W7_Hassan Albarrami_ Monitoring contractor performance using Earned Value Management (EVM)

W7_Hassan Albarrami_ Monitoring contractor performance using Earned Value Management (EVM)

1. Problem Definition

EVM is a power full technique which used to track project progress and forecast the future performance. It can help in meeting the scope within cost and schedule parameters, reducing or eliminating schedule delays, and reducing or eliminating cost overruns. The table below shows the definition for EV acronym:


Tabl1 Earned Value Acronyms

In this blog we are going to test healthy of the following case


Figure 1 project tasks


BCWS = 1800 + 1000 + 1600 + 600 = $5000

BCWP = 1800 + 800 + 1400 + 0 = $4000

ACWP = $4500


2. Identify the Feasible Alternative

. Earned value (EV) consists of three dimensions:

  • Budgeted cost of work scheduled (BCWS),
  • Budgeted cost of work performed (BCWP)
  • Actual cost of work performed (ACWP).

These are used as the basis for computing and analyzing project performance. We can monitor project status by applying the information mentioned in the figure below.


Figure 2 schedule and cost variances

Schedule Variance SV = BCWP − BCWS

< 0: project delay

= 0: project on schedule

> 0: project ahead of schedule

Cost Variance CV = BCWP − ACWP

< 0: budget overrun

= 0: project on budget

> 0: budget under run


4. Selection Criteria

Based on SV and CV results the manager can take the required actions to ensure project healthy.

5. Analysis and Comparison of the Alternative

Schedule Variance SV = BCWP − BCWS


Schedule Variance = 4000 – 5000 = -$1000

Cost Variance CV = BCWP − ACWP

Cost Variance = $4000-$4500=-$500

6. Selection of the Preferred Alternative

It is clear that the project is not on the right track as it is over budget and behind schedule

7. Performance Monitoring and the Post Evaluation of Result

The management has to reassess the time and cost estimation and they may need to reallocate the resources to catch up. The issue to be raised to stakeholders to decide whether to go ahead with project or not .


  1. Debbie Goode, Partner at Carr, Riggs & Ingram, Defense Contract Audit Agency Audits on the Rise, Retrieved on 20.07.2014 fromhttp://mygcat.com/articles.html


  1. Project Management Guru, Earned Value Analysis, Retrieved on 20.07.2014 fromhttp://www.projectmanagementguru.com/eva.html


  1. Hyperthot,Earned Value Management, Retrieved on 20.07.2014 fromhttp://www.hyperthot.com/pm_cscs.htm





One thought on “W7_Hassan Albarrami_ Monitoring contractor performance using Earned Value Management (EVM)

  1. Nice job on your analysis but your case study was pretty weak…… Why didn’t you use your own blog postings or your paper as an example? That would have made it MUCH more “real” wouldn’t it?

    Also watch your citations……. Does the first name go first or the last name? By now I shouldn’t to be telling you about these kinds of details. By now they should be automatic……

    I am accepting your W7 posting but would challenge you to do the same using the blogs or your paper as the case study. Why? Because the more REAL you make it the more likely it will stick in your mind.

    Dr. PDG, Jakarta

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