September 2016 EVM 202—Lesson 4 Integrated Baseline Review Process (Part 4: Baseline Maintenance)

Management Processes Process Description Baseline Maintenance Process Maintains the PMB as a current depiction of the plan for accomplishing remaining work and accommodates changes to PMB caused by program dynamics Risk Management Process Documents and classifies risks associated with the PMB PMs should document action risks from IBR in risk management planning Each action risk addressed in risk management planning should be classified as to its probability of occurrence, consequences, handling, and identification of the individuals responsible for mitigation actions Business Processes Include scheduling, estimate to complete, earned value methodology, and managerial analysis Each process supports the project management Inappropriate or inadequate use of these processes may fail to identify project risks and may add risk to the project After an IBR, the emphasis shifts to management processes, which provide PMs with a continuous source of project information that enables a mutual understanding and reduces or eliminates the need for future IBRs.

Baseline Maintenance Ongoing Baseline Validity and Realism Validity PMB still represents goals and objectives PMB points to valid variances Variances result in management action Timely incorporation of contract changes Proper use of management reserve (MR) and undistributed budget (UB) Realism PMB changes made for management reasons, not for reporting reasons Use of over target baselines (OTBs) Use of single point adjustments (SPAs)

Baseline Maintenance Process PMB Chart—The program at a glance Troublesome baselines Front loaded Rubber baseline SPAs PMB changes Contract changes Internal replanning Formal reprogramming

The Program at a Glance

Troublesome Baselines

Hypothetical PMB Contract structure Period of performance: 38 months 1000 uniform control accounts (CAs) scheduled to approximate a Rayleigh distribution CA budgets: $10/each (BCWS) Actual CA costs: $11/each (ACWP) Assume that there are no schedule issues: BCWP = BCWS (budgeted cost for work performed = budgeted cost for work scheduled) Contractor has purposely underestimated costs to win contract This is a buy-in contract

Front-Loaded Baseline PMB Plot

Front-Loaded Cost Variance (CV) Chart

Rubber Baseline PMB Plot

Rubber Baseline CV Chart

Single Point Adjustment (SPA) An arbitrary baseline adjustment at any level of the Work Breakdown Structure (WBS) where BCWS is set equal to BCWP, or BCWP is set equal to actual cost of work performed (ACWP), or both BCWS and BCWP are set equal to ACWP and incomplete work is replanned to be completed on schedule and within the original PMB budget SPAs distort earned value cost and schedule metrics and make index-based earned value estimate at completion (EAC) computations unreliable.

SPA PMB Plot

SPA CV Chart

PMB Changes

Use of Management Reserve (MR) PMB Plot

Use of MR CV Chart

Effect of Contract Changes on PMB

Effect of Contract Changes on CV

Over Target Baseline/Over Target Schedule (OTB/OTS) Replanning actions involving establishing cost or schedule objectives that exceed the desired or contractual objectives on the program An OTB is a recovery plan, a new baseline for management when the original objectives cannot be met and new goals are needed for management purposes. The contractor must get permission from the Government before executing an OTB/OTS.

Over Target Baseline (OTB) PMB Plot

Effect of OTB on CV

IBR Risk Management Processes and PMB Do PMB revisions support program goals, objectives, and milestones? Changes must be incorporated in a timely manner Changed budgets must be reconcilable with prior budgets Retroactive changes must be controlled Changes must be made in the period the issue is identified The change-trail must be clearly documented An over-arching question: Is the new PMB valid?

Lesson 4 Summary Terminal Learning Objective Examine the performance measurement baseline (PMB) validity Enabling Learning Objective Explain the PMB development process Apply the DoD Integrated Baseline Review (IBR) policy and process Given the Earned Value (EV) technique, analyze control account EVM variables to select EVM metrics Analyze a schedule using the Precedence Diagram Method (PDM) Analyze IBR documents to determine areas of concern within the five risk areas in preparation for control account manager (CAM) interviews Analyze the current schedule to determine status Explain the importance of PMB maintenance