I am a huge fan of EV, despite having been wrestling with it since the Thistle hookup which was, 1977 I think.
Of course, what you measure has always been the secret.... And in many cases IS secret.
A proper definition of what constitutes measurable worth is almost never contractually defined properly. Front loaded equipment costs? Who do we shoot?
I find the best therapy is to remind myself that since the contract is crap, the estimate wrong, procurement a joke and the design unfinished when construction starts, the only chance the project has is great planning. Thank goodness I'm on the team.....
Member for
20 years 4 months
Member for20 years4 months
Submitted by Peter Holroyd on Sat, 2022-03-19 13:20
all excellent suggestions but forgot to mention that we had a PMC on the project who was determined to justify his fee as he (un)fortunately let our proposed payment milestone list get signed into the contract without challenge so we were way cash positive at this stage. Unfortunately, whilst our project was OK, the other 3 major projects in the company were in a terrible mess so senior management attention was elsewhere! (it went through a CVA eventually). The questions really relate to the Progress Measurement System you employ - should a deviation from it be signed off by the PD in the same way budgets, costs, VO's, float usage etc are used or moved between work packages.
I actually improved the numbers for the PD by including the VO budgets & EV numbers in the indices, additionally reported against the ES - LS 66% banana s curves and removed the 2 non-novated contracts from the baseline (so I could confuse the PMC). The rest I kicked down the road (sent in auditors), challenged finance on cost allocation or took the cost increase from contingence / management reserve.
As you can guess I am not a big fan of EVM despite using it for 30 years
My granny would say ‘tell the truth, and shame the devil’ Pretty good advice I would say.
These answers are P6 specific
In all cases the use of P6’s Cost Account to identify each change order or extra cost would be useful. Actually, by useful I mean essential.
1) An extra hammock (oops I meant LoE) activity with the extra cost.
2) As above
3) Zero Budget (maybe) but that does not have to mean zero remaining cost. Stupid P6 does not allow EV at the resource assignment level (sigh) so all of these VO’s will need to have discrete activities. But now our EV reports are easily organised by Cost Account which in essence is Base Scope/VO status analysis. A trick I have often used when you HAVE to do work that is not approved, is to add the fully resourced activities with a resource price of zero – and change to the real price and annotate the activity with the VO number when approved.
4) Clearly, ritual sacrifice of your contracts manager is appropriate here.
5) Actual costs with no earned costs.
6) Whose mistake? You have to pay them why? If you have not implanted P6’s ‘Financial Calendars’ you do have a wee bit of a ‘S’ curve problem here.
As always, I recommend all Vos are in a separate project. This means that P6’s insistence that Earned value ONLY comes from a baseline works for you, rather than against you. None of the new work needs to be added to a baseline, because the baseline for earning value in the VO project(s) is set to ‘current project.
Member for
21 yearsI am a huge fan of EV,
I am a huge fan of EV, despite having been wrestling with it since the Thistle hookup which was, 1977 I think.
Of course, what you measure has always been the secret.... And in many cases IS secret.
A proper definition of what constitutes measurable worth is almost never contractually defined properly. Front loaded equipment costs? Who do we shoot?
I find the best therapy is to remind myself that since the contract is crap, the estimate wrong, procurement a joke and the design unfinished when construction starts, the only chance the project has is great planning. Thank goodness I'm on the team.....
Member for
20 years 4 monthsDavid,all excellent
David,
all excellent suggestions but forgot to mention that we had a PMC on the project who was determined to justify his fee as he (un)fortunately let our proposed payment milestone list get signed into the contract without challenge so we were way cash positive at this stage. Unfortunately, whilst our project was OK, the other 3 major projects in the company were in a terrible mess so senior management attention was elsewhere! (it went through a CVA eventually). The questions really relate to the Progress Measurement System you employ - should a deviation from it be signed off by the PD in the same way budgets, costs, VO's, float usage etc are used or moved between work packages.
I actually improved the numbers for the PD by including the VO budgets & EV numbers in the indices, additionally reported against the ES - LS 66% banana s curves and removed the 2 non-novated contracts from the baseline (so I could confuse the PMC). The rest I kicked down the road (sent in auditors), challenged finance on cost allocation or took the cost increase from contingence / management reserve.
As you can guess I am not a big fan of EVM despite using it for 30 years
Member for
21 yearsSorry, Peter. I can make P6
Sorry, Peter. I can make P6 do practically anything, but a properly formatted reply in PP is way above my pay grade,,,,,
Member for
21 yearsSo, Peter, situation normal
So, Peter, situation normal then.
My granny would say ‘tell the truth, and shame the devil’ Pretty good advice I would say.
These answers are P6 specific
In all cases the use of P6’s Cost Account to identify each change order or extra cost would be useful. Actually, by useful I mean essential.
1) An extra hammock (oops I meant LoE) activity with the extra cost.
2) As above
3) Zero Budget (maybe) but that does not have to mean zero remaining cost. Stupid P6 does not allow EV at the resource assignment level (sigh) so all of these VO’s will need to have discrete activities. But now our EV reports are easily organised by Cost Account which in essence is Base Scope/VO status analysis. A trick I have often used when you HAVE to do work that is not approved, is to add the fully resourced activities with a resource price of zero – and change to the real price and annotate the activity with the VO number when approved.
4) Clearly, ritual sacrifice of your contracts manager is appropriate here.
5) Actual costs with no earned costs.
6) Whose mistake? You have to pay them why? If you have not implanted P6’s ‘Financial Calendars’ you do have a wee bit of a ‘S’ curve problem here.
As always, I recommend all Vos are in a separate project. This means that P6’s insistence that Earned value ONLY comes from a baseline works for you, rather than against you. None of the new work needs to be added to a baseline, because the baseline for earning value in the VO project(s) is set to ‘current project.