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Earned Value Management

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What Can EVM Do?
Other Benefits
Reviews/Validations
News & Events

What is Earned Value?

Earned Value:

  • is a set of Best Practice Project Management Principles that integrate Cost, Schedule and Technical Performance.
  • establishes objective measures of the actual work achieved compared to the plan for that work.
  • is mandated in DMO policy, with the level of application decided depending upon contract value, risk and duration.

    Performance Baseline

Here's a very basic introduction to Earned Value

What can EVM do?

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  • Requires better up-front planning by the contractor, leading to joint ownership of the Contract Performance Baseline, through an Integrated Baseline Review (IBR).
  • Provides the Commonwealth and Company Management with the same performance data that:
    • reflects an objective measure of contract progress;
    • aids in analysis of the future cost and schedule outcomes; and
    • aids in informed and timely decision making by providing early indication of possible problem areas.

Other benefits

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  • Performance data produced is highly useful for risk management and can therefore benefit both contractor and client.
  • Existing contractor systems can be tailored/enhanced to satisfy the EVM principles, i.e. no new systems are imposed upon the contractor.
  • EVM is compatible with the principles of DMO Project Management Methodology (PMM).
  • Earned Value data may be linked to Progress Payments ("Payment by Earned Value").

Compliance Reviews/Verification

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  • The Project Authority conducts a series of reviews to establish accuracy of data and the Contractor's compliance with EVM requirements on contract.
  • The statement of contract compliance for the company’s systems is issued by the Project Authority and is applicable to only that contract.

The Standardisation Office provides policy and guidance for Australian Department of Defence procurements. We also provide total contract life cycle Earned Value Management advice and support for the Defence Materiel Organisation (DMO).

News and Events

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DMO adopted AS 4817-2003, supplemented by the Defence Supplement to AS 4817-2003 to replace the legacy Cost Schedule Control System Criteria (CSCSC) and Cost Schedule Status Reporting (CSSR) standards. New in house documentation has also been released in line with the adoption of AS 4817 to provide guidance to Industry and Commonwealth personnel on the implementation and monitoring of EVM systems.

The fundamental principles of EVM have not changed but the move to the new Australian Standard indicates a change from a process based standard to a principles based standard.

In early 2006 Standards Australia reissued AS 4817. The 2006 edition contains clarification and corrections to some requirements, deletes redundant requirements and contains a changed the format and style to maintain commonality with other Australian Standards’ products. Further AS 4817-2006 now contains fewer definitions and refers to the PMBOK and ANSI/EIA -748 for definitions of common use terms. Where DMO has found that the definitions in the PMBOK and ANSI/EIA -748 do not meet our requirements, appropriate definitions have been included in the Defence Supplement to AS 4817- 2006. Other Guidance documents affected by AS4817-2006 have been revised and are attached.

 

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Publications

Future Submarine Industry Skills Plan Future Submarine Industry Skills Plan
Introducing the Defence Materiel Organisation Introducing the DMO - June 2014 Update
Portfolio Budget Statements 2011-12 Portfolio Budget Statement 2013-2014
 2012 Public Defence Capability Plan 2012 Public Defence Capability Plan
Defence Annual Report 11-12 Defence Annual Report 12-13
Defence Annual Report 2011-12 DMO Major Projects Report 2012-13
Defence Industry Policy Statement 2010 Defence Industry Policy Statement 2010
Defence Procurement Policy Manual Defence Procurement Policy Manual
Coles Review Coles Review