EVMS Guideline 27 Design Considerations - Revised Estimates at Completion

ANSI Standard 748 Guideline 27 requires the organization to develop revised estimates at completion (EACs) of all control accounts based upon perfomance to date. Comparison of EACs with the Performance Measurement Baseline (PMB) renders a variance at completion (VAC). The VAC is important to both management and to the customer for visibility into resource and funding needs. Montly, the Control Account Manager (CAM) must review the status and the cost of completed work and predict the achieveability of work remaining using budgted values and schedules and any additional resources or time needed. The control account EAC should reflect a valid projection of project costs. CAM EACs must be evaluated by upper management to best ensure completion of project objectives. EACs must be reported to the customer in applicable monthly and funding reports. At least yearly, the organization must perform a comprehensive EAC. Formal organizational policies and procedures must developed to manage comprehensive EACs.

In developing its Guideline 27 system description document, the organization should author procedures ensuring:

1. Estimates of costs of completion are based upon:
   
   • Performance to date and material commitment
   
   
   • Actual costs to date
   
   
   • Knowledgeable projections of future performance
   
   
   • Estimates of the cost for contract work remaining to be accomplished considering economic escalation
   
   


2. Coordination of estimates developed by program personnel with those responsible for overall plant management in order to determine whether required resources will be available according to revised planning


3. Conducting annual (or sooner) comprehensive estimates of costs at completion


4. Generation of estimates of cost at completion by knowledgeable personnel for the following levels:
   
   • Control accounts
   
   
   • Major functional areas of contract effort
   
   
   • Major subcontracts
   
   
   • WBS elements contractually specified for reporting of status to the customer (lowest level only)
   
   
   • Total contract (all authorized work)
   
   


5. Providing of accurate and timely performance to date data to CAMs and to other key managers


6. Generation of estimates of costs at completion in a rational, consistent manner


7. Estimates of cost at completion are generated with sufficient frequency to provide identification of future cost problems in time for possible corrective or preventive actions by the organization and by the customer program manager


8. Comparison of the latest revised estimates of costs at completion with established budgets and with identified causes of variances


9. Estimates of costs at completion are reconcilable with cost data reported to the customer


10. Developing of the contract cost estimate to complete using overhead rates based upon:
    
    • Historical experience
    
    
    • Contemplated management improvements
    
    
    • Projected economic escalation
    
    
    • The anticipated business volume
    
    


11. Comparing budgeted and current indirect rates to estimates of final indirect costs for determination of significant variances


12. Comparing material budgets at completion with estimates for material


13. Performance of independent Estimate at Completions (IEACs)


14. Conducting of subcontract estimate of costs at completion