliverables necessary for project success. ARCHITECTURE, URBAN
PLANNING AND
– These are items that by themselves do not satisfy the project need but CONSTRUCTION
ENGINEERING
combined make up a successful project Master of Science in

Architecture
– Examples: a design completion, generator delivery, or acceptance test Project Appraisal
completion
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
3. Incorporate additional levels of detail until management requirements for

managing and controlling the project are met.
– Remember that each project is different, thus each WBS will be
different
– WBS’s from previous projects can be used as templates, but
remember that the management philosophy and the level of details
may be different from project to project
– Understand your controlling and reporting requirements
• Projects have different requirements; make sure you take
these into consideration when developing low level details SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
4. Review and refine the WBS until the stakeholders agree with the level of
project planning and reporting. Architecture
– Remember that no matter how detailed a WBS is, there are planning Project Appraisal
and reporting restrictions a WBS creates. On the following pages, we Milan

11th March 2016
will look at examples of these restrictions.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
Let’s use the BEST Management Books’ WBS we looked at earlier. Assume that
the WBS was only planned down to the chapters level (see graph below, left),
but after the first month of work, the stakeholder wants reporting at the
subchapter level (see graph below, right). Without restructuring the WBS and
changing the other supporting systems, like cost tracking and reporting, it is
impossible for the project manager to meet the stakeholder’s request.
Current Project WBS Project WBS Needed
Writing Writing
Text Book Text Book
1.1.1 1.1.1 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Chapter 2 Chapter 2 ENGINEERING
Chapter 1 Chapter 1
1.1.1.1 1.1.1.2 1.1.1.1 1.1.1.2
Architecture
Project Appraisal
Project Project Project Budget & Scheduling
Scheduling Project
Not Planned to this level Selection
1.1.1.1.1
Organization
Organization
1.1.1.1.2
Planning
1.1.1.1.3
Cost
1.1.1.2.1
1.1.1.2.2 Controls
1.1.1.2.3
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
Now let’s reverse the situation. Assume WBS was planned down to the
subchapter level (see graph below, left), but after the first month of work, the
stakeholder wants reporting at the chapter level (see graph below, right). Is
there any restructuring needed to the WBS? The answer is “No”. Since you
planned the work at a level below what is now the stakeholder’s requirement,
you can “roll-up” and meet the stakeholder’s request.
Do you still see a problem with the project WBS? Let’s take a look.
Current Project WBS Project WBS Needed SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
Writing Writing CONSTRUCTION
Text Book Text Book ENGINEERING
1.1.1 1.1.1
Architecture
Chapter 1 Chapter 2 Chapter 1 Chapter 2

1.1.1.1 1.1.1.2 1.1.1.2 Project Appraisal
1.1.1.1
Milan
11th March 2016
.
Project
Selection
Project
Organization
Organization
Project
Planning
Budget &
Cost
Scheduling
Scheduling
1.1.1.2.2
Project
Controls
1.1.1.1.2 1.1.1.2.1
1.1.1.1.1 1.1.1.1.3 1.1.1.2.3
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
Actually, there is not a problem with the WBS structure, but a problem with the
idea of time and cost. The project manager spent time and resources to
define the WBS down to a level that he determined was appropriate. The
only benefit could be that the project manager wishes to manage the project
at the lower level and will roll-up reporting for the stakeholder.
In review, always get stakeholders to agree with the level of project planning and
reporting.
Current Project WBS Project WBS Needed SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
Writing Writing CONSTRUCTION
Text Book Text Book ENGINEERING
1.1.1 1.1.1
Architecture
Chapter 1 Chapter 2 Chapter 1 Chapter 2

1.1.1.1
Milan
11th March 2016
Project Project Project Budget & Scheduling
Scheduling Project
Selection Organization
Organization Planning Cost 1.1.1.2.2 Controls
1.1.1.1.2 1.1.1.2.1
1.1.1.1.1 1.1.1.1.3 1.1.1.2.3
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
In developing a WBS, one must realize that there are multiple ways to develop a
WBS for any given project. Some ways might be better than others, but the
two most important item to remember are that the WBS must contain all
approved scope and the Project Manager must develop the WBS to reflect
the way he/she intends to manage the project.
Other items to consider when developing a WBS are:

• Reporting requirements
• Size of project
• Resource executing the work (contractors vs. in-house)
• Complexity of the project
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
On the following two pages are examples of alternative WBS structures for the Project Appraisal
BEST Management Books project.

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
This WBS structure is designed to control scope by
chapters, unlike the original WBS which was
developed to control scope by writing and
editing.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Preparing a WBS
This WBS structure is taking into consideration that
the writing and editing will be executed by a
contractor. It still requires the contractor to
control scope by writing and editing by chapter.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Building a WBS
Armed with the basics of the WBS, it is time to examine them in more detail and
to begin to understand how to build one. To do this, let’s look at building a WBS
for the construction of a single family home. First, take a moment to familiarize
yourself with some background information about the construction company,
which appears on the next page.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
WBS: Structure
The ACME Housing Corporation, which you own, has been contracted to build its
first house. You want to be able to manage your projects effectively and
efficiently, so you charge your project managers to develop an appropriate
WBS. You decide to manage the project by the individual tasks necessary to
complete the house.
You hope that this is the first of many houses that ACME will build, so you start
the WBS with ACME in the highest position, or Level 1. Accordingly, Level 1 is
given a WBS code of 1. You assign the WBS code of 1 to the highest level
because all future projects (houses) will be summarized at Level 1.
NOTE: For ease of explanation, our SCHOOL OF

ARCHITECTURE, URBAN
example will assume the following: PLANNING AND
CONSTRUCTION
Level 1 
ENGINEERING
• Design is complete Master of Science in

Architecture
• All permits issued Project Appraisal
• All Material ordered Milan

11th March 2016
• Inspection happens
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
WBS: Structure
With Level 1 established, you can begin to complete the WBS. But what should
the next level be?
The logical next level for ACME is the project level. Level 2 is the level for each
individual project, or house, that ACME undertakes. As the chart shows below,
Level 2 is identified at the project level: House.
Appropriately, the code for Level 2 corresponds to Level 1. In this case, the code
is 1.1.
Level 1  SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Level 2  Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
WBS: Structure
Now the WBS for the housing project is complete, right? Actually, no, the WBS is
not complete. At this point you determine that you want to divide the work into
the major elements needed to build a house. You choose to divide Level 3 into
six elements: concrete, framing, plumbing, electrical, interior and roofing. You
realize that these are both major deliverables and milestones for managing the
project. They also enable you to get to your goal of managing the project by
task.
Notice the WBS codes at level 3. Each is unique to the project and starts with the
WBS code from the level above (11.11.1.1). Now lets look and see if
another level is needed.
Level 1  SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Level 2  Master of Science in

Architecture
Project Appraisal
Milan
Level 3 
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
WBS: Structure
The ACME WBS is taking shape, but it does not quite define the project at a level
that shows needed tasks for completion. To do this, one more level needs to
be included.
Level 4 of the WBS will enable us to manage
the project as desired. All of our contractors
fit into specific elements at level 4, and so
do all specific departments. As with the  Level 1
previous Levels, note the WBS codes that
have been assigned to the tasks and their  Level 2
relationship to the previous Level.
SCHOOL OF
Level 3  ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Level 4  Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
WBS: Structure
What do you think? Is the WBS complete? Does it enable the manager to
manage at the task level?
After a review to make sure that only approved scope is included, our WBS is
complete. It does include the necessary components to manage the project by
task.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Work Breakdown Structure (WBS) Tree

1 ACME Housing Corporation
The graphical structure of the WBS is an 1.1 New Home Construction
1.1.1 Concrete
easy way to identify the project
1.1.1.1 Pour Foundation
components and relationships of those 1.1.1.2 Install Patio
components; however, the WBS can 1.1.1.3 Pour Stairway
1.1.2 Framing
be displayed in another format as well: 1.1.2.1 Frame Exterior Walls
the Tree format. Both formats are 1.1.2.2 Frame Interior Walls
acceptable. The graphical format is at 1.1.2.3 Install Roofing Trusses
1.1.3 Plumbing
times easier to understand, but can 1.1.3.1 Install Water Lines
take up considerable space in a report. 1.1.3.2 Install Gas Lines
The tree is not as easy to understand 1.1.3.3 Install B/K Fixtures
1.1.4 Electrical
but is more easily incorporated into a 1.1.4.1 Install Wiring
report format. 1.1.4.2 Install Outlets/Switches SCHOOL OF
ARCHITECTURE, URBAN
1.1.4.3 Install Fixtures PLANNING AND
Note the WBS codes and the structure of 1.1.5 Interior
CONSTRUCTION
ENGINEERING
the Levels in the Tree format mirror the 1.1.5.1 Install Drywall
1.1.5.2 Install Carpets
graphical format. The content has not Architecture
1.1.5.3 Install Painting

changed; only the way the content is 1.1.6 Roofing
Project Appraisal
presented has changed. 1.1.6.1 Install Felt Milan

1.1.6.2 Install Shingles 11th March 2016
1.1.6.3 Install Vents

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
WBS and Earned Value
Now that you understand the WBS and how to assemble one, let’s examine how
it relates to earned value.
In Module 1, we discussed that in implementing earned value, a project manager
must have control of the project’s “triple constraint” (scope, schedule and cost).
Unlike traditional management, which tracks two components (budget and
expenditures), earned value considers three and provides a more robust
understanding of a project’s overall progress and health.
The WBS is the most important item in defining and controlling the project scope.
How does it control the scope? If the WBS is not developed correctly and does
not capture all the project scope and only the project scope, then the “earned
value” system built using the WBS will be inaccurate. The project manager will SCHOOL OF
ARCHITECTURE, URBAN
lose control of the project before it even begins. PLANNING AND

CONSTRUCTION
ENGINEERING
Now that you have your WBS, let’s take a look on the next page at the other item
Architecture
Project Appraisal
needed to properly organize your project.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
WBS Dictionary
Once the WBS is complete, the WBS dictionary needs to be the next item
developed. The WBS dictionary is a narrative documentation of the effort
needed to accomplish all work defined in the WBS. The WBS dictionary is
developed for the lowest level element in the WBS only.
To better understand how a WBS and a WBS dictionary work, let’s compare it to
a book and the book’s table of contents:
– The WBS is the table of contents for the project. It captures the
contents in an organized fashion (chapters, subchapter).
– The WBS dictionary is the book itself. It tells the story. In our case the
story is what work will be accomplished and what outputs will be SCHOOL OF
ARCHITECTURE, URBAN
produced in each of the WBS elements. The total of these descriptions PLANNING AND
CONSTRUCTION
is how a house will be built and what is needed to build the house. ENGINEERING
Architecture
The WBS dictionary will often lead to the development of the statements of work Project Appraisal
(SOW) for the project. SOWs will be discussed in later modules. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Organization Breakdown Structure (OBS)

Now that our WBS is developed, the appropriate resources and responsibilities
need to assigned. The first step in doing this is developing the Organizational
Breakdown Structure (OBS) for the project. The OBS indicates the
organizational relationships and is used as the framework for assigning work
responsibilities. Below is an example of the OBS for the ACME house building
project. The OBS is structured by Responsible Department and then by
Performing Department at the lowest level. This Performing Department level
is were the responsibility and resource needed to accomplish the project will
be assigned.
PROJECT OFFICE
RESP DEPT
B. Smithers
SCHOOL OF
CIVIL STRUCTURAL ELECTICAL PLUMBING ARCHITECTURE, URBAN
With the relationships RESP DEPT RESP DEPT RESP DEPT RESP DEPT PLANNING AND
R. Kelly P. Tate J. Sims R. Lee CONSTRUCTION
and responsibilities ENGINEERING
CONCRETE CARPENTRY WIRING WATER/SEWER

defined, the second PERF DEPT 6010 PERF DEPT 5010 PERF DEPT 4010 PERF DEPT 3010
Architecture
M. Manning R. Sites S. Johnson K. Wells
and final step is to Project Appraisal
MASONRY ROOFING HOOKUP/TIE-IN GAS
merge the WBS and PERF DEPT 6020 PERF DEPT 5020 PERF DEPT 4020 PERF DEPT 3020
T. Greams Y. Taylor P. Ottis R. Oriely
OBS. Take a look on Milan
11th March 2016
TEST DRYWALL
the next page. PERF DEPT 6030 PERF DEPT 5030
K. Neumann D. Smith prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Responsibility Assignment Matrix (RAM)

Merging the WBS and OBS, the project manager creates a Responsibility
Assignment Matrix (RAM). The RAM displays the lowest level of both the
WBS and the OBS. The integration identifies specific responsibility for
specific project tasks. It is at this
point that the project manager
develops control accounts or work
package. Control accounts and
work packages will be discussed
in Module 4. Lets look at what the
RAM may look like on the ACME
house construction project on the SCHOOL OF
next page. ARCHITECTURE, URBAN
PLANNING AND
PERF DEPT 3010
PERF DEPT 3020

WATER/SEW ER
CONSTRUCTION
R. Oriely
PLUMBING
RESP DEPT
K. Wells
GAS
ENGINEERING
R. Lee
PERF DEPT 4010
PERF DEPT 4020
Architecture
HOOKUP/TIE-IN
Responsibility
S. Johnson
RESP DEPT
ELECTICAL
WIRING
P. Ottis
J. Sims
Project Appraisal
PROJ ECT OFFICE
Assignment Matrix
B. Smithers
RESP DEPT
PERF DEPT 5010
PERF DEPT 5020
PERF DEPT 5030

CARPENTRY
STRUCTURAL
DRYWALL
ROOFING
D. Smith
Y. Taylor
R. Sites
Milan
RESP DEPT
P. Tate
11th March 2016

PERF DEPT 6010
PERF DEPT 6020
PERF DEPT 6030

K. Neumann
prof. Barrese
CONCRETE
M. Manning
MASONRY
T. Greams
RESP DEPT
TEST
R. Kelly
CIVIL
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Below is part of the RAM for the ACME housing project.
– The lowest level of the WBS appears across the top
– The lowest level of the OBS appears on the vertical axis
An “X” appears at the intersection of the WBS task and OBS personnel. The “X”
defines the specific performing department (from the OBS) assigned to
complete a task (from the WBS).
CONCRETE FRAMING PLUMBING
1.1.1 1.1.2 1.1.3
Frame Frame Install Install
Pour Pour Exterior Interior Roofing Water Install Gas Install B/K
Foundation Install Patio Stairway Walls Walls Trusse Lines Lines Fixtures
Performing Dept. Manager 1.1.1.1 1.1.1.2 1.1.1.3 1.1.2.1 1.1.2.2 1.1.2.3 1.1.3.1 1.1.3.2 1.1.3.3
CONCRETE
DEPT 6010 Manning X X X
MASONRY
DEPT 6020 Greams X
SCHOOL OF
TEST
DEPT 6030 Neumann X X X ARCHITECTURE, URBAN
PLANNING AND
CARPENTRY
DEPT 5010 Sites X X X CONSTRUCTION
ENGINEERING
ROOFING
DEPT 5020 Taylor X
DRYWALL Master of Science in
DEPT 5030 Smith X Architecture
WIRING
DEPT 4010 Johnson Project Appraisal
HOOKUP/TIE-IN
DEPT 4020 Ottis
WATER/SEWER Milan
DEPT 3010 Wells X X 11th March 2016
GAS
DEPT 3020 Oriely X X
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

To better understand the RAM, consider the ACME housing project.
The OBS specifies Mr. Sites and the carpentry department as responsible for
framing the exterior walls. Therefore, in the RAM, an X appears at the cross-
section between the task, framing the exterior walls, and the responsible party,
Mr. Sites. Additionally, Mr. Sites is also responsible for framing the interior walls
and installing the roofing trusses.
1.1.1 1.1.2 1.1.3
CONCRETE
DEPT 6010 Manning X X X
MASONRY
DEPT 6020 Greams X
TEST SCHOOL OF
DEPT 6030 Neumann X X X ARCHITECTURE, URBAN
CARPENTRY PLANNING AND
DEPT 5010 Sites X X X CONSTRUCTION
ROOFING ENGINEERING
DEPT 5020 Taylor X
DRYWALL Master of Science in
DEPT 5030 Smith X Architecture
WIRING
DEPT 4010 Johnson Project Appraisal
HOOKUP/TIE-IN
DEPT 4020 Ottis
WATER/SEWER
DEPT 3010 Wells X X Milan
11th March 2016
GAS
DEPT 3020 Oriely X X
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Alternatively, hours and dollars may be used in the RAM rather than an “X”.
Using our ACME House example, the “X” was replaced with the hours needed
to complete the task. Now we see that Mr. Sites has 300 hours to frame the
exterior walls, 250 hours to frame the interior walls and 175 hours to install the
roofing trusses.
1.1.1 1.1.2 1.1.3
CONCRETE
DEPT 6010 Manning 200 125 85
MASONRY
DEPT 6020 Greams 50
TEST
DEPT 6030 Neumann 20 10 5 SCHOOL OF
CARPENTRY ARCHITECTURE, URBAN
DEPT 5010 Sites 300 250 175 PLANNING AND
ROOFING CONSTRUCTION
DEPT 5020 Taylor 100 ENGINEERING
DRYWALL
DEPT 5030 Smith 275 Master of Science in
Architecture
WIRING
DEPT 4010 Johnson
Project Appraisal
HOOKUP/TIE-IN
DEPT 4020 Ottis
WATER/SEWER
DEPT 3010 Wells 100 15 Milan
11th March 2016
GAS
DEPT 3020 Oriely 125 25
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review
Take some time to review the major items of this module:
• The Work Breakdown Structure (WBS) is a tool that defines a project and
groups the projects elements in a way that helps organize and define the
total work scope of the project
• In preparing a WBS there are a number of steps that need to be taken
including:
– identifying the final project product
– identifying the major deliverables
– incorporating the appropriate levels of detail
– obtaining stakeholder agreement
• WBS Dictionary is a narrative description of the lowest level for each WBS SCHOOL OF
ARCHITECTURE, URBAN
element PLANNING AND

CONSTRUCTION
ENGINEERING
• Organizational Breakdown Structure (OBS) indicates the organizational Master of Science in
relationships and is used as the framework for assigning work Architecture
responsibilities Project Appraisal
• Responsibility Assignment Matrix (RAM) merges the WBS and OBS to Milan
11th March 2016
identify the specific responsibility for specific project tasks
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Project Scheduling
The objective is to introduce you to Project Scheduling.
The Topics that will be addressed in this Module include:
• Define Planning vs. Scheduling
• Define and Illustrate Basic Scheduling Concepts
• Define Logic Relationships and Critical Path

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
• Define and Illustrate Different Schedule Formats CONSTRUCTION

ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review of Previous Modules

Let’s quickly review what has been covered in the previous modules.
• In Module 1 we introduced you to earned value and the requirements for

properly implementing an earned value management system (EVMS).
• In Module 2 we discussed
– the first steps in the planning process
– development of the work breakdown structure (WBS)
– organizational breakdown structure (OBS)
– the integration of WBS and OBS in creating the responsibility assignment
matrix (RAM) SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
• The next step in this process is to develop the project schedule. So the first Master of Science in
Architecture
question we need to ask is what is scheduling?
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
What is Scheduling?
There are multiple ways of defining scheduling. Scheduling is:
…Forming a network of activities and event relationships that portrays the sequential
relations between the tasks in a project…
…Planned completion of a project based on the logical arrangement of activities,
resources…
…Placing the project and its activities in a workable sequenced timetable…
…A detailed outline of activities/tasks with respect to time…
While scheduling is all of these things, the main thing to remember is that SCHOOL OF
ARCHITECTURE, URBAN
scheduling is the development of planned dates PLANNING AND
CONSTRUCTION
for performing project activities and meeting milestones. ENGINEERING
Architecture
Project Appraisal
By looking at the aforementioned definitions of scheduling, do you see a
difference between planning and scheduling? Let’s take a look on the next Milan
11th March 2016
page.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Planning vs. Scheduling
“I keep six honest serving men (they taught me all I knew); their names are
What and Why and When and How and Where and Who.”
--- Rudyard Kipling
Planning involves making decisions with the objective of influencing the future.
Another way to consider planning is as the “thinking” phase. Defining
activities, their logical sequence, and their relationship to each other are all
planning functions. In planning you answer the following questions:
What will be performed?

SCHOOL OF
• This question is answered by determining the final project product necessary ARCHITECTURE, URBAN
PLANNING AND
for achieving project success. This is done in the initiation phase before the CONSTRUCTION
ENGINEERING
development of your WBS. Master of Science in

Architecture
Project Appraisal
How will it be performed?

Milan
• This question is answered by determining the processes, procedures, and 11th March 2016
methodologies used to complete the project. prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Where will it be performed?
• This answer varies for each type of project. For example, if it’s a construction
project, the “where” will be the physical location of the building or road etc. If
the project is a software development project, the answer could be the
physical location of the project team or the final location of the project
software.
Who will perform the work?

• This question is answered by determining if the work will be contracted or will
use in-house resources. Then, the question will be examined in even more
detail: if a contractor, what type of contractor, and if company resource, what
department and who in each department? SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
In what sequence? ENGINEERING
• This question involves determining the order in which activities will be

Architecture
performed to complete the project. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
With five main questions answered, only one last question remains: when. This
question involves scheduling.
Scheduling determines the timing of operations in the project. The schedule will
determine the specific start and completion dates for the project and all project
activities. Another way to look at scheduling is to consider it the “action” or
“doing it” phase. In scheduling you answer the question:
When will the work be performed?

• Scheduling includes the project start and completion dates, project
deliverables and milestones dates, and the start and completion dates for all SCHOOL OF
ARCHITECTURE, URBAN
activities needed to successfully complete the project. PLANNING AND

CONSTRUCTION
ENGINEERING
Equipped with an understanding of the difference between planning and Architecture
scheduling, let’s look on the next page at the scheduling requirement needed Project Appraisal
in an earned value management system (EVMS). Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Project Scheduling
To satisfy the earned value management system (EVMS) criteria, the schedule
must:
• Include logical ties for all activities

• Include all key milestones and deliverables
• Reflect the agreed to project baseline
• Integrate with the cost baseline
We will discuss the last two bullet points in Module 5.

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
On the following pages, we will discuss the process for developing a project CONSTRUCTION
ENGINEERING
schedule, including how to ensure it is logical and how to ensure that it Master of Science in
Architecture
includes all key milestones and deliverables.
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Project Scheduling
Project scheduling in the earned value management system involves a clear, five
step process. This process aids managers in determining the project schedule
and, eventually, the project schedule baseline. The process steps are:
1. Develop the list of project activities
2. Sequence the list of project activities
3. Determine the relationships between activities
4. Establish the duration for each activities

SCHOOL OF
5. Determine the project duration (start and completion dates) ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
For the purpose of explaining the process in detail, we will use the smaller BEST Master of Science in
Management Books project, instead of the ACME House Building project. At Architecture
the end of the process will will look at the outcome of using this process on the Project Appraisal
ACME House Building project. Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Scheduling - Step 1. Develop a List of Project THE COURSE
Activities
Developing a list of project activities is as simple as it sounds: list all activities
that are needed to complete the project. Do not order or rank them yet, as this
step comes later. This list needs to be as complete as possible. You can add
and subtract activities throughout the process, but the more complete the list is
now, the easier the process will be.
BEST Management
Using the BEST Management Book example from Books
1.
Module 2, we will use the lowest level of BEST’s

WBS as our activity list. The list for this example is Project Management
relatively short; however, the list for your projects will - An Introduction
1.1
most likely reflect more detailed activities for each

SCHOOL OF
task. Writing Editing Publishing
ARCHITECTURE, URBAN
PLANNING AND
Text Book Text Book Text Book CONSTRUCTION
1.1.1 1.1.2 1.1.3
Let’s take a look at our activity list

ENGINEERING
on the following page. Chapter 1 Chapter 2 Chapter 3 Editing Editing Editing
Architecture
1.1.1.1 1.1.1.2 1.1.1.3 Chapter 1 Chapter 2 Chapter 3
Milan
Project Project Project Budget & Scheduling Project Auditing Administrative 11th March 2016
Selection Organization Planning Cost 1.1.1.2.2 Controls 1.1.1.3.1 Closeout
1.1.1.1.1 1.1.1.1.2 1.1.1.1.3 1.1.1.2.1 1.1.1.2.3 1.1.1.3.2
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Scheduling – Step 1. Develop a List of Project THE COURSE
Activities
Here is the initial list of activities for the BEST Project Management book. There
are two things to remember at this stage of the process.
1. The activity list is not a complete list; additions and subtractions will be
made from it.
2. As you develop your list, you may see the need to update the WBS.
Remember the WBS is a dynamic tool, revisions may be needed and
should be expected as the scheduling of activities progresses.
WBS Activity List

1.1 Start Development of Project Management Book For this example, we will assume that
1.1.1.1.1 Writing Project Selection section for Chapter 1
1.1.1.1.2 Writing Project Organization section for Chapter 1 this is a complete list of activities, and SCHOOL OF
ARCHITECTURE, URBAN
1.1.1.1.3 Writing Project Planning section for Chapter 1 no revision to the WBS is needed. PLANNING AND
CONSTRUCTION
1.1.1.2.1 Writing Budget and Cost section for Chapter 2 ENGINEERING
1.1.1.2.2 Writing Scheduling section for Chapter 2
1.1.1.2.3 Writing Project Controls section for Chapter 2 Architecture
1.1.1.3.1 Writing Auditing section for Chapter 3
Project Appraisal
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3
1.1.2.1 Editing Chapter 1
1.1.2.2 Editing Chapter 2 Milan
11th March 2016
1.1.3 Publishing Project Management Book
1.1 Finished Development of the Project Management Book prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Scheduling – Step 2. Sequence the List of Project THE COURSE
Activities
With the activity list complete, we need to “sequence” or develop “logic” between
activities. To complete this process we need the WBS activities list and a
pencil.
A pencil? Why a pencil?
This process requires the project manager, subject matter experts (SME), and
other project team members who are familiar with the nature of the specific
activities to meet, discuss and develop the sequencing of the project activities.
This process is known as “a pencil to paper” process.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Continuing to use our BEST Management book example, we will take a look at CONSTRUCTION
ENGINEERING
this sequencing process on the next page. Master of Science in

Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Scheduling – Step 2. Sequence the List of Project THE COURSE
Activities
1. Start with the WBS… BEST Management
Books
1.
…2. Develop the Activity List….
WBS Activity List
1.1 Start Development of Project Management Book
Project Management 1.1.1.1.1 Writing Project Selection section for Chapter 1
- An Introduction
1.1 1.1.1.1.2 Writing Project Organization section for Chapter 1
1.1.1.1.3 Writing Project Planning section for Chapter 1
1.1.1.2.1 Writing Budget and Cost section for Chapter 2
Writing Editing Publishing 1.1.1.2.2 Writing Scheduling section for Chapter 2
Text Book Text Book Text Book
1.1.1 1.1.2 1.1.3
1.1.1.2.3 Writing Project Controls section for Chapter 2
1.1.1.3.1 Writing Auditing section for Chapter 3
Chapter 1 Chapter 2 Chapter 3 Editing Editing Editing 1.1.2.1 Editing Chapter 1
1.1.1.1 1.1.1.2 1.1.1.3 Chapter 1 Chapter 2 Chapter 3
1.1.2.1 1.1.2.2 1.1.2.3 1.1.2.2 Editing Chapter 2
1.1.3 Publishing Project Management Book
Project Project Project Budget & Scheduling Project Auditing Administrative
Selection Organization Planning Cost 1.1.1.2.2 Controls 1.1.1.3.1 Closeout 1.1 Finished Development of the Project Management Book
1.1.1.1.1 1.1.1.1.2 1.1.1.1.3 1.1.1.2.1 1.1.1.2.3 1.1.1.3.2
Writing Project Writing Project

Organization section for Planning section for Editing Chapter 1
Chapter 1 Chapter 1
Publishing Project
SCHOOL OF
Management Book
Writing Project ARCHITECTURE, URBAN
Selection section for PLANNING AND
Chapter 1 CONSTRUCTION
ENGINEERING
Writing Budget and Master of Science in

Writing Scheduling Writing Project Controls
Cost section for Editing Chapter 2 Architecture
section for Chapter 2 section for Chapter 2
Chapter 2
Project Appraisal
3. …Use the WBS and Activity List to

develop the project activity sequence
Milan
Writing Administrative 11th March 2016
Writing Auditing section
or logic… for Chapter 3
Closeout section for
Chapter 3
Editing Chapter 3
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Scheduling - Step 3. Determine the Relationship THE COURSE
Between Project Activities

Once the sequence has been established, you need to determine the direct
relationship between each activity. But how does sequencing differ from
identifying the relationships of tasks and activities?
Sequencing is the order of how things will happen. First, second, third, etc. . .
Identifying direct relationships provides greater understanding to the project tasks

and schedule. By identifying the relationships between activities in scheduling,
you identify the sequence plus dependencies of tasks. There are 4 types of
scheduling dependencies:
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• FS – Finish to Start ENGINEERING
• SS – Start to Start Master of Science in

Architecture
• FF – Finish to Finish Project Appraisal
• SF – Start to Finish Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Scheduling - Step 3. Determine the Relationship THE COURSE
Between Project Activities
There are two methods for developing project

• FS – Finish to Start sequence and relationships:
• SS – Start to Start Precedence Diagramming Method (PDM)
• FF – Finish to Finish Arrow Diagramming Method (ADM).
• SF – Start to Finish
We will use PDM in this module but will not explore
these scheduling methods in detail.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Let’s take a closer look at the first three scheduling dependencies. We will not ENGINEERING
discuss the last dependence, as it is never used. Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Types of Scheduling Dependencies

The first type of relationship is called Finish to Start (FS). This means that activity
“A” must finish before activity “B” can start.
Let’s look at this relationship using the BEST Management Books example:
Finish-To-Start
Writing Project Writing the

Organization FS Project Planning
section for section for SCHOOL OF
Chapter 1
ARCHITECTURE, URBAN
Chapter 1 PLANNING AND

CONSTRUCTION
ENGINEERING
You must “Finish” writing the Project Organization section of Chapter 1 before Architecture
you can “Start” writing the Project Planning section for Chapter 1.
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The second type of relationship is Start to Start (SS). This means that activity “B”
can start as soon as activity “A” starts.
Start-To-Start
Start BEST
Management
Books Project
SCHOOL OF
SS Writing Project ARCHITECTURE, URBAN

PLANNING AND
Selection section
CONSTRUCTION
ENGINEERING
for Chapter 1 Master of Science in

Architecture
Project Appraisal
You can “Start” writing the Project Selection section for Chapter 1 as soon as you Milan
11th March 2016
“Start” the BEST Management Books Project.

prof. Barrese
. prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The third type of relationship is Finish to Finish (FF). This means that activity “B”
cannot finish until activity “A” finishes.
Finish-To-Finish
FF
Editing Chapter 3
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Finish BEST CONSTRUCTION

ENGINEERING
Management Master of Science in
Books Project
Architecture
Project Appraisal
You cannot “Finish” the project, Finish BEST Management Book Project, until
Milan
11th March 2016
you “Finish” Editing Chapter 3.

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Step 3. Determine the Relationship Between THE COURSE
Project Activities
Using the relationships we have just described, the BEST Management Books
project activities and the logical relationships among them is diagrammed
below. This is formally known as a Network Diagram.
Start BEST
Finish BEST
Management Book
Management Book
Project
Project
Writing Project FS Writing Project Planning FS
Organization Section for Section for Chapter 1 Editing Chapter 1 FF
SS FS
Chapter 1
FS
Publishing Project
Writing Project Management Book
Selection Section for
FS
Chapter 1
FS Writing Budget and Cost FS Writing Project FS Writing Project Controls FS

Section for Chapter 2 Scheduling Section for Section for Chapter 2 Editing Chapter 2 FS
Chapter 2
SCHOOL OF
FS
FS ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Writing Auditing Section FS Writing Administrative FS
Closeout Section for ENGINEERING
for Chapter 3 Editing Chapter 3
Chapter 3
Architecture
With the relationships defined, we now need to establish the duration for each Project Appraisal
activity. Let’s take a look on the next page. Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Project Scheduling - Step 4. Establish the THE COURSE
Duration for Each Activity

Now that you have the project network diagram, it is time to determine the
duration for each project activity. Once again, just like the sequencing
process: you need to enlist the help of the people or group of people familiar
with the nature of the project.
Establishing the duration of each project activity involves determining the work
periods needed to complete each identified activity. Work periods can be
– hours
– days
– weeks
SCHOOL OF
– months, etc.. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Regardless of the exact work period chosen, the period must be consistent for all Master of Science in
Architecture
activities in the schedule. The project manager and team member(s) must Project Appraisal
decide which work period is right for the project.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Methods for Determining Activity Duration

Two major duration estimating tools can help project managers estimate the
activity duration: the PERT and CPM.
Three time estimates can be applied to any activity:

– Optimistic (O)
– Pessimistic (P)
– Most Likely (M)
PERT uses the distribution’s mean

Critical Path Method (CPM) requires
to determine individual activity
only a one time estimate per activity. SCHOOL OF
duration. Specifically, the PERT ARCHITECTURE, URBAN
This method uses only a Most Likely PLANNING AND
formula is CONSTRUCTION
time estimate. ENGINEERING
(P + 4M + O) / 6 Master of Science in
Architecture
Project Appraisal
Let’s consider an example on the next page to understand better. Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Methods for Determining Activity Duration: an THE COURSE
Example
For the activity “Editing Chapter 1,” the following estimates are determined:
– (O) Optimistic estimate = 6 days
– (P) Pessimistic estimate = 18 days
– (M) Most Likely = 9 days
Using PERT, the following estimate is derived: (18 + 36 + 6) / 6 = 10 days.
Using CPM, the estimate is 9 days.
Legend
SCHOOL OF
ARCHITECTURE, URBAN
Time Estimates PLANNING AND
CONSTRUCTION
• Optimistic (O) ENGINEERING
• Pessimistic (P) Master of Science in

Architecture
• Most Likely (M)
Project Appraisal
CPM = Most Likely time estimate Milan
PERT = the distribution’s mean: (P + 4M + O) / 6

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Project Scheduling - Step 4. Establish the THE COURSE
Duration for Each Activity

Now let’s look at the duration estimate for the activities in the BEST
Management Books project. For the purposes of this tutorial, it does not
matter which duration estimating method was used.
WBS Activity Description Duration
1.1 Start Development of Project Management Book 0 wks
Here is a list of the activities in 1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks
the BEST Management Books 1.1.1.1.3 Writing Project Planning section for Chapter 1 9 wks
Project. The durations for each 1.1.1.2.1
1.1.1.2.2
Writing Budget and Cost section for Chapter 2
Writing Scheduling section for Chapter 2
9 wks
5 wks
activity have been determined. 1.1.1.2.3 Writing Project Controls section for Chapter 2 7 wks
1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks
From looking at the chart, what 1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk
is the work period chosen by the 1.1.2.1
1.1.2.2
Editing Chapter 1
Editing Chapter 2
8 wks
8 wks
project manager? 1.1.2.3 Editing Chapter 3 4 wks
SCHOOL OF
ARCHITECTURE, URBAN
1.1.3 Publishing Project Management Book 4 wks PLANNING AND
1.1 Finish Development of the Project Management Book 0 wks CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
The work period is weeks (wks). Remember the selected work period must be Milan
consistent for all activities. 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Scheduling – Quick Review

At this point, you have covered a good bit of information. Take some time now to
review what you have learned before you continue with the module.
So far in this module, we have covered four of the five steps related to project
scheduling:
1. Developing the list of project activities

2. Sequencing the list of project activities
3. Determining the relationship between each activity
4. Establishing the duration for each activity
SCHOOL OF
The final step in this process is to determine the project duration (start and ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
completion dates) and the start and finish dates for each individual activity. ENGINEERING
Take a closer look at this step on the following page. Master of Science in
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Project Scheduling – Step 5. Determine Project THE COURSE
Duration
Usually the project duration and activity start and completion dates are mapped
in a typical scheduling software application. The activities are placed in the
software tool, and the relationships are identified. The software calculates the
dates.
To better understand how the software calculates the dates, we will take a look
at the process known as Forward and Backward Pass.
The Forward Pass determines the early The Backward Pass determines the late
start (ES) and the early finish (EF) of each start (LS) and late finish (LF) of each
activity. activity.
Together, these processes give the total project duration, including the start and SCHOOL OF
ARCHITECTURE, URBAN
finish dates for each activity. Additionally, the process will determine the PLANNING AND
CONSTRUCTION
• critical path, which tells you the activities that cannot slip without increasing ENGINEERING
the total duration of the project or moving the project completion date, and Architecture
• float, which tells you how much certain activities can slip without impacting Project Appraisal
the total project duration. Milan
We will look at critical path and float later in the module. 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
To start this process, let’s look at the Forward Pass.
The Forward Pass calculates the earliest date that each activity can start and
finish according to the logical sequence of work and the duration of each
activity. The Forward Pass yields the project duration.
To start this process, a Project Network Project Network Diagram

Start BEST
Diagram and a chart will help estimate the Management Book
Project
appropriate dates. SS
Writing Project
Organization Section for
Chapter 1
FS
SCHOOL OF
Writing Project
Chart Selection Section for
ARCHITECTURE, URBAN
PLANNING AND
Chapter 1 CONSTRUCTION
WBS Activity Duration ES EF LS LF
ENGINEERING
FS Writing Budget and Cost
Section for Chapter 2 Master of Science in
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
To begin the Forward Pass process, determine a project start date. Looking at
the BEST project, we will use January 1 as the project start date.
Start BEST
The first activity that appears in the Network Diagram Management Book
Project
is “Start BEST Management Books project.” SS
Writing Project
Organization Section for
Chapter 1
Accordingly, the information appears in the FS
Writing Project
corresponding chart. Selection Section for
Chapter 1

WBS Activity Duration ES EF LS LF Section for Chapter 2
1.1 Start Development of Project Management Book 0 wks 1/1 1/1
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
The early start (ES) is 1/1 since this is the First activity and the start date for the Master of Science in
Architecture
project is 1/1. The early finish (EF) for this activity is also 1/1 since it is a Project Appraisal
milestone and a milestone has no duration.

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
Using the Network Diagram, the next activity is “Writing Project Selection section
of Chapter 1.” This activity is start to start (SS) with the previous activity, thus
its early start date is 1/1 (see chart). The early finish is determine by the
duration of the activity itself. This activity has a duration of 8 weeks, which
translates to a early finish date of 2/25.
Start BEST
Management Book
Project
Writing Project
SS Organization Section for
Chapter 1
FS
Writing Project
Selection Section for
Chapter 1
SCHOOL OF
ARCHITECTURE, URBAN
WBS Activity Duration ES EF LS LF Section for Chapter 2
PLANNING AND
1.1 Start Development of Project Management Book 0 wks 1/1 1/1 CONSTRUCTION
1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks 1/1 2/25 ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
The next activity is “Writing the Project Organizational section of Chapter 1.” It is
finish to start (FS) with the previous activity. With the FS relationship in mind,
what is the early start date for this activity?
Start BEST
Management Book
Because you must finish writing the Project Project
Writing Project
Selection section before you start writing the SS Organization Section for
Chapter 1
FS
Project Organizational section, the early start Writing Project
date for the current activity is 2/26. The early Selection Section for
Chapter 1
finish is once again calculated by using the FS Writing Budget and Cost
Section for Chapter 2
duration of the activity, giving you a early
SCHOOL OF
completion of 5/6. ARCHITECTURE, URBAN
PLANNING AND
WBS Activity Duration ES EF LS LF CONSTRUCTION
1.1 Start Development of Project Management Book 0 wks 1/1 1/1 ENGINEERING
1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks 1/1 2/25
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6 Master of Science in
Architecture
Project Appraisal
Let’s look at one more.

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
The next activity is “Writing the Project Budget and Cost section of Chapter 2.” It
is finish to start (FS). Can you determine the activity that must finish, before
this activity can start?
Start BEST
It is finish to start (FS) with Writing the Project Selection Management Book
Project
Writing Project
section: because you must finish writing the project SS Organization Section for
Chapter 1
FS
selection section before you start writing the project
Writing Project
budget and cost section (same as Writing Project Selection Section for
Chapter 1
Selection section), the early start date is also 2/26. The FS Writing Budget and Cost
Section for Chapter 2
early finish is once again calculated by using the duration
SCHOOL OF
of the activity, giving you an early completion of 4/29. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
WBS Activity Duration ES EF LS LF ENGINEERING
1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks 1/1 2/25 Master of Science in
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6 Architecture
1.1.1.2.1 Writing Budget and Cost section for Chapter 2 9 wks 2/26 4/29
Project Appraisal
This process is used to determine each activity’s ES and EF. On the page next is
Milan
11th March 2016
the completed Forward Pass.

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
By looking at the chart below, can you determine the project duration, start and
completion dates?
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6
1.1.1.1.3 Writing Project Planning section for Chapter 1 9 wks 5/7 7/8
1.1.1.2.2 Writing Scheduling section for Chapter 2 5 wks 4/30 6/3
1.1.1.2.3 Writing Project Controls section for Chapter 2 7 wks 6/4 7/22
1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks 7/23 8/5
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 SCHOOL OF
1.1.3 Publishing Project Management Book 4 wks 9/17 10/14 ARCHITECTURE, URBAN
PLANNING AND
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 CONSTRUCTION
ENGINEERING
Project Duration: 41 weeks or 205 days. Architecture
Project Start: January 1 Project Appraisal
Project Completion: October 14 Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
With the Forward Pass complete, let’s look at the Backward Pass. The Backward
Pass calculates the latest date that each activity can start and finish in order
to meet the project end date.
Again, using the BEST Management Books example, let’s now address the
Backward Pass. The chart below contains the Forward Pass information.
Unlike the Forward
Pass, which started 1.1
WBS Activity
Start Development of Project Management Book
Duration
0 wks
ES
1/1
EF
1/1
LS LF
with the first activity, 1.1.1.1.1 Writing Project Selection section for Chapter 1
1.1.1.1.2 Writing Project Organization section for Chapter 1
8 wks
10 wks
1/1
2/26
2/25
5/6
the Backward Pass 1.1.1.2.1 Writing Budget and Cost section for Chapter 2
1.1.1.1.3 Writing Project Planning section for Chapter 1
9 wks
9 wks
2/26
5/7
4/29
7/8
will start at the 1.1.1.2.2 Writing Scheduling section for Chapter 2
1.1.1.2.3 Writing Project Controls section for Chapter 2
5 wks
7 wks
4/30
6/4
6/3
7/22 SCHOOL OF
bottom of the chart 1.1.1.3.1. Writing Auditing section for Chapter 3

2 wks
1 wk
7/23
8/6
8/5
8/12
ARCHITECTURE, URBAN
PLANNING AND
with the last activity 1.1.2.1

CONSTRUCTION
Editing Chapter 1 8 wks 7/9 9/2 ENGINEERING
and work 1.1.2.3
1.1.3
Editing Chapter 3
Publishing Project Management Book
4 wks
4 wks
8/13
9/17
9/9
10/14
Architecture
backwards. 1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14
Project Appraisal
Start at the end and go backwards Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
The process works the same as the Forward Pass but in the opposite direction.
Once again using the Network Diagram, the last activity is “Finish the
Development of the Project Management Book” (see below). The late finish
(LF) and the late start (LS) will be the same as the early start (ES) and early
finish (EF) since it is the final activity. Finish BEST
Management Book
Project
Editing Chapter 1 FF
FS
Publishing Project
WBS Activity Duration ES EF LS LF Management Book
1.1 Start Development of Project Management Book 0 wks 1/1 1/1 FS
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6
Editing Chapter 2 FS
1.1.1.1.3 Writing Project Planning section for Chapter 1 9 wks 5/7 7/8
1.1.1.2.2 Writing Scheduling section for Chapter 2 5 wks 4/30 6/3 FS
1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks 7/23 8/5 SCHOOL OF
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12 Editing Chapter 3 ARCHITECTURE, URBAN
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2 PLANNING AND
1.1.2.2 Editing Chapter 2 8 wks 7/23 9/16 CONSTRUCTION
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 ENGINEERING
1.1.3 Publishing Project Management Book 4 wks 9/17 10/14 9/17 10/14
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14 Master of Science in
Architecture
The next activity is “Publishing Project Management Book,” and it is finish to Project Appraisal
finish (FF) with the “Finish Development” activity. Thus, the LF and LS are
Milan
also the same as the ES and EF. 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
Looking at the Network Diagram on the previous page, you see that there are
three activities that have a relationship with Publishing Project Management
Book:
– Editing Chapter 1
Also note that the relationships are all finish to start (FS). With this in mind, what
is the LF and LS for each activity?
1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks 1/1 2/25 SCHOOL OF
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6 ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
1.1.1.1.3 Writing Project Planning section for Chapter 1 9 wks 5/7 7/8 ENGINEERING
1.1.1.2.2 Writing Scheduling section for Chapter 2 5 wks 4/30 6/3
1.1.1.2.3 Writing Project Controls section for Chapter 2 7 wks 6/4 7/22 Architecture
1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks 7/23 8/5
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12 Project Appraisal
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2 7/23 9/16

1.1.2.2 Editing Chapter 2 8 wks 7/23 9/16 7/23 9/16 Milan
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 8/20 9/16 11th March 2016
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14 prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
Because “Publishing
Project Management 1.1 Start Development of Project Management Book 0 wks 1/1 1/1
Book” has an LS of 1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6
9/17 and all three 1.1.1.1.3
1.1.1.2.2
Writing Project Planning section for Chapter 1
Writing Scheduling section for Chapter 2
9 wks
5 wks
5/7
4/30
7/8
6/3
activities are finish to 1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks 7/23 8/5
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12
start (FS), the late 1.1.2.1
1.1.2.2
Editing Chapter 1
Editing Chapter 2
8 wks
8 wks
7/9
7/23
9/2
9/16
7/23
7/23
9/16
9/16
1.1.2.3
finish (LF) for each 1.1.3
Editing Chapter 3
Publishing Project Management Book
4 wks
4 wks
8/13
9/17
9/9
10/14
8/20
9/17
9/16
10/14
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14
must be 9/16.
SCHOOL OF
How do you determine the late start (LS) for each activity? Subtract the duration ARCHITECTURE, URBAN
PLANNING AND
for each activity from LF, as shown in the chart. CONSTRUCTION

ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
Here is the completed list of all the activities, including the early starts (ES), early
finishes (FS), late starts (LS) and late finishes (LF). What can you determine
about the project from this data?

1.1 Start Development of Project Management Book 0 wks 1/1 1/1 1/1 1/1
1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks 1/1 2/25 1/1 2/25
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6 3/12 5/20
1.1.1.2.1 Writing Budget and Cost section for Chapter 2 9 wks 2/26 4/29 2/26 4/29
1.1.1.1.3 Writing Project Planning section for Chapter 1 9 wks 5/7 7/8 5/21 7/22
1.1.1.2.2 Writing Scheduling section for Chapter 2 5 wks 4/30 6/3 4/30 6/3
1.1.1.2.3 Writing Project Controls section for Chapter 2 7 wks 6/4 7/22 6/4 7/22
1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks 7/23 8/5 7/30 8/12
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12 8/13 8/19 SCHOOL OF
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2 7/23 9/16 ARCHITECTURE, URBAN
PLANNING AND
1.1.2.2 Editing Chapter 2 8 wks 7/23 9/16 7/23 9/16 CONSTRUCTION
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 8/20 9/16 ENGINEERING
1.1.3 Publishing Project Management Book 4 wks 9/17 10/14 9/17 10/14 Master of Science in
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14 Architecture
Project Appraisal
Take a look on the next page. Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
From the Forward Pass information, we know the Project duration, Project Start,
and Completion date.

1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12 8/13 8/19
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2 7/23 9/16 SCHOOL OF
ARCHITECTURE, URBAN
1.1.2.2 Editing Chapter 2 8 wks 7/23 9/16 7/23 9/16 PLANNING AND
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 8/20 9/16 CONSTRUCTION
ENGINEERING
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14 Master of Science in
Architecture
Project Appraisal
Now it is time to use the information from the Backward Pass to determine the
Milan
project’s critical path. 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
The Critical Path tells you the activities that cannot slip a day without increasing
the total duration of the project or moving the project completion date. The
critical path is the longest path of logically related activities through the
network which cannot slip without impacting the total project duration.
SCHOOL OF
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12 8/13 8/19 ARCHITECTURE, URBAN
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2 7/23 9/16 PLANNING AND
CONSTRUCTION
1.1.2.2 Editing Chapter 2 8 wks 7/23 9/16 7/23 9/16 ENGINEERING
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 8/20 9/16
Architecture
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14
Let’s look at calculating the critical path on the following page.
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
The Critical Path is calculated as follows:
Late Finish date (LF) - Early Finish date (EF)
• If the difference is Zero, then the activity is on the critical path.
• If the result is a number greater the zero, then the activity is not on the critical
SCHOOL OF
path and has float. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
To better understand critical path, look at the chart. Note a column was added
to calculate float and determine the critical path. From reviewing the chart,
what activities are on the critical path?
WBS Activity Duration ES EF LS LF Float

1.1 Start Development of Project Management Book 0 wks 1/1 1/1 1/1 1/1 0
1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks 1/1 2/25 1/1 2/25 0
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6 3/12 5/20 14
1.1.1.2.1 Writing Budget and Cost section for Chapter 2 9 wks 2/26 4/29 2/26 4/29 0
1.1.1.1.3 Writing Project Planning section for Chapter 1 9 wks 5/7 7/8 5/21 7/22 14
1.1.1.2.2 Writing Scheduling section for Chapter 2 5 wks 4/30 6/3 4/30 6/3 0
1.1.1.2.3 Writing Project Controls section for Chapter 2 7 wks 6/4 7/22 6/4 7/22 0
1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks 7/23 8/5 7/30 8/12 7
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12 8/13 8/19 7
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2 7/23 9/16 14
SCHOOL OF
1.1.2.2 Editing Chapter 2 8 wks 7/23 9/16 7/23 9/16 0 ARCHITECTURE, URBAN
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 8/20 9/16 7 PLANNING AND
1.1.3 Publishing Project Management Book 4 wks 9/17 10/14 9/17 10/14 0 CONSTRUCTION
ENGINEERING
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14 0
Architecture
Project Appraisal
All the activities with zero float are on the Critical Path!!!! But what exactly does
this mean? Take a look on the next page. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
The Critical Path tells management the activities that are critical or essential in
completing the project on time. It is also important for management to look at
activities with minor float because any delays in those activities could cause
them to be on the critical path.
WBS Activity Duration ES EF LS LF Float
1.1 Start Development of Project Management Book 0 wks 1/1 1/1 1/1 1/1 0
1.1.1.1.1 Writing Project Selection section for Chapter 1 8 wks 1/1 2/25 1/1 2/25 0
1.1.1.1.2 Writing Project Organization section for Chapter 1 10 wks 2/26 5/6 3/12 5/20 14
1.1.1.2.1 Writing Budget and Cost section for Chapter 2 9 wks 2/26 4/29 2/26 4/29 0
1.1.1.1.3 Writing Project Planning section for Chapter 1 9 wks 5/7 7/8 5/21 7/22 14
1.1.1.2.2 Writing Scheduling section for Chapter 2 5 wks 4/30 6/3 4/30 6/3 0
1.1.1.2.3 Writing Project Controls section for Chapter 2 7 wks 6/4 7/22 6/4 7/22 0
1.1.1.3.1. Writing Auditing section for Chapter 3 2 wks 7/23 8/5 7/30 8/12 7
1.1.1.3.2 Writing Administrative Closeout section for Chapter 3 1 wk 8/6 8/12 8/13 8/19 7
1.1.2.1 Editing Chapter 1 8 wks 7/9 9/2 7/23 9/16 14 SCHOOL OF
ARCHITECTURE, URBAN
1.1.2.2 Editing Chapter 2 8 wks 7/23 9/16 7/23 9/16 0 PLANNING AND
1.1.2.3 Editing Chapter 3 4 wks 8/13 9/9 8/20 9/16 7 CONSTRUCTION
1.1.3 ENGINEERING
Publishing Project Management Book 4 wks 9/17 10/14 9/17 10/14 0
1.1 Finish Development of the Project Management Book 0 wks 10/14 10/14 10/14 10/14 0 Master of Science in
Architecture
Lets look at the table above in a PERT chart format. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
Below is the PERT chart layout of the project. The boxes in red indicate those
activities on the critical path. The blue boxes are for all other activities.
Notice the information in the boxes, it shows the activity name, duration, early
start and finish, and late start and finish. See the legend below for details.
Writing
Writing Project
Project
Organization
Organization section
section Duration
for Chapter 1
Start Development Early Start 10wks
10 wks Early Finish
of Project
Management Book 2/26/2002 5/6/2002
2/26/2002 5/6/2002
0 days 3/12/2002 5/20/2002
3/12/2002 5/20/2002
1/1/2002 1/1/2002 Late Start Late Finish
1/1/2002 1/1/2002
W riting Project W riting Project W riting Project

Publishing Project
Selection section Organization section Planning section for Editing Chapter 1
Management Book
for Chapter 1 for Chapter 1 Chapter 1 8 wks SCHOOL OF
4 wks
8 wks 10 wks 9 wks 7/9/2002 9/2/2002 ARCHITECTURE, URBAN
9/17/2002 10/14/2002
1/1/2002 2/25/2002 2/26/2002 5/6/2002 5/7/2002 7/8/2002 7/23/2002 9/16/2002
9/17/2002 10/14/2002 PLANNING AND
1/1/2002 2/25/2002 3/12/2002 5/20/2002 5/21/2002 7/22/2002
CONSTRUCTION
ENGINEERING
W riting Master of Science in

W riting Budget and W riting Project Finish Development
W riting Scheduling W riting Auditing Administr ative
Cost section for Controls section for Editing Chapter 3 of the Project Architecture
section for Chapter 2 section for Chapter 3 Closeout section
Chapter 2 Chapter 2 4 wks Management Book
5 wks 2 wks for Chapter 3
9 wks 7 wks 8/13/2002 9/9/2002 0 days
4/30/2002 6/3/2002 7/23/2002 8/5/2002 1 wk Project Appraisal
2/26/2002 4/29/2002 6/4/2002 7/22/2002 8/20/2002 9/16/2002 10/14/2002 10/14/2002
4/30/2002 6/3/2002 7/30/2002 8/12/2002 8/6/2002 8/12/2002
2/26/2002 4/29/2002 6/4/2002 7/22/2002 10/14/2002 10/14/2002
8/13/2002 8/19/2002
Milan
Editing Chapter 2
8 wks 11th March 2016
7/23/2002 9/16/2002
7/23/2002 9/16/2002
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Duration
Now that we have covered the entire process with the BEST Management
project in detail, lets apply it to the ACME House Building project from Module
2. It reveals the following information:
Activity Duration ES EF LS LF Float
Start House Construction 0 days 1/15 1/15 1/15 1/15 0
Pour foundation 6 days 1/15 1/22 1/15 1/22 0
Install Patio 6 days 1/23 1/30 3/21 3/28 57
Pour stairway 2 days 1/31 2/1 3/29 4/1 59
Concrete Complete 0 days 2/1 2/1 4/1 4/1 59
Frame exterior walls 13 days 1/23 2/8 1/23 2/8 0
Frame interior walls 7 days 2/11 2/19 2/11 2/19 0
Project Duration: 55 Install roofing trusses 4 days 2/20 2/25 2/20 2/25 0
Framing Complete 0 days 2/25 2/25 2/26 2/26 1
days Install waterlines 7 days 2/20 2/28 2/25 3/5 5
Install gas lines 3 days 2/22 2/26 3/1 3/5 7
Install B/K fixtures 5 days 3/1 3/7 3/26 4/1 25
Plumbing Complete 0 days 3/7 3/7 4/1 4/1 25
Project Start:
SCHOOL OF
Install wiring 5 days 2/20 2/26 2/27 3/5 7 ARCHITECTURE, URBAN
Install outlets/switches 4 days 3/22 3/26 3/22 3/26 0 PLANNING AND
1/15 Install fixtures

Electrical Complete
4 days
0 days
3/27
4/1
4/1
4/1
3/27
4/1
4/1
4/1
0
0
CONSTRUCTION
ENGINEERING
Install drywall 7 days 3/6 3/14 3/6 3/14 0 Master of Science in

Painting 5 days 3/15 3/21 3/15 3/21 0 Architecture
Project Complete: Install Carpeting

Interior Complete
2 days
0 days
3/22
3/25
3/25
3/25
3/29
4/1
4/1
4/1
7
7 Project Appraisal
4/1 Install felt

Install shingles
4 days
2 days
2/26
3/4
3/1
3/5
2/26
3/4
3/1
3/5
0
0
Milan
Install vents 3 days 3/6 3/8 3/12 3/14 6 11th March 2016
Roofing Complete 0 days 3/8 3/8 3/15 3/15 7
House Complete 0 days 4/1 4/1 4/1 4/1 0
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Project Scheduling – Schedule Baseline
As mentioned early in the module, the earned value management system

schedule must:
• Include logical ties for all activities

• Include all key milestones and deliverables
• Reflect the agreed to project baseline
• Integrate with the cost baseline
At this point, we have examined the first two bullets; the next step in our process
SCHOOL OF
is to reflect the schedule baseline. Take a moment now to familiarize yourself ARCHITECTURE, URBAN
PLANNING AND
with this step on the next page. CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Schedule Baselining
Baseline is the original approved plan that consists of both schedule and cost.
The baseline is used as the foundation for measuring project performance. In
an Earned Value Management System (EVMS), the schedule and cost
baseline are essential.
The Schedule Baseline is the standard that all schedule performance will be
measured against. It should be approved by the project manager and other
appropriate individuals. Once the project manager approved the project start,
logic, relationships and project duration, the schedule is then “baselined” to
measure schedule performance.
SCHOOL OF
ARCHITECTURE, URBAN
The final step, integrating with the cost baseline, will be discussed in detail in the PLANNING AND
CONSTRUCTION
next module. For now, take a look at the types of scheduling formats on the ENGINEERING
next page. Master of Science in

Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Schedule Formats
In reporting and displaying your schedule, there are multiple formats that have
and can be used. We focus on three major formats:
Gantt or Bar Chart Milestone or Event Charts
SCHOOL OF
ARCHITECTURE, URBAN
Logic or Network Diagram PLANNING AND

CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Schedule Formats – Gantt or Bar Chart

Gantt or Bar chart shows the activity start and end dates as well as the expected
durations. It does not usually show dependencies between tasks. It is a weak
planning tool but is good for tracking and reporting progress to the project
team. Below is a copy of the Gantt chart for the ACME House Building
project.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Schedule Formats – Milestone or Event Charts

Milestone or Event Charts are a summary-level schedule which identifies the
major milestones on a project. It is easy to understand and good for reporting
to senior management, but it provides no progress information. Below is a
copy the Milestone chart for the ACME House Building project.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Schedule Formats – Logic or Network Diagram

The Logic or Network Diagram displays the logic relationships of the project
activities. It stresses the logic/interdependencies between activities and is
excellent for reviewing project logic. It is not a good reporting format, because
the time frame is not clear and can at times be confusing. Below is a partial
copy of the Gantt chart for the ACME House Building project.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review
Take some time now to review the major items:
• Planning involves making decisions with the objective of influencing the

future. Planning is the “thinking” phase.
• Scheduling is the development of planned dates for performing project

activities and meeting milestones. Scheduling is the “doing” phase.
• A clear five step process delineates how to develop a project schedule:

– Develop a list of project activities
– Sequence the list of project activities SCHOOL OF
ARCHITECTURE, URBAN
– Determine the relationship between each activities PLANNING AND

CONSTRUCTION
– Establish the duration for each activities ENGINEERING
– Determine project duration (start and completion dates) Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review
• The Critical Path tells you the activities that can not slip a day without
increasing the total duration of the project or moving the project completion
date. It is the longest path of logically related activities through the network
which cannot slip without impacting the total project duration, termed zero
float.
• The Schedule Baseline is what all schedule performance will be measured

against. It should be approved by the project manager and other
appropriate individuals.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Summary
At this point we have examined the basics for developing a project schedule
and schedule baseline. The Schedule Baseline is one of the two most
important items in an earned value management system (EVMS). In the
next module you will examine the other important item in an earned value
management system (EVMS): the cost baseline.
If you have a firm grasp of the concepts covered in this module, feel free to
progress to the next module. Otherwise, review this module to ensure you
have a solid understanding of the basics for developing a project schedule.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Module 4: Budgeting
• Welcome to Module 4. The objective of this module is to introduce Prepared by:
you to Budgeting Concepts and Definitions. Booz Allen
Hamilton
• The Topics that will be addressed in this Module include:
• Cost/Schedule Baselines
• WBS Levels: Control Accounts, Work Packages, Planning Packages
• Elements of an Earned Value Contract Baseline
SCHOOL OF
ARCHITECTURE, URBAN
• Proposed Cost and the Contract Budget Baseline PLANNING AND

CONSTRUCTION
ENGINEERING
• Control Account Manager Roles and Responsibilities Master of Science in

Architecture
Project Appraisal
• Review
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
The Budgeting Process

• In the previous module, we defined Planning as making decisions with Prepared by:
the following objectives: Booz Allen
Hamilton
• Define what will be performed (Statement of Work)

• Determine how the work will be structured and tracked (Work
Breakdown Structure)
• Assign Responsibility for elements of work (Organizational Breakdown
Structure)
• Schedule the authorized work in a manner which describes the
sequence of work and identifies significant task interdependencies SCHOOL OF
ARCHITECTURE, URBAN
required to meet the requirements of the program

PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
• Now let’s discuss Budgeting. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• The budgeting process establishes a means for developing and tracking Prepared by:
Booz Allen
the cost goals for all contractually authorized work. Hamilton
• One of the key criteria for establishing an earned value management

system is that all major components of a project must be integrated and
baselined. Major components of the earned value management system
include scope, schedule and cost. The cost and schedule performance
are measured against a baseline to help track the progress of the project.
• But what is a baseline, and how do you establish one? SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• Let’s review the steps required to establish a cost and schedule baseline ENGINEERING
on the next page. Master of Science in

Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Establish the Schedule Baseline

Prepared by:
Booz Allen
• Recall the Work Breakdown Structure from Module 2, which defines a Hamilton
project’s tasks, processes, responsible parties, etc. Establishing the WBS is
the first step in defining the project and in establishing the baseline.
Acme Project Work Breakdown Structure
ACME Project X
1.0
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Design Procurement Construction Project Mgmt CONSTRUCTION
1.1 1.2 1.3 1.4 ENGINEERING
Architecture
Prelim Design Title I Design Final Design
Project Appraisal
1.1.1 1.1.2 1.1.3
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Establish the Schedule Baseline

ACME Project X
1.0
Prepared by:
Booz Allen
Design Procurement Construction Project Mgmt Hamilton
1.1 1.2 1.3 1.4

1.1.1 1.1.2 1.1.3
Based on the Project Scope and available
resources, the work activities in the WBS are
scheduled to establish the Schedule Baseline.
This important step was covered in Module 3.
Schedule Baseline
Preliminary Design 1.1.1 Jan Feb Mar Apr May
1.1.1.1 Define Specifications & Req. SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
1.1.1.2 Develop Preliminary Design CONSTRUCTION
ENGINEERING
1.1.1.3 Review Preliminary Design Architecture
Project Appraisal
1.1.1.4 Incorporate Comments

Milan
11th March 2016
1.1.1.5 Preliminary Design Complete
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Establish the Cost Baseline

ACME Project X
1.0
Prepared by:
Booz Allen
1.1 1.2 1.3 1.4

Based on the Project Scope and available
1.1.1 1.1.2 1.1.3
resources, the project budget is allocated
across the scheduled activities and across
time. The time phased allocation of
resources, establishes the Cost Baseline.
Notice in the chart the time phased hours
Cost Baseline associated with each task.
Preliminary Design 1.1.1 Hours Jan Feb Mar Apr May
SCHOOL OF
ARCHITECTURE, URBAN
1.1.1.1 Define Specifications & Req. 1,500 1,000 PLANNING AND
CONSTRUCTION
ENGINEERING
1.1.1.2 Develop Preliminary Design 2,000 2,000
Architecture
1.1.1.3 Review Preliminary Design 500 500 Project Appraisal
1.1.1.4 Incorporate Comments 320 320 Milan

11th March 2016
1.1.1.5 Preliminary Design Complete 1,000 prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Integrated Scope, Schedule and Cost

ACME Project X
1.0
Prepared by:
Booz Allen
1.1 1.2 1.3 1.4

The allocation of resources across the schedule
1.1.1 1.1.2 1.1.3
for each element of the project’s scope is what
creates the project’s integrated baseline. The
scope, cost, and schedule must be fully
integrated to be able to perform EVM. As the
chart shows below , each task has an associated
schedule and time phased cost.
Preliminary Design 1.1.1 Hours Jan Feb Mar Apr May
SCHOOL OF
1.1.1.1 Define Specifications & Req. ARCHITECTURE, URBAN
1,500 1,000 PLANNING AND
CONSTRUCTION
1.1.1.2 Develop Preliminary Design ENGINEERING
2,000 2,000
Architecture
1.1.1.3 Review Preliminary Design
500 500 Project Appraisal
1.1.1.4 Incorporate Comments

320 320 Milan
11th March 2016
1.1.1.5 Preliminary Design Complete

1,000 prof. Barrese
Integrated Cost/Schedule Baseline prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Work Breakdown Structure Reporting Levels

• Now let’s discuss how the budgeting process and the cost/schedule Prepared by:
integration is accomplished in an earned value environment. Booz Allen
Hamilton
•
• The Work Breakdown Structure is the framework used to facilitate the
requirement for integrating these major components. The Work
Breakdown Structure is further broken down by Control Accounts,
Work Packages, and Planning Packages.
• Let’s discuss these three key elements in more detail, starting with
Control Accounts, on the next page. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Control Accounts
• A Control Account is an assigned WBS Level used to monitor the cost Prepared by:
and schedule performance of a significant element of the work. Booz Allen
Hamilton
Control Accounts are also referred to as Cost Accounts. These terms
are interchangeable, however, we will use the term Control Accounts.
• A Control Account is a major management control point for:
• Cost Summarization
• Variance Analysis and Reporting
• Responsibility Assignment
• Scope Description
• Corrective Action Planning SCHOOL OF
ARCHITECTURE, URBAN
• A Control Account Manager (CAM) is responsible for executing the

PLANNING AND
CONSTRUCTION
ENGINEERING
Statement of Work associated with their assigned Control Account(s). Master of Science in
• The illustration on the following page depicts the ACME House Architecture
Project Appraisal
Project WBS down to the Control Account Level.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Control Accounts
• For the ACME House project, it was determined that the performance
Prepared by:
measurements for the project will be taken at Level 3 (see graphic Booz Allen
below). The project manager and the stakeholders must determine the Hamilton
level at which the performance measurement will be required.
ACME Housing Corporation

Level 1 1
Level 2 House Building

Project
1.1 Control Account Level
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Level 3 Concrete
1.1.1
Framing
1.1.2
Plumbing
1.1.3
Electrical
1.1.4
Interior
1.1.5
Roofing
1.1.6
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Work Packages
• The detail that builds up to the Control Account Level is contained in
Prepared by:
Work Packages and Planning Packages. Take a moment now to review Booz Allen
Work Packages. Hamilton
• Work Packages (WP) contain a discrete segment of work below the

Control Account level that is defined by
– a description or brief work statement
– starting and ending dates
– completion milestone
– work-in-process measure
SCHOOL OF
– time-phased budget expressed in direct labor (hours and/or ARCHITECTURE, URBAN

PLANNING AND
dollars), material, other direct costs and subcontract dollars CONSTRUCTION

ENGINEERING
• It is important that the duration of a Work Package be a relatively short Architecture
span of time (normally, but not limited to, six months or less). Project Appraisal
Milan
11th March 2016
• Now let’s take a look at Planning Packages on the next page.

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Planning Packages
• Planning Packages reflect a future segment of work within a Control
Prepared by:
Account that is not yet broken down into detailed work packages. A Booz Allen
planning package has a firm budget, estimated start and complete dates, Hamilton
and Statement of Work.
• As work becomes more clearly defined, Planning Packages are converted

into Work Packages, with the following constraints. These constraints
ensure the initial budget is used appropriately:
– All planning packages are converted into work packages as SCHOOL OF
requirements are defined, and at a minimum, are scheduled to start at ARCHITECTURE, URBAN
PLANNING AND
least one month beyond the current reporting period CONSTRUCTION

ENGINEERING
– Conversion of planning packages to work packages is reviewed by the Master of Science in

Architecture
Team Leader and documented on a Revision Request (RR) Project Appraisal
– Any conversion involving a change to the schedule or budget of the Milan

11th March 2016
control account must be accompanied by an RR

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Work Packages/Planning Packages

• Now that you are familiar with work packages and planning packages,
Prepared by:
take some time to examine how they appear in the WBS. For the Booz Allen
ACME House project, the Work Packages and Planning Packages will Hamilton
be at Level 4 of the WBS. This is the level at which detailed budgets
will be developed, statused, and then summarized at the Control
Account level for reporting. ACME Housing Corporation
1
Level 1
House Building
Level 2 Project
1.1
Control Account Level
Concrete Framing Plumbing Electrical Interior Roofing
Level 3 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 1.1.6
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Frame Exterior Install Water CONSTRUCTION
Pour Foundation Install Wiring Install Drywall Install Felt
Walls Lines
1.1.1.1 1.1.4.1 1.1.5.1 1.1.6.1 ENGINEERING
1.1.2.1 1.1.3.1
Level 4 Frame Interior Install Outlets/

Architecture
Install Patio Install Gas Lines Install Carpets Install Shingles
Walls Switches
1.1.1.2 1.1.3.2 1.1.5.2 1.1.6.2
1.1.2.2 1.1.4.2 Project Appraisal
Install Roofing Install B/K Milan

Stairway Install Fixtures Install Painting Install Vents
Trusses Fixtures
1.1.1.3 1.1.4.3 1.1.5.3 1.1.6.3 11th March 2016
1.1.2.3 1.1.3.3
Work Package / Planning Package Level prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review
• At this point, you should have a comfortable understanding of the
following: Prepared by:
Booz Allen
Hamilton
• The budgeting process establishes a means for documenting and
tracking the cost goals for all contractually authorized work.
• The baseline is what cost and schedule performance is measured

against.
• A Control Account is an assigned WBS Level used to monitor the cost

and schedule performance of a significant element of the work.
• Detail below the Control Account Level is contained in Work Packages

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
and Planning Packages. CONSTRUCTION
ENGINEERING
• If you are unsure about any of these concepts, please go back and review, Architecture
otherwise let’s move on to discuss the key elements used to develop, Project Appraisal
baseline, and manage an earned value project or contract. Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Elements of a Contract Baseline

• The contract baseline is comprised of eight key elements:
Prepared by:
Booz Allen
• Total Contract Price • Performance Measurement Baseline (PMB)
Hamilton
• Total Contract Cost • Management Reserve (MR)

• Profit / Fee • Distributed Budgets
• Contract Budget Base (CBB) • Undistributed Budgets (UB)
The relationship between these eight elements is depicted below. Each

element is defined on the following pages and is illustrated using the ACME
House Building Project.
Total Contract Price
SCHOOL OF
ARCHITECTURE, URBAN
Total Contract Cost Profit/Fee PLANNING AND
CONSTRUCTION
Contract Budget Base (CBB) ENGINEERING
Performance Measurement Baseline (PMB) Management Reserve (MR) Architecture
Project Appraisal
Distributed Budgets Undistributed Budget (UB)
Control Accounts Milan

11th March 2016
Work Packages
prof. Barrese
Planning Packages
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Prepared by:
• Total Contract Price is the total negotiated contract cost plus profit/fee. Booz Allen
Hamilton
Total Contract Cost Profit/Fee
Contract Budget Base (CBB)
Performance Measurement Baseline (PMB) Management Reserve (MR)
SCHOOL OF
Distributed Budgets Undistributed Budget (UB) ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Control Accounts ENGINEERING
Work Packages Architecture
Project Appraisal
Planning Packages
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Total Contract Cost

Prepared by:
• Total Contract Cost is the total negotiated contract cost without profit/fee.
Booz Allen
Hamilton
SCHOOL OF
Distributed Budgets Undistributed Budget (UB) ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Control Accounts ENGINEERING
Work Packages Architecture
Project Appraisal
Planning Packages
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Profit/Fee
Prepared by:
Profit/Fee is the estimated profit or fee realized by executing the contract or Booz Allen
Hamilton
project. Profit/Fee is not part of the Contract Budget Base (CBB), as
defined on the next page.

SCHOOL OF
ARCHITECTURE, URBAN
Distributed Budgets Undistributed Budget (UB) PLANNING AND
CONSTRUCTION
ENGINEERING
Control Accounts
Architecture
Work Packages
Project Appraisal
Planning Packages
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Contract Budget Base

• The Contract Budget Base (CBB) represents the total budget for all Prepared by:
authorized contractual work, minus Profit/Fee. The CBB can only be Booz Allen
Hamilton
modified when duly authorized changes to the contract are received.
CBB is always calculated as follows:
Current Estimated cost of additional

negotiated + authorized unpriced work = CBB
contract cost (yet to be negotiated)
Total Contract Cost Profit/Fee SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
Contract Budget Base (CBB) CONSTRUCTION
ENGINEERING
Performance Measurement Baseline (PMB) Management Reserve (MR) Master of Science in

Architecture
Distributed Budgets Undistributed Budget (UB) Project Appraisal

11th March 2016
Work Packages
prof. Barrese
Planning Packages prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Performance Measurement Baseline (PMB)

• The Performance Measurement Baseline (PMB) is the time-phased budget
Prepared by:
plan against which contract performance is measured. It includes all allocated
Booz Allen
or Distributed Budgets plus the Undistributed Budget. PMB does not includeHamilton
Management Reserve.
• PMB = Sum of Control Accounts

• PMB = Distributed Budgets + Undistributed Budgets
• PMB = Contract Base Budget – Management Reserve

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING

Architecture

11th March 2016
Work Packages
prof. Barrese
KEY FACTS ABOUT
THE COURSE
Management Reserve
• Once the CBB is established, the Program Manager establishes a Management
Reserve (MR) prior to distributing budgets to the performing organizations.Prepared by:
Booz Allen
The purpose of MR is to have a budget for the Program Manager to allocateHamilton
for unforeseen problems.
• MR is not part of the Performance Measurement Baseline because it is held at

the program level only. Transactions into and out of MR are approved by the
Program Manager. The documentation supporting all MR transactions is
maintained and reported by Program Control.
• Total Contract Cost Profit/Fee
SCHOOL OF
Contract Budget Base (CBB) ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Performance Measurement Baseline (PMB) Management Reserve (MR) ENGINEERING
Distributed Budgets Undistributed Budget (UB) Architecture
Project Appraisal
Control Accounts
Milan
Work Packages 11th March 2016
Planning Packages
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Distributed Budgets
• Distributed Budgets reflect the contractually authorized efforts allocated to
Prepared by:
the WBS elements. Booz Allen
Hamilton
• Distributed Budgets include budgets assigned to control accounts during

baseline establishment as well as work packages and planning packages.
• Distributed Budgets = Budgets assigned to Control Accounts

SCHOOL OF
Contract Budget Base (CBB) ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Performance Measurement Baseline (PMB) Management Reserve (MR) ENGINEERING
Distributed Budgets Undistributed Budget (UB) Architecture
Project Appraisal
Control Accounts
Milan
Work Packages 11th March 2016
Planning Packages
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Undistributed Budget
• Undistributed budget (UB) applies to contractually authorized efforts not Prepared
yet by:
allocated to WBS elements. The UB consists of a budget for authorized Booz Allen
changes for which there has not been adequate time to plan the change at Hamilton
the
control account level. Undistributed budget is an element of the
Performance Measurement Baseline, but it is not time-phased.
• Every effort should be taken to distribute budgets in a timely manner and to
minimize undistributed budgets. Undistributed budgets are controlled by the
Program Manager, and all changes must be documented using an
Undistributed Budget Log. Total Contract Price

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Contract Budget Base (CBB) CONSTRUCTION
ENGINEERING

Architecture

11th March 2016
Work Packages
prof. Barrese
KEY FACTS ABOUT
Proposed Costs and the Contract Budget Base THE COURSE
Relationship
• To better understand the key elements of the Contract Budget Base, lets
walk through the Proposal Development, Negotiations, and Contract Prepared by:
Booz Allen
Award Phases. To begin, first ensure you understand the relationship Hamilton
between the proposed cost and the established Contract Budget Base.
• Program Funding, the negotiated and/or authorized amount, is based on

the estimates developed during the proposal preparation phase. These
estimates can be modified during the contract negotiation phase. The
Program Funding amount is used to establish the Contract Budget
Baseline (CBB).
• A proposed cost estimate and a Contract Budget Base are developed in SCHOOL OF
ARCHITECTURE, URBAN
the same manner. The resources required to complete each defined PLANNING AND
CONSTRUCTION
element of work are developed in terms of hours. These hours are ENGINEERING
converted to Labor Dollars by applying Direct Labor Rates and Indirect Master of Science in
Architecture
Burdens (Direct and Indirect Costs are discussed on the following page). Project Appraisal
Costs of purchased materials and subcontracts (and applicable Milan

acquisition overhead rates) as well as Other Direct Costs (ODC) are also 11th March 2016
generated and included in the proposed amount. prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Direct and Indirect Cost Accounting

As mentioned on the previous page, costs include direct and indirect Prepared by:
charges. Booz Allen
Hamilton
Direct Costs – Costs applicable to, and identified specifically with, the
program contract Statement of Work.
Examples of Direct Costs: Labor, Travel, Material, Subcontractor
Charges
Indirect Costs – Charges that cannot be consistently or economically SCHOOL OF

ARCHITECTURE, URBAN
identified against a specific contract. These are typically calculated by PLANNING AND
CONSTRUCTION
applying rates and factors to the cost base. ENGINEERING
Example of Indirect Costs: Fringe Benefits, Overhead, Material Handling, Architecture
General & Administrative, Cost of Money. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Sample Indirect Rate Application

Here is an example of indirect rates applied to prime dollars or direct
Prepared by:
costs. Overhead costs are applied to prime dollars to derive the Total Booz Allen
Cost. The application of indirect rates and factors is based on a Hamilton
company’s accounting policies and procedures.

Design Engineering Task
Design Engineer Hours 1,000

Design Engineer Rate/Hour $ 40.00 Direct Costs
Prime Dollars $ 40,000.00
Overhead Rate 100%
Overhead Dollars $ 40,000.00
Total Burdened Dollars $ 80,000.00
G&A Rate 10% SCHOOL OF
Indirect Cost G&A Dollars $ 8,000.00 ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
Sub-Total $ 88,000.00 ENGINEERING
COM Rate 0.05%
COM Dollars $ 44.00 Architecture
Total Cost $ 88,044.00 Project Appraisal
Fee Rate 10%

Milan
Fee Dollars $ 8,800.00 11th March 2016
Total Price $ 96,844.00

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
ACME House Cost Proposal Development

• By now you should be familiar with the difference in types of costs, Prepared by:
but how exactly do you go about determining costs in a project? Take Booz Allen
Hamilton
some time to see how to develop a proposed cost using the ACME
House Building project.
• So far in the ACME House Building project, we have:

– Defined what will be performed (Statement of Work)
– Determined how will it be tracked (Work Breakdown Structure)
• Now we have to:

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
– Determine the Proposed Total Cost and Price

CONSTRUCTION
ENGINEERING
– Assign Labor, Material, ODC, and Subcontractor Resources to the Master of Science in
Architecture
Work Elements. Project Appraisal
– Apply Burdens and Fee to derive the Total Cost and Price. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• To start, we need our ACME House Work Breakdown Structure as shown
Prepared by:
here. Booz Allen
1
Hamilton
House Building
Project
1.1
Concrete Framing Plumbing Electrical Interior Roofing

1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 1.1.6
Frame Exterior Install Water

Pour Foundation Install Wiring Install Drywall Install Felt
Walls Lines
1.1.1.1 1.1.4.1 1.1.5.1 1.1.6.1
1.1.2.1 1.1.3.1
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Frame Interior Install Outlets/
Install Patio Install Gas Lines Install Carpets Install Shingles CONSTRUCTION
Walls Switches
1.1.1.2 1.1.3.2 1.1.5.2 1.1.6.2 ENGINEERING
1.1.2.2 1.1.4.2
Architecture
Install Roofing Install B/K
Stairway Install Fixtures Install Painting Install Vents
Trusses Fixtures
1.1.1.3 1.1.4.3 1.1.5.3 1.1.6.3 Project Appraisal
1.1.2.3 1.1.3.3
Milan
11th March 2016
• This insures that we develop cost for only approved project scope. prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• Next, we must develop the Proposal Price. Below is an example of Prepared by:
how we developed the Price for the WBS 1.1.1.2 to Install Patio. Booz Allen
Hamilton
• We assigned resources to this task, and based on the Labor Hours,

Material, and ODC Dollars, burdened by all the indirect rates, a Total
Price of $11,574 has been estimated to complete this task.
• This process is used to price each WBS element. On the next page is
the completed price for the ACME House.
WBS 1.1.1.2 Install Patio SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
RES CODE Hours Rate/Hour Prime Overhead G&A COM Fee Total Price CONSTRUCTION
Carpenter 40 $ 25.00 $ 1,000 $ 1,666 $ 422 $ 2 $ 618 $ 3,707 ENGINEERING
Drywall 40 $ 15.00 $ 600 $ 1,000 $ 253 $ 1 $ 371 $ 2,224
ELEC 4 $ 40.00 $ 160 $ 267 $ 67 $ 0 $ 99 $ 593 Master of Science in
Architecture
ENGE 20 $ 30.36 $ 607 $ 825 $ 226 $ 1 $ 332 $ 1,991
Material 0 $ 2,000 $ 109 $ - $ 1 $ 422 $ 2,531 Project Appraisal
Other 0 $ 500 $ 27 $ - $ 0 $ - $ 527
Total 104 $ 4,867 $ 3,894 $ 968 $ 5 $ 1,840 $ 11,574
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• The proposed resources for the entire project have been priced as
described on the previous page. The following chart reflects the Total Prepared by:
Booz Allen
Price for each WBS of the ACME Housing Building project. Hamilton

1
$231,894
Total Proposed Price = $231,894
House Building
Project 1.1
$231,894
Concrete 1.1.1 Framing 1.1.2 Plumbing 1.1.3 Electrical 1.1.4 Interior 1.1.5 Roofing 1.1.6
$59,094 $57,905 $25,018 $61,826 $20,447 $7,605
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Pour Foundation Frame Exterior Install Water Install Wiring Install Drywall
Install Felt 1.1.6.1 CONSTRUCTION
1.1.1.1 Walls 1.1.2.1 Lines 1.1.3.1 1.1.4.1 1.1.5.1
$3,259 ENGINEERING
$28,452 $22,026 $8,257 $24,642 $9,312
Install Patio Frame Interior Install Gas Lines Install Outlets/ Install Carpets Install Shingles Architecture
1.1.1.2 Walls 1.1.2.2 1.1.3.2 Switches 1.1.4.2 1.1.5.2 1.1.6.2
$11,574 $14,699 $8,339 $12,353 $2,500 $3,259 Project Appraisal
Install Roofing Install B/K Install Fixtures Install Painting Install Vents Milan
Stairway 1.1.1.3
Trusses 1.1.2.3 Fixtures 1.1.3.3 1.1.4.3 1.1.5.3 1.1.6.3 11th March 2016
$19,067
$21,180 $8,421 $24,831 $8,635 $1,086
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
ACME House Cost Proposal Negotiations

Now let’s review the proposed price and complete the negotiations.
Prepared by:
The proposed price is $231,894; however, the buyer of the ACME house can Booz Allen
Hamilton
only afford to pay $220,000. The ACME house builder has agreed to build
the ACME house for $219,999, but some revisions had to be made to the
plans to utilize less expensive materials.
The following summary reflects the negotiated cost and price to build the
ACME House.
Negotiated ACME House Cost and Price

SCHOOL OF
Total Cost Fee Total Price ARCHITECTURE, URBAN

PLANNING AND
$183,852 $36,147 $219,999 CONSTRUCTION

ENGINEERING
Architecture
Project Appraisal
On the next page, let’s look at the Total Price by WBS.

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
ACME House Cost Proposal Negotiations

The following summary reflects the negotiated price by WBS to build the Prepared by:
ACME House. Booz Allen
Hamilton
1
$219,999
Total Negotiated Price = $219,999

House Building
Project 1.1
$219,999
$47,200 $57,905 $25,018 $61,826 $20,447 $7,605
SCHOOL OF
ARCHITECTURE, URBAN
Pour Foundation Frame Exterior Install Water Install Wiring Install Drywall PLANNING AND
Install Felt 1.1.6.1 CONSTRUCTION
1.1.1.1 Walls 1.1.2.1 Lines 1.1.3.1 1.1.4.1 1.1.5.1
$3,259 ENGINEERING
$20,523 $22,026 $8,257 $24,642 $9,312
Architecture
Install Patio Frame Interior Install Gas Lines Install Outlets/ Install Carpets Install Shingles
1.1.1.2 Walls 1.1.2.2 1.1.3.2 Switches 1.1.4.2 1.1.5.2 1.1.6.2
Project Appraisal
$10,781 $14,699 $8,339 $12,353 $2,500 $3,259
Milan
Install Roofing Install B/K Install Fixtures Install Painting Install Vents 11th March 2016
Stairway 1.1.1.3
Trusses 1.1.2.3 Fixtures 1.1.3.3 1.1.4.3 1.1.5.3 1.1.6.3
$15,895
$21,180 $8,421 $24,831 $8,635 $1,086
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Now that we have a negotiated contract, we can establish the Contract Budget
Prepared by:
Base. Booz Allen
Hamilton
The Awarded Amount to the Builder is $219,999. This includes Profit/Fee.
The Negotiated Total Cost, without Profit/Fee, for the ACME House equals
$183,852. This will be the basis for developing the Contract Budget
Baseline (CBB). Again, remember that this amount is exclusive of Fee.

$219,999
Total Contract Cost Profit/Fee SCHOOL OF

$183,852 $36,147 ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
$183,852
Architecture
Project Appraisal
Milan
Control Accounts 11th March 2016
Work Packages
prof. Barrese
KEY FACTS ABOUT
THE COURSE

• After the Contract Budget Base has been established, the Management Prepared by:
Reserve is established by the Program Manager. Booz Allen
Hamilton
• In the case of the ACME House, the Program Manager has decided to
establish a Management Reserve amount equal to 10% of the Contract
Budget Base. This equates to $18,385. The Performance Measurement
Baseline, which equals the CBB – MR, will be established at $165,467.
• All of the PMB will be distributed, therefore Distributed Budgets will equal
$165,467, and Undistributed Budget will remain zero.
$219,999
SCHOOL OF
Total Contract Cost Profit/Fee ARCHITECTURE, URBAN
$183,852 $36,147 PLANNING AND
CONSTRUCTION
$183,852
Architecture
$165,467 $18,385
Project Appraisal

$165,467 $0
Milan
11th March 2016
Control Accounts
Work Packages prof. Barrese

prof. Pandolfi
Planning Packages
KEY FACTS ABOUT
THE COURSE

• Now that the Management Reserve has been established by the Program
Prepared by:
Manager, target budgets are developed and distributed to the Control Booz Allen
Account Managers. Hamilton
• Establishing the target budgets will often be accomplished through a joint

effort by the Program Manager, Team Leaders, and the Control Account
Managers.

$219,999

$183,852 $36,147 SCHOOL OF
ARCHITECTURE, URBAN
Contract Budget Base (CBB) PLANNING AND
$183,852 CONSTRUCTION
ENGINEERING

$165,467 $18,385
Architecture

$165,467 $0

11th March 2016
Work Packages
Planning Packages prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• In developing target budgets, applicable proposal information is relied upon
heavily. The proposal information is modified to reflect negotiated changesPrepared by:
Booz Allen
and to accommodate establishment of MR. Hamilton
• For example, remember the ACME House Proposal? Control Account 1.1.1
Concrete, had a proposed Total Price of $59,094, however, based on final
contract negotiations, the negotiated price was $47,200. The negotiated cost,
without Profit Fee was $39,424.
• The following table summarizes the proposed vs. negotiated price for the
Concrete effort. Remember, in establishing target budgets, Profit/Fee is not
included.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Control Account 1.1.1 Concrete CONSTRUCTION
ENGINEERING
Total Dollars Profit/Fee Total Price Architecture
Proposed $49,337 $9,757 $59,094 Project Appraisal
Milan
Negotiated $39,424 $7,776 $47,200 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• The Program Manager has decided to establish a Management Reserve (MR)
amount equal to 10% of the negotiated dollars. Once again, remember in Prepared by:
Booz Allen
establishing target budgets Profit/Fee and Management Reserve are not Hamilton
included.
• The target budget released to the Control Account Manager for 1.1.1
Concrete is $35,482 ($39,424 – $3,942 = $35,482).
Control Account 1.1.1 Concrete
Total Dollars SCHOOL OF

ARCHITECTURE, URBAN
Negotiated $39,424 PLANNING AND

CONSTRUCTION
ENGINEERING
MR (10%) -$3,942 Architecture
Project Appraisal
Target Budget $35,482

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• When detailed planning reveals the target budget established for the controlPrepared by:
account is unrealistic (too high or low), the CAM, Team Leader and Program Booz Allen
Hamilton
Manager participate jointly to determine appropriate adjustments. In some
cases, this may require the use of MR.
• In the case of the Concrete Control Account, the Control Account Manager
has accepted the budget of $35,482.
• Once the budgets have been allocated to the Control Accounts, the Control
Account budgets are further subdivided into work packages and planning SCHOOL OF
ARCHITECTURE, URBAN
packages.
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• Here’s the distributed budget for the entire ACME WBS. Remember, this
does not include Profit/Fee, or Management Reserve. Prepared by:
Booz Allen
Hamilton
1
$165,467
Distributed Budget = $165,467

Control Accounts House Building
Project 1.1
$165,467
$35,482 $43,432 $18,765 $46,373 $15,711 $5,704
SCHOOL OF
Pour Foundation Frame Exterior Install Water Install Wiring Install Drywall
Install Felt 1.1.6.1 ARCHITECTURE, URBAN
1.1.1.1 Walls 1.1.2.1 Lines 1.1.3.1 1.1.4.1 1.1.5.1
$2,445 PLANNING AND
$15,394 $16,521 $6,194 $18,483 $6,984
CONSTRUCTION
ENGINEERING
1.1.1.2 Walls 1.1.2.2 1.1.3.2 Switches 1.1.4.2 1.1.5.2 1.1.6.2 Master of Science in
$8,166 $11,025 $6,255 $9,265 $2,250 $2,445 Architecture
Project Appraisal
Install Roofing Install B/K Install Fixtures Install Painting Install Vents
Stairway 1.1.1.3
$11,922
$15,887 $6,317 $18,625 $6,477 $815 Milan
11th March 2016
Work Packages prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• Time phased budgets are prepared for each work package and planning Prepared by:
Booz Allen
package. Each work package and planning package contains a budget divided Hamilton
into time increments (typically monthly) by elements of cost, such as direct
labor, material, subcontract, and other direct cost (ODC).
•
• During the phasing process, Management ensures that requirements will be
met, work sequences are logical, and resources are available to execute the
plan.
• The development of detail planning for the control account and ultimate
approval of the budget, schedule, and associated Work Authorization
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Document (WAD) is accomplished through an iterative process. CONSTRUCTION
ENGINEERING
Architecture
• A Work Authorization Document (WAD) authorizes and documents the Project Appraisal
work scope, schedule and budget to organizations supporting the project. No

work is to proceed without a proper WAD. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
The Budget Process

• The Control Account Manager (CAM) uses work packages and planning Prepared by:
Booz Allen
packages to divide the control account into specific manageable and Hamilton
measurable units of work for the purpose of developing plans and
determining progress.
• Each work package and planning package is sequenced in a manner that

provides logical support for the program schedule. The CAM assigns each
work and/or planning package a budget value in hours and/or dollars.
• The sum of the work packages and planning package budgets are equal to the
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
total budget assigned to the CAM on the work authorization form. The total
CONSTRUCTION
ENGINEERING
budget for the control account is time-phased in hours and dollars. Master of Science in
Architecture
• Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Baseline Documentation
• Summaries of schedules and budgets at the work package level are integrated
Prepared by:
using a Control Account Plan (CAP). A CAP is a low level detail plan Booz Allen
prepared by the CAM showing time phased planning of tasks and their Hamilton
associated budget for a Control Account. The CAP also provides brief work
package and milestone descriptions that enable the CAM to clarify and
differentiate the unique content of each work package.
•
• The CAM and Program Control develop the cost and schedule database by
using the control account planning documentation and other data. A series
of checks and balances are performed to ensure the data is consistent. Upon
completion of the baseline development, reports displaying the planning data
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
as it appears in the system are reviewed and verified for accuracy. CONSTRUCTION
ENGINEERING
• Master of Science in
Architecture
• The baselining process is complete when all Work Authorization Document Project Appraisal
(WADs) have been issued and accepted, and all CAPS have been developed Milan
and equal the WAD budget amounts.

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Schedule and Cost Baseline

• Below is the time-phased budget for the ACME House Building Project.
Prepared by:
This profile represents the cost and schedule baseline in Total Dollars. Booz Allen
Hamilton
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
Total $165,467 $38,269 $73,412 $49,130 $4,656

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review of Module 4: Budgeting

• Many new terms and concepts were presented in this module. Let’s
Prepared by:
summarize what was covered. Booz Allen
• The budgeting process establishes a means for developing and tracking theHamilton
cost goals for all contractually authorized work.
• One of the key criteria for establishing an earned value management system is
that the scope, schedule and cost must be integrated and baselined. The
baseline is what cost and schedule performance is measured against
The Work Breakdown Structure is the
framework used to facilitate the ACME Housing Corporation
1
$165,467
requirement of integrating scope,

schedule, and cost. House Building
Project 1.1
$165,467 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
$35,482 $43,432 $18,765 $46,373 $15,711 $5,704 ENGINEERING
Pour Foundation Frame Exterior Install Water Install Wiring Install Drywall Architecture
Install Felt 1.1.6.1
1.1.1.1 Walls 1.1.2.1 Lines 1.1.3.1 1.1.4.1 1.1.5.1
$2,445
$15,394 $16,521 $6,194 $18,483 $6,984
Project Appraisal
1.1.1.2 Walls 1.1.2.2 1.1.3.2 Switches 1.1.4.2 1.1.5.2 1.1.6.2
$8,166 $11,025 $6,255 $9,265 $2,250 $2,445 Milan
11th March 2016
Install Roofing Install B/K Install Fixtures Install Painting Install Vents
Stairway 1.1.1.3
$11,922
$15,887 $6,317 $18,625 $6,477 $815
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• A Control Account is an assigned WBS Level used to monitor the cost and
Prepared by:
schedule performance of a significant element of the work. Booz Allen
Hamilton
• Work Packages (WP) contain a discrete segment of work below the Control
Account level and provide detailed planning for accomplishing the work
within a Control Account.
Level 1 1
Planning Packages
House Building
include efforts that will Level 2 Project

1.1
Control Account Level
eventually be identified
as separate work Level 3 Concrete
1.1.1
Framing
1.1.2
Plumbing
1.1.3
Electrical
1.1.4
Interior
1.1.5
Roofing
1.1.6
SCHOOL OF
ARCHITECTURE, URBAN
packages within the Pour Foundation
Frame Exterior Install Water
Install Wiring Install Drywall Install Felt
PLANNING AND
control account. They Level 4

Walls Lines
1.1.1.1 1.1.4.1 1.1.5.1 1.1.6.1 CONSTRUCTION
1.1.2.1 1.1.3.1
ENGINEERING
represent far term Install Patio

1.1.1.2
Frame Interior
Walls
1.1.2.2
Install Gas Lines
1.1.3.2
Install Outlets/
Switches
1.1.4.2
Install Carpets
1.1.5.2
Install Shingles
1.1.6.2 Masterof Science in
Architecture
efforts that cannot be Stairway
Install Roofing
Trusses
Install B/K
Fixtures
Install Fixtures Install Painting Install VentsProject Appraisal
1.1.1.3 1.1.4.3 1.1.5.3 1.1.6.3
defined in detail at the 1.1.2.3 1.1.3.3
start of the control Work Package / Planning Package Level

Milan
11th March 2016
account.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• The major elements of an earned value contract consist of:
Prepared by:
Booz Allen
Hamilton
• Contract Budget Base (CBB): The total
• budget, exclusive of fee, for all Total Contract Price
• authorized work Total Contract Cost Profit/Fee
• Performance MeasurementDistributed Budgets Undistributed Budget (UB)
• Baseline (PMB): The time- Control Accounts

• phased sum of all the Work Packages
• allocated budgets Planning Packages
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
• Management Reserve: The amount of the contract budget withheld by Master of Science in
Architecture
Management Project Appraisal
Milan
11th March 2016
• Undistributed Budget: Contractually authorized funds not yet allocated to

WBS elements. prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• At this point we have examined the basics of planning, scheduling, and Prepared by:
Booz Allen
budgeting to establish the integrated baseline. These items lay the Hamilton
groundwork for maintaining an Earned Value Management System (EVMS).
The next module takes us into the details of Earned Value.
• If you have a firm grasp of the concepts covered in these first four modules,
feel free to progress to the next module. Otherwise, review the modules to
ensure you have a solid understanding of the basics.
SCHOOL OF
• This concludes Module 4. ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Module 5: EVMS Concepts and Methods

Welcome to Module 5. The objective of this module is to introduce you to Basic
Earned Value concepts and methods.
• Earned Valve Management System (EVMS) Criteria
• The definitions and illustrations of the basic EVMS terminology
• The definition and illustrations of the EV methods SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

In the previous four modules, we discussed the framework needed to perform
Earned Value and develop an Earned Value Management System (EVMS).

properly implementing an earned value management system (EVMS)
• In Module 2 we discussed the development of the work breakdown structure

(WBS), organizational breakdown structure (OBS) and the integration of WBS
and OBS in creating the responsibility assignment matrix (RAM)
• In Module 3 we discussed the development of the project schedule and the

schedule baseline SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• In Module 4 we discussed the development of the project budget and the cost
ENGINEERING
baseline Architecture
Project Appraisal
Now lets discuss the basic Earned Value concepts and methods. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Criteria
Before we start discussing the Earned Value concepts and methods, let’s look at
an overview of the criteria needed for EVMS. There are numerous EVMS
guidelines that have been developed in both the government and commercial
industry.
On the next page, we will look at the

Industry Standard Earned Value Management Department of
Department of
Defense
System guideline published in DoD 5000.2-R. Department of
Defense
5000.2-R
These guideline comes from the ANSI/EIA Defense
5000.2-R
5000.2-R
standard 748-98.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Criteria
The Industry Standard Earned Value Management System guide provides a

uniform set of 32 criteria for developing an EVMS. It is compliant with the
ANSI/EIA Standard 748-98 discussed in Module 1.
The criteria represents the requirements against

which the validity of a contractor’s Earned Value Department of
Department of
Defense
Management System will be judged. The criteria Department of
Defense
5000.2-R
provides contractors the flexibility to develop and Defense
5000.2-R
implement effective management systems tailored 5000.2-R
SCHOOL OF
to meet their respective needs, while still ensuring ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
that fundamental Earned Value Management ENGINEERING
concepts are provided for. Master of Science in

Architecture
Project Appraisal
Let’s review these criteria on the next page. Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Criteria
The criteria are divided into five categories:
Industry Standard
• Organization Earned Valueof
Department
• Planning and Budgeting Department Standard
Industry
Management
Defense of
Earned
Defense Valueof
Department
• Accounting System
5000.2-R
Department of
Management
5000.2-R
Defense
• Analysis and Management Reporting Defense
System
5000.2-R
5000.2-R
• Revisions and Data Maintenance
SCHOOL OF
On the followings pages we provide a summary level review of the criteria. As ARCHITECTURE, URBAN
PLANNING AND
mentioned earlier there are 32 criteria but for the purpose of a summary CONSTRUCTION
ENGINEERING
review, the criteria were combined. For a complete list of the criteria and the
guideline go to the frequently asked questions (FAQ) section or reference Architecture
section of this web site. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Criteria - Organization

The first category is Organization. Within Industry Standard Earned Value
Management System
Organization the criteria require the following:
• Organization
• Planning & Budgeting
• Define the Work Breakdown Structure (WBS) • Accounting
• Analysis & Management Reporting
• Revisions & Data Maintenance
• Define the Organizational Breakdown Structure (OBS)
• Establish the work authorization and cost accumulation processes
• Establish Cost and Schedule Integration Process SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
• Identify Indirect/Overhead Cost Structure Master of Science in

Architecture
Project Appraisal
• Create the Responsibility Assignment Matrix (RAM) Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Criteria – Planning and Budgeting

The second category is Planning and Budgeting. Industry Standard Earned Value
Management System
Within Planning and Budgeting the criteria require
• Organization
the following: • Planning & Budgeting
• Accounting
• Create the Integrated Master Schedule • Revisions & Data Maintenance
• Identify Milestones, Key Events, Technical Performance Measures
• Establish and Maintain a Time-Phased Budget Baseline

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
• Identify Management Reserves and Undistributed Budget CONSTRUCTION

ENGINEERING
Architecture
• Ensure that the Contract Budget Base (CBB) is reconciled with the Total Project Appraisal
Allocated Budget (TAB)

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Criteria - Accounting

The third category is Accounting. Within Accounting Industry Standard Earned Value
Management System
the criteria require the following:
• Organization
• Accounting
• Record direct and indirect costs in accordance • Analysis & Management Reporting
with company disclosure statement
• Provide summary and detail visibility of costs
• Establish process for reporting Material, Other Direct Costs, and Subcontractor SCHOOL OF
Costs ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
ENGINEERING
• Provide full accounting of all material purchased for the project Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
EVMS Criteria – Analysis and Management THE COURSE
Reports
The fourth category is Analysis and Management Industry Standard Earned Value
Reports. Within Analysis and Management Management System
Reports the criteria require the following: • Organization

• Accounting
• At least monthly, provide information at the • Analysis & Management Reporting
Control Account Level necessary for analysis and
reporting using actual cost data that is
reconcilable with the approved accounting system
• Provide variance reporting of Budget (BCWS), Earned Value (BCWP), and
Actual (ACWP)
SCHOOL OF
ARCHITECTURE, URBAN
• Provide explanation of indirect costs PLANNING AND
CONSTRUCTION
ENGINEERING
• Implement recovery plans, management actions, recommendations Master of Science in

Architecture
Project Appraisal
• Develop revised estimates (EACs, LREs) based on performance to date and Milan
11th March 2016
estimates of future performance
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
EVMS Criteria – Revisions and Data THE COURSE
Maintenance
The final category is Revisions and Data Industry Standard Earned Value
Management System
Maintenance. Within Revisions and Data
• Organization
Maintenance the criteria require the following: • Planning & Budgeting
• Accounting
• Establish Change Management System • Revisions & Data Maintenance
• Provide Reconciliation and Revision Reports
• Control and Document changes SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
EVMS Criteria – Revisions and Data THE COURSE
Maintenance
In modules 1 through 4, we discussed the criteria in the first 3 categories:
Organization, Planning and Budgeting, and Accounting.
In this and succeeding modules we will cover the criteria in the final two
categories: Analysis and Management Reporting, and Revisions and Data
Maintenance.
Let’s get started! Industry Standard Earned Value

Management System
SCHOOL OF
•
ARCHITECTURE, URBAN
Organization PLANNING AND
• Planning & Budgeting CONSTRUCTION

ENGINEERING
• Accounting Master of Science in
• Analysis & Management Architecture
Reporting Project Appraisal
• Revisions & Data MaintenanceMilan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Basic Concepts

At this point, you should understand that Earned Value helps determine if your
project is on schedule and within budget. It does this by assessing the project
on the basis of cost and schedule as compared to what has been
accomplished.
In determining the status of projects, three key components are examined
• Cost and Schedule baseline

• Actual Charges (expenditures)
• Reported accomplishments or “Earned Value” SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Understanding how the three components work in earned value is explained on ENGINEERING
the following pages. Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Planned Value (PV)

Cost and Schedule baseline refers to the physical work scheduled and the
approved budget to accomplish the scheduled work. Together, they result in
an important value: Planned Value (PV). PV tells you what you plan to do.
Simply stated,
Planned Value = Physical Work + Approved Budget
PV can be looked at in two ways: cumulative and current.
Current PV is the approved SCHOOL OF

ARCHITECTURE, URBAN
Cumulative PV is the sum of budget for activities PLANNING AND
CONSTRUCTION
the approved budget for scheduled to be performed ENGINEERING
activities scheduled to be during a given period. This Master of Science in

Architecture
performed to date. period could represent days, Project Appraisal
weeks, months,etc.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Planned Value (PV) consists of a 5 step THE COURSE
process…
PV, also known as Budget Cost of Work Scheduled (BCWS), can be defined as:
1. Define Scope: What you are tasked to do (Scope Statement)
2. Assign Scope: Breakdown scope into manageable parts (WBS)
3. Schedule Scope: Time-phased, logic driven with critical path (Project

Schedule)
4. Budget Scope: develop cost (budget) for all approved scope (Performance
Measurement Baseline) SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
5. Baseline: Snap-shot in time, frozen. What performance measurement will be
based on. Architecture
Project Appraisal
Now let’s look at an example of Planned Value on the next page. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Planned Value (PV) example

We are working on a Client/Server project, and part of the scope is for Software
Design. The time frame is 5 months and the budget for this scope is $15,000,
resulting in a budget of $3,000 per month.
Client/Server Project - WBS 1.1.1 Software Design

Dollars
JAN FEB MAR APR MAY SCHOOL OF
ARCHITECTURE, URBAN
PV 3000 3000 3000 3000 3000 PLANNING AND
CONSTRUCTION
ENGINEERING
Time Now Master of Science in
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Planned Value (PV) example

Based on these figures, we can calculate the cumulative PV and the current PV.
The Cumulative PV is the total for the elapsed months: January – March. The
cumulative PV is $9,000.
The Current PV is the budget for the current month, March, and equals $3,000.

SCHOOL OF
Dollars ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
JAN FEB MAR APR MAY ENGINEERING
PV 3000 3000 3000 3000 3000 Master of Science in

Architecture
Time Now Project Appraisal
This example uses dollars as units of measure, but note that you can use any
Milan
unit of measurement: hours, days, dollars, etc. 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Budget at Completion (BAC)

So far we have discussed the cumulative budget and current budget, but what
about the budget at the end of the project? Earned Value also uses this
figure, termed Budget at Completion (BAC).
BAC is the sum of all budgets allocated to a project scope.
Keep some important points in mind regarding BAC:

– BAC = PMB
– BAC can be examined by work packages and control accounts SCHOOL OF
–
ARCHITECTURE, URBAN
The Project BAC must always equal the Project Total PV. If they are not equal, PLANNING AND
your earned value calculations and analysis will be inaccurate. CONSTRUCTION
ENGINEERING
Let’s examine BAC using our previous example. Take a look on the next page.
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Budget at Completion (BAC)

Take a moment to review the Software Design project. Knowing that BAC is the
sum of all budgets allocated to a project, what is the BAC for this project if
Software Design is the complete scope of the project?

Dollars
JAN FEB MAR APR MAY
PV 3000 3000 3000 3000 3000
SCHOOL OF
ARCHITECTURE, URBAN
Yes, BAC = $15,000. And, in keeping with the previous points about BAC, the PLANNING AND
CONSTRUCTION
project BAC equals the Project Total PV. The Earned Value calculations are ENGINEERING
correct. Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Basic Concepts

As you recall from earlier in the module, three key components are required to
determine the status of projects. So far, we have examined the first: Cost and
Schedule Baseline.
Now let’s turn our attention on the following pages to the second, Actual
Charges.
 Cost and Schedule baseline
 Actual Charges (expenditures)

SCHOOL OF
• Reported accomplishments or ARCHITECTURE, URBAN

PLANNING AND
“Earned Value” CONSTRUCTION

ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Actual Cost (AC)

Actual Cost (AC), also called actual expenditures, is the cost incurred for
executing work on a project. This figure tells you what you have spent and, as
with Planned Value, can be looked at in terms of cumulative and current.
Cumulative AC is the sum of Current AC is the actual costs

the actual cost for activities of activities performed during a
performed to date. given period. This period could
represent days, weeks, SCHOOL OF
months,etc. ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
AC is also called Actual Cost of Work Performed (ACWP). Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Actual Cost (AC) example

Illustrating again from the Client/Server project example, can you determine the
cumulative AC and current AC? Remember, Cumulative AC is the sum of the
actual cost for activities performed to date, and Current AC is the actual
costs of activities performed during a given period.

Dollars
JAN FEB MAR APR MAY
PV 3000 3000 3000 3000 3000
AC 1100 900 1200 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
ENGINEERING
The Cumulative AC is the total for the elapsed months: January – March. The Master of Science in
Architecture
cumulative AC is $3,200.
Project Appraisal
Milan
The Current AC is the actual cost for the current month, March, and equals 11th March 2016
$1,200. prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
EVMS Basic Concepts

So far, we have examined Cost and Schedule Baseline and Actual Changes.
Now let’s turn our attention on the following pages to the last of the three
components, Actual Charges.
 Cost and Schedule baseline
 Actual Charges (expenditures)

SCHOOL OF
 Reported accomplishments or ARCHITECTURE, URBAN

PLANNING AND
“Earned Value” CONSTRUCTION

ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV)

To report the accomplishments of the project, you must apply Earned Value (EV)
to the figures and calculations in the project.
EV is the quantification of the “worth” of the work done to date.
In other words, EV tells you, in physical terms, what the project has
accomplished. As with PV and AC, EV can be presented in a Cumulative
and Current fashion. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Cumulative EV is the sum of Current EV is the sum of the

CONSTRUCTION
ENGINEERING
the budget for the activities budget for the activities Master of Science in
Architecture
accomplished to date. accomplished in a given period. Project Appraisal
Milan
11th March 2016
Earned Value is also called Budgeted Cost of Work Performed (BCWP).

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) example

Through the Software Design example we have answered several questions,
namely, the cumulative PV and AC, the current PV and AC, and the BAC.
Let’s now determine the cumulative and current EV.

Dollars
JAN FEB MAR APR MAY
PV 3000 3000 3000 3000 3000
AC 1100 900 1200
EV 800 1300 1000 SCHOOL OF
ARCHITECTURE, URBAN
Time Now PLANNING AND
CONSTRUCTION
ENGINEERING
The Cumulative EV is the sum of the budget for the activities accomplished to date: Master of Science in
Architecture
January – March. The cumulative EV is therefore $3,100. Project Appraisal
The Current EV is the sum of the budget for the activities accomplished in the current Milan
11th March 2016
month, March, and equals $1,000.

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) example

Armed with a thorough picture of this project’s progress, let’s summarize the
findings we have.

Dollars
JAN FEB MAR APR MAY
PV 3000 3000 3000 3000 3000
AC 1100 900 1200
EV 800 1300 1000 SCHOOL OF
ARCHITECTURE, URBAN
Time Now PLANNING AND
CONSTRUCTION
ENGINEERING
Cum PV = $9,000 Current PV = $3,000 BAC = $15,000 Architecture
Project Appraisal
Cum AC = $3,200 Current AC = $1,200
Cum EV = $3,100 Current EV = $1,000 Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review
At this point, you should have a solid understanding of the three key earned
value components. Let’s review them now.
• Planned Value (PV) is determined by the cost and schedule baseline

(discussed in Module 2 through 4)
• Actual Cost (AC) is determined by the actual cost incurred on the project
• Earned Value (EV) tells you, in physical terms, what the project
accomplished. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
 Cost and Schedule baseline CONSTRUCTION

ENGINEERING
 Actual Charges (expenditures) Architecture
Project Appraisal
 Reported accomplishments or
“Earned Value” Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) Methods

As you know, EV is determined by what has been physically accomplished. But
how do you determine the “physical” accomplishment? Physical
accomplishment is determined by measuring the progress of a given activity.
There are numerous EV methods to measure progress. On the following pages,

we will focus on the following techniques:
Earned Value Methods
• Fixed Formula SCHOOL OF

ARCHITECTURE, URBAN
•
PLANNING AND
Milestone Weights CONSTRUCTION
ENGINEERING
• Milestone Weights with % Complete Master of Science in

Architecture
• Units Complete Project Appraisal
• Percent Complete
Milan
• Level of Effort 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) Methods - Fixed Formula

The Fixed Formula method for determining Earned Value Methods
progress applies to work packages and control
accounts that span a short period of time (within  Fixed Formula
an accounting period, < 3 months). This method • Milestone Weights
• Milestone Weights with % Complete
applies a percent complete to the start and finish
• Units Complete
of an activity. Generally, the percentages used
in the formula are 0/100, 50/50, or 25/75. • Level of Effort
0/100 - Nothing is earned when activity starts but 100% of budget is earned
when completed
SCHOOL OF
50/50 - 50% is earned when activity starts and the balance is earned on ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
completion ENGINEERING
Architecture
25/75 - 25% is earned when activity starts and the balance is earned on Project Appraisal
completion
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) Methods – Fixed Formula

The Fixed Formula method has several advantages and disadvantages:
Advantages: Works well for short term work packages, and requires minimal
effort to status.
Disadvantages: No significant disadvantages for short term, low value work

packages. Not very effective for longer term work packages. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Earned Value (EV) Methods – Milestone THE COURSE
Weighting
The next method of calculating EV that Earned Value Methods
we will discuss is Milestone Weights.
The Milestone Weighting method assigns  Fixed Formula
budget value to each milestone. Not until  Milestone Weights
full completion of each milestone is the • Milestone Weights with % Complete
budget earned. Milestone Weighting is • Units Complete
used as a method for work packages with • Percent Complete
• Level of Effort
long term durations and ideally should have
milestones each month or accounting period.
Let’s take a look at an example on the next page.

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Weighting
Below is an example of the Milestone Weighting method. For the purposes of
this and future examples, we will assume that the Building Design is the
Control Account Level and the activities are at the Work Package level.
Below are the activities and milestones in the Control Account for completing
a building design. The dates for each milestone are given, along with the
value for each milestone upon completion.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Let’s use this example and see how Milestone Weighting is applied.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Weighting
For this example, assume that all activities begin and complete as scheduled.
With this in mind, can you determined the earned value as of January 31th?
Time Now SCHOOL OF

ARCHITECTURE, URBAN
As you can see by the schedule the project has started (1/7). The “Start
PLANNING AND
CONSTRUCTION
Inspection milestone” has been completed, but no value appears for that
ENGINEERING
milestone. The “Site Inspection Complete” milestone has also been Master of Science in
Architecture
completed, and its value is 100. There are no more milestones completed Project Appraisal
through January, so our Current EV is 100. Because it is the first month for
the control account, the Cumulative EV is also 100. Now lets look at what Milan
11th March 2016
has been earned through February.

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Weighting
As you can see by looking at the schedule below, there are no milestones
scheduled for February (remember we assumed all activities will start and
complete as scheduled), but we have started the Phase 1 Design. What are
the Current EV and Cumulative EV as of February 28th?
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND

ENGINEERING
The Current EV is 0. Remember we can only take “earned” if milestone is Master of Science in
complete. Since there were no milestones scheduled for or accomplished in Architecture
February, we have earned no value under the milestone weighting approach. Project Appraisal
The Cumulative EV is 100, which includes the 100 from January and the 0 Milan
from February. 11th March 2016
Lets take a look at one more month. prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
Weighting
Two milestones are scheduled for March. What is are Current EV and
Cumulative EV as of March 31th?
Time Now SCHOOL OF

ARCHITECTURE, URBAN
The Current EV is 350. Completion of Phase 1 Design (150) and Phase 2 Design
PLANNING AND
CONSTRUCTION
(200). ENGINEERING
The Cumulative EV is 450, which includes the Site Inspection Complete fromArchitecture
January (100), February (0), plus the current March EV (350). Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Weighting
The advantages and disadvantages of Milestone Weighting are:
Advantages: Requires objective measurable milestones, which most customers

or Project Managers prefer.
Disadvantages: Does not allow partial credit for in-process work, and requires
detailed milestone planning.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Weighting with Percent Complete

We will now look at the third method for Earned Value Methods
determing EV: Milestone Weights with
Percent Complete.The Milestone  Fixed Formula
Weighting with Percent Complete method  Milestone Weights
 Milestone Weights with % Complete
assigns budget value to each milestone,
• Units Complete
and it is earned based on the percent of work
Completed against each individual milestone. • Level of Effort
Like Milestone Weighting, Milestone Weighting
with Percent Complete is used as a method for
work packages with long term durations and ideally
should have milestones each month or SCHOOL OF
accounting period. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Take a look on the following pages at how using Milestone Weighting with Master of Science in
Percent Complete affects the Building Design example demonstrated Architecture
Project Appraisal
previously using simple Milestone Weighting.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT

There is no difference using either Milestone Weighting method for determining
the “earned” value for January because the milestone was 100% completed
during the month.
Milestone
As of January Milestone Weighting with
31th Weighting Percent
Complete
Current EV 100 100
Cumulative EV 100 100
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
Time Now
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT

Through February the Milestone Weighting method had a current EV of 0 and a
cumulative of 100. Remember, because there are no milestones completed
in February, the project cannot earn anything. Using the Milestone
Weighting with Percent Complete method, however, you are able to “earn” a
portion of the value of the milestone equal to the amount of the work
completed for the activity(s) that make up the milestone.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Time Now
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT

Using the Building Design schedule, you can see that the Phase 1 Design is
nearly complete by the end of February. For example, lets say that at the end
of February the Phase 1 Design was determined to be 70% complete. Now
let’s take this information and determine the EV for February using the
Milestone Weighting with Percent Complete method and compare.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Time Now
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT

Because it has been determined that you are 70% complete with Phase 1
Design, you can take credit for earning 105 of the 150 for completing Phase
1 Design in February. See the chart below to compare the two methods as
of February 28th.
Milestone
As of February Milestone Weighting with
28th Weighting Percent
Complete
Current EV 0 105
Cumulative EV 100 205
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
Time Now
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT

The advantages and disadvantages of Milestone Weighting with Percent
Complete are:
Advantages: Requires objective measurable milestones, which most customers

prefer, and allows for partial credit against milestones.
Disadvantages: Requires a Control Account Manager (CAM) assessment of the

% complete for each milestone and requires documentation of assessment
SCHOOL OF
ARCHITECTURE, URBAN
methodology. PLANNING AND

CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) Methods – Unit Complete

Now let’s look at the Unit Complete method Earned Value Methods
of computing EV.The Unit Complete method
uses a physical count to determine what is  Fixed Formula
earned. To use Unit Complete you must have  Milestone Weights
 Milestone Weights with % Complete
units that are identical or similar and they must
 Units Complete
have the same budget value.
• Level of Effort
To examine the Unit Complete method, let’s
take a look at a different example on the next
page.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

For this example, you must install a total of 40 mainframe computers over five
months. The number of units and the schedule to install them is listed below.
After the 1st month, you have installed 12 mainframes, which means you are
30% complete with the total job. The earned value analysis shows that the
PV is 10 units($10,000), EV is 12 units($12,000) and the AC is 12 units
($12,000).
JAN FEB MAR APR MAY

Main Frames (Units) 10 5 7 11 7
Cost = $1000/unit $10,000 $5,000 $7,000 $11,000 $7,000
SCHOOL OF
Total Units = 40 ARCHITECTURE, URBAN
PLANNING AND
If after the 1st month you install 12 main frames, you are 30% complete CONSTRUCTION
ENGINEERING
PV EV AC Master of Science in
Units 10 12 12 Architecture
Units ($) $10,000 $12,000 $12,000
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The advantages and disadvantages of Unit Complete are:
Advantages: An objective and easy way of determining the earned value for an
activity.
Disadvantages: Limited to production type atmosphere of similar items that are

fixed unit prices. Does not take into consideration labor fluctuations so may
SCHOOL OF
ARCHITECTURE, URBAN
misrepresent actual EV. PLANNING AND

CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Earned Value (EV) Methods – Subjective THE COURSE
Percent Complete
The fifth method of EV calculation that we will Earned Value Methods
review is Subjective Percent Complete. The
Subjective Percent Complete method applies  Fixed Formula
a percent complete to a budget value to  Milestone Weights
determine what is earned. The percent
 Units Complete
complete value is determined by the Control
 Percent Complete
Account Manager or other designated • Level of Effort
individuals. The percent complete is applied
to the Budget at Completion (BAC) for a
given activity to determine the current and
cumulative EV. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Take a look on the next page at how Subjective Percent Complete is used. CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Percent Complete
To use the Subjective Percent Complete method, the value is placed on the work
activity, not the milestone (as in the Milestone Weighting method). Using the
Building Design Project from earlier, this becomes more clear.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Percent Complete
Looking at the Site Inspection activity in the schedule below, the start date is
January 7th with a scheduled completion date of January 30th. Let’s status the
activity as of January 15th.
To determine the percent complete for January 15th, the control account
manager (CAM) must use an educated guess to determine the percent
complete of the activity. The CAM must maintain the logic for assessing each
activity’s percent complete.
In this example, the CAM decides that the activity is 45% complete as of January
15th. Given this, the EV for Site Inspection as of January 15th is 45. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Percent Complete
The advantages and disadvantages of Subjective Percent Complete are:
Advantages: This is one of the more subjective methods. Earned Value is

based on the CAM’s assessment of the work package progress. Detailed
planning at the milestone level is not required.
Disadvantages: Customer Satisfaction maybe low due to the subjectiveness

involved and the lack of detailed planning, however, CAMs are required to
provide the customer with their assessment methodology.
SCHOOL OF
Note: Milestones do not apply to this method. Labor and non-labor must be ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
identified in separate work packages if this method is applied. This method ENGINEERING
is highly subjective, and documentation in support of percent complete Master of Science in

Architecture
derivations is required. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) Methods – Level of Effort

The last EV method to define is Level of Earned Value Methods
Effort. The Level of Effort (LOE) method
is based on the passage of time. A monthly  Fixed Formula
budget value is earned with the passage of  Milestone Weights
time and is always equal to the monthly
 Units Complete
planned amount. When using LOE, the PV
 Percent Complete
is always equal to the EV (see chart below).  Level of Effort
This method is usually used for accounts that
are more time related than task oriented.
Example of an LOE account is Program and
Project Management support. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Jan Feb Mar Apr May Jun Jul Aug CONSTRUCTION
ENGINEERING
PV $1,000 $1,000 $1,200 $1,200 $1,200 $1,500 $1,500 $1,500
Architecture
EV $1,000 $1,000 $1,200 $0 $0 $0 $0 $0 Project Appraisal
Time Now Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Earned Value (EV) Methods – Level of Effort

The advantages and disadvantages of Level of Effort are:
Advantages: This EVM does not require statusing, and is appropriate for
sustaining tasks like Program Management.
Disadvantages: Level of Effort work packages are often challenged by the

customer. This EV method should be kept to a minimal number of work
packages. LOE work packages require accurate assessment (planning) of SCHOOL OF
monthly performance. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review
At this point, you should have a firm grasp of the EV methods of calculation.
Earned Value Methods
• Fixed Formula
• Milestone Weights
• Milestone Weights with % Complete
• Units Complete
• Level of Effort SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Now that we are finished reviewing the EV methods, let’s take a look at our Master of Science in
ACME House Building project using the concepts discussed in this module. Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Project Status: Example

Let’s recall, from previous modules, the project baseline (schedule and cost) for
the House Building project. The project start date is 1/15, with an expected
completion date of 4/1. It is now 1/31. The project started on schedule and
needs to be statused as of 1/31. Look at the schedule and identify the
activities that need to be reviewed for status.
Status as of 1/31
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

According to the baseline, the following activities need to be reviewed for status
as of 1/31:
• Pour Foundation • Frame Exterior Walls
• Install Patio • Pour Stairway
Status as of 1/31
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Before we go any further a few assumptions need to explained.
1. The activities will be done as sequenced, thus no other activities, besides

the four mentioned, will be affected by the 1/31 statusing effort.
2. Activity cost is spent uniformly across each activity
With these assumptions at hand, let’s focus on statusing the project.
Status as of 1/31
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Now we need to determine our Earned Value (EV) for each activity. As we
discussed on the previous pages, there are numerous EV methods used for
measuring progress each method more applicable to certain types of
activities than other methods. For example we will use the following EV
methods for, the four activities we are statusing.
Activity EV Method
Pour Foundation Fixed Formula: 0/100
Install Patio Subjective % Complete
Frame Exterior Walls Subjective % Complete
Pour Stairway Fixed Formula: 25/75 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Now that we understand what activities need statusing and what method of EV Architecture
will be used for each activity, it is time to status the project activities. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

To obtain our project activity status, we will need to meet with the Project
Manager or those responsible for the work. In our case, we will need to meet
with the different CAMs or Project Superintendents responsible for each
Control Account. Below are the results of that meeting.
Monthly Status Meeting
January 31th, 2002
Actual Actual % Forecast
Control Account Activity Start Finish Complete Completion
Concrete Pour Foundation 1/15 1/22 100%
Install Patio 1/23 1/30 100%
Pour Stairway 1/31 25% 2/1
SCHOOL OF
ARCHITECTURE, URBAN
Framing Frame Exterior Walls 1/23 40% 2/8 PLANNING AND
CONSTRUCTION
ENGINEERING
Plumbing No activities scheduled
Architecture
Electrical No activities scheduled Project Appraisal
Interior No activities scheduled Milan

11th March 2016
Roofing No activities scheduled prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Now let’s review the status of each activity.
The first activity is Pour Foundation. This activity was scheduled to start on 1/15
and finish on 1/22 (see schedule below). It’s actually started on 1/15 and
finished on 1/22 (see status report below). Thus this activity was on
schedule and is 100% complete. What is its Planned Value (PV), Earned
Value (EV), and Actual Cost (AC)?
January 31th, 2002
Framing Frame Exterior Walls 1/23 40% 2/8SCHOOL OF

ARCHITECTURE, URBAN
Plumbing No activities scheduled PLANNING AND
CONSTRUCTION
Electrical No activities scheduled
ENGINEERING
Interior No activities scheduled

Roofing No activities scheduled Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The Planned Value is determine by what was “planned” or scheduled to be
complete. Using the schedule below, the activity was planned to start on
1/15 and finish on 1/22 thus as of 1/31 the PV for Pour Foundation is
$15,394, the entire value of the activity.
The Earned Value (EV) is what was actually done as of 1/31. The activity is
100% complete and its EV is $15,394 (100% of PV). Remember you cannot
earn more then was planned. Monthly Status Meeting
January 31th, 2002
The Actual Cost (AC) is what was Control Account
Concrete
Activity
Pour Foundation
Start
1/15
Finish
1/22
Complete
100%
Completion
actually spent and can be Install Patio

Pour Stairway
1/23
1/31
1/30 100%
25% 2/1
obtained from the accounting Framing Frame Exterior Walls 1/23 40% 2/8
SCHOOL OF
ARCHITECTURE, URBAN
system. The AC is $15,850. Plumbing No activities scheduled PLANNING AND
CONSTRUCTION
Electrical No activities scheduled ENGINEERING

Architecture
Roofing No activities scheduled
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The next activity, Install Patio, is handled the same way as the previous activity.
It was completed on schedule and is 100% complete as of 1/31. Its PV, EV
and AC are as follows:
Planned Value (PV) = $8,166

Earned Value (EV) = $8,166
Actual Cost (AC) = $7,200
January 31th, 2002

ARCHITECTURE, URBAN
CONSTRUCTION
ENGINEERING

Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The next two activities are a little different because they are not 100% complete,
and they use two different methods of determining EV.
Let’s take a look at the activity, Frame Exterior Walls first. Check out this activity
on the next page.

January 31th, 2002

ARCHITECTURE, URBAN
CONSTRUCTION
ENGINEERING

Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The activity, Frame Exterior Walls, was schedule to start on 1/23 and finish on
2/8. It started on 1/23 and is forecasted to complete on 2/8 (see status
report), thus the activity is on schedule. As of 1/31 the Project
Superintendent said the activity was 40% complete. Remember the EV
method used for this activity is Subjective % Complete. What is our PV,
EV and AC?

January 31th, 2002

ARCHITECTURE, URBAN
CONSTRUCTION
ENGINEERING

Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The Planned Value is $8,748. Let’s review how the planned value was
determined.
The activity is schedule from 1/23 to 2/8, which is 17 calendar days or 13 working
days. We will use calendar days in our example calculation. Remembering
the assumption that all costs are spent uniformly across each activity, we
need to determine what the PV is as of 1/31. Let’s take a look at the
calculations on the next page. Monthly Status Meeting
January 31th, 2002

ARCHITECTURE, URBAN
CONSTRUCTION
ENGINEERING

Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The cost of the activity, $16,521, will be divided by the total duration of the
activity, 17 days, to give us a value of $972 per day. Next we take the
planned start date (1/23) and the status date (1/31) to determine the amount
of days planned (9). Now let’s determine the Planned Value (PV).
The PV is determined by taking the amount of days (9) times the value per day
($972). Our PV is $8,748. Remember that there is a difference between
cumulative and current. For this example they are the same.
January 31th, 2002
Now let’s take a look on the next Control Account Activity

Actual
Start
Actual
Finish
%
Complete
Forecast
Completion
page at determining EV. Install Patio
Pour Stairway
1/23
1/31
1/30 100%
25% 2/1
SCHOOL OF
Framing Frame Exterior Walls 1/23 40% 2/8
ARCHITECTURE, URBAN
PLANNING AND
Plumbing No activities scheduled
CONSTRUCTION
Electrical No activities scheduled ENGINEERING
Interior No activities scheduled Master of Science in

Architecture
Roofing No activities scheduled
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The Earned Value for this activity is determined by taking the activity's total
value, $16,521, and multiplying it by the % complete. In this case, the %
complete is 40%. The EV for this activity, as of 1/31, is $6,608.
The Actual Cost (AC) as derived from the accounting system is $6,250.
In summary:
January 31th, 2002
PV = $8,748 Actual Actual % Forecast
EV = $6,608 Concrete Pour Foundation

Install Patio
1/15
1/23
1/22
1/30
100%
100%
AC = $6,250 Framing Frame Exterior Walls 1/23 40% 2/8

SCHOOL OF
ARCHITECTURE, URBAN
CONSTRUCTION
ENGINEERING
Now let’s take a look at our last activity.

Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The last activity is Pour Stairway. This activity was scheduled to start on 1/31
and finish on 2/1. It started on schedule on 1/31 and is forecasted to
complete on 2/1 (see status report), thus the activity is on schedule. Its EV
method is Fixed Formula 25/75, so its % complete is 25%. Using the same
processes discussed on the previous pages, what is the PV, EV and AC for
this activity?

January 31th, 2002
PV = $5,961 ($11,922/2 calendar days) Actual Actual % Forecast
EV = $2,981 ($11,922 x .25) Concrete Pour Foundation

Install Patio
1/15
1/23
1/22
1/30
100%
100%
AC = $3,100 (from accounting system) Framing Frame Exterior Walls 1/23 40% 2/8
SCHOOL OF
ARCHITECTURE, URBAN
CONSTRUCTION
ENGINEERING
Now let’s review our project status.

Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The chart below lists the project status results as of 1/31. But what does this
information tell us?
as of 1/31 PV EV AC SV CV SPI CPI

Foundation $15,394 $15,394 $15,850 0 -456 1.00 0.97
Patio $8,166 $8,166 $7,200 0 966 1.00 1.13
Exterior Walls $8,748 $6,608 $6,250 -2,140 358 0.76 1.06
Stairway $5,961 $2,981 $3,100 -2,980 -119 0.50 0.96
Project Total $38,269 $33,149 $32,400 -5,120 749 0.87 1.02
Note: SV = Schedule Variance, CV = Cost Variance, SPI = Schedule Performance Index, CPI = Cost Performance Index
Can you answer these questions?

• Is the Project on Schedule?, If not, what activity(s) is behind?
•
SCHOOL OF
Is the project overrunning? If so, what activity(s) is overrunning? ARCHITECTURE, URBAN
PLANNING AND
• Is the project going to miss the project completion milestone? CONSTRUCTION
ENGINEERING
• Is the project going to need more budget? Master of Science in

Architecture
Project Appraisal
These questions and others will be answered in the next module, Module 6 – Milan
Metrics, Performance Measures and Forecasting where the value of EVM 11th March 2016
will become apparent. prof. Barrese

prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Estimate at Completion (EAC)

One final item that needs to be covered briefly is Estimate at Completion (EAC).
The Estimate at Completion (EAC) is the actual cost to date plus an objective
estimate of costs for remaining authorized work. The objective in preparing
an EAC is to provide an accurate projection of cost at the completion of the
project. There are multiple ways and varying degrees of detail to calculate
EAC, and they will be covered in a future module. The most common is:
EAC = Actual Cost (AC) + Estimate to Complete (ETC)
The Estimate to Complete (ETC) is the cost of completing the authorized SCHOOL OF
remaining work. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review of Module 5
Take some time to review the major items of this module
• There is an Industry Standard Earned Value Management System guideline

published in DoD 5000.2-R. It contains 332 criteria in 5 categories.
• There are three key components to earned value: Planned Value, Earned
Value and Actual Cost.
– PV (BCWS) is the physical work scheduled or “what you plan to do”.
– EV (BCWP) is the quantification of the “worth” of the work done to date or
“what you physically accomplished”.
– AC (ACWP) is the cost incurred for executing work on a project or “what
you have spent”.
SCHOOL OF
ARCHITECTURE, URBAN
• There are numerous EV methods used for measuring progress. PLANNING AND
CONSTRUCTION
– Fixed Formula ENGINEERING
– Milestone Weights
Architecture
– Milestone Weights with % Complete Project Appraisal
– Units Complete Milan

11th March 2016
– Percent Complete
– Level of Effort prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Module 6: Metrics, Performance THE COURSE
Measurements and Forecasting

Welcome to Module 6. The objective of this module is to introduce you to the
Metrics and Performance Measurement tools used, along with Forecasting, in
Earned Value Management.
• Define Cost and Schedule Variances
• Define Cost and Schedule Performance Indices

SCHOOL OF
ARCHITECTURE, URBAN
• Define Estimate to Complete (ETC) PLANNING AND

CONSTRUCTION
ENGINEERING
• Define Estimate at Completion (EAC) and Latest Revised Estimate (LRE) Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Let’s quickly review what has been covered in the previous modules.
• There are three key components to earned value: Planned Value, Earned
Value and Actual Cost.
– PV is the physical work scheduled or “what you plan to do”.
– EV is the quantification of the “worth” of the work done to date or “what
you physically accomplished”.
– AC is the cost incurred for executing work on a project or “what you
have spent”.
• There are numerous EV methods used for measuring progress. SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
The next step is to stand back and monitor the progress against the PerformanceMaster of Science in
Architecture
Measurement Baseline (PMB). Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
What is Performance Measurement?

Performance measurement is a common phrase used in the world of project
management, but what does it mean? Performance measurement can have
different meanings for different people, but in a generic sense performance
measurement is how one determines success or failure on a project. How then
can performance measurement have different meanings for different people?
To answer this question, consider the ACME House Building project. You have
two major stakeholders on this project, the Buyer and the Builder. Do you
think they both measure success on the project identically or do you believe
their definition of project success may be different? Let’s take a look on the
next page. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

It seems logical to say that they both want a home that provides security, meets
building code, and keeps them warm in the winter and cool in the summer.
Now let’s look at possible differences in the way they define successful
performance on the project.
Buyer Builder
– Home has 4 bedrooms, 3 – Completed on time

bathrooms – Within contract price
– Backyard is landscaped for – Sells within first two months
children to play – Less than 10% Post-sell SCHOOL OF
– Two car garage maintenance ARCHITECTURE, URBAN
PLANNING AND
– Walls don’t have paint streaks CONSTRUCTION

ENGINEERING
– Carpeting is correct color Master of Science in

Architecture
Project Appraisal
Can you see how different parties or individuals can have conflicting views of Milan
what defines project success? 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The Stakeholders (Buyer and Builder in the ACME House Building Project)
should understand how each party defines project success and what each
party measures to determine that success.
In the case of Earned Value Management, performance measurements focus on

cost and schedule management.
The Cost Management focuses on the cost performance of the project. It looks
at the relationships between the Earned Value (EV) and the Actual Cost (AC).
The Schedule Management focuses on the schedule performance of the project. SCHOOL OF
It looks at the relationships between the Earned Value (EV) and the Planned ARCHITECTURE, URBAN
PLANNING AND
Value (PV). CONSTRUCTION
ENGINEERING
Now let’s look at these relationships in more detail on the following pages.
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Earned Value: Metrics and Performance THE COURSE
Measurements
Earned value performance measurements look at the project cost and
schedule performance by analyzing the cost and schedule variance along
with cost and schedule efficiency. The formulas used are as follows:
Variance Analyses
Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC)
Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV)
Performance Indices
SCHOOL OF
Cost Performance Index = Earned Value (EV)/Actual Cost (AC) ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Schedule Performance Index = Earned Value (EV)/Planned Value (PV)
Architecture
Project Appraisal
Let's take a look at the Variance Analyses on the next page. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Variances
The Cost Variance (CV) is the difference between the earned value of work
performed and the actual cost. CV tells you the earned value of work
performed for each dollar’s worth of work scheduled.
Cost Variance (CV) = EV – AC
If the result is POSITIVE, project is experiencing an

“Underrun”
If the result is NEGATIVE, project is experiencing an SCHOOL OF

ARCHITECTURE, URBAN
“Overrun” PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Variances: Cost Variance example

Using the ACME Home Building project information from Module 5, let's
calculate the Cost Variance (CV) for the project.
as of 1/31 PV EV AC
Foundation $15,394 $15,394 $15,850
Patio $8,166 $8,166 $7,200
Exterior Walls $8,748 $6,608 $6,250
Cost
Stairway $5,961 $2,981 $3,100
Project Total $38,269 $33,149 $32,400
CV = EV – AC
Cost SCHOOL OF
CV = $33,149 - $ 32,400 Variance
ARCHITECTURE, URBAN
PLANNING AND
CV = $749 CONSTRUCTION
ENGINEERING
What does this tell you? Look at the explanation Architecture
Project Appraisal
on the next page.
1/31 Milan
Time 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

A Cost Variance of $749 tells you that the project is “Underrun” or under
budget.
Please note that the cost variance, along with all other performance analyses
tools, can be computed (or assessed) in terms of cumulative and current.
Since we are in the first status period in our example, the cumulative and
current are the same.
Cost
Using the graph to right, you can see that on

1/31 the EV line (green) is above the AC line Cost SCHOOL OF
Variance
ARCHITECTURE, URBAN
(red). This means that it cost less to PLANNING AND
accomplish the work then was budgeted, CONSTRUCTION

ENGINEERING
thus a positive cost variance. Master of Science in

Architecture
Project Appraisal
Let's look at another Cost Variance calculation

1/31
on the next page. Time
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Another calculation for reviewing Cost Variance (CV) Percentage is CV%.
Cost Variance (CV)% = CV/EV
Tells you what percentage cost varies from what

has been earned to date.
Using our example, what is the CV%?

CV = EV – AC CV% = CV/EV
CV = $33,149 - $32,400 CV% = $749/$33,149 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CV = $749 CV% = .023 or 2.3% CONSTRUCTION
ENGINEERING
Architecture
To date the project has a Cost Variance of $749 or 2.3% Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Variances
The Schedule Variance (SV) is the difference between the earned value of
work performed and the work scheduled. SV tells you the value of work
performed less value of work scheduled.
Schedule Variance (SV) = EV – PV
If the result is POSITIVE, project is on schedule or

exceeding the schedule
If the result is NEGATIVE, project is behind schedule SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Variances: Schedule Variance example

Using the ACME Home Building project information from Module 5, let's
calculate the Schedule Variance (SV) for the project.
as of 1/31 PV EV AC
Foundation $15,394 $15,394 $15,850
Patio $8,166 $8,166 $7,200
Exterior Walls $8,748 $6,608 $6,250 Cost
Stairway $5,961 $2,981 $3,100
Project Total $38,269 $33,149 $32,400
Schedule
Variance
SV = EV – PV
SV = $33,149 - $38,269 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
SV = -$5,120 CONSTRUCTION
ENGINEERING
Project Appraisal
on the next page.
1/31 Milan
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

A Schedule Variance of -$5,120 tells you that the project is “Behind” schedule.
Cost
Using the graph to right, you can see that
on 1/31 the EV line (green) is below the
PV line (blue). This means that what was Schedule
Variance
earned to date is less then what was
planned to be accomplished. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Now consider on the following page what Project Appraisal
schedule variance does and does not 1/31 Milan

Time
address. 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Variances: Schedule Variance

Schedule Variance status does:
• indicate the dollar value difference between work that is
ahead or behind the plan
• reflect a given measurement method
Schedule Variance status does not:

• address impact of work sequence
• address importance of work
• reflect critical path assessment
• indicate amount of time it will slip
• identify source (labor & material) of difference SCHOOL OF
ARCHITECTURE, URBAN
• indicate the time ahead/behind (or regain) schedule PLANNING AND

CONSTRUCTION
•
ENGINEERING
indicate the cost needed to regain schedule Master of Science in
Architecture
Project Appraisal
Let's look at another Schedule Variance calculation on the next page. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Another calculation for reviewing Schedule Variance (SV) is SV%.
Schedule Variance (SV)% = SV/PV
Tells you what percentage schedule varies from

what has been planned to date.
Using our example, what is the SV%?

SV = EV – PV SV% = SV/PV
SV = $33,149 - $38,269 SV% = -$5,120/$38,269 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
SV = -$5,120 SV% = -.134 or -13.4% CONSTRUCTION
ENGINEERING
Architecture
To date the project has a Schedule Variance of -$5,120 or -13.4% Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Variances: Review
You should have a solid understanding of the cost and schedule variance
calculations and what they mean. Let's review them now.
Cost Variance (CV) = EV – AC Schedule Variance (SV) = EV – PV
If the result is POSITIVE “Underrun” If the result is POSITIVE  “On Schedule”

If the result is NEGATIVE “Overrun” If the result is NEGATIVE  “Behind Schedule”
Using these variance calculations, our project information is as follows.
SCHOOL OF
as of 1/31 PV EV AC SV CV ARCHITECTURE, URBAN
PLANNING AND
Foundation $15,394 $15,394 $15,850 0 -456 CONSTRUCTION
ENGINEERING
Patio $8,166 $8,166 $7,200 0 966
Exterior Walls $8,748 $6,608 $6,250 -2,140 358 Architecture
Stairway $5,961 $2,981 $3,100 -2,980 -119 Project Appraisal
Project Total $38,269 $33,149 $32,400 -5,120 749

Milan
11th March 2016
Now let's look at the performance indices on the following pages.

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Performance Indices
The Cost Performance Index (CPI) is a measure of Cost Efficiency. The CPI
measures the value of work performed against the actual cost.
Cost Performance Index (CPI) = EV/AC
If the result is less than 1.0, cost is GREATER than

budgeted
If the result is greater than 1.0, cost is LESS than

budgeted
SCHOOL OF
Example 1: Example 2: ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
PV = $950 PV = $1100
EV = $1000
EV = $1000 Architecture
AC = $ 900 AC = $1200 Project Appraisal
CPI = $1000 = 1.11 CPI = $1000 = .83 Milan

11th March 2016
$900 $1200
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Performance Indices: Cost Performance Index THE COURSE
example
Using the ACME Home Building project information, let's calculate the Cost
Performance Index (CPI) for the project.
as of 1/31 PV EV AC
Foundation $15,394 $15,394 $15,850
Patio $8,166 $8,166 $7,200
Stairway $5,961 $2,981 $3,100
Project Total $38,269 $33,149 $32,400
CPI = EV/AC
CPI= $33,149/$32,400 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CPI = 1.02 CONSTRUCTION
ENGINEERING
Project Appraisal
on the next page.
1/31
Milan
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
example
A Cost Performance Index (CPI) of 1.02 tells you that your actual costs are less
then what was budgeted.
You are getting $1.02 worth of work for every $1.00 spent.
1.2
1.15
1.1
1.05
CPI1.02
1
SCHOOL OF
0.95 CPI 1.02 ARCHITECTURE, URBAN
PLANNING AND
0.9 CONSTRUCTION
ENGINEERING
0.85
Architecture
0.8
Project Appraisal
Now let's look at some causes of favorable and unfavorable cost performance. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
example
Potential Causes of Unfavorable (-) Potential Causes of Favorable (+)
Cost Performance Cost Performance
• Work more complex than • Efficiencies being realized

anticipated • Work less complex than anticipated
• Design review comments extensive • Fewer revisions and rework
• Rework • Favorable Market Fluctuations in
• Unclear Requirements the Cost of Labor or Material
• Scope Creep • Overhead Rate Decreases
• Unfavorable Market Fluctuations in
SCHOOL OF
the Cost Labor or Material ARCHITECTURE, URBAN
PLANNING AND
• Overhead Rate Increases CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Performance Indices
The Schedule Performance Index (SPI) is a measure of Schedule Efficiency.
The SPI measures the value of work performed against the work scheduled.
Schedule Performance Index (SPI) = EV/PV
If result is less than 1.0, project is “BEHIND” schedule

If the result greater than 1.0, project is “AHEAD of schedule
Example 1: Example 2: SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
PV = $950 PV = $1100 CONSTRUCTION
ENGINEERING
EV = $1000 EV = $1000
AC = $ 900 AC = $1200 Architecture
Project Appraisal
SPI = $1000 = 1.05 SPI = $1000 = .91

$950 $1100 Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Performance Indices: Schedule Performance THE COURSE
Index example
Using the ACME Home Building project information, let's calculate the
Schedule Performance Index (SPI) for the project.
as of 1/31 PV EV AC
Foundation $15,394 $15,394 $15,850
Patio $8,166 $8,166 $7,200
Stairway $5,961 $2,981 $3,100
Project Total $38,269 $33,149 $32,400
SPI = EV/PV
SPI = $33,149/$38,269 SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
SPI = .87 CONSTRUCTION
ENGINEERING
Project Appraisal
on the next page.
1/31
Time Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Index example
A Schedule Performance Index (SPI) of .87 tells you that you are behind
schedule. It can be defined in two ways:
You are 13% behind schedule

Or
You are working at an 87% efficiency
1.2
1.15
1.1
1.05
CPI 1.02 SCHOOL OF
PLANNING AND
0.95 CPI 1.02 CONSTRUCTION
ENGINEERING
0.9
0.85
SPI 0.87 Architecture
Project Appraisal
0.8
Now let's look at some causes of favorable and unfavorable schedule Milan
11th March 2016
performance on the following page.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Index example
Potential Causes of Unfavorable (-) Potential Causes of Favorable (+)
Schedule Performance Schedule Performance
• Manpower shortage • Efficiencies being realized

• Revised Execution Plan • Work less complex than anticipated
• Supporting organizations behind • Fewer revisions and rework
• Favorable Market Fluctuations in
schedule the Cost of Labor or Material
• Late Vendor delivery • Subcontractor ahead of schedule
• Delayed customer
feedback/direction
• Rework
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
• Work more complex than CONSTRUCTION
ENGINEERING
anticipated Master of Science in
• Design review comments extensive Architecture
• Unclear requirements Project Appraisal
• Scope creep Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review of Variance and Performance Indices

Below is a summary of the ACME Home Building project.

Foundation $15,394 $15,394 $15,850 0 -456 1.00 0.97
Patio $8,166 $8,166 $7,200 0 966 1.00 1.13
Exterior Walls $8,748 $6,608 $6,250 -2,140 358 0.76 1.06
Stairway $5,961 $2,981 $3,100 -2,980 -119 0.50 0.96
Project Total $38,269 $33,149 $32,400 -5,120 749 0.87 1.02
What conclusions can be inferred as to the cost and schedule performance of

this project? SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Let’s take a look on the next page. Master of Science in

Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Foundation $15,394 $15,394 $15,850 0 -456 1.00 0.97
Patio $8,166 $8,166 $7,200 0 966 1.00 1.13
Exterior Walls $8,748 $6,608 $6,250 -2,140 358 0.76 1.06
Stairway $5,961 $2,981 $3,100 -2,980 -119 0.50 0.96
Project Total $38,269 $33,149 $32,400 -5,120 749 0.87 1.02
The ACME Home Building Project is 13% behind schedule (SPI = .87) but is
ahead on cost by 2% (CPI = 1.02). In review of the activities, Installation of the
Stairway and Framing the Exterior Walls are the activity causing the project to
be behind (SPI = .50 and .76) schedule. On the cost side, the Installation of
the Patio is costing less then budgeted (CV =$966) and is the main reason for SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
the project underrunning its budget. CONSTRUCTION
ENGINEERING
What is the standard reporting variance threshold for a project? Find out on the Architecture
next page. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Reporting Variances
The size and complexity of the project determines the

reporting needed. Different industries and
government agencies will set variance thresholds at Variance Report for
different levels, but most set the variance level Department
ACME Housingof
Department
Defense of
between + or - 7% to 10%. This means that a SPI or Project
Defense
5000.2-R
CPI of .90 to 1.1 will require an official variance 5000.2-R
analysis to explain what is happening on the project.
Note that you need to explain positive variances as
well as negative variances.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
So far we have only looked at how to analyze what has happened on a project
(CV,SV, CPI, SPI). Take some time to review the formulas below.
Cost Variance (CV) = EV – AC Schedule Variance (SV) = EV – PV
If the result is POSITIVE “Underrun” If the result is POSITIVE  “On Schedule”

If the result is NEGATIVE “Overrun” If the result is NEGATIVE  “Behind Schedule”
Cost Variance (CV)% = CV/EV Schedule Variance (SV)% = SV/PV
Tells you what percentage cost varies Tells you what percentage schedule varies from
from what has been earned to date. what has been planned to date.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Cost Performance Index (CPI) = EV/AC Schedule Performance Index (SPI) = EV/PV
Architecture
If result is less than 1.0, cost is If result is less than 1.0, project is
Project Appraisal
GREATER than budgeted “BEHIND” schedule
If the result greater than 1.0, cost is If the result greater than 1.0, project is Milan
LESS than budgeted “AHEAD of schedule 11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Estimate at Completion
Now it is time to learn how to analyze the future or what is expected to happen
on a project given the progress measurements reported to date. Anticipating
future progress requires determining when the project will be completed and
how much it will cost to complete it.
To complete our analysis, we will look at the Estimate at Completion (EAC) and
the Budget at Completion (BAC).
The Estimate at Completion (EAC), which was defined in Module 5, is the actual
cost to date plus an objective estimate of costs for remaining authorized work.
The objective in preparing an EAC is to provide an accurate projection of cost
at the completion of the project.
SCHOOL OF
ARCHITECTURE, URBAN
The Budget at Completion (BAC) is the sum of all budgets allocated to a projectPLANNING AND
CONSTRUCTION
scope. The Project BAC must always equal the Project Total PV. If they are ENGINEERING
not equal, your earned value calculations and analysis will be inaccurate. Master of Science in
Architecture
Project Appraisal
The chart on the following page lists the parameters of the BAC and EAC along
with the other EVM items we have covered. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Item Questions
Planned Value (PV) How much work should be done?
Earned Value (EV) How much work was done?
Actual Cost (AC) How much did the work cost?
Budget at Completion (BAC) What is the total job budgeted to cost?
Estimate at Completion (EAC) What do we expect the total job to cost?
Another term you may hear is Latest Revised Estimate (LRE). The LRE is equal
to the EAC.
SCHOOL OF
ARCHITECTURE, URBAN
Estimate At Completion = Latest Revised Estimate PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
For the remainder of the Modules, we will refer to Estimate at Completion as Project Appraisal
“EAC”.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
The EAC is the best estimate of the total cost at the completion of the project.
The EAC is a periodic evaluation of the project status, usually on a monthly
basis or when a significant change happens to the project.
EACs are developed with varying degrees of detail and supporting documents. A
comprehensive EAC is usually prepared annually or if there are any major
changes in the project. The EAC should be reviewed on a monthly basis by
the Control Account Manager (CAM) or those responsible. The EAC is
developed for projects as well as Control Accounts and Work Packages.
There are multiple ways to develop an EAC. The technique selected is based
upon the dollar value of the project, the risk, accounting system available and
SCHOOL OF
the accuracy of the estimates. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Let's take a look on the following pages at the most frequently used EAC Master of Science in
formulas. Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Calculating Estimate at Completion

The first EAC calculation we will look at is Estimate to Complete:
EAC = Actual Cost (AC) + Estimate to Complete (ETC)
The Estimate to Complete (ETC) is the estimated cost of completing the

authorized remaining work. A detailed ETC will include a description of the
work remaining and any revisions to the estimated resources or cost for
SCHOOL OF
completing the project. This formula assumes that all remaining work is ARCHITECTURE, URBAN
PLANNING AND
independent of the burn-rate incurred to date. CONSTRUCTION
ENGINEERING
Now let's look use the EAC formula for our ACME Home Building project. Take a Architecture
look on the next page. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Earlier in this module, we determined the actual cost (AC) for January to be
$32,400. Now we need to determine the Estimate to Complete (ETC) for all
activities. For the two activities that are 100% complete, their actual cost
replaces their ETC (see chart below). For the two activities current being
worked, we will assume that they will be completed as budgeted even though
they have current cost variances (see ETC adjustments below). It will also be
assumed that all other activities will have no adjustments to their ETC.
ACTUALS ETC EAC
By reviewing the Activity January February March April Total
1.1.1.1 Pour foundation $15,850 $15,850
chart to the left you 1.1.1.2 Install Patio
1.1.1.3 Pour stairway
$7,200
$3,100 $8,822
$7,200
$11,922
can see that our 1.1.2.1 Frame exterior walls $6,250 $10,271 $16,521
1.1.2.2 Frame interior walls $11,025 $11,025
new Estimate at 1.1.2.3 Install roofing trusse $15,887 $15,887
SCHOOL OF
1.1.3.1 Install waterlines $6,194 $6,194
ARCHITECTURE, URBAN
Completion (EAC) 1.1.3.2 Install gas lines $6,255 $6,255
PLANNING AND
1.1.3.3 Install B/K fixtures $6,317 $6,317
CONSTRUCTION
is $164,957. 1.1.4.1 Install wiring $18,483 ENGINEERING
$18,483
1.1.4.2 Install outlets/switches $9,265 $9,265
1.1.4.3 Install fixtures $13,969 $4,656 $18,625
Architecture
1.1.5.1 Install drywall $6,984 $6,984
Now lets look at the 1.1.5.2 Install Carpeting $2,250 $2,250
Project Appraisal
same example with 1.1.5.3 Painting

1.1.6.1 Install felt $1,834
$6,477
$611
$6,477
$2,445
some additional 1.1.6.2 Install shingles
1.1.6.3 Install vents
$2,445
$812
Milan
$2,445
11th March 2016
$812
changes to the $32,400 $85,088 $42,813 $4,656 $164,957
prof. Barrese
ETC. prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

As the project manager you are reviewing your ETC and you get a call from the
carpeting contractor. He tells you that the original budget for installing the
carpet ($2,250) is no longer correct because the price of the carpet increased.
The project manager asks for a new estimate and the carpeting contractor tells
him that it will now cost $3,100. Additionally, your superintendent tells you that
the current ETCs for Framing the Exterior Walls and Pour Stairway are good,
thus the current cost underrun ($358) for Framing and the cost overrun ($120)
for Stairway will be realized at the completion of each activity.
With this information, lets take a look at the EAC.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

EAC = Actual Cost (AC) + New Estimate to Complete
The new ETC total is $133,169 ($84,850 + $43,663 + $4,656)

The new EAC total is $165,569 ($32,400 (AC) + $133,169 (ETC)).
When using this formula to calculate EAC, you can also include expert opinion,
project and industry trends and other forms of objective analysis.
ACTUALS ETC EAC
Activity January February March April Total
1.1.1.1 Pour foundation $15,850 $15,850
1.1.1.2 Install Patio $7,200 $7,200
1.1.1.3 Pour stairway $3,100 $8,942 $12,042
1.1.2.1 Frame exterior walls $6,250 $9,913 $16,163
1.1.2.2 Frame interior walls $11,025 $11,025
1.1.2.3 Install roofing trusse $15,887 $15,887 SCHOOL OF
1.1.3.1 Install waterlines $6,194 $6,194 ARCHITECTURE, URBAN
PLANNING AND
1.1.3.2 Install gas lines $6,255 $6,255
CONSTRUCTION
1.1.3.3 Install B/K fixtures $6,317 $6,317 ENGINEERING
1.1.4.1 Install wiring $18,483 $18,483
1.1.4.2 Install outlets/switches $9,265 $9,265 Master of Science in
1.1.4.3 Install fixtures $13,969 $4,656 $18,625 Architecture
1.1.5.1 Install drywall $6,984 $6,984 Project Appraisal

1.1.5.2 Install Carpeting $3,100 $3,100
1.1.5.3 Painting $6,477 $6,477
1.1.6.1 Install felt $1,834 $611 $2,445 Milan
11th March 2016
1.1.6.2 Install shingles $2,445 $2,445
1.1.6.3 Install vents $812 $812
$32,400 $84,850 $43,663 $4,656 $165,569 prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Now that we have the EAC, what does it tell us?
As mentioned earlier, EAC is the best estimate of the total cost at the completion
of the project. It is also used to determine the Variance at Completion (VAC)
for the project. The VAC is calculated as follows:
VAC = BAC – EAC
If the result is POSITIVE, project is projecting an “Underrun”
If the result is NEGATIVE, project is projecting an “Overrun”

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Now let's determine the VAC for our project as shown on the next page. Master of Science in
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The VAC for our project is determined as follows:
BAC – EAC = VAC

$ 165,467 – $165,569 = - $102
In other words, the project is now forecasted to overrun by $102 using this form
of EAC. Remember, this is only one method of forecasting the performance of
the project. Several other methods can be used. Let’s consider those on the
following pages.
As you examine the remaining Estimate at Completion (EAC) formulas, keep in

mind that they are subjective analyses. These calculations use performance- SCHOOL OF
ARCHITECTURE, URBAN
to-date data to help calculate the EAC. Sometimes these forms of EAC PLANNING AND
CONSTRUCTION
Calculations are called Independent Estimate at Completion (IEAC). ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The second EAC formula is as follows:
EAC = AC/EV x BAC
This calculation uses the Actual cost, Earned value and Budget at Completion for
the project.
This formula is the easiest to use, but it assumes that the “burn-rate” will be the
same for the remainder of the project.
Let's use our ACME Home Building project to calculate the EAC using this
formula. Take a look on the next page. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

EAC = AC/EV x BAC
EAC = $32,400/$33,149 x $165,467
EAC = .98 x $165,467
EAC = $162,158
as of 1/31 PV EV AC BAC
VAC = BAC – EAC Foundation $15,394 $15,394 $15,850 $15,394
VAC = $165,467 - $162,158 Patio $8,166 $8,166 $7,200 $8,166
Frame exterior Walls $8,748 $6,608 $6,250 $16,521
VAC = 3,309 Stairway $5,961 $2,981 $3,100 $11,922
Frame interior walls $0 $0 $0 $11,025
Install roofing trusse $0 $0 $0 $15,887
Using this EAC calculation, our project Install waterlines $0 $0 $0 $6,194
is projected to underrun by $3,309. Install gas lines $0 $0 $0 $6,255
SCHOOL OF
Install B/K fixtures $0 $0 $0 $6,317
ARCHITECTURE, URBAN
PLANNING AND
Install wiring $0 $0 $0 $18,483
CONSTRUCTION
Now let's look at the next EAC formula Install outlets/switches $0 $0 $0 $9,265
ENGINEERING
Install fixtures $0 $0 $0 $18,625

on the next page. Install felt $0 $0 $0
$2,445
Architecture
Install shingles $0 $0 $0 $2,445

Project Appraisal
Install vents $0 $0 $0 $815
Install drywall $0 $0 $0 $6,984
Milan
Painting $0 $0 $0 $6,477
11th March 2016
Install Carpeting $0 $0 $0 $2,250
$38,269 $33,149 $32,400 $165,467
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The third EAC formula is as follows:
EAC = BAC/CPI
This calculation uses the Budget at Completion (BAC) and the Cost Performance
(CPI) Index to calculate EAC.
This formula is also easy to use and assumes that the “burn-rate” remains
constant for the remainder of the project.
This formula is derived from the previous formula and thus should result in the
same EAC figure. Note that with this formula you need additional information SCHOOL OF
ARCHITECTURE, URBAN
than the previous formula. PLANNING AND
CONSTRUCTION
ENGINEERING
Let's use our ACME Home Building project and calculate the EAC using this Master of Science in
Architecture
formula. Take a look on the next page. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

EAC = BAC/CPI
EAC = $165,467/1.02 as of 1/31 PV EV AC SV CV SPI CPI
Foundation $15,394 $15,394 $15,850 0 -456 1.00 0.97
EAC = $162,222 Patio $8,166 $8,166 $7,200 0 966 1.00 1.13
Exterior Walls $8,748 $6,608 $6,250 -2,140 358 0.76 1.06
Stairway $5,961 $2,981 $3,100 -2,980 -119 0.50 0.96
VAC = BAC – EAC Project Total $38,269 $33,149 $32,400 -5,120 749 0.87 1.02
VAC = $165,467 - $162,222 as of 1/31 PV EV AC BAC

Foundation $15,394 $15,394 $15,850 $15,394
VAC = 3,245 Patio $8,166 $8,166 $7,200 $8,166
Using this EAC calculation, our project Stairway $5,961 $2,981 $3,100 $11,922
is projected to underrun by $3,245. Install roofing trusse $0 $0 $0 $15,887
Install waterlines $0 $0 $0 $6,194
Why is this answer different then the Install gas lines $0 $0 $0 $6,255
SCHOOL OF
previous calculation when it was Install wiring $0 $0 $0
ARCHITECTURE, URBAN
$18,483
PLANNING AND
mentioned that the two formulas are Install outlets/switches $0 $0 $0 $9,265
CONSTRUCTION
ENGINEERING
derived from each other? Install felt $0 $0 $0 $2,445
Architecture
Rounding to the second decimal is the Install vents $0 $0 $0 $815
Project Appraisal
reason for the $64 difference. Painting $0 $0 $0 $6,477
Milan
11th March 2016
$38,269 $33,149 $32,400 $165,467

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The fourth EAC formula is as follows:
EAC = AC/EV x [Work Completed

+ and in [Cost of work not yet begun]
Progress]
This calculation uses the Actual cost, Earned value, the value of work completed
and in process and the cost of work not yet begun.
This formula assumes that the work not yet begun will be completed as planned.
Let's use our ACME Home Building project and calculate the EAC using this
formula. Take a look on the next page.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Progress]
You need the chart to the left to
determine the first part of the formula
(actual cost and earned value).
as of 1/31 PV EV AC BAC
Foundation $15,394 $15,394 $15,850 $15,394
AC/EV = $32,400/$33,149 Patio $8,166 $8,166 $7,200 $8,166
AC/EV = .98 Stairway $5,961 $2,981 $3,100 $11,922
To obtain the remaining two parts, you Install waterlines $0 $0 $0 $6,194
will also need to use the chart, but Install gas lines $0 $0 $0 $6,255
SCHOOL OF
some calculations will be needed. Install wiring $0 $0 $0

ARCHITECTURE, URBAN
$18,483
PLANNING AND
Install outlets/switches $0 $0 $0 $9,265
CONSTRUCTION
ENGINEERING
Let's take a look on the next page at Install felt $0 $0 $0 $2,445
Architecture
the final two part of this formula. Install vents $0 $0 $0 $815
Project Appraisal
Painting $0 $0 $0 $6,477
Milan
11th March 2016
$38,269 $33,149 $32,400 $165,467

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Progress]
The project has 4 activities that are

completed and in progress
(Foundation, Patio, Frame exterior as of 1/31 PV EV AC BAC
walls and stairway). The value of Foundation $15,394 $15,394 $15,850 $15,394
Patio $8,166 $8,166 $7,200 $8,166
these activities is obtained by using Frame exterior Walls $8,748 $6,608 $6,250 $16,521
the BAC column. The total for Work Stairway $5,961 $2,981 $3,100 $11,922
Completed and in Progress is Frame interior walls $0 $0 $0 $11,025
$52,003. Install waterlines $0 $0 $0 $6,194
Install gas lines $0 $0 $0 $6,255
The final part is the cost of work not Install B/K fixtures $0 $0 $0 $6,317
SCHOOL OF
ARCHITECTURE, URBAN
yet begun. The value for this section Install outlets/switches $0 $0 $0
PLANNING AND
$9,265
CONSTRUCTION
is the sum of the activities not yet Install fixtures $0 $0 $0 ENGINEERING

$18,625
Install felt $0 $0 $0 $2,445
begun. The total Cost of work not Install shingles $0 $0 $0
Architecture
$2,445
yet begun is $113,464. Install vents $0 $0 $0 $815
Project Appraisal
Painting $0 $0 $0 $6,477
Now let's calculate our EAC. Check it Install Carpeting $0 $0 $0
Milan
$2,250
11th March 2016
out on the next page. $38,269 $33,149 $32,400 $165,467
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Progress]
EAC = (.98 x $52,003) + $113,464
EAC = $164,427
Now let's calculate the Variance at Completion (VAC).
VAC = BAC – EAC

VAC = $165,467 - $164,427
VAC = 1,040
SCHOOL OF
ARCHITECTURE, URBAN
Using this EAC calculation, our project is projected to underrun by $1,040. PLANNING AND
CONSTRUCTION
ENGINEERING
Now let's look on the next page at our final EAC formula. Master of Science in
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The final EAC formula is as follows:
EAC = AC + [1/CPI (BAC-EV)]
This calculation uses the Actual Cost (AC) Budget at Completion (BAC), Earned
Value (EV) and the Cost Performance (CPI) Index to calculate EAC.
This formula is a very subjective way of calculating EAC.
Let's use our ACME Home Building project and calculate the EAC using this
formula. Check it out on the next page.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

EAC = AC + [1/CPI (BAC-EV)]
EAC = $32,400 + [1/1.02 ($165,467 – $33,149)]
EAC = $32,400 + [.98 ($132,319) as of 1/31 PV EV AC BAC
EAC = $32,400 + $129,726 Foundation $15,394 $15,394 $15,850 $15,394
Patio $8,166 $8,166 $7,200 $8,166
EAC = $162,073 Frame exterior Walls $8,748 $6,608 $6,250 $16,521
Stairway $5,961 $2,981 $3,100 $11,922
VAC = BAC – EAC Install waterlines
Install gas lines
$0
$0
$0
$0
$0
$0
$6,194
$6,255
VAC = $165,467 - $162,073 Install B/K fixtures $0 $0 $0 $6,317
VAC = 3,394 Install outlets/switches $0 $0 $0 $9,265
Install felt $0 $0 $0 $2,445
Using this EAC calculation, our project Install shingles $0 $0 $0
SCHOOL OF
$2,445
ARCHITECTURE, URBAN
is projected to underrun by $3,394. Install vents $0 $0 $0 $815
PLANNING AND
CONSTRUCTION
ENGINEERING
Painting $0 $0 $0 $6,477
Architecture
$38,269 $33,149 $32,400 $165,467
as of 1/31 PV EV AC SV CV SPI Project Appraisal
CPI
Foundation $15,394 $15,394 $15,850 0 -456 1.00 0.97
Patio $8,166 $8,166 $7,200 0 966 1.00 1.13
Milan
Exterior Walls $8,748 $6,608 $6,250 -2,140 358 0.76 1.06
11th March 2016
Stairway $5,961 $2,981 $3,100 -2,980 -119 0.50 0.96
Project Total $38,269 $33,149 $32,400 -5,120 749 0.87 1.02
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

The outcomes of the various methods for computing EAC are shown in the table
below:
EAC Formula EAC VAC

EAC = AC + ETC $165,569 -$102
EAC = AC/EV x BAC $162,158 $3,309
EAC = BAC/CPI $162,222 $3,245
[Work Completed [Cost of work
EAC = AC/EV x and in Progress]
+ not yet begun] $164,427 $1,040
EAC = AC + [1/CPI (BAC-EV)] $162,073 $3,394
In reviewing the EAC formulas, be aware that the formula you use impacts your SCHOOL OF
project’s EAC. Though all the EAC calculations are correct, choosing the ARCHITECTURE, URBAN
PLANNING AND
appropriate formula for your project is important. The EAC formula you CONSTRUCTION
ENGINEERING
choose should be determined by the specifics of the project. Master of Science in
Architecture
If you need to review these techniques, please pay close attention to the Project Appraisal
assumptions of each.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review Module 6
At this point, you have covered all of the content in Module 6. Take some time
now to review the major items:
• Performance measurement defines how success or failure is determined on a

project. In the case of Earned Value Management, performance
measurements focus on cost and schedule management.
• Earned value performance measurements look at the project cost and

schedule performance by analyzing the cost and schedule variance along with
cost and schedule efficiency.
– Cost Variance (CV) is the difference between the earned value of work
performed and the actual cost. CV tells you the earned value of work
SCHOOL OF
performed for each dollars worth of work scheduled. ARCHITECTURE, URBAN
PLANNING AND
– Schedule Variance (SV) is the difference between the earned value of work CONSTRUCTION
performed and the work scheduled. SV tells you the value of work performed ENGINEERING
less value of work scheduled. Master of Science in
Architecture
– Cost Performance Index (CPI) is a measure of Cost Efficiency. The CPI Project Appraisal
measures the value of work performed against the actual cost.
– Schedule Performance Index (SPI) is a measure of Schedule Efficiency. The Milan
11th March 2016
SPI measures the value of work performed against the work scheduled.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Review Module 6 cont. THE COURSE
• The Estimate at Completion (EAC) is the actual cost to date plus an

objective estimate of costs for remaining authorized work. The objective in
preparing an EAC is to provide an accurate projection of cost at the
completion of the project.
• There are multiple methods for determining EAC. Each project needs to be
evaluated to determine which EAC formula best fits the project’s size and
complexity.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Summary of Module 6 THE COURSE
At this point we have examined the basic metrics and performance measures
used in EVMS. In the next module you will examine the concepts of Integrated
Baseline Review (IBR), Rebaselining, and Change Control.
have a solid understanding of the basics metrics and performance measures
used in EVMS.
This concludes Module 6.

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Module 7: Integrated Baseline Review and THE COURSE
Change Control
Welcome to Module 7. The objective of this module is to introduce you to

the concepts of the Integrated Baseline Review Process and requirements
for Change Control.
• Definition of an Integrated Baseline Review (IBR) SCHOOL OF
• Integrated Baseline Review Objectives and Responsibilities

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• Change Control Process

ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

To review some critical terminology and define the framework within which
IBRs are conducted, let’s look back at the previous six modules.
• In Module 1 we introduced you to the basic concepts of an Earned Value

Management System (EVMS)
• In Module 2 we discussed the Work Breakdown Structure (WBS),

Organizational Breakdown Structure (OBS), and the integration of WBS and
OBS to create the Responsibility Assignment Matrix (RAM) SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• In Module 3 we discussed the development of the project schedule and the ENGINEERING
schedule baseline Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
• In Module 4 we discussed the Contract Budget Base (CBB), Performance

Measurement Baseline (PMB), Control Account , Work Package, and
Planning Package setup
• In Module 5 we discussed EVMS Criteria, EVMS Terminology, and Earned

Value Methods
• In Module 6 we discussed Earned Value Metrics and Performance Measures

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Integrated Baseline Review (IBR) Definition

Now let’s discuss the Integrated Baseline Review (IBR), followed by the Change
Control Process.
An Integrated Baseline Review (IBR) is a formal review led by the Government

Program Manager and Technical Support Staff. An IBR is conducted jointly
with the Government and their Contractor counterparts.
The purpose of an IBR is to

– verify the technical content of the Performance Measurement Baseline
(PMB) SCHOOL OF
– assess the accuracy of the related resources (budgets) and schedules ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
– identify potential risks ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Performance Measurement Baseline Review

Because the IBR uses the technical content of the Performance Measurement
Baseline (PMB), it’s important that you have a solid understanding of the
PMB.
Remember the discussion on PMB from Module 4? Let’s quickly review. The
Performance Measurement Baseline (PMB) is the time-phased budget plan
against which contract performance is measured.
Now that we’ve reviewed the PMB and defined the purpose of an IBR, let’s
SCHOOL OF
discuss when an IBR is conducted. ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Integrated Baseline Review (IBR) Timing

The initial Integrated Baseline Review is typically conducted within six months
after contract award. Integrated Baseline Reviews will also be performed
when work on a production option of a development contract begins or, at
the discretion of the program manager, when a major modification to an
existing contract significantly changes the existing PMB.
When a major event occurs within the life of a program such as a Critical Design
Review (CDR), and a significant shift in the content and/or time-phasing of
the PMB occurs, the Program Manager may conduct a review of the
associated resources and schedules affected by the changes.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
The IBR is intended to be a continuous part of the Program Management CONSTRUCTION
ENGINEERING
Process by both the Government and the Contractor. Master of Science in

Architecture
Project Appraisal
Now let’s review the specific IBR objectives, on the next page.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Integrated Baseline Review (IBR) Objectives

The Objectives of the Integrated Baseline Review are to:
• Ensure that the technical content of Control Account, Work Packages, and
Planning Packages is consistent with the Contract Work Breakdown Structure
(CWBS) and the Contract Statement of Work (SOW)
• Ensure that a logical sequence of effort planned is consistent with the

contract schedule
SCHOOL OF
• Assess the validity of allocated budgets in terms of work content, resources,

ARCHITECTURE, URBAN
PLANNING AND
and time-phasing
CONSTRUCTION
ENGINEERING
Architecture
• Understand the earned value methods for measuring accomplishment and to Project Appraisal
verify that objective and meaningful performance data is provided in terms of

Milan
11th March 2016
technical accomplishment
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Integrated Baseline Review (IBR) Objectives

Integrated Baseline Review Objectives (Continued)
• Verify that effective variance analysis processes are applied to identify,

correct, and report problems including cost and schedule impacts
• Verify that proper accounting cross-checks are established so cost account

data is accurately reflected in reports to the government
• Verify that cost, schedule, and technical systems are integrated SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• Establish a forum through which the government program manager and the
ENGINEERING
program technical staff gain a sense of ownership of the cost/schedule Architecture
management process Project Appraisal
Milan
11th March 2016
Now that we’ve reviewed the IBR objectives, let’s review some of the key prof. Barrese
documents required at an IBR. Check these out on the next page. prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Integrated Baseline Review (IBR) Checklist

The following documents are typically provided by the Contractor to the
Government for review during the Integrated Baseline Review:
Statement of Work (SOW) Contract Work Breakdown Structure (CWBS)

CWBS Dictionary Work Authorization Documents (WADs)
Control Account Plans (CAPs) Integrated Master Schedule
Variance Thresholds for Reporting Management Reserve Logs
Undistributed Budget Logs Responsibility Assignment Matrix (RAM)
Earned Value Methods  Earned Value Measurement Criteria SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
Organizational Breakdown Structure (OBS) CONSTRUCTION
ENGINEERING
Architecture
All of these documents were discussed in previous modules. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Integrated Baseline Review (IBR) THE COURSE
Responsibilities
Now that we’ve discussed the key objectives for conducting an IBR and
reviewed the IBR Checklist, let’s review the responsibilities.
As the primary beneficiary of the IBR process, the Government Program

Manager is responsible for the timeliness and successful execution of the
review.
The Program Office Technical Team assesses the PMB and identifies risk areas.
The Control Account Managers are responsible for the integrity and SCHOOL OF
compliance of their Control Accounts/Work Packages. ARCHITECTURE, URBAN

PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Key Integrated Baseline Review (IBR) Concepts

Check your understanding by reviewing these key Integrated Baseline Review
(IBR) Concepts:
• The IBR is an assessment of the contractor’s Performance Measurement

Baseline (PMB) and is conducted jointly by the Government and the
Contractor.
• The IBR is conducted within six months of the award of a new contract or as
required due to a major change to an existing contract.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
• The responsibility for conducting the IBR lies with the Program Manager and
CONSTRUCTION
ENGINEERING
the Program Office Technical Staff. Master of Science in

Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Integrated Baseline Review (IBR) Summary
In summary, the IBR facilitates an understanding of the overall technical,

cost, and schedule processes. The Government and Contractor technical
counterparts can jointly conduct recurring reviews of PMB planning,
status, and Estimates at Completion (EAC) to ensure that baseline
integrity is maintained throughout the life of the contract.
Now that we’ve discussed the Integrated Baseline Review Process, let’s
discuss what happens when there are changes made to the PMB and the SCHOOL OF
ARCHITECTURE, URBAN
Change Control Process used to track baseline changes. Take some time to
PLANNING AND
CONSTRUCTION
ENGINEERING
review this on the following pages. Master of Science in

Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control Overview
As we’ve discussed, the Performance Measurement Baseline (PMB) is the

time-phased budget plan against which contract performance is measured.
Meaningful performance measurement data require a documented PMB,
which reflects the most current conditions of the program.
Once the Performance Measurement Baseline (PMB) is frozen or established,

cost and schedule changes are processed through formal change control
procedures. Authorized changes must be incorporated into the PMB in a SCHOOL OF
ARCHITECTURE, URBAN
timely manner and reflected in both budgets and schedules.

PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
The Change Control Process is used to establish, analyze, communicate, and Project Appraisal
record approved changes to the program baseline. Milan

11th March 2016
prof. Barrese
Now let’s discuss the specific objectives of a Change Control Process. prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control Objectives

The objectives of a Change Control Process are to:
• Document, track, and communicate changes to the Performance

Measurement Baseline
• Reconcile current budgets to prior budgets in terms of changes to the

authorized work in the detail needed by management for effective control
• Control retroactive changes to records pertaining to work performed that SCHOOL OF
would change previously reported amounts for actual costs, earned value, orARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
budgets. Adjustments should be made only for correction of errors, routine ENGINEERING
accounting adjustments, effects of customer or management directed Master of Science in

Architecture
changes, or to improve the baseline integrity and accuracy of performance Project Appraisal
measurement data Milan

11th March 2016
prof. Barrese
• Prevent revisions to the program budget except for authorized changes prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control: Baseline Changes

What types of baseline changes are subject to the change control process? Are
all changes subject to it? Let’s discuss types of baseline changes that would be
subject to the change control process.
Baseline changes may occur as a result of

– contractual changes/modifications
– application of undistributed budget
– the use of management reserve
– re-planning SCHOOL OF
ARCHITECTURE, URBAN
– formal reprogramming PLANNING AND

CONSTRUCTION
ENGINEERING
Architecture
We will examine each of these in more detail on the following pages, but first,
Project Appraisal
take a look on the next page at the types of documentation that must be
completed for these changes.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Baseline changes must be documented and reflected in the Cost Performance
Reports (CPRs) and Change Control Logs, and must be coordinated with the
procuring agency.
Revised Work Authorization Documents (WADs), Revised Control Account

Plans (CAPs), and Revision Request Forms are all required as part of the
Change Control Process.
Revised Statement of Work (SOW) and Contract Work Breakdown Structure

(CWBS) documentation may also be required for contractual modifications.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

Contractual changes/modifications are  contractual changes/modifications
initially incorporated into the Contract – application of undistributed budget
Budget Base (CBB), typically as part of – the use of management reserve
– re-planning
Undistributed Budget (UB), immediately – formal reprogramming
after the change is received. These
modifications can be either definitized or
authorized unpriced work.
Definitized Work Authorized Unpriced Work
Definitized work is incorporated into Authorized Unpriced Work, including SCHOOL OF

ARCHITECTURE, URBAN
the PMB within 60 days of cost of money, is entered in UB using PLANNING AND
CONSTRUCTION
definitization. the proposal dollars at total cost. It may ENGINEERING
be maintained in UB until definitized or

Architecture
distributed to the responsible Project Appraisal
organizations. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control: Undistributed Budget

Undistributed Budget is budget applicable to  contractual changes/modifications
contract effort that has not yet been  application of undistributed budget
identified to specific WBS elements at or – the use of management reserve
– re-planning
below the lowest level of reporting to the – formal reprogramming
customer.
Distribution of Undistributed Budget (UB) is authorized by the Program

Manager. UB may be established at the time of initial contract award and/or
when contract modifications are received.
SCHOOL OF
The distribution of UB must be identified in the Contract Budget Base (CBB) ARCHITECTURE, URBAN
PLANNING AND
and Undistributed Budget (UB) Log for each authorized contract CONSTRUCTION
ENGINEERING
change/modification. This is a requirement as part of a Change Control Master of Science in

Architecture
Process.
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control: Management Reserve

Management Reserve (MR) is an amount of  contractual changes/modifications
the total contract target cost withheld for  application of undistributed budget
management control purposes rather than  the use of management reserve
– re-planning
designated to accomplish specific tasks.
– formal reprogramming
Baseline changes caused by a
distribution of Management Reserve (MR)
are also subject to Change Control.
Distribution of Management Reserve (MR) is at the discretion of the Program

Manager and is based on a justified request for budget to perform an
unidentified scope of work that is within the contract SOW.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
Distribution of Management Reserve must be identified in the Contract Budget ENGINEERING
Base (CBB) and Management Reserve (MR) Log. This is a requirement as Master of Science in
Architecture
part of a Change Control Process. Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control: Re-Planning

Baseline changes caused by a re-planning of  contractual changes/modifications
Work Packages are also subject to  application of undistributed budget
Change Control.  the use of management reserve
 re-planning
Re-planning of Work Packages within Control Accounts is sometimes

necessary to compensate for internal conditions which affect the planning
and scheduling of remaining work. Except for correction of errors and
accounting adjustments, no retroactive changes will be made to budgets for
completed work. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Re-planning should be accomplished within the constraints of the previously Master of Science in
Architecture
established Control Account schedule and budget.
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control: Re-Planning

When more extensive re-planning of future  contractual changes/modifications
work is necessary and the total Control  application of undistributed budget
Account budget must be changed,  the use of management reserve
 re-planning
Management Reserve may be used to
increase or decrease the control account
budgets.
If re-planning requires that work and associated budget be transferred between
control accounts, this transfer must also be controlled and documented.
Major internal re-planning/re-baselining may be required when the result of SCHOOL OF
cost, schedule or technical issues have caused the original plan to become ARCHITECTURE, URBAN
PLANNING AND
unrealistic. The contract target cost remains unchanged. The ground rules CONSTRUCTION
ENGINEERING
for re-baselining the remaining effort are submitted to the procuring agency Master of Science in
Architecture
prior to implementation, and all baseline changes must be documented and
Project Appraisal
tracked.
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Change Control: Over Target Baseline (OTB)

Over Target Baseline (OTB)/Formal  contractual changes/modifications
Reprogramming may arise when contract  application of undistributed budget
performance deviates from the plan to such  the use of management reserve
 re-planning
an extent that the original plan no longer
 formal reprogramming
serves as a reasonable measurement device.
In this case, formal reprogramming to a
budget that exceeds the CBB may be necessary.
The remaining work and budget should be thoroughly analyzed prior to

reprogramming. An overrun contract and overrun projections are not the
most important factors in the decision. Changing a baseline merely to SCHOOL OF
ARCHITECTURE, URBAN
compensate for current variances is inappropriate. PLANNING AND

CONSTRUCTION
ENGINEERING
The procuring agency must be consulted prior to reprogramming. The change Architecture
to the budget and schedule are recorded as though the contractual scope Project Appraisal
had been changed. Changes to the baseline budget are fully documented Milan
11th March 2016
and traceable per the change control process.
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review Module 7
• The IBR facilitates an understanding of the overall technical, cost, and

schedule processes. The Government and Contractor technical counterparts
can jointly conduct recurring reviews of PMB planning, status, and Estimates
at Completion (EAC) to ensure that baseline integrity is maintained
throughout the life of the contract.
Change Control is required to:

SCHOOL OF
• Maintain the integrity of the Performance Measurement Baseline

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• Incorporate authorized changes in a timely manner, recording the effects of ENGINEERING
such changes in budgets and schedules Master of Science in

Architecture
• Reconcile current budgets to prior budgets in terms of changes to the Project Appraisal
authorized work and internal re-planning in the detail needed by management Milan
for effective control 11th March 2016
• Prevent revisions to the program budget except for authorized changes prof. Barrese
prof. Pandolfi
• Document changes to the Performance Measurement Baseline
KEY FACTS ABOUT
THE COURSE
Summary of Module 7
At this point we have examined the basic metrics and performance measures
used in EVMS. In the next module you will examine EVMS Reporting.
have a solid understanding of the basics metrics and performance measures
used in EVMS.
This concludes Module 7. SCHOOL OF

ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Module 8: Government Required Reports

Welcome to Module 8. The objective of this module is to introduce you to
Government required reports.
• Define Cost Performance Report (CPR)
• Define Cost/Schedule Status Report (C/SSR)
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

In the previous seven modules, we discussed the framework needed to perform
Earned Value and develop an Earned Value Management System (EVMS).

properly implementing an earned value management system (EVMS)
• In Module 2 we discussed the development of the work breakdown structure

(WBS), organizational breakdown structure (OBS) and the integration of WBS
and OBS in creating the responsibility assignment matrix (RAM)
• In Module 3 we discussed the development of the project schedule and the

schedule baseline SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
• In Module 4 we discussed the development of the project budget and the cost
ENGINEERING
baseline Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE

• In Module 5 we discussed EVMS criteria and the three key components to
earned value: Planned Value (PV) , Earned Value (EV) and Actual Cost (AC).
• In Module 6 we discussed Earned value metrics and performance

measurements (CV, SV, SPI, CPI,etc.)
• In Module 7 we discussed the Integrated Baseline Review (IBR), rebaselining

of a project and proper baseline control or change control
Now let’s look at the Government reporting requirements for earned value. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Government Reporting Requirements

There are several reports which may be used for Earned Value Management
Reporting and Analysis.
The most commonly used reports are:

• Cost Performance Report (CPR)
• Cost/Schedule Status Report (C/SSR)
Let’s take a look at each type of report on the next page.

SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Cost Performance Report (CPR)

The Cost Performance Report (CPR) is the most comprehensive of the EVMS
reports. It is normally a monthly report and has five different formats.
• Format 1 Work Breakdown Structure (WBS)

• Format 2 Organizational Categories (OBS)
• Format 3 Baseline
• Format 4 Staffing (Manpower)
• Format 5 Variance Analysis Report
Generally, all five formats are applied to a contract requiring EVMS. However, SCHOOL OF
ARCHITECTURE, URBAN
the customer may not require all the reports and may delete one or more. PLANNING AND
CONSTRUCTION
ENGINEERING
Most customers will require at least the CPR Format 1 (WBS) and Format 5 Architecture
Project Appraisal
(Variance Analysis Report).
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Cost Performance Report (CPR)

All Performance Measurement data reported in the CPR are derived from the
formal Earned Value Management System (EVMS).
All reported changes to the project baseline, management reserve (MR) and
contingency should be traceable through the formal Earned Value
Management System (EVMS) and CPR reports.
On the following pages, we will look at examples of the five CPR reports using
the ACME House Building Project.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Cost Performance Report (CPR) - Example
First let’s quickly review the projects current status that will be used in the
example reports.
ACME Home Building Project
Project Start date: January 15th as of 1/31 PV EV AC SV CV SPI CPI
Foundation $15,394 $15,394 $15,850 0 -456 1.00 0.97
Patio $8,166 $8,166 $7,200 0 966 1.00 1.13
Status Date: January 31th Exterior Walls $8,748 $6,608 $6,250 -2,140 358 0.76 1.06
Stairway $5,961 $2,981 $3,100 -2,980 -119 0.50 0.96
Project Total $38,269 $33,149 $32,400 -5,120 749 0.87 1.02
EAC calculations used for the ACTUALS ETC EAC
Activity January February March April Total
example will be based on the 1.1.1.1 Pour foundation $15,850 $15,850
assumptions discussed on 1.1.1.2 Install Patio
1.1.1.3 Pour stairway
$7,200
$3,100 $8,942
$7,200
$12,042
Page 35 and 36 of Module 6. 1.1.2.1 Frame exterior walls
1.1.2.2 Frame interior walls
$6,250 $9,913
$11,025
SCHOOL OF
$16,163
ARCHITECTURE, URBAN
$11,025
See the charts to the right for 1.1.2.3 Install roofing trusse
1.1.3.1 Install waterlines
$15,887
$6,194
PLANNING AND
$15,887
CONSTRUCTION
$6,194
an overview. 1.1.3.2 Install gas lines
1.1.3.3 Install B/K fixtures
$6,255
$6,317
ENGINEERING
$6,255
$6,317
1.1.4.1 Install wiring $18,483 Master of Science in
$18,483
Architecture
1.1.4.2 Install outlets/switches $9,265 $9,265
Now let’s take a look at the Cost 1.1.4.3 Install fixtures

1.1.5.1 Install drywall
$13,969
$6,984
$4,656 $18,625
Project Appraisal
$6,984
Performance Reports (CPR) 1.1.5.2 Install Carpeting

1.1.5.3 Painting
$3,100
$6,477
$3,100
$6,477
Milan
on the next page. 1.1.6.1 Install felt
1.1.6.2 Install shingles
$1,834 $611
$2,445
$2,445
11th March 2016
$2,445
1.1.6.3 Install vents $812 $812
$32,400 $84,850 $43,663 $4,656 $165,569
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Cost Performance Report (CPR) Format 1 - WBS

The Cost Performance Report (CPR) Format 1 includes current period,
cumulative, and at complete values for each WBS element. It also contains
header data showing quantity, targets, ceilings, and Management Estimate
At Completion (MEAC) calculations.
This report also contains data about budget, price, Management Reserve
(MR), Undistributed Budget (UB), and MEAC cases.
A copy of the CPR Format 1 for the ACME Home Building project is on the
following page. Please review the entire report but pay close attention to
the lower section (highlighted red) of the report. This is the Performance
data section that contains the current and cumulative cost and schedule SCHOOL OF
ARCHITECTURE, URBAN
information for the project. PLANNING AND

CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Cost Performance Report (CPR) Format 1 - WBS

COST PERFORMANCE REPORT Form Approved
FORMAT 1 - WORK BREAKDOWN STRUCTURE OMB No. 0704-0188
1. CONTRACTOR 2. CONTRACT 3. PROGRAM 4. REPORT PERIOD
a. NAME: ACME Construction a. NAME: ACME Housing a. NAME: ACME Housing a. FROM: 01-JAN-02
b. LOCATION: Denver, CO b. NUMBER: ACME - 1000 b. PHASE (X one) b. TO: 31-JAN-02
c. TYPE: FFP [ ] RDT&E [X] PRODUCTION
d. SHARE RATIO:
5. CONTRACT DATA
a. QTY b. NEG COST c. EST COST AUTH UNPR d. TGT PROFIT/FEE e. TGT PRICE f. EST PRICE g. CONT CEILING h. EST CEILING
0 $183,852 $0 $36,147 / 20.00% 219,999 219,999 0 0
6. EST COST AT MGMT EST AT COMPL CONT BUDGET BASE VARIANCE 7. AUTHORIZED CONTRACTOR REPRESENTATIVE
COMPLETION (1) (2) (3)
a. NAME (Last, First, Middle Initial) b. TITLE
a. BEST CASE $227,009 Ted Smith Manager
b. WORST CASE $165,467 c. SIGNATURE d. DATE SIGNED
c. MOST LIKELY $226,158 $183,852 -$42,306 31-JAN-02
8. PERFORMANCE DATA CURRENT PERIOD CUMULATIVE TO DATE AT COMPLETION
BUDGETED COST ACTUAL VARIANCE BUDGETED COST ACTUAL VARIANCE
ITEM COST COST
WORK WORK WORK WORK WORK WORK
SCHED PERF PERF SCHED COST SCHED PERF PERF SCHED COST BUDGET EST VAR
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
1.1.1 Concrete 9,670 8,757 26,150 -912 -17,393 9,670 8,757 26,150 -912 -17,393 11,485 28,873 -17,388
SCHOOL OF
1.1.2 Framing 7,089 5,355 6,250 -1,734 -895 7,089 5,355 6,250 -1,734 -895 27,147 28,041 -893
ARCHITECTURE, URBAN
PLANNING AND
1.1.3 Plumbing 0 0 0 0 0 0 0 0 0 0 5,704 5,704 0
CONSTRUCTION
1.1.4 Electrial 0 0 0 0 0 0 0 0 0 0 14,070 14,070 ENGINEERING
0
1.1.5 Interior 0 0 0 0 0 0 0 0 0 0 6,328 7,178 Master of Science in

-850
Architecture
1.1.6 Roofing 0 0 0 0 0 0 0 0 0 0 1,730 1,730 0
OVERHEAD 16,062 14,317 0 -1,745 14,317 16,062 14,317 0 -1,745 14,317 75,684 61,371 14,313Appraisal
Project
b. COST OF MONEY 19 17 0 -3 17 19 17 0 -3 17 82 65 17
c. GEN & ADMIN 5,429 4,702 0 -726 4,702 5,429 4,702 0 -726 4,702 23,237 18,537 4,700
d. UNDISTRIBUTED BUDGET 0 0 0
Milan
e. SUBTOTAL (PM Baseline) 38,269 33,149 32,400 -5,120 749 38,269 33,149 32,400 -5,120 749 165,467 165,569 -102
f. MANAGEMENT RESERVE 18,385
11th March 2016
g. TOTAL 38,269 33,149 32,400 -5,120 749 38,269 33,149 32,400 -5,120 749 183,852
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Cost Performance Report (CPR) Format 2 – THE COURSE
Organizational Categories
The Cost Performance Report (CPR) Format 2 includes current period,
cumulative, and at complete values for each Organization (Performing or
Responsible), It also contains header data showing quantity, targets,
ceilings, and MEAC cases.
This report also contains data about budget, price, Management Reserve
(MR), Undistributed Budget (UB), and MEAC cases.
The reporting details in CPR Format 2 are the same as on the CPR Format 1
accept that it is structured by organization.
SCHOOL OF
ARCHITECTURE, URBAN
A copy of the CPR Format 2 for the ACME Home Building project is on PLANNING AND
CONSTRUCTION
following page. Please review the entire report but pay close attention to
ENGINEERING
the lower section (highlighted red) of the report. This is the Performance
Architecture
data section that contains the current and cumulative cost and schedule Project Appraisal
information for the project.

Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Organizational Categories
FORMAT 2 - ORGANIZATIONAL CATEGORIES OMB No. 0704-0188
d. SHARE RATIO:
5. PERFORMANCE DATA CURRENT PERIOD CUMULATIVE TO DATE AT COMPLETION
BUDGETED COST ACTUAL VARIANCE BUDGETED COST ACTUAL VARIANCE
ITEM COST COST
WORK WORK WORK WORK WORK WORK
SCHED PERF PERF SCHED COST SCHED PERF PERF SCHED COST BUDGET EST VAR
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
Construction
Construction 12,116 9,560 10,300 -2,556 -740 12,116 9,560 10,300 -2,556 -740 17,226 17,965 -739
Management
Project Management 7,503 5,668 6,250 -1,835 -582 7,503 5,668 6,250 -1,835 -582 19,475 20,057 -582
SubCont
Subcontractor Mgmt 13,203 13,203 15,850 0 -2,647 13,203 13,203 15,850 0 -2,647 36,272 38,919 -2,647
SCHOOL OF
SUBTOTAL 32,821 28,430 32,400 -4,391 -3,970 32,821 28,430 32,400 -4,391 -3,970 72,973 76,941 ARCHITECTURE,
-3,969 URBAN
b. COST OF MONEY 19 17 0 -3 17 19 17 0 -3 17 82 65 PLANNING
17 AND
c. GEN & ADMIN 5,429 4,702 0 -726 4,702 5,429 4,702 0 -726 4,702 23,237 18,537 CONSTRUCTION
4,700
d. UNDISTRIBUTED BUDGET 0 0 ENGINEERING
0
e. SUBTOTAL (PM Baseline) 38,269 33,149 32,400 -5,120 749 38,269 33,149 32,400 -5,120 749 165,467 165,569 -102
f. MANAGEMENT RESERVE 18385 Master of Science in
g. TOTAL 38,269 33,149 32,400 -5,120 749 38,269 33,149 32,400 -5,120 749 183,852 Architecture
6. RECONCILIATION TO CONTRACT BUDGET BASE
a. VARIANCE ADJUSTMENT 0 0 Project Appraisal
b. TOTAL CONTR VARIANCE 0 0 0 0 0
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Baseline
Cost Performance Report (CPR) Format 3 displays a forecast of monthly
changes to the Baseline, Management Reserve, and Undistributed Budget
for the entire project, and contains header data showing schedule dates for
the contract and the project.
FORMAT 3 - BASELINE DOLLARS IN THOUSANDS OMB No. 0704-0188
d. SHARE RATIO:
5. CONTRACT DATA
a. ORIGINAL NEGOTIATED COST b. NEGOTIATED CONTRACT
c. CURRENT NEGOTIATED d. ESTIMATED COST e. CONTRACT BUDGET f. TOTAL ALLOCATED g. DIFFERENCE
CHANGE COST (A + B) AUTH UNPRICED WORK BASE (C + D) BUDGET (E - F)
$0 $0 $0 $0 $0 $0 $0
h. CONTRACT START DATE i. DEFINITIZATION DATE j. PLANNED COMPL DATE k. CONT COMPLETION DATE l. EST COMPLETION DATE
01-JAN-01 31-DEC-01
6. PERFORMANCE DATA BUDGETED COST FOR WORK SCHEDULED (NON - CUMULATIVE)
BCWS BCWS SIX MONTH FORECAST
ITEM CUM FOR
TO REPORT +1 +2 +3 +4 +5 6+ UNDISTRIB TOTAL
DATE PERIOD FEB02 MAR02 APR02 MAY02 JUN02 JUL02 AUG02 SEP02 OCT02 NOV02 DEC02 BUDGET BUDGET
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16)
a. PM BASELINE
(BEGIN OF PERIOD) 165 0 0 0 0 0 0 0 0 0 0 0 0 0 165 SCHOOL OF
b. BASELINE CHANGES AUTH ARCHITECTURE, URBAN
DURING REPORT PERIOD
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
c. PM BASELINE
(END OF PERIOD) 38 73 49 5 0 0 0 0 0 0 0 0 0 165
7. MANAGEMENT RESERVE 18
8. TOTAL 184
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Staffing
The Cost Performance Report (CPR) Format 4 displays a forecast of hours and
person-months by Organization (Performing/Responsible), and contains
header data showing schedule dates for the contract and the project. This
report also contains program variance thresholds for month, cumulative, and
at-complete percents and values.
FORMAT 4 - STAFFING OMB No. 0704-0188
d. SHARE RATIO:
5. PERFORMANCE DATA FORECAST (NON - CUMULATIVE)
ACTUAL
END OF SIX MONTH FORECAST BY MONTH
ORGANIZATIONAL ACTUAL CURRENT
CATEGORY CURRENT PERIOD +1 +2 +3 +4 +5 +6 AT
PERIOD (CUM) FEB02 MAR02 APR02 MAY02 JUN02 JUL02 AUG02 SEP02 OCT02 NOV02 DEC02 COMPL
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15)
Construction
Hours 0 0 121 0 0 0 0 0 0 0 0 0 0 343
Man Months 0 0 1 0 0 0 0 0 0 0 0 0 0 2
SCHOOL OF
Project Management ARCHITECTURE, URBAN
Hours 0 0 134 0 0 0 0 0 0 0 0 0 0 134 PLANNING AND
Man Months 0 0 1 0 0 0 0 0 0 0 0 0 0 1 CONSTRUCTION
Subcontractor Mgmt
ENGINEERING
Hours 0 0 138 0 0 0 0 0 0 0 0 0 0 305
Man Months 0 0 1 0 0 0 0 0 0 0 0 0 0 2
Architecture
Project Appraisal
Milan
11th March 2016
6. TOTAL DIRECT
Hours 0 0 393 0 0 0 0 0 0 0 0 0 0 781
Man Months 0 0 2 0 0 0 0 0 0 0 0 0 0 5 prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Variance Analyses Report

The Cost Performance Report (CPR) Format 5 provides narrative explanation
of cost, schedule, and other problems related to total contract, undistributed
budget (UB), management reserve (MR), PMB, and manpower.
The variance reporting thresholds are pre-determined prior to the start of the
program. Explanations and problem analysis reporting is only required for
those variances that breech the pre-set threshold(s). The report will
indicate those variances needing explanation.
A copy of the Variance Analyses Report is on the following page. The

variance report uses the ACME Home Building project information.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Variance Analyses Report

WBS: 1.1 Manager: Phillips
Desc: House Building Project
(EAC - Actuals thru JAN-02 + ETC)
Charge #:
Header information includes quantified
TOTAL $$ BCWS BCWP ACWP SCHED-VAR % COST-VAR %
cost and schedule variances and indicates
Mon Hours
Cum Hours
389
389
328
328
0
0
-61
-61
-16
-16
328
328
100
100
out of tolerance items. Explanations may
Mon Dollars 38,269 33,149 32,400 -5,120 * -13 749 * 2 be required for monthly, cumulative, and at
Cum Dollars 38,269 33,149 32,400 -5,120 * -13 749 * 2
complete variances.
BAC Hours 1,732 EAC: 1,404 VAC: 328 19
BAC Dollars 165,467 EAC: 165,569 VAC: -103 * 0
PROBLEM ANALYSIS: (* = requires explanation)

Problem Analysis:
The schedule variance is due to delays in completing the framing of the exterior walls. This delay
is caused by both material shortages and availability of qualified resources.
This section is used to explain the variance
drivers, abnormal conditions and factors
The cost variance is due to increased productivity in installing the patio. The concrete subcontractor creating variances, and other issues, problems,
developed a faster way of forming a pour the stairway.
and concerns.
TASK/PROJECT IMPACT:
Task/Project Impact: SCHOOL OF
Framing the exterior walls will be completed on schedule and no delay will occur to the project complete. This section is used to explain the impact toARCHITECTURE, URBAN
the Control Account and overall Project. PLANNING AND
CONSTRUCTION
ENGINEERING
CORRECTIVE ACTION PLAN: Architecture
The current skill mix will be adjusted to complete this activity as scheduled. The ACME project
Corrective Action Plan:
management team is conducting a review of all future work to determine if resource availability will an issue. This section provides the recovery and risk Project Appraisal
mitigation plan.
Milan
Preparer: Dept: Initials: Date: 11th March 2016
Approval: Dept: Initials: Date:

prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Cost/Schedule Summary Report (C/SSR)

The final standard EVMS report we will review is the Cost/Schedule Summary
Report (C/SSR).
The C/SSR (Cost/Schedule Summary Report) is used primarily for reporting

cost and schedule summary data to the government or contractors on
specific procurements.
This report includes cumulative and at complete summaries for each WBS
element, and contains header data showing contractor and contract
information, and MEAC calculations.
This report also contains data about contract price, budget, Management
Reserve (MR), Undistributed Budget (UB), and MEAC cases. SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
It is very similar to the CPR Format 1 except that the C/SSR has only CONSTRUCTION
ENGINEERING
cumulative information. Master of Science in

Architecture
A copy of the C/SSR for the ACME Home Building project in on the following Project Appraisal
page. Milan
11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Cost/Schedule Summary Report (C/SSR)

COST/SCHEDULE STATUS REPORT Form Approved
OMB No. 0704-0188
a. NAME: a. NAME: ACME Housing a. NAME: ACME Housing a. FROM: 01-JAN-02
ACME Construction b. NUMBER: ACME - 1000 b. PHASE (X one) [ ] RDT&E [X] PRODUCTION b. TO: 31-JAN-02
b. LOCATION: c. TYPE: FFP
Denver, CO d. SHARE RATIO:
5. AUTHORIZED CONTRACTOR REPRESENTATIVE c. SIGNATURE d. DATE SIGNED
a. NAME (Last, First, Middle Initial) b. TITLE 31-JAN-02
Ted Smith Manager
6. CONTRACT DATA
a. ORIGINAL CONTRACT TARGET COST b. NEGOTIATED CONTRACT CHANGES c. CURRENT TARGET COST (A + B) d. EST COST OF AUTH UNPR WORK
$0 $0 $0 $0
e. CONTRACT BUDGET BASE (C + D) f. MGMT ESTIMATE AT COMPLETION g. VARIANCE AT COMPLETE (E - F) h. OVER TARGET BASELINE DATE
$0 $0 $0 01-JAN-02
7. PERFORMANCE DATA CUMULATIVE TO DATE AT COMPLETION
BUDGETED COST ACTUAL VARIANCE
ITEM COST
WORK WORK WORK
SCHEDULED PERFORMED PERFORMED SCHEDULED COST BUDGET ESTIMATE VARIANCE
(1) (2) (3) (4) (5) (6) (7) (8) (9)
1.1.1 Concrete 9,670 8,757 26,150 -912 -17,393 11,485 28,873 -17,388
1.1.2 Framing 7,089 5,355 6,250 -1,734 -895 27,147 28,041 -893
SCHOOL OF
ARCHITECTURE, URBAN
1.1.3 Plumbing 0 0 0 0 0 5,704 5,704 0
PLANNING AND
CONSTRUCTION
1.1.4 Electrical 0 0 0 0 0 14,070 14,070 0
ENGINEERING
1.1.5 Interior 0 0 0 0 0 6,328 7,178 -850

Architecture
1.1.6 Roofing 0 0 0 0 0 1,730 1,730 0
Project Appraisal
OVERHEAD 16,062 14,317 0 -1,745 14,317 75,684 61,371 14,313
b. COST OF MONEY 19 17 0 -3 17 82 65 17
c. GEN & ADMIN 5,429 4,702 0 -726 4,702 23,237 18,537 4,700
d. UNDISTRIBUTED BUDGET 0 0 Milan0
e. SUBTOTAL (PM Baseline) 38,269 33,149 32,400 -5,120 749 165,467 165,569 11th
-102March 2016
f. MANAGEMENT RESERVE 18,385
g. TOTAL 38,269 33,149 32,400 -5,120 749 183,852
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
THE COURSE
Review Module 8
• There are two major formats for EVMS reports

– Cost Performance Reports (CPR)
– Cost/Schedule Summary Report (C/SSR)
• The Cost Performance Report (CPR) has five formats:

– Format 1 Work Breakdown Structure (WBS)
– Format 2 Organizational Categories (OBS)
– Format 3 Baseline
– Format 4 Staffing (Manpower) SCHOOL OF
ARCHITECTURE, URBAN
– Format 5 Variance Analysis Report PLANNING AND

CONSTRUCTION
ENGINEERING
• CPR Format 1 and 5 are the most widely used Architecture
Project Appraisal
• The Cost/Schedule Summary Report (C/SSR) is similar to CPR Format 1 Milan

11th March 2016
prof. Barrese
prof. Pandolfi
KEY FACTS ABOUT
Summary of Module 8 THE COURSE
At this point we have examined the basic reporting formats of EVMS.
If you have a firm grasp of the concepts covered in this module, along with all
provide modules, you have completed the EVMS tutorial. Otherwise, review
this or any other module to ensure you have a solid understanding of the
Earned Value Management.
Congratulations, you have completed Module 8 and the EVMS tutorial.
SCHOOL OF
ARCHITECTURE, URBAN
PLANNING AND
CONSTRUCTION
ENGINEERING
Architecture
Project Appraisal
Milan
11th March 2016
prof. Barrese
prof. Pandolfi

Project Management (Prof. Barrese)

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Project Management (Prof. Barrese)

Diunggah oleh

Hak Cipta:

Format Tersedia

A Framework for Project Management

prof. Carlo Barrese

Introduction to Earned Value

This module will include the following topics:

• Earned Value Management defined

• The differences between Traditional Management and Earned Value

• The framework necessary for proper Earned Value implementation Milan

What is Earned Value Management?

integration and measurement of cost, schedule, and technical (scope)

Earned Value Management is intended to provide data from a

– Indicate work progress objectively ENGINEERING

– Are valid, timely and auditable Master of Science in

– Are at a practical level of summarization Milan

Why use Earned Value Management?

• Where have we been?

• Where are we now?

• Where are we going?

following pages will discuss these. ENGINEERING

There is an important and fundamental difference between the data

what was actually 0

Actuals 10 20 30 40 50 60 prof. Barrese

Earned Value Management

– the budget (or planned) value of work scheduled

– the actual value of work completed

– the “earned value” of the physical work completed

Earned Value Management

beginning of the project. 25

interpreted from the graph? Budget 5 10 15 20 25 30 35 40 45 50 55 60

Let’s take a closer look on the Actuals 10

next page. Forecast 70 80 90 100 110 120

Earned Value Management

Earned Value Management

Schedule Variance - the project is experiencing a schedule variance of 15. This

Forecast 70 80 90 100 110 120

Earned Value Management

Budget 5 10 15 20 25 30 35 40 45 50 55 60 Project Appraisal

Earned Value Management

While Earned Value Management provides you with…

Earned Value in a Management Environment

What is Program/Project Management?

Program/Project Management requires the ability to get the job done:

These requirements are know as the Scope

So how do projects and programs differ? Master of Science in

Take a look on the next page. Quality Project Appraisal

Time Cost/Resources prof. Barrese

What is a Project vs. Program

The Characteristics of a Program are:

Earned Value Management is a Program Management

Management. While many Reporting

components comprise Program Risk Master of Science in

tutorial focuses on the Earned

Value Management component. Milan

The EVMS framework can be divided into three phases:

1. Inputs - what is needed to implement Earned Value

1. Earned Value Methods – formulas, metrics and performance SCHOOL OF

1. Outputs – reporting requirements (structure, time-phases, details) Master of Science in

• Work Breakdown Structure (WBS)

properly represent the program/project current and future status.

Management System (EVMS)

through 7 Earned Value

Reviewing the major items of this module:

• Earned Value Management is a subset of Program/Project Management Project Appraisal

management of the program/project prof. Barrese