Actual Cost of Work Performed (ACWP). The costs actually incurred and recorded in accomplishing the work performed within a given time period. Actual costs include the direct cost plus the related indirect cost such as overhead, general and administrative, etc. allocated to the activity. ACWP reflects the applied direct costs and may be for a specific period or cumulative to date. (Also known as Actual Cost).
Administrative Contracting Officer (ACO). The individual within the Defense Contract Management Agency (DCMA) Contract Management Office (CMO) responsible for ensuring that the functions described in NFS 1842.302 are completed by the contract in accordance with the terms and conditions of the contract.
Advance Agreement (AA). The agreement between the Administrative Contracting Officer (ACO) and the contractor that documents the contractor's commitment to use the accepted Earned Value Management System (EVMS) as an integral management process on current and future contracts and maintain the EVMS compliant system through an internal surveillance program.
American National Standards Institute/Electronic Industries Alliance (ANSI/EIA).The Institute that oversees the creation, promulgation and use of thousands of norms and guidelines that directly impact businesses in nearly every sector. ANSI is also actively engaged in accrediting programs that assess conformance to standards — including globally-recognized cross-sector programs such as the ISO 9000 (quality) and ISO 14000 (environmental) management systems. The Earned Value Management System (EVMS) guidelines have been published as an ANSI/EIA standard. The set of 32 guidelines, established by ANSI/EIA-748, define the requirements the contractor's EVMS should meet.
Applied Direct . The actual direct costs recognized in the time period associated with the consumption of labor, material, and other direct resources, without regard to the date of commitment or the date of payment. These amounts are to be charged to work in-process when any of the following takes place:
Labor, material, or other direct resources are actually consumed.
Material resources are withdrawn from inventory for use.
Material resources are received that are uniquely identified to the contract and scheduled for use within 60 days.
Major components or assemblies that are specifically and uniquely identified to a single serially numbered end item are received on a line flow basis.
Authorized Unpriced Work (AUW). Any effort for which contractually definitized costs have not been agreed upon, but for which written authorization has been received.
Baseline. See Performance Measurement Baseline (PMB).
Budget at Completion (BAC). Total planned budget through any level of the PBB or CBB. See also Total Allocated Budget (TAB).
Budgeted Cost for Work Performed (BCWP). The sum of budgets for completed work packages and partially completed work packages, plus the appropriate portion of the budgets for level of effort and apportioned effort work packages. (Also known as Earned Value).
Budgeted Cost for Work Scheduled (BCWS). The sum of the budgets for all work packages, planning packages, etc., scheduled to be accomplished (including in-process work packages), plus the amount of level of effort and apportioned effort scheduled to be accomplished within a given time period. This is the value of planned work. (Also known as Planned Value).
Change Control Board (CCB). The CCB is a committee that makes decisions on whether proposed changes to project baselines should be accepted.
Compliance. The characteristic of an EVMS that ensures the intent of the 32 EVMS Guidelines is embodied in the integrated processes and sub processes of a organization’s methods of operation that generate accurate and auditable program performance data.
Contract. A mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements.
Contract Budget Base (CBB). The sum of the negotiated contract cost plus the estimated cost of authorized unpriced work. It includes the PMB and MR. Customer approval is generally required to change it. (See also Project Budget Base).
Contract Performance Report (CPR). A contract data requirement when EVM is required. This report consists of five formats containing data for measuring contractors' cost and schedule performance on Government acquisition contracts:
- Format 1 provides data to measure cost and schedule performance by product-oriented WBS elements, the hardware, software, and services the Government is buying.
- Format 2 provides the same data by the contractor's organization (functional or Integrated Product Team (IPT) structure).
- Format 3 provides the budget baseline plan against which performance is measured.
- Format 4 provides staffing forecasts for correlation with the budget plan and cost estimates.
- Format 5 is a narrative report used to explain significant cost and schedule variances and other identified contract problems and topics.
Control Account. A management control point at which budgets (resource plans) and actual costs are accumulated and compared to earned value for management control purposes. A control account is a natural management point for planning and control since it represents the work assigned to one responsible organizational element (or integrated product team) for a single WBS element.
Control Account Manager. See Project Control Account Manager (P-CAM).
Cost Performance Index (CPI). A measure of cost efficiency. It compares BCWP to the actual cost to perform that work (CPI = BCWP / ACWP). An index of 1.0 means that we are spending exactly what we planned to spend to accomplish the work performed. CPI > 1.0 means we are under running costs. CPI < 1.0 means that we are over running costs.
Cost Variance (CV). A metric for the cost performance derived fro earned value data. It is the algebraic difference between earned value and actual cost (CV = BCWP – ACWP). A positive value indicates a favorable condition and a negative value indicates an unfavorable condition. It may be expressed as a value for a specific period of time or cumulative to date.
Data Requirements Description (DRD). The document that describes the specific data required for supplier/contract management and reporting.
Defense Contract Audit Agency (DCAA): The Defense Department organization tasked with monitoring a contractor’s design and implementation of an acceptable accounting system.
Defense Contract Management Agency (DCMA). The Department of Defense (DoD) component that works directly with Defense suppliers to help ensure that DoD, Federal, and allied government supplies and services are delivered on time, at projected cost, and meet all performance requirements. As the DoD Executive Agent for EVMS, DCMA is responsible for ensuring the integrity and application effectiveness of contractor EVMS. The NASA Program/Project contracting officer will normally delegate the responsibility for verifying a supplier’s initial and continuing compliance with ANSI/EIA -748 guidelines to the designated DCMA ACO.
Direct Costs: The expenditures for labor, material, and other direct costs that reasonably can be related directly to performance of a unit of work and which are charged directly and finally to the project, without distribution to an overhead or burden unit.
Discrete Effort: Tasks that are related to the completion of specific end products or services and can be directly planned and measured. (Also may be known as work packaged effort).
Earned Value Management (EVM). A tool for measuring and assessing project performance through the integration of technical scope with schedule and cost objectives during the execution of the project. EVM provides quantification of technical progress, enabling management to gain insight into project status and project completion costs and schedules. Two essential characteristics of successful EVM are EVM system data integrity and carefully targeted monthly EVM data analyses (i.e., risky WBS elements).
Earned Value Management Focal Point (EVMFP). The EVM subject matter expert at each NASA Center/organization that serves as the point of contact for coordination and exchange of information on EVM. The EVMFP is responsible for effective policy implementation within their component, ensuring consistency with NASA policy and the provisions of this guide.
Earned Value Management System (EVMS). The integrated set of policies, processes, systems and practices that meet an organization’s implementation of ANSI/EIA-748.
Earned Value Management System (EVMS) Guidelines: The set of 32 guidelines, established by ANSI/EIA-748 that define the requirements the project/contractor must meet.
Earned Value Management Working Group (EVMWG). A group consisting of the EVM Subject Matter Experts from each NASA Center and other subject matter experts to facilitate Agency-wide communication, consistency, and lessons learned related to implementing and using EVM.
Earned Value Technique (EVT): See Performance Measurement Technique (PMT).
Estimate at Completion (EAC). The estimated total cost for all authorized work. The actual direct costs, plus indirect costs allocable to the project/contract, plus the estimate of costs (direct and indirect) for authorized work remaining is the EAC. EAC = ACWP + ETC.
Estimate to Complete (ETC). Estimate of costs to complete all work from a point in time to the end of the program/contract.
Indirect Costs: The cost for common or joint objectives that cannot be identified specifically with a particular program or activity. Also referred to as overhead cost or burden.
Integrated Baseline Review (IBR). A risk-based review conducted by Program/Project Management to ensure mutual understanding between the customer and supplier of the risks inherent in the supplier’s performance measurement baseline (PMB) and to ensure the PMB is realistic for accomplishing all the authorized work within the authorized schedule and budget.
Integrated Master Schedule (IMS). An integrated schedule developed by logically networking all detailed program/project activities. The highest level schedule is the Master Schedule supported by Intermediate Level Schedules and by lowest level detail schedules.
Joint Cost and Schedule Confidence Level. (1) The probability that cost will be equal to or less than the targeted cost AND schedule will be equal to or less than the targeted schedule date. (2) A process and product that helps inform management of the likelihood of a project’s programmatic success. (3) A process that combines a project's cost, schedule, and risk into a complete picture. JCL is not a specific methodology (e.g., resource-loaded schedule) or a product from a specific tool (e.g., @RISK).
Key Decision Point (KDP). The event at which the decision authority determines the readiness of a program/project to progress to the next phase of the life cycle (or to the next KDP).
Level of Effort (LOE): Effort of a general or supportive nature that does not produce definite end products. Examples include supervision, program administration and contract administration.
Management Reserve (MR). An amount of the total allocated budget withheld for management control purposes rather than designated for the accomplishment of a specific task or a set of tasks. It is not part of the Performance Measurement Baseline.
Memorandum of Understanding (MOU). The MOU is a bilateral or multilateral document describing the agreements between two parties.
NASA Policy Directive (NPD). Agency policy statements that describe what is required by NASA management to achieve NASA’s vision, mission, and external mandates and describe who is responsible for carrying out those statements.
NASA Procedural Requirements (NPR). Agency mandatory instructions and requirements to implement NASA policy as delineated in an associated NPD.
Office of the Chief Engineer (OCE). The Chief Engineer is the principal advisor to the NASA Administrator on the technical readiness, review, and execution of NASA programs and projects. The OCE ensures that NASA missions are planned and conducted with sound engineering practices and proper controls and management. The OCE is responsible for EVM policy and guidance.
Office of Management and Budget (OMB). A Cabinet level office within the Executive Office of the United States President. The OMB oversees and coordinates the Administration's procurement, financial management, information, and regulatory policies. In each of these areas, the OMB's role is to help improve administrative management, to develop better performance measures and coordinating mechanisms, and to reduce any unnecessary burdens on the public.
Organizational Breakdown Structure (OBS). The project hierarchy of line and functional organizations as applied to the specific project.
Other Direct Costs (ODC). These costs represent resources not classified as labor or material. They include travel, computer costs, etc.
Over Target Baseline (OTB). Replanning actions involving establishment of cost and/or schedule objectives that exceed that desired or contractual objectives on the program. An OTB is a new baseline for management when the original objectives cannot be met and new goals are needed for management purposes.
Over Target Schedule (OTS): An established schedule that extends beyond the contractual milestones or delivery dates.
Performance Measurement Baseline (PMB). The time-phased budget plan against which performance is measured. It is formed by the budgets assigned to scheduled control accounts and the applicable indirect budgets. For future effort, not planned to the control account level, the PMB also includes budgets assigned to higher level WBS elements and undistributed budgets. It equals the total allocated budget less management reserve.
Performance Measurement Technique (PMT). The method or “algorithm” used to calculate earned value at the work package level.
Planning Package (PP). A logical aggregate of far-term effort within a control account that can be identified and budgeted, but not yet defined into discrete Work Packages.
Price Variance (PV). For material analysis, PV = (Budgeted Price – Actual Price) x (Actual Quantity). Quantity breakouts are most useful on programs procuring multiple items of the same part number, typical for production type contracts.
Project Budget Base (PBB). The negotiated value of the project plus the estimated cost of authorized, unpriced work. It is the Government project equivalent to the Contract Budget Base. It includes the PMB and MR. Customer approval is generally required to change it.
Project Control Account Manager (P-CAM). A NASA manager responsible for task performance of a control account within the PMB and for planning and managing the resources authorized to accomplish such task.
Rebaselining. The process that results in a change to a program’s/project’s Commitment Agreement. This agreement establishes and documents an integrated set of project requirements, cost, schedule, technical content, and an agreed-to Joint Confidence Level that forms the basis for NASA’s commitment with the external entities of OMB and Congress.
Replanning. The process by which a program or project updates or modifies its plans. This applies to a change in the original authorized PBB or CBB planning for accomplishing formally authorized requirements, typically involving the redistribution of budget for remaining work. In accordance with the ANSI/EIA-748, traceability is required to previous baselines, and funding requirements need to be considered in any replanning effort. There are two types of replanning effort:
- Internal Replanning. Replanning actions performed by the supplier for remaining effort within the authorized PBB or CBB. It is caused by a supplier’s need to accommodate cost, schedule, or technical problems that may have made the original plan unrealistic. Internal replanning is restricted to remaining effort and if significant, the customer must be advised of the action.
- Authorized Change (or External) Replanning. A change necessitated by government/customer direction which may be in the form of either a definitized or a no cost contract change order for contracts or formal change to the Project Plan for in-house Projects that calls for a change in the previously authorized plan. It most often results from a change in the authorized requirement affecting cost, schedule, technical parameters or a combination thereof.
Request for Proposal (RFP). A solicitation used in negotiated acquisitions to communicate government requirements to prospective contractors and solicit proposals.
Responsibility Assignment Matrix (RAM). A matrix showing the relationship between the WBS elements and the organizations assigned responsibility for ensuring their accomplishment. The RAM normally depicts the assignment of each control account to a single manager, along with the assigned budget.
Risk Management Plan (RMP). The document that describes how risks will be identified and managed for a specific program/project.
Schedule Performance Index (SPI). A measure of schedule efficiency. It compares the BCWP to the work scheduled (SPI = BCWP / BCWS). An index of 1.0 means the work is being performed right to the schedule. SPI > 1.0 means that the work is ahead of schedule. SPI < 1.0 means that the work is behind schedule.
Schedule Variance (SV): A metric for the schedule performance derived from earned value data. It is the algebraic difference between earned value and the planned value (SV = BCWP – BCWS). A positive value is a favorable condition while a negative value is unfavorable. It may be expressed for a specific period of time or cumulative to date.
Statement of Work (SOW). A document that contains a narrative description of the work scope requirements for a project or contract.
Suppliers. Each project office is a customer having a unique, multi-tiered hierarchy of suppliers to provide it products and services. A supplier may be a contractor, grantee, another NASA Center, university, international partner, or other government agency. Each project supplier is also a customer if it has authorized work to a supplier lower in the hierarchy. A project office may also be a supplier if it provides products and services in-house to a customer.
To Complete Performance Index (TCPI): The future cost efficiency needed to accomplish the remaining work within a financial goal such as the Budget at Completion (BAC) or the Estimate at Completion (EAC). It compares the budget for remaining work with the remaining cost or the estimated remaining cost to complete the work. TCPIBAC=(BAC - BCWPcum) / (BAC - ACWPcum). Or TCPIEAC=(BAC - BCWPcum) / (EAC - ACWPcum). Compare the CPI to determine if the BAC or the EAC is realistic or not.
Total Allocated Budget (TAB). The sum of all budgets allocated to a project/contract. Total allocated budget consists of the PMB and all MR. The TAB should reconcile directly to the PBB/CBB. If the TAB is greater than the CBB/PBB, the difference is attributable to an over target baseline and must be documented.
Unallocated Future Expenses (UFE). The portion of estimated cost required to meet the specified JCL that cannot yet be allocated to the specific project WBS elements because the estimate includes probabilistic risks and specific needs that are not known until these risks are realized. Typically not part of PBB.
Undistributed Budget (UB). Budget associated with specific work scope or authorized changes that have not been assigned to a control account or lower level WBS element.
Usage Variance (UV): For material analysis, UV = (Budget Quantity – Actual Quantity)) x (Budgeted Price). Quantity breakouts most useful on programs procuring multiple items of the same part number, typical for production type contracts.
Variance at Completion (VAC). The difference between the budget at completion and the estimate at completion (VAC = BAC – EAC). It may be calculated at any level from the Control Account up to the total project/contract. It represents the amount of expected overrun (negative VAC) or underrun (positive VAC).
Work Breakdown Structure (WBS). The product-oriented hierarchical breakdown or division of hardware, software, services and other work tasks that organizes, displays, and defines the products to be developed and/or produced and relates the elements of the work to be accomplished to each other and the end products.
Work Package (WP). A detail, short duration task or material item identified by the P-CAM for accomplishing a Control Account task. A work package has the following characteristics:
- Represents unit of work at the level where work is performed.
- Clearly separate from other Work Packages.
- Assignable to a single organizational element.
- Has scheduled start and completion dates, and interim milestones – if required- all of which represent physical accomplishment.
- Has budget expressed in terms of dollars or hours/FTEs.
- Its duration is limited to a relatively short span.
- Is integrated with detailed engineering, shop, or other schedules.
- Has an correct Earned Value Technique assigned to it.