EVM Assessment and Application on Finishing a Basement Project
Table of Contents
Earned Value Management (EVM) is a project management tool for measuring project performance and progress in an objective manner. The Office of the Assistant Secretary of DoD explains that EVM is “Earned Value Management is an essential Program Manager and Technical Lead tool for supporting proactive decision making” (Kranz, 2014, pg. 1). PMBOK describes EVM as “a management methodology for integrating scope, schedule, and resources, and for objectively measuring project performance and progress. Performance is measured by determining the budgeted cost of work performed (i.e., earned value) and comparing it to the actual cost of work performed” (PMBOK, 2008, pg. 433). There are 3 elements for EVM: Planned Value (PV), Actual Cost (AC), and Earned Value (EV). PV is the total costs of the work schedule. AC is the total cost that was taken to complete the work. EV is the value performed by a status, measured in costs. Earned Value is the value earned for the past working being completed. For an example after 30 days of working on a $1000 dollar budget and the schedule showed that 40% of the work has been completed then $400 of the total budget should be spent. Anything less then the total budget would show that the project is under running and anything over $400 shows that the project is overrunning. This is important for the project lead so he is able to determine at any point past or present the financial health of the project. If the project becomes too large and he begins seeing a large over budget project then he needs to either go back to the customer and request more money or time to get the project back on budget. Background
This paper will analyze how EVM will be used for completing the basement project. In this example the project lead is Daniel Allex, a homeowner who decided to finish his basement. To keep contracting costs down he decided throughout the project he would hire his family to do some of the work. This includes the initial framing and painting of the basement. The construction project requires external influences during the entire project that could affect schedule and costs. Finishing the basement include construction, electrical, plumbing, painting and applying flooring. Finishing the basement requires multiple mini-projects that have to work together in order to get the entire project completed. The mini-projects are sequential for an example the construction has to be done before you can add the electric and plumbing. Because of the nature of the work I decided to break up the analysis. The first part of the analysis is just for phase 1 and the second part of the analysis is for phases 2 through 4. Analysis of the Project
The first part of the process is getting a permit that has to be done by the county commissions office. Part of that process is the giving the commissions a set of blueprints of the construction design. Included in the blueprints are how big each room will be including closets, all electrical wiring, and plumbing. For this example Mr. Allex had to set up an appointment with the Frederick county building counsel so they can review his plans and either accept them or reject them. They did accept his plans and gave him a 1-year building permit.
Once the permit is given the next stage was the construction. The construction included all the framing needed to finish the basement. The blueprints showed that there was a bathroom, closet, and a main room with a bar. All of that had to be framed before the rest of the basement could be finished. In order to save money Mr. Allex decided to do the construction himself with the help of his family. There are benefits and negatives for doing construction yourself instead of paying for contractors. The biggest...
References: Allex, Daniel S (2014). Interview.
Kranz, Gordon M (2014). Earned Value Management (EVM) Divison. Office of
Assistant Secretary of DOD. http://www.acq.osd.mil/evm/ .
Project Management Institute (2008). A Guide to the project management body of knowledge (PMBOK Guide). (4th ed.). Newtown Square, PA: PMI.
Please join StudyMode to read the full document