Earned Value Management for Construction Projects

Introduction

Construction projects often report that they are on budget and nearly complete until, suddenly, they are neither. Earned value management provides an objective way of integrating scope, schedule and cost so that project teams can see early whether work is being delivered as planned and forecast where the project is heading.

This Earned Value Management for Construction Projects training course shows how to apply earned value techniques to the realities of construction. Participants learn how to build a performance measurement baseline from the work breakdown structure, schedule and estimate, measure progress objectively, calculate variances and performance indices, forecast completion cost and date, and use the results to drive corrective action.

The course uses construction examples throughout, including civil, building and infrastructure projects, and addresses practical issues such as change, rework and subcontractor reporting.

Course Objectives

By the end of this training course, participants will be able to:

• Explain the principles and benefits of earned value management
• Build a work breakdown structure and control accounts for construction
• Develop a time-phased performance measurement baseline
• Measure physical progress objectively using appropriate methods
• Calculate schedule and cost variances and performance indices
• Forecast estimate at completion and completion dates
• Manage changes and maintain baseline integrity
• Report earned value results and drive corrective action

Target Audience

This training course is suitable for a wide range of professionals, including:

• Project managers and construction managers
• Project controls and planning engineers
• Cost engineers and quantity surveyors
• Project directors and sponsors
• Owner's representatives and project management consultants
• Contract and commercial managers

Training Methodology

The course is practical and calculation-based. Participants build a baseline for a sample construction project, measure progress from site data, calculate earned value metrics, prepare forecasts and interpret results to recommend actions. Spreadsheet templates are used to reinforce learning.

Target Competencies

• Baseline development
• Progress measurement
• Earned value analysis
• Cost and schedule forecasting
• Change control
• Performance reporting

Day One: Earned Value Fundamentals

• Why traditional cost reporting can mislead
• Planned value, earned value and actual cost explained
• The integration of scope, schedule and cost
• Earned value standards and guidelines in overview
• Benefits and limitations of earned value in construction
• Organisational requirements for earned value
• Exercise: interpreting a simple earned value chart

Day Two: Building the Performance Baseline

• Work breakdown structures for construction projects
• Control accounts and work packages
• Linking the schedule and cost estimate
• Time-phasing budgets and resource loading
• Management reserve and contingency treatment
• Baseline review and approval
• Workshop: building a baseline for a sample project

Day Three: Measuring Progress

• Objective progress measurement methods
• Weighted milestones, units completed and percent complete
• Measuring progress on earthworks, concrete and steelwork
• Subcontractor progress reporting requirements
• Recording actual costs and accruals
• Validating site progress claims
• Exercise: calculating earned value from site data

Day Four: Analysis and Forecasting

• Cost and schedule variances and their causes
• Cost and schedule performance indices
• Estimate at completion and estimate to complete
• To-complete performance index and its use
• Earned schedule for time forecasting
• Trend analysis and early warning signals
• Workshop: forecasting completion cost and date

Day Five: Change, Reporting and Corrective Action

• Incorporating approved changes into the baseline
• Handling rework, claims and disputed work
• Earned value reporting formats for different audiences
• Using results to drive recovery plans
• Integrating earned value with risk management
• Implementing earned value on your projects
• Personal action plan for earned value management