PRIMARY METRICS

Four primary EV metrics, introduced below, are used for a program (which can consist of multiple contracts) that has been authorized, planned, and funded and is being executed. The terms given first in the following paragraphs are more popular in industry and are becoming more universally adopted. The second terms were the originally used terms and are often the primary references in government documents.

Total Value (TV) or Budget at Completion (BAC)

A program or project’s total value (TV) or budget at completion (BAC) is prepared in the planning stage before the project is begun and represents the program’s or project’s expected total cost or total allocated budget (TAB). BAC is developed by examining all the work to be accomplished on the project, estimating the cost of each portion of work that must be completed to prepare the project’s deliverables, and then summing the individual costs. The budget and the project schedule then become the baseline against which project progress is measured.

Importantly, this metric is established before work is begun. Having all required information prior to beginning work greatly reduces rework when program requirements are not fully understood. Of course, many details of a program requirement may not be known prior to beginning a project and revisions can be authorized. Nonetheless, an initial total project budget must be in place before any reasonable measurements of progress can be made.

As work progresses on the project, EVMS requires periodic status reports. At each status point, typically monthly, three periodic measures are used to report the project status and to derive other report metrics. The first two are budgeted (estimated) costs and the third is actual costs. Another distinction is that the first metric represents the value of scheduled work that should have been completed by this point in time and the next two are for results achieved for the same time period:

•Budgeted cost of the work scheduled [BCWS, or planned value (PV)] to have been completed by the status report date

•Budgeted cost of the work actually performed (BCWP, or EV) by the report date

•Actual cost of the work performed (ACWP, or AC) by the report date.

These metrics are described more fully below.

Planned Value (PV) or Budgeted Cost of Work Scheduled (BCWS)

At each reporting date, a status is taken of the portion of the project’s PV or BAC corresponding to the elapsed time from the beginning of the project to the status date. The data detail both the work (tasks or activities) that should have been completed and the costs that should have been incurred. DoD calls this subset of BAC the budgeted cost of work scheduled (BCWS); others refer to it as planned value (PV). BCWS or PV is the dollar value of the work that was scheduled for completion by this point in the project’s schedule.

Earned Value (EV) or Budgeted Cost of Work Performed (BCWP)

This periodic measurement shows the original estimated costs for work actually completed. BCWP can be the most confusing of the basic measures because it uses both an actual measurement and a budget measurement. It is a measure of the work completed during the status period, but at its planned (budgeted) amount, not its actual cost. It is the earned portion of the budget. Both EV and PV typically represent cumulative-to-date values, but this additional clarification (EVcum and PVcum, respectively) is seldom used.

Actual Cost (AC) or Actual Cost of Work Performed (ACWP)

The actual costs incurred from the initiation of the project represent the third periodic measure. Costs incurred (direct or indirect costs used on the project) are not necessarily the same as costs paid in cash due to billing and accounting processing delays. The formal name for costs incurred is actual cost of work performed (ACWP), but actual cost (AC) is often used. Like the other two basic periodic status measures, this is usually a cumulative amount. Again, the terminology can be confusing. It might seem logical to use the term actual value to maintain the value terminology (PV, EV), but once the actual amount of a predicted value becomes known, it is universally referred to as a cost.