How to Avoid Corrective Action Requests Related to Level of Effort

by Humphreys & Associates on November 20, 2012

Has DCMA issued you a Level III Corrective Action Request (CAR) because you have had repeat Level 2 CARs for having “BCWP with no ACWP(Budgeted Cost for Work Performed vs. Actual Cost of Work Performed) or “ACWP with no BCWP” that has not been corrected?

According to all the EVMS rules, this appears to be a legitimate finding. If left uncorrected, is a valid Level 3 CAR request that can have serious financial implications.

This would certainly be a valid finding for discretely measured tasks. However, what about level of effort (LOE) work? Because LOE earns value with the passage of time it may or may not align with actual accomplishment of the work planned in that LOE task.

This usually is not a problem for general support tasks that span the duration of the project (unless the project slips). The issue more often arises with shorter duration LOE tasks that are planned to support specific discretely measured tasks. Everything is fine if the discrete work task takes place as planned. But what happens when it doesn’t?

If you are not paying attention to the LOE tasks associated with the discrete work effort, e.g. the EVM system is on autopilot, and the associated discrete work starts early or late, the result for the LOE work effort is:

  • ACWP (Actual Cost of Work Performed) without BCWP
  • BCWS (Budgeted Cost for Work Scheduled) and BCWP without ACWP
  • Distortion in the system of when the support work is really happening

The issue is further compounded when contractors attempt to make previous period adjustments (something that should be avoided) for LOE work effort and do not explain to their customer why they made current or prior period adjustments to BCWS, BCWP, and ACWP.

How you do avoid these issues with LOE tasks? It takes proactive planning and management of LOE tasks.

Read our in-depth article on recommended practices for improving the planning and monitoring of LOE activities. The goal is to avoid changing past LOE data when the discrete work does not take place as planned and to avoid those repeat CARs for “BCWP with no ACWP” or “ACWP with no “BCWP”.

Need help with how you are handling LOE work tasks or need to develop guidance on how to use the various earned value techniques? Contact H&A today.

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