Posted by: EVMConsulting.Com | June 7, 2010

The Use of TCPI in Evaluating Your EAC

One of the most misused metrics in the EVMS world is TCPI.  What is TCPI you ask?

Well, TCPI is the To Complete Performance Index that can be used for your program’s EAC.  It is a good test of reasonableness for your EAC estimates. The TCPI calculates what efficiency must be attained and maintained for the remainder of the POP (period of performance) if the EAC is to be met.

TCPI indicates the cost efficiency at which work must be performed in the future to remain on track so to speak. Generally a TCPI greater than 1.0 indicates a favorable CV in the future. However, using TCPI without the CPI has little value and that is usually where it is misused. As a stand-alone metric it has little value.

Calculating TCPI=BAC-CUM BCWP/EAC-CUM ACWP

Example:

TCPI=210k-70K/210K-80K = 140K/130K=1.076.

For every dollar of cost, we must earn 1.076 worth of work in order to finish on EAC.

Some examples:

EAC Example #1

CPI (Cum)=0.92, TCPI=0.99, CPI (3-month trend)=0.80 and % complete of the program is 35%

Analysis: Improving efficiency by 7% is ambitious. The EAC is most likely understated. However, it is possible that increased funding could improve the program metrics given the program is only 35% complete.

EAC Example #2

CPI (Cum)=1.00, TCPI=1.00, CPI (3-month trend)=1.22 and % complete of the program is 21%

Analysis: Initially everything looks very good. However, the 3-month trend indicates a favorable cost variance trending forward. It is possible the EAC estimates are overstated based on this data.

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Posted by: EVMConsulting.Com | February 12, 2010

The New 44 Working Day Guidline

So the new guidance is for most work packages to be no longer than 44 working days, or 2 calendar months when a contract is detail planned. This may have a significant impact for some, since this impacts material receipts, Inter-company work orders and travel expenses. Some exclusions are permitted with merit and of course if you don’t exceed the threshold (typically 5-10%),  but there is no doubt the 14-point assessment has impacted many programs. If your program is planning on having an IBR (Integrated Baseline Review) in the near future, make sure your work packages are evaluated.

Has it impacted your program? How are you adjusting to this new guideline?

Posted by: EVMConsulting.Com | March 4, 2009

Obama Seeks Major Change in Federal Contracting

obama33

More changes coming? I would think so. Stay tuned…

http://news.yahoo.com/s/ap/20090304/ap_on_go_pr_wh/obama_waste

Learning more about the functionality of wInsight today. Administrator isn’t being covered because it is a general overview of the suite for the everyday user.

Posted by: EVMConsulting.Com | March 3, 2009

Attending EVP Prep Course in Arizona

Wow is it nice to get off the east coast! I left last night in a terrible snow storm and now I am in Phoenix, Arizona to attend the advanced EV training with Humphreys & Associates. Check them out: http://www.humphreys-assoc.com/index.php

Their prep book is recomended by AACE in preparation of the EVP certification. Check them out and I will give more feedback later.

Posted by: EVMConsulting.Com | February 24, 2009

EVM World 2009

naples_grande-evm_2009

http://www.pmi-cpm.org/pages/home/index.html

So who is planning on attending the 2009 EVM World Expo? I would love to hear from you if you have attended in the past. I believe there is also an EVP prep course around the same time.  I am trying to attend both, but my schedule at work is not cooperating at the moment. Stay tuned….

Posted by: EVMConsulting.Com | January 28, 2009

What Does the Future Hold for the Defense Industry?

cyber_security

I know a lot of people are worrying what the future holds for the defense industry with the new administration. This article touches on some very good points and makes sense of things. Forbes addresses potential changes to the military and what it entails for certain companies and the DoD in general:

http://www.forbes.com/forbes/2009/0202/038.html

I have gotten some messages from some of you concerned about FCS and what the future holds, particularly with General Cartwright leaving (see link below). Only time will tell, but I know John McCain was not a big fan of cost plus contracts and how this program was run. I do believe Senator McCain will have President Obama’s ear on these issues.

http://www.defensenews.com/story.php?i=3790480&c=LAN&s=AME

Posted by: EVMConsulting.Com | January 5, 2009

Abuse of the LOE (Level of Effort) Earned Value Technique

bradley

It is a very common occurence with CAM’s of new EV programs to use LOE for all their tasks. This must be prevented at all costs. During an IBR, the customer (and also DCMA during an audit) will look at your LOE percentage to total program in both dollars and WBS numbers to see if this is logical. If too many LOE activities exists, it ruins the credibility of the metrics or brings up the question-why was Earned Value used at all for this program? If the contract is support by nature, EV would not be appropriate.

LOE  should only be used for work tasks that are supportive in nature and or have no measurable delivery product. Any EVM schedule metric would track progress on your test – rework – test – accept scenario if your work is planned and managed using discrete incremental milestones along with the disciplined baseline maintenance required by EVMS.

From the DoD Implementation Guide:

“LOE activities may be included or excluded in the network as appropriate.  This determination should be made based on contractor standard procedures.  LOE activities should not normally drive the critical path; and this can be avoided by including LOE activities on the IMS without network logic.  If LOE activities are included within the IMS, they are clearly identified as such.  As a best practice, understand that LOE work package (or lower level task/activity), by definition, cannot influence an event-driven schedule and are not required to be included in the IMS.  However, if inclusion is desired to maintain consistency with the cost system they should be included in such a way that they do not yield erroneous critical paths.  LOE is required to be in the IMS whenever a resource-driven schedule is constructed utilizing resource limitations/constraints.  In these cases, LOE is required to be included in the schedule along with the interdependencies with discrete work.”

Want more info?Here is a link to the official implementation guide:

http://guidebook.dcma.mil/79/EVMIG.doc

Posted by: EVMConsulting.Com | December 16, 2008

EVP Certification

Looking for Earned Value Certification?

http://www.aacei.org/certification/EVP/welcome.shtml

I looked at the criteria and I easily have the experience, so I guess perhaps I should start looking into this a little more. I read that they recently had a prep class offered in DC:

http://www.centredaily.com/news/education/story/991779.html

Any EVP’s out there? Drop me a line. I would love to hear about your experience with the certification.

Posted by: EVMConsulting.Com | December 10, 2008

2008: What a Year!

Sorry I haven’t written in a while. It has been a very busy year and now 2008 is coming to an end.

It was a very busy year full of big challenges, but also great opportunities. It was a chaotic year outside of our industry in the world financial markets, but also within our industry regarding the precarious nature of defense funding moving forward.

Let’s see. I have  been training and setting up EVMS at our site here and we had to get an entire team (100+) ready for an IBR, something they had no clue about. It was a challenging year to say the least. Additionally, we had two detail planning sessions and had to find a scheduler in a very short period of time. Thank goodness a former associate accepted our offer just before the IBR. It was exciting! IBR was successful, but we have another one to prepare for next spring. We are not out of the woods yet.

Now I am in the middle of doing another detail plan for the new contract extension for the end of the year. We expect a brand new contact in the spring of next year that will have all 5 formats (as opposed to only 2-Formats 1 & 5). They will be looking carefully at the DID’s to make sure we are adhering to our System Description and of course 32 Criteria. As many of you know, the hard part isn’t so much the work as it making sure Program Management is on board. This can easily be the most challenging part. Everyone associates EVMS with FCS, which is a real shame. FCS and Earned Value Management are not synonymous. It is a large developmental program that uses EV, but clearly not the playbook everyone should be using.

I have fielded a lot of phone calls recently from consultants and companies looking for good EV folks. Keep the emails coming. I will be sure to reach out to you if I know of any good people that become available. It is definitely hard to find good folks and sometimes you don’t know if they are good until they are hired. It is pretty easy to get hired in the EVMS world, but you need to know what you are doing. You can email me at Darryl@PlayBaltimore.com if you have a position you are recruiting for or if you just need some EV advice, I would be more than happy to help if I can and it doesn’t violate any company policies (I work for one of the bigger defense companies).

I have also received a few inquiries from companies outside of DoD land: Dept of Energy, Transportation, etc. This is a very positive development because I think good (but not overly cumbersome) EV principles can be put to good use on other government contracts. And as you can tell from watching the news, I think we will be seeing a lot of government contracts moving forward.

Finally, I was wondering if anyone out there knew what happened to wInsight web. Prior to Deltek (http://finance.yahoo.com/q?s=PROJ) buying wInsight, I believe it was a great tool but not sure if Deltek is currently using it or not. I guess I could just pick up the phone too, but it would be nice to hear from you.

winsight_deltek

 

Happy Holidays to Everyone!

Until Next Time…

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