M09-5 - Project Performance Forecasting - EVM

Paul,



You said - I also disagree vehemently that EVM is inconsistent with Activity Based Costing.

• I did not said that, on the contrary I said - EVM is dependent on Activity Based Costing [ABC].  Due to the amount of activities on construction CPM Schedules, ABC method is considered impractical by Construction Contractors.

You said - Bottom line- keep in mind the rather abysmal track record of the US government in general in terms of bringing their projects in on time and within budget.

• I agree but GAO is worse, just look at Veterans Administration Jobs and GAO overlook by using EVM that is of no help at all. It looks like overemphasis on EVM is part of the problem, a few patches is not going to solve the issue.  Invariably when you read all references regarding the VA Construction jobs the issue boils down to the innumerable changes in scope that end up in substantial change orders.
• GAO stands for Government Accountability Office but I do not recall them assigning any accountability on the VA cases.  At the end ultimate accountability rested on the wrong side, on the tax-payer who pay for the change orders.
• Most of US Contractors do not want EVM, we understand what it is but see not much value on it, otherwise we all would be on the EVM bandwagon.
• Maybe in the UK only 7% of contractors indicated they use earned value analysis.  We are smarter we do not waste cost and time on something we do not find of much value, we EVM only when at gunpoint.
• http://www.arcom.ac.uk/-docs/proceedings/ar2009-0879-0886_Olawale_and_M…  
• PMBOK over emphasis on EVM seems directed to other industries and to oudated bureaucratic process of government agencies.  It looks PMBOK does not care about the average Construction Contractor.  As I see it for the average contractor in Puerto Rico GPCBCAR is doomed to be irrelevant.  The average construction contractor in Puerto Rico have a preference on unit costing at the process level.
• http://www.nps.edu/academics/centers/drmi/docs/unit%20cost%20handbook-w…
• ...the unit cost methodology identifies and reports all costs as they relate to outputs. This provides management with a view of the total cost of operations and the resultant cost per unit of output. This view encourages a new and more meaningful understanding of production processes at all management levels. It also assists managers in determining more efficient uses of the resources available to them. The producers' focus shifts from managing fixed budgets to managing processes and their consequent costs. Using unit cost principles is consistent with the implement ation of the Government Performance and Results Act, changes arising from the National Performance Review, and other initiatives designed to create a government that works better and costs less.
• A Body of Knowledge (BOK or BoK) is the complete set of concepts, terms and activities that make up a professional domain, as defined by the relevant learned society or professional association.
• In my "Barrio" any BOK on Project Controls that misses to adequately adress the unit cost methodology is not considered a BOK.

You said - Anyway, if you have something you feel is really MISSING or flat out WRONG then by all means, fill in the appropriate form and submit it for review by the relevant Technical Committee.

• I have a genuine interest as a member of the Planning Planet community to expose and debate my views especially after finding out so many false statements about how US Contractor do business.   
• If you insist on requiring anyone who challenges the GPCCAR to fill some forms then you shall make it private for the exclusive use of the Guild members.  Not everyone is into the Publish or Perish Business.

You said - Bottom line- keep in mind the rather abysmal track record of the US government in general in terms of bringing their projects in on time and within budget, which is why I wrote the two papers I did.

• I agree Government agencies are a different story, it is on their management of the scope that over 90% of change orders do originate. GPCCAR keep looking on the wrong place and if not enough keep suggesting unrealistic procedures for US Contractors and Government Agencies on the places where the issue does not originate.
• Puerto Rico is not as big as Texas, so the same contractors that work for private client do work for government clients. I see the same faces on the pre-bid meetings of government as well as on private jobs.  The private jobs usually make it on budget and on time, government jobs do not.  My observation is that over 90% of failed jobs in Puerto Rico is on the Government jobs.  By simple association the difference is on the sponsor, not on the contractor, a no-brainer. 

You said - Rafael, what sector do you work in?

• I worked on the private sector for construction contractors for over 25 years doing work for private sponsors as well as for government agencies.  I worked about four years [our election period] on the government sector for a Program Manager and currently work as an estimator 80% and as a Scheduler/Planner 20% for several local construction firm.

You said - The big difference I see between the DOD is that as a private sector contractor, I apply risk mitigation at the ACTIVITY level and not at the PROJECT level, with the premise that by "managing the details" (the activities) the "big picture" will take care of itself.

• But the main source of issues is on the management of the scope.  I do not see GPCCAR making any reference on the activities that are the main source of overruns.

• From a CONTRACTORS perspective, Option 2 is generally preferred, not Option 1, no need to complicate things unless it is of some value that justifies the complication. 
  • Many local contractors do not see much value on EVM and understand the limits and flaws of such methodology and I agree with them.
  • https://www.pomsmeetings.org/confpapers/060/060-1448.pdf  
• EVM is not a methodology for claim analysis in any case a tool for measuring performance that fails its purpose when baseline frequently changes. EVM is not mentioned in many references such as AACE International Recommended Practice No. 29R-03, it is not true it is necessary to demonstrate impact of changes. 

When an additional view to traditional scheduling reports are desired there is a tendency to ask for RA risk analysis using statistical methods and not require EVM because in addition to the many reasons why many of us reject formal EVM it is incompatible with risk analysis.