Humphreys & Associates

Effective Use of Quantifiable Backup Data (QBD)

By Humphreys & Associates / October 1, 2025 / Control Account Managers, earned value management system, EVMS Implementation, Level of Effort, percent complete, QBD, Work Package

Control Account Managers, earned value management system, EVMS Implementation, Level of Effort, percent complete, QBD, Work Package

Effective Use of Quantifiable Backup Data (2)

One of the fundamental rules that contributes to generating useful information from an Earned Value Management System (EVMS) is planning the work in manageable segments to facilitate more accurate project performance status. The goal in selecting an appropriate earned value technique (EVT) for a work package or task is to use the most objective rationale possible for the nature of the work. This often becomes more challenging when the Percent Complete EVT is selected for a longer duration work package/task. That’s where the use of Quantifiable Backup Data (QBD) comes into play. Properly used, QBDs provide the necessary objective evidence to claim earned value.

QBDs are also sometimes referred to as “predetermined rationale” consisting of defined lower-level objective and measurable milestones or steps that when completed contribute to the overall work package/task percent complete. The work package/task percent complete is determined based on when the milestones or steps are accomplished and the weight, typically a percentage of the total budget, assigned to the milestones/steps.

What are the benefits of using QBDs?

QBDs help to ensure there is a clear definition of done for each milestone or step; earned value claimed is based on verifiable accomplishments. Project personnel can substantiate and communicate to other project stakeholders how they determined the current overall percent complete for a work package/task based on documented criteria. QBDs eliminate the subjectivity often associated with using the Percent Complete EVT.

Common Characteristics of Effective QBDs

Here is a short list of the expected characteristics of QBDs.

Specific, defined accomplishment criteria are established before work begins. The accomplishment criteria must clearly describe the objective measurable outcome or deliverable.
Documented and actively maintained. QBD details could be captured in a specific tool, database, or as additional attributes of the EVM data. Designated project personnel are responsible for “owning” and maintaining the QBD details; this is typically the control account manager (CAM). The QBD details should be accessible to all project stakeholders to review as needed for full transparency. There is a defined, repeatable process to track any scope changes to the QBD accomplishment criteria.
Used as the basis for performance measurement. As work progresses, the QBD owner tracks the milestones/steps and records when the accomplishment criteria are met. The QBD weight provides the objective basis to determine the current cumulative to date percent complete used to calculate the work package earned value.
They may or may not have a period of performance depending upon the nature of the work effort and QBDs. QBDs with a period of performance align with the scheduled time frame for the work package/task they support; this should be captured with the QBD details. When the QBDs are used solely to calculate task progress, they do not have a defined period of performance. They may be accomplished in any order.

Figure 1 provides an illustration of the use of QBDs with a period of performance.

Examples of Quantifiable Backup Data (QBD) — Figure 1: QBD Example for a Work Package Task in the IMS with Related Time-Phased Cost Data

What are common QBD issues?

H&A earned value consultants routinely provide hands-on support and guidance to our clients when there are issues with an EVMS implementation. Here is a short list of issues with the use of QBDs that they have observed on various engagements.

Generic QBDs that are not measurable and lack exit criteria. An example of generic QBD descriptions: Test Procedure Development Step 1, Test Procedure Development Step 2, and Test Procedure Development Step 3. Since there is no clear definition of what the steps entail, generic QBDs are subject to interpretation and not useful.
Ad-hoc methods to capture accomplishment/exit criteria. The QBD must be documented in a manner that others on a project can access and verify.
Weighting is not well defined or tied logically to the technical work. If the basis used to determine or substantiate the weighting is not known, the QBD is lacking an objective means to determine whether that weighting makes sense.
The time-phased cost values are not logically tied to the weighting. Classic case of failing to ensure the BCWS, BCWP, and ACWP are aligned in a given reporting period for accurate performance reporting. Figure 1 illustrates this requirement for data traceability between the QBDs and the time-phased cost data. It is easy to verify that the BCWS and BCWP for June (125.00) aligns with QBD #1 weight of 25% of the total budget (500).
Disguising level of effort (LOE) as discrete work effort with QBDs. Evidence of this: QBD weighting or time-phasing is level loaded.

Strategies for Ensuring the Effective Use of QBDs

All of these issues can be prevented with a focus on data quality and ensuring project personnel have the necessary tools and training. Here are a few successful strategies H&A earned value consultants have helped our clients to implement to ensure the effective use of QBDs.

Review your EVM System Description and any related procedures specific to QBD content. Has a repeatable process been defined that describes the expectations and requirements for the use of the QBDs for the entire project life-cycle? Establishing the QBD accomplishment/exit criteria details is an essential part of the project planning activities at the beginning of the project. Is there clear direction on when the use of QBDs are appropriate? A common example is when a supporting process such as Agile is providing the QBD information to claim earned value in the EVMS.
In support of the repeatable process, establish a common software tool or core EVM tool configuration that includes a means to capture the required QBD details. As part of the design criteria, be sure to allow for project specific configuration options in addition to the standard core data requirements. The objective is to make it easy for project personnel to capture the necessary data and reduce the likelihood of ad-hoc methods.
When it makes sense, create a QBD “library” of common, repeatable milestones/steps that include a crisp description, measurable outcome or deliverable, and rationale for the weighting that project personnel can use as a basis for their work packages/tasks. This works best when there is historical data to substantiate the total budget, duration, elements of cost, and weighting. A complexity factor may also be applied that is documented.
Conduct targeted training on how to properly document and maintain the QBD details following the documented process and using the tools of choice. Hands-on exercises and examples can help project personnel learn how to distill requirements into clear specific accomplishment/exit criteria and how that process saves time throughout the project execution phase. For example, it is easier to quickly track QBD progress. The basis for claiming earned value is transparent and auditable.
Include a review of the QBD details as part of any Integrated Baseline Review (IBR) to ensure clear accomplishment/exit criteria have been defined as well as to ensure they have been properly used. This helps to eliminate a number of QBD issues at the beginning of project including instances where LOE is disguised as discrete work effort.

Need help with your QBD planning and implementation?

H&A earned value consultants often assist clients with producing work or desktop instructions that help project personnel to address common issues with implementing an EVMS on their projects such as the proper and effective use of QBDs. H&A schedule, cost, and other toolset experts can help you to establish a core, common configuration to capture QBD details or collect supporting data from other software tools. Targeted and tailored training is one our core competencies – we can help you to enhance your training content to include QBD best practice content and exercises. We also routinely conduct mock IBRs for our clients to ensure they are well-prepared for the event with their customer. Call us today to get started.

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Maximizing the Value from Integrated Baseline Review (IBR) Investments

By Humphreys & Associates / September 1, 2025 / earned value consultants, Earned Value Management (EVM), EVMS, IBR, Integrated Baseline Review, Performance Measurement Baseline (PMB), PMB, Risk Management, schedule risk assessment

earned value consultants, Earned Value Management (EVM), EVMS, IBR, Integrated Baseline Review, Performance Measurement Baseline (PMB), PMB, Risk Management, schedule risk assessment

A previous blog, How Integrated Baseline Reviews (IBRs) Contribute to Project Success, provided an overview of the purpose and scope of IBRs as well as the benefits of conducting an IBR. This blog adds to the discussion on the benefits of conducting an IBR. It reflects observations gathered from our earned value consultants while assisting clients to prepare for IBR events.

As a reminder, IBRs provide the opportunity to verify the:

Contractor and the customer have a common understanding of the scope of work, technical requirements, and accomplishment criteria.
Contractor has established an executable performance measurement baseline (PMB) for the entire contractual scope of work that accurately reflects how they plan to accomplish the work within the contractual period of performance, negotiated contract cost, and funding profile.
Required resources have been identified and assigned to the project to accomplish the project’s objectives. For example, the staffing plan accurately reflects the sequence of work as well as resource availability and demand.
Technical, schedule, and cost risks/opportunities have been identified, assessed, and captured in a risk/opportunity register. Risk mitigation actions have been incorporated into the PMB to reduce known threats to an acceptable level. This is often the most valuable component of the IBR to ensure all parties have an understanding of the risks/opportunities, assumptions, and risk mitigation or opportunity capture plans.

Factors that Contribute to a Successful IBR

Treating an IBR as just a contractual requirement limits its value to all parties. IBRs are essential to the successful execution of any project. IBRs require a focused mindset to clearly define as well as assess the measurable benefits gained for the time and effort invested in the IBR. From our observations, contractors that defined what they expected to gain from an IBR, whether the IBR was contractually required or not, made a measurable difference in the outcomes from the IBR. The effectiveness of an IBR is contingent upon management’s commitment to excellence in implementing their EVMS and their desire to ensure they have reliable and useful data for management visibility and control. And that begins with establishing an executable PMB.

The following list of factors often influence the perceived value of an IBR and hence the approach a contractor takes to planning and conducting their IBRs.

Recognizing the relative importance of the review.
Defining the value or measurable benefits they expect to gain from conducting the review.
Well defined risk/opportunity management process.
Timely and sufficient review planning and preparation.
Joint or collaborative planning and preparation.
Well defined objectives as well as entrance and exit criteria.
Tailoring the IBR approach to best accomplish the review objectives.
Communication and expectation management.

These factors were ultimately indicative of whether the IBRs were considered value-added (retrospective assessment by the participants) based on the level of understanding, investment in or attention to, or the degree of success in implementing these factors. Based on H&A earned value consultant’s observations, the single factor that tends to drive the IBR approach is clearly defining the value the contractor expects to gain beyond what is mandatory or contractually required.

IBR Investment Value

The term “IBR investment value” is purposefully used here. The intent is to invite you to re-assess how IBRs are viewed apart from simply meeting government agency IBR requirements. “IBR investment value” is used to mean a qualitative assessment that encapsulates the value-add or measurable benefits teams often have difficulty defining as well as to help provide the impetus and guiding direction for conducting an IBR. It has both intrinsic and extrinsic properties.

The intrinsic value of the IBR investment resides in those specific elements of information (as identified by the customer in the form of questions or concerns) that are either exchanged, clarified, or refined through the course of discussions between the customer and performing contractor teams. This intrinsic value can be measured by how well the exchanged information supports:

A complete, clear and mutual understanding of the work to be accomplished.
The resources needed to get the work done.
The detailed plan to perform the work.
What resources are available to support the plan.
What’s missing or unknown that is needed to complete the work correctly and on time.
What risks, issues, concerns, or opportunities are associated with contractor’s concept that need to be fully considered to make the plan work.

The extrinsic value of the IBR Investment rests wholly in the quality of the exchanges (discussions), and the resulting actions generated from the discussions. This extrinsic IBR value addresses how appropriate, rich and comprehensive the information exchanges were, and answers to questions, such as:

Were the discussions responsive to a list of customer information requirements and concerns?
Were the right discussions held? At the right level of detail?
Were the right people involved in each discussion?
Did the discussions provide sufficient context? Were they comprehensive? Complete?
Did the discussions address associated risks, issues, opportunities or other concerns? Relationships to other discussions/elements?
Were all the customer’s questions or concerns answered to their satisfaction?
Were the discussions documented to support decisions? Alternatives? Changes? Studies?

The exchanges of essential information (intrinsic value) and the quality of those exchanges (extrinsic value) when combined directly translate to the investment value achieved from the IBR. It characterizes how well the information exchanged provides both teams with the necessary details to successfully define, schedule, budget, and manage the contracted effort relative to the investment into the IBR process. A realistic, risk adjusted PMB helps to prevent schedule delays and cost overruns during project execution that often impact a contractor’s profit margins and tarnishes their credibility with their customers.

What are the characteristics of a value added IBR approach?

A successful approach H&A earned value consultants have observed contractors implement is a structured process corporate management actively participates in to ensure they gain the most value from all IBR events.

This is often an outgrowth from corporate initiatives to retain top project management talent and establishing an EVMS self-governance process. It is part of a corporate culture that is committed to excellence in project management and sustaining a best in class EVMS – becoming efficiently expert at EVM.

What are some common characteristics of their IBR approach?

A chartered authority or corporate team responsible for assisting project personnel with IBR events in addition to EVMS implementation, self governance, and customer surveillance events. A good practice we have seen implemented is to establish rotating members on the IBR teams from different projects as a means to pollinate best practices across projects. It also provides an opportunity to mentor top talent on track to move up to higher management positions.
A standard repeatable process with defined measurable outcomes that can be tailored to the unique project requirements or objectives. This includes maintaining a set of materials for the internal IBR team to effectively plan and execute an IBR as well as to close out any action items. Examples include training materials to prepare project personnel, process description with team member roles and responsibility assignments, data call list, role based interview question forms with assessment criteria, data quality assessment materials and tools, list of data traces to be performed, schedule risk assessment tools, risk/opportunity evaluation criteria, defined assessment criteria (technical, schedule, cost, resources), in-briefing and out-briefing templates, and template to capture action items to track to closure. The corporate team is often responsible for actively maintaining the content for the IBR teams and conducting training.
They place an emphasis on two components that directly impact the quality of the schedule and cost data. This includes:
- Well-documented data driven basis of estimates (BOEs) that can be substantiated using historical or bench-marked data with the goal of reducing expert judgement cost estimates to the lowest level possible as a risk reduction strategy.
- The quality of the risk/opportunity management plan and the content in the risk/opportunity register. This content directly affects the ability of all parties to gain a better understanding of the risks/opportunities and best options to mitigate a risk or capture an opportunity. A well constructed schedule is required to be able to perform schedule risk assessments (SRAs). SRAs help to identify where duration risk exists in the schedule and to determine a level of confidence in meeting major project milestones as well as the project completion date.
They perform internal IBRs as a standard practice on all projects regardless of contractual requirements. This is particularly important when subcontractors are performing a substantial percentage of the work effort. The corporate team often assists Project Managers with conducting a joint IBR with major subcontractors.

Need help establishing a corporate IBR process?

H&A earned value consultants often help clients to establish a corporate EVM council or center of excellence with defined responsibilities to ensure project personnel effectively implement their EVMS, integrate risk/opportunity management into the EVMS, as well as define and implement a standard repeatable process for IBRs and self-governance. Clients often need assistance establishing a repeatable process for conducting schedule risk assessments, an essential component of the IBR process. A defined process that clearly articulates the expected measurable outcomes from conducting IBRs is one way to ensure all parties gain the most value from the event with the end objective of ensuring a realistic and executable PMB has been established.

Call us today to get started.

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Who Should “Own” Earned Value Management (EVM)? Programs or Finance?

By Robert “Too Tall” Kenney / August 1, 2025 / CFO, Corrective Action Request, earned value management, EVM, EVMS Implementation, Program Manager, Program Planning & Control

CFO, Corrective Action Request, earned value management, EVM, EVMS Implementation, Program Manager, Program Planning & Control

Who should own erarned value management?

I have read several Earned Value Management (EVM) reports, papers, and articles that debate what company organization should “own” EVM and the company’s Earned Value Management System (EVMS). These debates most often mention the finance department and program organization as common EVM “owners.” The majority opinion seems to be that because EVM is a program management best practice it belongs in the program organization. A minority opinion is that because EVM is denominated in dollars, schedule included, and because EVM reports are financial in nature, EVM belongs in the finance department. Before we dive into this debate, a summary of the responsibilities of a Chief Financial Officer (CFO) and the head of programs is useful. In the Company A and Company B examples to follow, both the CFO and the head of programs reported to the company president.

What are the duties of a Chief Financial Officer (CFO)?

A CFO has three duties; each measured in the time domain. The first duty of the CFO is as the company’s controller and is responsible to accurately and honestly report past company financial performance. The CFO is also responsible for the current financial health of the company – to ensure that today’s decisions create rather than destroy value. And lastly, the CFO must protect the company’s future financial health and that all expenditures of capital maximize that future financial health. Every business decision, especially those of the CFO, are either good decisions (are accretive – increase shareowner value) or are bad decisions (are dilutive – destroys shareowner value).

What are the duties of the Head of Programs?

The head of programs is typically a Vice President or higher and all program and project managers report to them. The head of all programs has profit and loss responsibility for their portfolio of programs and projects. In addition, each program and project manager is responsible for achieving the technical, schedule, and cost requirements of the contracts they are executing on behalf of the company’s customers.

A Tale of Two Companies

I have first-hand experience with two companies and how each company decided who should “own” EVM that illustrates the nuances to these two approaches.

Company “A” had EVM assigned to the finance department. All EVM employees were overhead, even those assigned to a program. A new CFO arrived and quickly decided to reduce indirect costs, declaring that he was “coin-operated.” The new CFO terminated the employment of all EVM employees. Each program attempted to create an EVM branch office but failed. DCMA issued a Level 3 Corrective Action Request (CAR) detailing the EVMS deficiencies and the CFO was fired. A second new CFO arrived and agreed to transfer EVM to the head of programs. The head of programs was instrumental in changing the disclosure statement making EVM personnel assigned to a program a direct charge to that program or contract. The head of programs created a Program Planning and Control (PP&C) organization and demanded all Program Managers and their program members to quickly learn, use, and master EVM. A program control room was built with five screens. Daily 2 pm EVM data-driven reviews were held on short notice. These daily reviews became known as “CAM Bakes.” The EVM and program management culture changed quickly and dramatically at Company “A.”

Company “B” had EVM assigned to the CFO who was as “coin-operated” and unaware of EVM as was the first new CFO of Company “A.” The culture of company “B” was very hostile to EVM, so it probably did not matter who “owned” EVM. The company failed 16 of the EIA-748 Standard for EVMS 32 guideline requirements and they lost their DCMA approved EVMS status. Significant withholdings were imposed and the company’s reputation was damaged. Several top managers hostile to EVM sought employment elsewhere. A new CFO arrived who was also coin-operated – with one difference – the CFO was an expert in EVM. The new CFO formed a partnership with the head of programs. The new CFO was as much a program manager as he was a CFO. The new CFO told his direct reports assigned to each program to “make the program managers successful.” And they did exactly that.

The new CFO understood that the company was the sum of all its contracts and that every dollar flowed from its customers. The EVM and program management culture at Company “B” changed rapidly.

Who Should “Own” EVM? Programs or Finance?

Returning to our original question of who should “own” EVM, the majority theory is that the program organization should “own” EVM. All else being equal, I tend to agree with this theory.

However, while theory is suggestive, experience is conclusive. My experience at Company “A” proved that a strong program leader could rapidly change the EVM and program management culture of a company. My experience at Company “B” proved that a CFO could “own” EVM and be successful at changing the company’s EVM and program management culture. The CFO and the head of programs must form an EVM partnership no matter who “owns” EVM.

Who “owns” EVM at your company?

Mr. Kenney is a senior business executive with over 35 years of experience in the aerospace industry as well as over 10 years as a consultant to industry. He is an experienced practitioner of program management best practices as an Executive Vice President of Government Programs, Vice President of Naval Programs, and Program Manager at various aerospace and defense contractors. He is also a retired U.S. Marine Corps Colonel with 27 years of active and reserve duty.

Who Should “Own” Earned Value Management (EVM)? Programs or Finance? Read Post »

How to Get the Most from Your IMS: What Makes an IMS Useful?

By Paul Bolinger / July 1, 2025 / Earned Value Consulting, earned value management, EVM Consulting, IMS, Tips

Earned Value Consulting, earned value management, EVM Consulting, IMS, Tips

How to Get the Most from Your IMS: What Makes an IMS Useful?

A major challenge with an Integrated Master Scheule (IMS) is making the most out of this powerful project management tool. Large and even not-so-large projects are required to have an IMS which adheres to the requirements of the Integrated Program Management Report (IPMR) or Integrated Program Management Data and Analysis Report (IPMDAR) Data Item Description (DID) and meets the schedule data quality checks available. But having met the DID requirements and passing the quality checks does not mean the IMS is being used to get the most information into the hands of decision makers on the project.

The IPMR or IPMDAR DID, even though detailed and thorough, is generic. The same DID is used on a contract whether it is for an important new hardware-based system, a new software system, or some other goal. The DID misses the point that the type of product on the contract means that unique topics may be the most important. There is no focus in the DID; it is high level and comprehensive. What’s missing are the special interest or special focus schedules that can be drawn from the IMS with good coding, grouping, filtering, and sorting techniques.

Remember that the statement of work (SOW) for the project is really comprised of promises made in the various plans submitted in the proposal and updated after contract award. The System Engineering Management Plan (SEMP), the Software Development Plan (SDP), Make/Buy Plan, Procurement Plan, Test and Evaluation Management Plan (TEMP), and others all contain commitments that should be translated into actions in the IMS. There should be access to the portions of the IMS that show how these commitments will be accomplished.

Examples of Special Interest Schedules

On a new hardware-based project, key pieces of information revolve around getting designs done and into a form to plan for the procurement of the various things needed to build the end items. This information often resides in the IMS but must be pulled out into a “drawing release” schedule. That is a schedule showing the transition from design to 3-D models or drawings. Pinpointing the times and links in the IMS where design becomes actionable for procurement enables the project team and their suppliers to be prepared to execute the procurements. The teams or engineers (designers) and procurement people should be focused on the drawing release schedule with frequent, at least weekly meetings to coordinate.

One of the serious issues I witnessed on a project was the lack of preparedness in having trained and qualified drawing checkers who could sign-off and release drawings. Because of the need for flight safety considerations, the drawing checker position could only be filled by qualified people. Instead of preparing months ahead for the wave of drawings, the waves were allowed to crash into the far-too-few checkers. What was supposed to be a short cycle became weeks long as drawings sat waiting for release.

As the transition is made from design to production, then the procurement schedule becomes another focused schedule which should show the information about what is being procured, from whom, and when it will be delivered. This information is used by the engineers, procurement, and inventory control people including receiving to understand the timing and volume of inbound items. Frequent coordination with suppliers and internal team members using this focused schedule helps to ensure a smooth process. Will the factory be ready to receive, inspect, process, and store all the inbound items?

What about software development as a special topic focus schedule? This is often needed. The project personnel must be able to quickly understand where in the cycle the software is and when releases will be made as well as what the release is needed for in the overall project.

Think about all the other important focus areas that could exist on a project. For example, the training effort should be in a focused schedule showing the development of the training material (courseware), training aids, facilities, instructor preparation and anything else needed to execute the statement of work related to training.

Testing is possibly more complicated than training. This includes development of test plans and procedures, as well as the creation of test fixtures and tools. The preparation of test personnel capable of performing complicated tests should be in the focused schedule.

By now you get the idea. The IMS is the combination of all these schedules, the thing that coordinates between and among them. But the focused schedules are the real bread-and-butter of the schedule discipline. It is shocking to see a project where these do not exist. Maybe the managers don’t know they are needed or possibly that they are available. Maybe the schedule team did not prepare for these extractions from the IMS.

If your project does not have focused schedules and does not use them, the project is in jeopardy. These schedules should be generated and used frequently; weekly at least. Even if the IMS itself is only undergoing a monthly update, the detailed schedules should be much more alive and part of the weekly communication between work teams on the project.

Tips and Suggestions

How to get started. Begin with the source documents and their authors, the SEMP, the TEMP, and so on. Make a list of the likely focused schedules that need to be drawn from the IMS. Read them and extract the information you need to build your IMS. If you are just starting the IMS, you could build individual schedules with the authors and then integrate them into the IMS. If you already have built the IMS, you can find the tasks you need and code them so they will appear on the focused schedule. Once coded, extract the focused schedule from the IMS using the applicable coding filters and verify it matches the commitments that were made in the source documents from the various authors.
Hold “report court.” Rather than reading and sorting through all the various plans, schedule a project meeting with the key team members and ask them what reports and what schedules they need to do their jobs. Remind them of the commitments they made in the plans. They can bring or provide a list and description to you, and you can decide “in court” which items you can or cannot incorporate into the IMS. That can help to streamline what is included in the IMS and who is responsible for what.
Create a schedule data dictionary if you haven’t already done so. This is essential to identify standard as well as project unique activity, milestone, or resource coding and how the coding is used so there is a common understanding of the content. The customer will need this information as well as when the IMS is provided as a monthly performance reporting data deliverable (see the IPMDAR Section 2.4.2.20, Data Dictionary for Native Schedule File). It is a prerequisite to ensure consistency in use as well as to establish a level of discipline throughout the IMS development and maintenance process. Ensure tasks always include the necessary coding. Ideally, you did your homework on the likely special topic schedules you need to draw from the IMS before starting to build the IMS. Otherwise you may need to determine various sorting and filter techniques to identify the tasks that require additional coding details. As noted above, once the tasks are coded, you or other project personnel will be able to extract the various special interest schedules from the IMS as needed.

Need help?

Building a useful IMS for complex projects is not easy. Up front planning for the development of the IMS can help to identify the necessary outline codes and other coding to be able to group, filter, or sort the activities to extract the special topic or special focus details from the IMS. The IMS is an essential communication tool for everyone on the project. How the schedule is constructed and coded makes a difference. H&A scheduling subject matter experts (SMEs) have decades of experience in a variety of complex project environments and can help you avoid common pitfalls. Contact us today.

How to Get the Most from Your IMS: What Makes an IMS Useful? Read Post »

Why We Updated Our Most Popular Posts on Material Management in an EVMS Environment

By Humphreys & Associates / June 1, 2025 / Material

Material

Earned value management of materials has many dimensions and can be challenging on development or production contracts. This includes planning, scheduling, budgeting, calculating earned value, properly aligning the actual cost of work performed (ACWP), and maintaining the estimate to complete (ETC)/estimate at completion (EAC) for performance reporting. A recent uptick in requests from contractors asking for help with resolving material management issues with their Earned Value Management System (EVMS) highlights this continues to be a major challenge.

For many government funded contracts, the material content represents a significant percentage of the entire contract. Any cost or schedule variances associated with material may dwarf the variances for labor and other direct costs along with the associated indirect costs. Corrective actions taken to address cost or schedule variances are commonly prioritized by their relative dollar value. The government customer will expect the contractor to pay attention to the highest-cost portion of the contract, underscoring the need for accurate and effective EVM for material.

We have updated and added content to our previous series of blogs on material management in an EVMS environment. These blogs address common issues our earned value consultants are observing on client engagements and focus on the basic requirements. The updated blogs include:

Earning Value for Material – The Correct Approach – Part 1. This blog answers questions about the best points to claim earned value for the category of material.
Earning Value for Material – The Correct Approach – Part 2. This blog discusses the different categories and classifications of material as well as acceptable earned value techniques to use.
EVM Material Earned Value – Price vs. Usage Variance Analysis – Part 3. This blog discusses practical approaches for doing this analysis.
Earned Value Management Systems (EVMS) – Residual Material Accountability – Part 4. This blog addresses material traceability and how to handle residual or excess materials purchased for a contract.
Aligning ACWP with BCWP for Proper EVM | Earned Value Management. This blog discusses when it makes sense to use Estimated ACWP to ensure the material ACWP and budgeted cost for work performed (BCWP) are claimed in the same reporting period in the EVM cost tool.
EVMS Compliance: Material Transfers and Loan/Paybacks. This blog provides an overview of material management and accounting system requirements and the difference between a material transfer and loan/payback to ensure project personnel know how to handle these situations.

Observations from Recent Engagements

Enterprise systems and personnel’s ability to use those systems effectively.
For some contracts, the sheer volume of material acquired and managed by the contractor can be very large. A control account manager (CAM) might be responsible for many different part numbers, and dozens, hundreds or even thousands of individual parts. As the quantity of parts increases, the need for robust, highly automated and integrated enterprise systems used to manage material increases.

Company-wide commitment to business management systems that support the EIA-748 Standard for EVMS guideline requirements is critical. For some companies, implementation of the EVMS is not well understood or considered as their enterprise systems are selected and implemented, and they find that the systems do not support EVM well. This can become a significant and expensive problem. Attempting to support EVM using enterprise systems that are antiquated or not well integrated is difficult and may result in a need for inefficient manual data tracking activity that is expensive and prone to data entry errors.

Contractors that either already have, or anticipate winning, large government contracts are well-served to carefully examine their existing processes, research the available enterprise software systems, and conduct the appropriate training to ensure project personnel are equipped to support EVM.

CAMs with material elements of cost in their control accounts must be familiar with the enterprise systems that manage material, which differ from those used to track labor. Some examples of the enterprise tools that are critical for successful EVM of material include:

The product data management tool that maintains the bills of materials.
Systems that track material purchase order placement, material receipt, and supplier invoices.
M/ERP system and the associated accounting reports used to track material demand, allocation, and residual material. This includes the grouping, pegging, and distribution (GPD) processes.
Project integrated master schedules (IMS).
The configuration management/change process.
Quality reports (to track scrap and rework).

Key Points:

Material EVM is critically important because of the high percentage of the contract value associated with material.
Material EVM can be a complex process that requires a family of enterprise tools and processes within the company infrastructure. CAMs and other project personnel must understand and know how to use the output from those tools.
Company-wide commitment to effective EVMS implementations that support the EIA-748 guideline requirements is extremely important to support successful EVM.

EVMS process and procedures provide the necessary guidance to project teams.

Another challenge is ensuring the EVM System Description and related processes, procedures, and training materials provides the necessary guidance to project teams on how to implement the EVMS on contracts with significant material content. It is essential project personnel have clear, specific guidance and recurring training to ensure they are following a standard, repeatable process that support your enterprise systems and unique business environment.

Ensure the EVMS guidance addresses these topics:

What is considered material, subcontract, or other direct cost (ODC) elements of cost.
Material categories. This could be very simple for a non-production environment such as “receipt type material” and “inventory type material.” Material categories tend to be more specific for production environments and must be defined in alignment with the corporate enterprise systems. Applicable earned value methods or techniques to be used for a given category as well as BCWP and ACWP alignment is also a consideration.
Material classifications. Material is typically classified as “high value,” “critical,” or “low value” materials. The material classifications as well as category are useful to state the applicable earned value technique to use. High value and critical materials must always use objective discrete earned value techniques.
Material planning, performance measurement, and ACWP. Material requirements should be planned, scheduled, and budgeted to reflect a defined need date and how earned value will be claimed to ensure the budgeted cost for work scheduled (BCWS), BCWP, and ACWP can be consistently compared in the EVM cost tool for the same accounting/reporting period. Define the points for planning and claiming earned value as well as the accounting recognition points and how they are aligned for claiming earned value in the same accounting/reporting period for the various material categories.
Approach for interfacing the IMS with the production schedules. Material processes affect the IMS such that the wrong methodology can increase the size and complexity of the IMS with little or no payback.
Variance Analysis Reporting (VAR). A recurring request for H&A Earned Value training includes how to analyze the EVM metrics, perform a root cause analysis, and produce a useful VAR narrative. For control accounts with material elements of cost, the CAM should know how to perform a price versus usage variance analysis. The narrative should clearly describe the problem, the root cause, the scope of the impact to the control account or work effort, and recommended corrective action with sufficient backup information to substantiate the analysis.

The list of blogs at the beginning provide more information on most of these topics.

Key Points:

Project personnel must know the difference between what is considered a material, subcontract, or ODC element of cost and how they are handled.
Ensure your EVM System Description and related materials provide clear, specific guidance on how to plan, schedule, budget, claim BCWP, align ACWP, and maintain the ETC/EAC for the different categories and classifications of material.
Conduct recurring training to ensure project personnel know how to use the applicable software tools to plan, schedule, budget, determine schedule status, claim earned value, use estimated actuals, and maintain their ETC/EAC for work effort that includes material elements of cost.

Need help?

Material management can be one of the most complex subsystems to incorporate into an EVMS. As the “911” for EVMS, H&A has worked with numerous contractors to sort through their unique material requirements and enterprise business systems to resolve their EVMS issues. Call us today at (714) 685-1730 to get started.

Why We Updated Our Most Popular Posts on Material Management in an EVMS Environment Read Post »

Planning Ahead for the EIA-748 Standard for EVMS Revision E

By Humphreys & Associates / May 1, 2025 / Earned Value Consulting, EIA-748, EVM Training

Earned Value Consulting, EIA-748, EVM Training

EIA-748 Revision E is here!
Streamlined, clarified, and ready
for action.
Planning Ahead
IA-748 Standard for EVMS Revision E

For anyone following the process to update the SAE EIA-748 Standard for EVMS Revision D to Revision E, the NDIA Integrated Program Management Division (IPMD) EIA-748 Committee is getting closer to the finish line. As the author and steward of the EIA-748 Standard for EVMS, the IPMD is responsible for working with the SAE International standards organization to maintain the EIA-748 following SAE’s protocols.

At the March 2025 IPMD meeting, the EIA-748 Committee briefed membership on the coming Revision E publication. A summary of the scope of the Revision E changes follows.

Section 1, Scope of EVMS. General refresh of the Revision D content.
Section 2, EVMS Guidelines. There are now 27 guidelines that were agreed upon and adjudicated with the joint government and industry team. This also included a general refresh of content in Section 2.6 Common Terminology.
Section 3, EVMS Process Discussion. Mostly unchanged from Revision D with minor updates. The NDIA IPMD EIA-748 Intent Guide provides additional context to the guidelines in Section 2.
Sections 4, System Documentation and Section 5, System Evaluation. General refresh of the Revision D content.

Following the current schedule, any comments for Revision E will be adjudicated by May 31, 2025 and finalized for publication. Revision E will then be available on the SAE web site for purchase. The next step for the NDIA IPMD EIA-748 Committee is to update and publish the IPMD EIA-748 Intent Guide for the Revision E set of 27 guidelines. This guide will be available for download from the NDIA IPMD Guides and Resources page once completed and approved by IPMD membership.

What’s the same and what’s different in the set of guidelines?

The guidelines are organized into the same five process categories with an update to the name of one category to improve clarity. As part of the guideline updates, the order of some of the guidelines changed to more accurately follow the typical project life cycle process, others were merged. Four guidelines were deleted. Two were added resulting in final set of 27 guidelines. In some instances, the guideline text was modified to improve clarity. A summary of these changes along with an impact assessment by category follows.

NOTE: The final order and/or text of the guidelines are subject to change as a result of the SAE comment and adjudication process. Refer to the published EIA-748-E for the official set of guidelines and text. The NDIA IPMD March presentation is available for download at the end of this blog. This presentation includes the full text for the revised set of guidelines.

Guideline Map			Process Category: Organization
748 D	748 E		Guideline
D 1	E 1	2.1a	Decompose Scope Using a Work Breakdown Structure
D 2	E 2	2.1b	Identify Organizational Responsibilities for the Work
D 5	E 3	2.1c	Integrate WBS/OBS to Create Control Accounts
D 3	E 4	2.1d	Integrate Management Processes Using the WBS and OBS

D Guideline 4, Identify Overhead Management was deleted.

Assessment: No impact as E Guidelines 1 to 4 reflect the same requirements as D Guidelines 1, 2, 3, and 5.

Guideline Map			Process Category: Planning, Scheduling and Budgeting
748 D	748 E		Guideline Description
D 6	E 5	2.2a	Schedule the Authorized Work
D 7	E 6	2.2b	Identify Indicators to Measure Progress
D 8	E 7	2.2c	Establish and Maintain a Time Phased Budget Baseline
D 9	E 8	2.2d	Authorize Scope, Schedule and Budget by Cost Elements
D 10	E 9	2.2e	Plan Scope, Schedule and Budget into WP/PPs
D 10, 12	E 10	2.2f	Establish Work Package Performance Measurement Criteria
D 13	E 11	2.2g	Develop/Apply Indirect Rates to Determine Indirect Budgets
D 14	E 12	2.2h	Identify any Undistributed Budget and Management Reserve
D 11, 15	E 13	2.2i	Reconcile to Target Cost Goals

D Guidelines 10 (Determine Discrete Work) and 12 (LOE) were merged/modified and became E Guideline 10. D Guidelines 11 (Sum Detail Budgets to Control Accounts) and 15 (Reconcile to Target Cost) were merged/modified and became E Guideline 13. The text for E Guidelines 9 and 11 were modified.

Assessment: Minimal impact as E Guidelines 5 to 13 reflect the same requirements as D Guidelines 6 to 15.

Guideline Map			Process Category: Progress Assessment and Data Collection
748 D	748 E		Guideline Description
ADD	E 14	2.3a	Measure Progress and Determine Earned Value
D 16, 19	E 15	2.3b	Collect Actual Costs by Cost Elements
D 21	E 16	2.3c	Account for Purchased Material

The title for the process category changed to more accurately reflect the guideline requirements. E Guideline 14 was added to explicitly state the requirement to measure progress and calculate earned value. D Guidelines 16 (Record Direct Costs) and 19 (Record/Allocate Indirect Costs) were merged into E Guideline 15. D Guidelines 17 and 18 on summarizing direct costs by WBS/OBS were deleted as cost management software does this automatically. D Guideline 20 on identifying unit and lot costs was deleted; this is a separate business system function.

Assessment: Minimal impact. Clarified and streamlined requirements. One potential exception is text add to E Guideline 15 that states: “Where actual costs are not available for comparison, estimated costs will be entered into the EVMS.”

Guideline Map			Process Category: Analysis and Management Reports
748 D	748 E		Guideline Description
D 22	E 17	2.4a	Generate Schedule and Cost Variances
D 23	E 18	2.4b	Identify and Evaluate Significant Variances
D 24	E 19	2.4c	Evaluate Indirect Cost Variances
ADD	E 20	2.4d	Update Control Account Estimates at Completion
D 25	E 21	2.4e	Summarize, Review, Evaluate Performance Data and Variances
D 26	E 22	2.4f	Implement Management Actions in Response to EVM Data
D 27	E 23	2.4g	Develop Revised Program Estimate at Completion

D Guideline 27 was split into two E guidelines to highlight the difference and purpose of the control account and program level EACs. E Guideline 20 was added to explicitly state the requirement to maintain control account level ETCs and EACs. E Guideline 23 text was modified for clarity and scope of the EAC at the program level.

Assessment: Minimal impact. Clarified requirements.

Guideline Map			Process Category: Revisions and Data Maintenance
748 D	748 E		Guideline Description
D 28	E 24	2.5a	Incorporate Customer Directed Changes
D 29, 32	E 25	2.5b	Document and Reconcile Internal Replanning Changes
D 30	E 26	2.5c	Control Retroactive Changes
D 31	E 27	2.5d	Over Target Budget or Over Target Schedule

This process category was significantly improved to eliminate redundancy and to clearly separate out the types of changes: 1) customer directed, 2) internal replanning (merged D Guidelines 29 and 32), or 3) OTB/OTS situation. In all instances, retroactive changes must be controlled.

Assessment: Minimal impact. Clarified requirements.

What is the impact to EVM System Descriptions?

If your EVM System Description is organized somewhat in alignment with the EIA-748 five guideline process categories or the nine process groups as illustrated in the following table, there should be minimal impact. In general, the requirements are the same.

EIA-748 Five Guideline Process Categories	Nine Process Groups
Organization	Organization
Planning, Scheduling and Budgeting	Planning and Scheduling
Planning, Scheduling and Budgeting	Work Authorization and Budgeting
Accounting Considerations	Accounting Considerations
Accounting Considerations	Indirect Management
Analysis and Management Reporting	Analysis and Management Reporting
Change Management	Change Management
	Material Management
	Subcontract Management

With the publication of the EIA-748-E, use this opportunity to make EVM System Description content improvements. In particular, review content related to:

Use of estimated costs (Guideline 15). Verify this is addressed in your EVM System Description.
Managing changes. Potentially align with the types of changes identified in Revision E.
ETC/EAC process. Verify content is clear on purpose/requirements at the control account level versus the program level.
Discussion on unit/lot costs as a result of the Revision D Guideline 20 deletion. This is often dependent upon whether your business environment includes production. Your EVM System Description may include content about supporting other contractual reporting requirements for production such the Contractor Cost and Data Reporting (CCDR) DIDs.

What will require an update is mapping the EVM System Description sections to the EIA-748-E set of guidelines. Also remember to review the content in your self-surveillance or self-governance section to see what may need to be updated.

Caveats

Note that the Cognizant Federal Agencies (CFAs) such as DCMA, NASA, DOE, and others will need to update their EVMS compliance or surveillance processes and materials to reflect the EIA-748-E once it is published. Timing is unknown, however, representatives from the various agencies participated in the IPMD joint government and industry team that produced the final set of guidelines. They are aware of the changes and have been planning to make the necessary updates to documents such as the DoD EVMS Interpretation Guide (EVMSIG). The updates to these agency documents have the potential to impact a contractor’s EVM System Description.

Note that government agency regulations (FAR, DFARS) refer to the EIA-748 guideline requirements (Section 2 only), not the entire standard. They ignore the rest of the standard as they define their process for evaluating whether a contractor complies with the Section 2 guidelines; an example is the DoD EVMSIG.

Planning Ahead

This is a good time to consider updates to improve or streamline your EVM System Description or related processes as industry and government both need to digest the EIA-748-E. Likely your training materials will need a refresh as well. Hopefully, your EVM System Description was not organized by Guideline. In that case, you may have significant work ahead. If you have a CFA approved EVMS, be sure to coordinate with them on the updates to your EVM System Description as they will need to review your changes.

H&A earned value consultants often review and assess EVM System Descriptions. If you need an independent third party to assess your EVMS documentation and provide recommendations on what could be improved, simplified, or clarified, give us a call today at (714) 685-1730.

NDIA IPMD presentation PDF

Planning Ahead for the EIA-748 Standard for EVMS Revision E Read Post »