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Earned Value

4 replies [Last post]
moutaz aldeib
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Joined: 31 Dec 2003
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Hi Cost Controllers,

I am using an earned value to track the progress and control costs, I am facing an issue which I do not understand how to manage it:

In the BOQ, I have hollow block and solid block with quantities and amount, I put the amount as PV.

In the actual work, the contractor cancelled the solid block and does not want to use it and will use hollow block instead for alll the building.

For example:

amount of hollow block is 75K

amount of solid block is 10k (which willl not be used) is 10K

These are considered PV

How can I deal with the EV for the solid block? I mean shall I enter a progress for it. considering that the progress for hollow block is 100%?

Replies

Rafael Davila
User offline. Last seen 3 hours 30 min ago. Offline
Joined: 1 Mar 2004
Posts: 5073

Please be reminded that changes to the Baseline must be accommodated so that the Baseline accurately represents the current plan. Timely incorporation of changes is necessary so that managers are not tracking to obsolete plans and generating "false" variances.

Rodel Marasigan
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Joined: 25 Oct 2006
Posts: 1639

Hi Moutaz,

Welcome to the real world. The issue that you encounter is typical and always exist in our practice. The best way to deal with it is to check first if the changes is approved and authorised by the client/ Project Manager. If it does and the block work is completed, you can update the progress as ex. Below:

Block Work:
Hollow Block = PV =75K EV = 100% and AV = (whatever the actual value) = 100%
Solid Block = PV = 10K EV = 100% and AV = 0

Then you can roll up to the next level as block work = PV = 85K EV = 100% AV = (whatever the actual value) =100%

Note: this is assuming that the change is approved and no changes to BOQ and the SOW or WUC for particular item is completed.

moutaz aldeib
User offline. Last seen 5 weeks 6 days ago. Offline
Joined: 31 Dec 2003
Posts: 291
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I appreciate your explanation, but what if there is no revised BOQ? they still use the same BOQ?

regard,

Muataz

Bian Mutang Tagal
User offline. Last seen 3 weeks 5 days ago. Offline

Hi Moutaz,

You have brought up a issue often encountered by new EVM practioners. Imagine the project is now at CPC (Certificate of Practical Completion) with all scope of work completed and accounted for. Now, the scenario you brought up of the material being omitted would most likely happen for other materials too, not only the solid block. So cumulatively, at CPC your overall EV may be somewhere at, let's say 95% versus PV of 100%. But we know that doesn't make sense, all the work has been completed, agreed, signed-off on and CPC issued. So it isn't fair to say the contractor has only completed 95% of the work. Probably at this stage in the reporting the overall EV could be made 100% with justifications given in the final report.

 

So there is the matter of timing which you have to make clear the method with the Client:

Does the planner wait until CPC or close to it to correct the overall EV from 95% to 100% with justification provided in the final report.

or

Does the planner claim 100% for each individual omitted BQ item as they come across them during regular progress updating, such that when they reach CPC the EV is already 100%?

 

In my past experience in a mega-road project build-only with remeasurable contract, the process was to perform a revised BOQ (RBQ) exercise every 6 months, with the theoretical view that the combination of actual quantities, additions, VOs, omissions would bring us closer and closer to the "true" quantities required to complete the works with each subsequent RBQ. As you can imagine, with each RBQ there would come a revised work programme, and no guesses as to what happens to the shape of the Earned Value curve. But the point here is that at least theoretically the EV would over time more realistically reflect the actual works to be done on site.