EARNED VALUE MANAGEMENT (EVM) GUIDE (AUG 2005) (DOT/FAA)

EARNED VALUE MANAGEMENT (EVM) GUIDE (AUG 2005) (DOT/FAA)., The effective application of Earned Value Management (EVM) in support of integrated program management provides both the FAA and its contractors with timely, accurate, and integrated cost, schedule and technical performance information, for both the total capital investment program and individual supporting contracts. EVM continuously measures the quantity and value of work completed and enables the forecasting of reliable estimates of future performance. The approach has proven to be an effective management tool for programs with performance risk or high interest to management. The three aspects of earned value referenced in this Guide are defined as follows: Earned Value Management (EVM) is a methodology that integrates a program’s (or contract's) work scope, schedule, and resources with risk management, thereby providing government and contractor managers with objective visibility into progress on their programs and the ability to manage effectively. By reliably identifying trends and problems early, EVM helps program managers effectively plan, control, and manage programs so they can take corrective action and re-plan the work, if necessary. Systematic implementation of EVM throughout the organization facilitates comparison of program performance, enabling managers to make better-informed decisions. Earned Value Management System (EVMS) is the integrated set of processes, applications and practice that follow the guidelines in American National Standard ANSI/EIA-748, "Earned Value Management Systems." The ANSI/EIA-748 guidelines describe the attributes of an effectively integrated cost, schedule, and technical performance management system. Earned Value (EV) is the amount or volume of work completed to date, also referred to as the budgeted cost for work actually accomplished or performed. When compared to the planned value for the work and its actual cost, earned value provides objective measures of schedule and cost performance. The FAA EVM Guide provides specific implementation guidance to program managers and contracting officers in support of the policy established in the Acquisition Management System (AMS) for EVM systems use on FAA programs and contracts. Additionally, the Guide provides FAA program managers, contracting officers, executives, executive committees, and review boards with a further understanding of the application of EVM concepts in support of program management practices in FAA that will contribute to improved program performance.