Last Updated: July 2nd, 2024

This article discusses how to avoid Corrective Action Requests (CARs) that can result because of a lack of attention to level of effort (LOE) planned in support of discretely measured tasks.  The symptom: repeatedly triggering the Defense Contract Management Agency (DCMA) or DOE Office of Project Management (PM-30) EVMS data quality test metric specifications for instances of “BCWP with no ACWP” or “ACWP with no BCWP.”  Are there legitimate reasons for this to occur? 

EVM System Implementation Issue?

Impact of LOE Planning in Support of Short Discrete Tasks

1. The discretely measured work starts early:
   1. The discrete task earns value early (ahead of schedule) and ACWP occurs for them as normal within the system – when the work is completed.
   2. The LOE support is provided early, and should the CAM fail to update the schedule as they did with the discrete task, ACWP occurs, also as normal within the system, but unlike the discretely measured work being supported, providing the support early does not result in earned value (BCWP).  Note: the schedule may or may not include LOE tasks, either way, the schedule LOE tasks and/or the EVM cost tool LOE work packages must be actively maintained.  The schedule and cost data must be in alignment. 

Results: 

• The EVMS test metrics are triggered for ACWP (in the earlier period) without BCWP.
• The EVMS test metrics are triggered for BCWS and BCWP (in the originally planned period) with no ACWP.
• Distortion:  Support work is really ahead of schedule, but system does not show that fact.
   

2. The discretely measured work starts later than originally planned:
   1. The discrete task earns value late (behind schedule) and ACWP occurs for them as normal within the system.  Note: if the discretely measured task was actually replanned to the new date, they would not be behind schedule.
   2. The LOE support is provided later in time (again should the CAM fail to update the schedule in the form of ACWP) when the discretely measured task actually happens, also as normal within the system, but unlike the discretely measured work being supported, doing the support work later does not show up there.  By definition of LOE, BCWP will be earned where the work was originally planned.

Results:

• The EVMS test metrics are triggered for BCWS and BCWP (in the originally planned period) with no ACWP.
• The EVMS test metrics are triggered for ACWP (in the later period) without BCWP.
• Distortion: Support work is really behind schedule, but system shows no schedule variance (by definition).
   

Seems like a Catch 22 situation, doesn’t it?  It does not have to be.  There are options for replanning the work within the structured framework of an EVMS.  Accepted methods on how to handle LOE replanning are documented in DoD and DOE PM-30 guidance.  This includes the DoD EVMS Interpretation Guide (EVMSIG) and the DOE PM-30 EVMS Compliance Review Standard Operating Procedure (ECRSOP) Appendix A Compliance Assessment Governance (CAG).

Content from the DoD EVMSIG (March 2019) is excerpted below for Guideline 29, Maintain Baseline and Reconcile Budgets.

Work packages planned as LOE must be proactively maintained to ensure that the resulting overall progress assessment is accurate. Budgets for LOE effort must have a sound basis of estimate and be time-phased to properly reflect when the work will be accomplished. If budgets for LOE effort are in the current period (baseline start or finish) and the support work is not necessary to be performed in this period as well as future periods, then the work may be replanned as long as no actual costs for that effort have been previously incurred. If actuals have been incurred, the work may be replanned only in the future periods to reflect when the remaining work is expected to be performed.

Content from the DOE CAG (June 2022) is excerpted below for Subprocess G Change Control, G.3 Baseline Changes Reconciliation attribute, specifically G.3.4 that states: “The PMB is controlled in the freeze period to prevent unnecessary adjustments, with few immaterial exceptions.”  This section in the CAG states:

LOE WPs may be replanned to align the budget with the expected start and completion dates for work to be executed. LOE WPs may even be replanned within the freeze period when few cumulative actuals have occurred, to ensure that BCWP will be recorded at the proper time to align with the time frame when actual costs are expected to occur. The interpretation of few is less than 10% actuals to date as compared with the cumulative budget. However, if significant actual costs have already been recorded, these baseline changes are prohibited except for controlled purposes. When LOE WPs are not replanned to align with expected actual costs, BCWP will be still be automatically recorded, resulting in a false cost variance.

The objective is to ensure LOE tasks are actively maintained and avoid common DCMA or DOE PM-30 EVMS test metric triggers such as BCWP with no ACWP or ACWP with no BCWP.  The test metrics are intended to be indicators an EVMS may be producing unreliable data that could cause DCMA or DOE PM-30 to do a deeper dive into how project personnel have implemented the EVMS.

Note: The EVMSIG and CAG both assume the contractor’s EVM System Description discusses the requirement to establish a performance measurement baseline (PMB) “freeze period” to ensure PMB stability and forward planning discipline.  This freeze period is often defined as the current reporting period plus one additional month where any changes to the PMB are not permitted with a few exceptions such as LOE replanning in alignment with DoD and DOE PM-30 guidance.  A typical change control freeze period is illustrated in Figure 1.

Applying the Guidance

This guidance for internal replanning is useful.  To highlight:

• ·Establish a freeze period to maintain a stable and valid PMB.  This should be documented in the EVM System Description.  Specific rules apply that limits what can be modified within the freeze period to maintain the integrity of the current work effort budget data.
• Replan future LOE to correlate to the changes in the work.  When necessary, LOE may be adjusted within the current reporting period, without government approval, provided no actual costs (ACWP) have been charged to the LOE.  Whenever possible, replan the future LOE work effort before it is within the change control freeze period.  
• Ensure that when BCWS is claimed for the planned work effort (BCWS) in the current reporting period, it is in alignment with the ACWP for the work effort to prevent avoidable DCMA or DOE PM-30 EVMS test metric triggers.

Suggestions on how to improve LOE planning:

1. Separately identify LOE tasks from discrete effort to avoid distorting measurable work effort.
2. Separately substantiate LOE budgets and plan as direct labor, material, subcontract, or other direct costs.  Time phase the LOE budget plan and estimate to complete (ETC) for control and reporting purposes.
3. Minimize the amount of LOE tasks.  Objective measures of completed work are always preferred.
4. When the LOE earned value technique is legitimately used, proactively monitor these tasks.  CAMs need to pay attention to their LOE tasks and to what is happening with the discrete work packages the LOE supports.  A good technique is to use the rolling wave planning method so that when the near term future work effort discrete tasks are planned, the related LOE task is planned with it.  This action prevents changing LOE data when the discrete work does not take place as planned – and eliminates findings for BCWP with no ACWP or ACWP with no BCWP.
5. Review your EVM System Description to ensure you have provided enough guidance to project personnel on how to properly plan, track, and monitor LOE tasks.  Let LOE help you; don’t let it do bad things to you.

Download this Article as a PDF