ACCOUNTING PERIOD. The period of time during which actuals will be collected for transfer into the Earned Value Management System for reporting purposes.
ACTUAL COSTS. The costs actually incurred and recorded in the general ledger.
ACTUAL COST OF WORK PERFORMED (ACWP). The costs actually incurred and recorded in the Earned Value Management System for accomplishing the work performed within a given accounting period. ACWP reflects the applied costs that may be expressed as a value for a specific period or cumulative to date. (See also Estimated Actuals.)
ALLOCATED BUDGET. See Total Allocated Budget.
APPORTIONED EFFORT (AE). Effort that by itself is not readily measured or divisible into discrete work packages but is related in direct proportion to the planning and performance of other discrete effort.
AUTHORIZATION TO PROCEED (ATP). Official authority for the contractor to begin work. It is usually issued by the procuring contracting officer.
AUTHORIZED UNPRICED WORK (AUW). A contract scope change which has been directed by the government contracting officer but has not yet been fully negotiated/definitized. It includes a value, excluding fee or profit, typically associated with the authorized, unpriced change order.
AUTHORIZED WORK. That effort that has been definitized and is on contract plus that effort for which definitized contract costs have not been agreed to but for which written authorization has been received.
BASELINE. See Performance Measurement Baseline.
BASELINE SCHEDULE. The original time-phased plan incorporated into the Integrated Master Schedule against which schedule status is compared or measured.
BILL OF MATERIALS (BOM). A listing of material items required to complete the production of a single unit. When actual or expected prices are applied, it becomes the Priced Bill of Materials (PBOM).
BLOCK PLANNING. The periodic process of converting Summary Level Planning Packages into control accounts and control account planning packages into work packages. The time period chosen reflects blocks of time from a specific contractual milestone to a subsequent specific contractual milestone.
BUDGET AT COMPLETION (BAC). The sum of all budgets established for the contract through any given WBS/OBS level. When associated with a level it becomes control account BAC, Performance Measurement Baseline BAC, etc. (See Total Allocated Budget.)
BUDGETED COST FOR WORK PERFORMED (BCWP). The sum of the budgets for completed work packages and completed portions of open work packages, plus the applicable portion of the budgets for level of effort and apportioned effort. May be expressed as a value for a specific period or cumulative to date.
BUDGETED COST FOR WORK SCHEDULED (BCWS). The sum of the budgets for all work packages, planning packages, etc., scheduled to be accomplished (including in-process work packages), plus the amount of level of effort and apportioned effort scheduled to be accomplished within a given time period. May be expressed as a value for a specific period, or cumulative to date.
CONTRACT BUDGET BASE (CBB). The sum of the negotiated contract cost plus the estimated cost of authorized unpriced work. This represents the total amount of performance measurement budget that may be allocated to contract work. (See Total Allocated Budget).
CONTRACT DATA REQUIREMENTS LIST (CDRL). The standard format for identifying potential data requirements in a solicitation, and deliverable data requirements in a contract. The purpose of the CDRL is to provide a standardized method of clearly and unambiguously delineating the Government's minimum essential data needs.
CONTRACT PERFORMANCE REPORT (CPR). A contractually required report, prepared by the contractor, containing performance information derived from the internal Earned Value Management System that provides status of progress on the contract (DI-MGMT-81466A). (See Integrated Program Management Report).
CONTRACT WORK BREAKDOWN STRUCTURE (CWBS). The complete WBS for a contract. It includes the DoD approved WBS for reporting purposes and its discretionary extension to lower levels by the contractor, in accordance with government direction and the contract work statement. It provides for the product-oriented decomposition of contract work into major elements that include all the hardware, software, data and/or services that are the responsibility of the contractor.
CONTRACTOR. An entity in private industry which enters into contracts with the government. In this guide, the word also applies to government-owned, government-operated activities which perform work on major defense programs.
CONTROL ACCOUNT. The control account is the intersection of one WBS element and one OBS element representing a discrete portion of program scope assigned to an individual manager. The control account is the minimum level where technical, schedule, and cost responsibility exists.
CONTROL ACCOUNT MANAGER (CAM). A single manager within the contractor’s organizational structure that has been given the authority and responsibility to manage one or more control accounts.
CONTROL ACCOUNT PLAN (CAP). The documented representation of the time-phased integration of scope, schedule and resources for all control account authorized work.
COST ACCOUNTING STANDARDS (CAS). Requirements established by the CAS Board to ensure consistent and proper accounting for direct and indirect costs applied to government contracts.
COST ACCOUNTING STANDARDS BOARD (CASB). An independently established statutory Board. The Board has the exclusive authority to make, promulgate, and amend cost accounting standards and interpretations designed to achieve uniformity and consistency in the cost accounting practices governing the measurement, assignment, and allocation of costs to contracts with the United States (41 U.S.C. 1501 et seq., formerly, 41 U.S.C. 422).
COST ACCOUNTING STANDARDS BOARD (CASB) DISCLOSURE STATEMENT. A written description of a contractor's cost accounting practices and procedures.
COST VARIANCE (CV). A metric for showing cost performance derived from earned value data. It is the mathematical difference between Budgeted Cost for Work Performed and Actual Cost of Work Performed. A positive value indicates a favorable condition and a negative value indicates an unfavorable condition. It may be expressed as a value for a specific period of time or cumulative to date.
CRITICAL ACTIVITY. A discrete work package or planning package (or lower level tasks/activities) that resides on the critical path.
CRITICAL PATH. A sequence of discrete work packages and planning packages (or lower level tasks/activities) in the network that has the longest total duration with the least amount of total float/slack through an end point that is calculated by the schedule software application.
CRITICAL PATH ANALYSIS. A network analysis technique used to predict project duration by analyzing which sequence of activities (which path) has the least amount of scheduling flexibility (the least amount of float). See Network Schedule.
CURRENT PERIOD. Accounting period in which the program is currently executing, i.e., time now.
DETAIL PLANNING. The act of defining the scope, schedule and budget of a planning package into more detailed work packages with earned value techniques. Or the act of further defining the scope, schedule and budget of a SLPP into more detailed control accounts.
DIRECT COSTS. Any costs that may be specifically identified with a singular cost objective.
DISCRETE EFFORT. Tasks related to the completion of specific end products or services and can be directly planned and measured.
DRIVING PATH. The longest sequence of discrete tasks/activities from time-now to a selected interim contract milestone. Discrete tasks/activities on the driving path have the least amount of total float/slack to the interim contract milestone. Driving path may not be part of the contract critical path.
EARNED VALUE (EV). See Budgeted Cost for Work Performed (BCWP).
EARNED VALUE MANAGEMENT (EVM). A program management technique for measuring program performance and progress in an objective manner.
EARNED VALUE MANAGEMENT SYSTEM (EVMS). An integrated management system that integrates the work scope, schedule, and cost parameters of a program in a manner that provides objective performance measurement data. It measures progress objectively with earned value metrics; accumulates direct costs; allows for analysis of deviations from plans; facilitates forecasting the achievement of milestones and contract events; provides supporting data for forecasting of estimated costs; and fosters discipline in incorporating changes to the baseline in a timely manner.
EARNED VALUE MANAGEMENT SYSTEM (EVMS) COMPLIANCE. The continuing implementation, operation, and maintenance of the contractor’s EVMS in accordance with the 32 Guidelines in EIA-748.
EARNED VALUE MANAGEMENT SYSTEM (EVMS) GUIDELINES. The 32 Guidelines contained in the EIA-748 (current version) Standard that establish the framework for a contractor's EVMS.
EARNED VALUE MANAGEMENT SYSTEM (EVMS) SURVEILLANCE. A recurring process for assessing the continuous compliance of the contractor’s EVMS against the 32 Guidelines in EIA-748.
EARNED VALUE TECHNIQUE (EVT). A specific technique (e.g., Milestone Method, Percent Complete, 50/50, 0/100, Units Complete, Apportioned Effort, LOE, etc.) selected to represent the measurement of work scope progress and accomplishment in a work package.
ELEMENTS OF COSTS (EOC). Product costs are decomposed into the elements of cost. These elements are comprised of labor, materials, other direct costs and overhead. EOCs represent the cost of products that are typical across industry.
ENTERPRISE RESOURCE PLANNING (ERP). See Manufacturing/Enterprise Resource Planning (M/ERP) System.
ESTIMATE AT COMPLETION (EAC). The current estimated total cost for program authorized work. It equals Actual Cost of Work Performed plus the estimated costs to complete (Estimate To Complete (ETC)) the authorized work remaining. EAC does not include profit or fee.
ESTIMATE TO COMPLETE (ETC). Estimate of costs to complete all work from a point in time to the end of the program.
ESTIMATED ACTUALS (EA) . A value entered into the Earned Value Management System to represent direct costs for material and/or subcontracted items for which earned value has been taken but invoices or billings have not entered the accounting system.
ESTIMATED COST (ESTIMATED ACTUAL). An anticipated cost for specified work scope. Also known as estimated actual.
FORMAL REPROGRAMMING. The process of establishing an Over Target Baseline (OTB) and/or Over Target Schedule (OTS).
FORWARD PRICING RATE AGREEMENT (FPRA). An agreement between a contractor and a government agency in which certain indirect rates are established for a specified period of time. These rates are estimates of costs and are used to price contracts and contract modifications.
FREEZE PERIOD. A period of time when baseline changes are limited. See Guideline 29 for information on exceptions to making baseline changes within the freeze period.
GENERALLY ACCEPTED ACCOUNTING PRINCPLES (GAAP). The standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice.
GENERAL LEDGER. A complete record of financial transactions over the life of a company. The ledger holds account information that is needed to prepare financial statements, and includes accounts for assets, liabilities, owners' equity, revenues and expenses.
GENERAL & ADMINISTRATIVE (G&A). Per FAR Subpart 2.1: G&A expense means any management, financial, and other expense which is incurred by or allocated to a business unit and which is for the general management and administration of the business unit as a whole. G&A expense does not include those management expenses whose beneficial or causal relationship to cost objectives can be more directly measured by a base other than a cost input base representing the total activity of a business unit during a cost accounting period.
GROUPING, PEGGING, AND DISTRIBUTION. Developed as a way to combine material requirements across projects for procurement, fabrication, and assembly purposes but still allow for exact cost assignment back to the originating requirement.
HIGH VALUE MATERIAL. Major components, assemblies, or critical piece-part items, etc. that are identified based on an analysis of material categories a company needs to procure and consume in the integration and build of an end item on a program.
HORIZONTAL INTEGRATION. The logical relationships and time-phasing between tasks and milestones from program start to finish.
INDIRECT COSTS. Costs that cannot be identified specifically against a particular program or activity and must be controlled and budgeted at a functional or organizational level.
INTEGRATED MASTER PLAN (IMP). An event-driven plan that documents the significant accomplishments necessary to complete the work and ties each accomplishment to a key program event.
INTEGRATED MASTER SCHEDULE (IMS). An integrated, networked schedule containing all of the detailed activities necessary to accomplish the objectives of a program. When coupled with the Integrated Master Plan, it provides the time spans needed to complete the accomplishments and criteria of the Integrated Master Plan events. The IMS normally contains all levels of schedules for the program (master, intermediate, and detailed).
INTEGRATED PRODUCT TEAM (IPT). A multidisciplinary team assigned management responsibility for one or more elements of an acquisition program.
INTEGRATED PROGRAM MANAGEMENT REPORT (IPMR). A contractually required report, prepared by the contractor, containing performance information derived from the internal Earned Value Management System. Provides status of contract cost and schedule performance (DI-MGMT- 81861). The IPMR is being phased in to replace the Contract Performance Reports (DI-MGMT-81466) and the Integrated Master Schedule (DI-MGMT-81650).
LEVEL OF EFFORT (LOE). Work defined as having no practicable measurable output or product that can be discretely planned and objectively measured at the work package level.
MANAGEMENT RESERVE (MR). An amount of the total budget withheld for management control purposes for future considerations to handle execution risks. It is not part of the Performance Measurement Baseline.
MANUFACTURING RESOURCE PLANNING (MRP). See Manufacturing/Enterprise Resource Planning (M/ERP) System.
MANUFACTURING/ENTERPRISE RESOURCE PLANNING (M/ERP) SYSTEM. A method for the effective planning of all resources of a manufacturing contractor. It integrates planning of all aspects (not just production) of a manufacturing firm. It includes functions such as business planning, production planning and scheduling, capacity requirement planning, job costing, financial management and forecasting, order processing, shop floor control, time and attendance, performance measurement, and sales and operations planning.
MATERIAL CATEGORIES. Classes of material defined in the contractor’s Earned Value Management System Description and Manufacturing/Enterprise Resource Planning System Description.
MATERIAL CONTROL SYSTEM. See Manufacturing/Enterprise Resource Planning System and Material Management and Accounting System.
MATERIAL MANAGEMENT AND ACCOUNTING SYSTEM (MMAS). A system used by a contractor for the planning, controlling, and accounting for the acquisition, disbursements, and disposition of material. They may be stand-alone systems or may integrate with planning, engineering, estimating, purchasing, inventory, accounting, or other systems. See Manufacturing/Enterprise Resource Planning System.
MILESTONE. A zero duration schedule event marking the due date for accomplishment of a specified work scope or objective. A milestone may mark the start, an interim step, or the end of one or more activities.
NEAR-CRITICAL PATH. The lowest float or slack paths of discrete work packages and planning packages (or lower level activities) in the network that has the next longest total duration nearest to the critical path.
NEGOTIATED CONTRACT COST (NCC). The cost negotiated in a cost-plus-fixed-fee contract or the negotiated contract target cost in either a fixed-price-incentive contract or a cost-plus-incentive-fee contract; does not contain profit or fee. NCC does not include the estimated value of undefinitized change orders, known as Authorized Unpriced Work.
NETWORK SCHEDULE. A schedule format in which the activities and milestones are represented along with the interdependencies between activities. It expresses the logic of how the program will be accomplished.
NOT TO EXCEED (NTE). The portion of an estimated price for work scope the contractor is allowed to bill the government before reaching a final agreement on contract terms. Expenditures against this work scope are limited to this value.
ORGANIZATIONAL BREAKDOWN STRUCTURE (OBS). The hierarchical arrangement of the organization established to manage the resources tasked with performing the work on a specific contract or program.
OTHER DIRECT COSTS (ODC). A cost that can be identified specifically with a final cost objective that is not treated as a direct material cost or a direct labor cost.
OVER TARGET BASELINE (OTB). A new baseline for management when the original objectives cannot be met and new goals are needed for management purposes. An overrun to the Contract Budget Base (CBB) which is formally incorporated into the Performance Measurement Baseline for management purposes. The difference between the Total Allocated Budget and CBB is the amount of the overrun incorporated into the budget.
OVER TARGET SCHEDULE (OTS). A replanned schedule baseline that extends beyond the contract milestones and/or delivery dates. An OTS is usually accompanied by an increase in budgets resulting in a corresponding Over Target Baseline (OTB).
OVERHEAD. See Indirect Cost.
PERFORMANCE MEASUREMENT BASELINE (PMB). A time-phased resourced plan against which the accomplishment of authorized work can be measured.
PERFORMING ORGANIZATION. The organizational unit that applies resources to accomplish assigned work scope.
PERIOD OF PERFORMANCE (POP). The number of working days or calendar days, from a specified commencement date to a specified completion date, as provided for in a contract.
PLANNING PACKAGE (PP). A logical aggregation of future work within a control account that cannot yet be planned in detail at the work package or task level.
PRICE VARIANCE. A variance relative to material that is equal to the budgeted unit price less the actual unit price multiplied by the actual quantity of material used, (i.e., (Budgeted Unit Price – Actual Unit Price) x Actual Quantity.) It reflects a change between the originally budgeted price of material and the actual price.
PRICED BILL OF MATERIALS (PBOM). See Bill of Materials.
PROGRAM BUDGET. The total budget for the program including all allocated budget, management reserve, and undistributed budget.
PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT) COST FORMULA. An earned value technique calculating Budgeted Cost for Work Performed (BCWP) by comparing the Actual Cost of Work Performed (ACWP) of received material to the expected total cost for that material (Estimate at Complete (EAC)) and applying the resulting percentage to the originally budgeted value for the material (Budget at Complete (BAC)), BCWP = (ACWP/EAC) x BAC.
PROGRAM TARGET COST. The program cost objective based on the negotiated contract target cost, or the management goal value of the authorized work, plus the estimated cost of authorized unpriced work.
RATE VARIANCE. A variance relative to labor that is equal to the planned labor rate less actual labor rate multiplied by the actual labor hours used to execute the effort, (i.e., (Budgeted Rate – Actual rate) x Actual Hours.) It reflects a change between the originally budgeted labor rate and the actual labor rate.
REPLANNING. A realignment of schedule or reallocation of budget for remaining effort within the existing cost and schedule constraints of the contract. In this case, the Total Allocated Budget does not exceed the Contract Budget Base, nor is the schedule adjusted to extend beyond the contractually defined milestones.
RESIDUAL MATERIAL. Material procured for a contract that becomes excess to the needs of the contract.
RESOURCE PLAN. The schedule for the planned expenditure of program resources for accomplishment of program work scope
RESPONSIBILITY ASSIGNMENT MATRIX (RAM). A chart showing the relationship between the Contract Work Breakdown Structure elements and the organizations assigned responsibility for ensuring their accomplishment. The RAM depicts the assignment of each control account to a single manager. When resource values are applied to these relationships, it may be referred to as a dollarized RAM.
RESPONSIBLE ORGANIZATION. The organizational unit responsible for accomplishment of assigned work scope.
RISK ASSESSMENT. The definition of risk management that identifies and analyzes potential program risk events in terms of probability and their consequences/impacts.
RISK/OPPORTUNITY REGISTER. A risk/opportunity management tool used by the program manager and program personnel that provides a means of recording and quantifying the identified risks/opportunities.
ROLLING WAVE. The continuous process of converting Summary Level Planning Packages into control accounts and control account planning packages into work packages.
SCHEDULE. A plan that defines when specified work must be done to accomplish program objectives on time.
SCHEDULE MARGIN. A management method for accommodating schedule contingencies. It is a designated buffer within the schedule and does not have assigned resources.
SCHEDULE RISK ASSESSMENT (SRA). A process which uses statistical techniques to identify technical, programmatic, and schedule risks in a program and quantifies the impact of those risks on the program’s schedule.
SCHEDULE VARIANCE (SV). A metric for schedule performance on a program. It is the mathematical difference between Budgeted Cost for Work Performed and the Budgeted Cost for Work Scheduled. A positive value is a favorable condition, while a negative value is unfavorable.
SCHEDULE VISIBILITY TASKS (SVTs). Tasks, activities or milestones in the Integrated Master Schedule (IMS) that increase management visibility and functionality of the schedule for non-Performance Measurement Baseline related items. SVTs are included in the IMS to characterize potential impacts to the logic-driven network.
SINGLE POINT ADJUSTMENT (SPA). Process that sets existing contract cost and/or schedule variances to zero and typically accompanies a replan of all remaining effort with the goal of completing the project on schedule and on budget.
STATEMENT OF WORK (SOW). Contractual document that defines the work scope requirements for a program.
SUBCONTRACTOR. An entity in private industry which enters into a contract with a prime contractor that has entered into a contract with the government.
SUMMARY LEVEL PLANNING PACKAGE (SLPP). An aggregation of work for far-term efforts that are not able to be identified at the control account level, but can be distributed to reporting level Work Breakdown Structure elements (and, therefore, are not “Undistributed Budget”).
SYSTEM DESCRIPTION (SD). The set or series of integrated process descriptions/procedures that describe a contractor’s Earned Value Management System.
TASK/ACTIVITY. An element of work performed during the course of a program. A task/activity has an expected duration, expected cost and expected resource requirements. Some systems may define task/activity at a level below the work package while other systems do not differentiate between the two.
TOTAL ALLOCATED BUDGET (TAB). The sum of all budgets allocated to the contract. TAB consists of the Performance Measurement Baseline and all Management Reserve. In the event an Over Target Baseline is in place, the TAB must reconcile to the Contract Budget Base and any recognized over target budget.
UNDEFINITIZED WORK. Authorized work for which a firm contract value has not been negotiated or otherwise determined.
UNDISTRIBUTED BUDGET (UB). Budget associated with specific work scope or contract changes that have not been distributed to a control account or summary level planning package.
USAGE VARIANCE. A variance relative to material that is equal to the budgeted quantity less the actual quantity multiplied by the budgeted unit price, (i.e., (Budgeted Quantity - Actual Quantity) x Budgeted Unit Price.)
VARIANCE AT COMPLETION (VAC). The difference between the Budget at Completion (BAC) and the Estimate at Completion (EAC) (VAC = BAC – EAC). It may be calculated at any level from the control account up to the total contract. It represents the amount of expected overrun (negative VAC) or underrun (positive VAC).
VERTICAL INTEGRATION. Demonstrates the consistency of data between the various levels of schedules and consistency of data between various Work Breakdown Structure elements and/or Integrated Master Plan/Integrated Master Schedule elements (if applicable) within the schedules.
VOLUME VARIANCE. A variance relative to labor that is equal to the budgeted labor hours less actual labor hours multiplied by the budgeted labor hours planned to execute the effort (i.e., (Budgeted Hours – Actual Hours) x Budgeted Rate.) It reflects a change between the originally budgeted labor hours and the actual labor hours.
WORK AUTHORIZATION DOCUMENTATION (WAD). A contractor’s internal process for authorizing the commencement of program work. All work within a program is described in terms of work scope, budget and schedule and authorized through the work authorization system.
WORK BREAKDOWN STRUCTURE (WBS). A hierarchical product-oriented division of program tasks depicting the breakdown of work scope for work authorization, tracking, and reporting purposes.
WORK BREAKDOWN STRUCTURE (WBS) DICTIONARY. A listing of WBS elements with a description of the work scope content in each element. The work descriptions are normally summary level and provide for clear segregation of work for work authorization and accounting purposes.
WORK PACKAGE (WP). Natural subdivision of control accounts. A WP is simply a task/activity or grouping of work. A WP is the point at which work is planned, progress is measured, and earned value is computed.