Earned value for construction contracts
|
Earned value analysis (EVA), also known as earned value management (EVM), is a technique used to assess project progress by comparing the amount and cost of work that was planned to have been done by a particular stage with the amount that has actually been done and what it has actually cost.
This gives a good indication of how the project is progressing compared to what was planned and enables forecasts to be made about the eventual cost and time that will be required to complete the project.
Typically, EVA is carried out for each of the packages that make up the project. Actual outputs are measured against planned outputs (often on a weekly basis) using the units that individual companies use to price and measure work.
This provides an opportunity to investigate discrepancies and take remedial action where necessary. It also provides a fairly accurate insight into the financial wellbeing of package contractors and provides early warning of a shortage of resources or of an inefficient use of resources.
The key is to measure actual resource against planned resource using the production units by which estimates have been produced in order to price a tender. This can be:
- Hours worked per week.
- Number of workers per week.
- Volume of say, concrete per week per person.
- Units fixed per week per person.
These items can be plotted weekly to alert the user to trends and allow them to investigate causes. Furthermore, it provides an overall general picture of labour productivity for each monitored operation.
Carrying out this sort of analysis requires that project planning is broken down into packages and that tender documentation is drafted to require contractors to supply the information required.
[edit] Related articles on Designing Buildings Wiki
- Benchmarking.
- Contractor.
- Cost monitoring.
- Cost performance index (CPI).
- Identifying the causes of trends in construction labour productivity.
- Key performance indicators.
- Programme consultant.
- Progress of construction works.
- Schedule performance index (SPI).
- Sub-contractor.
- Tender.
- Tender documentation.
[edit] External references
Featured articles and news
Adapting to meet changing needs.
London Build: A festival of construction
Co-located with the London Build Fire & Security Expo.
Tasked with locating groups of 10,000 homes with opportunity.
Delivering radical reform in the UK energy market
What are the benefits, barriers and underlying principles.
Information Management Initiative IMI
Building sector-transforming capabilities in emerging technologies.
Recent study of UK households reveals chilling home truths
Poor insulation, EPC knowledge and lack of understanding as to what retrofit might offer.
Embodied Carbon in the Built Environment
Overview, regulations, detail calculations and much more.
Why the construction sector must embrace workplace mental health support
Let’s talk; more importantly now, than ever.
Refurbishment for net zero; the BSRIA white paper
The everyday practice of tackling energy efficiency, fabric first, ventilation, air quality, and occupant wellbeing.
Ensuring the trustworthiness of AI systems
A key growth area, including impacts for construction.
Foundations for the Future: A new model for social housing
To create a social housing pipeline, that reduces the need for continuous government funding.
Mutual Investment Models or MIMs
PPP or PFI, enhanced for public interest by the Welsh Government.
Stress Awareness Week ends but employer legal duties continue.
A call to follow the five Rs for the business and for the staff.
Key points and relevance to construction of meeting, due to reconvene.
Cladding remediation programmes, transparency and target date.
National Audit Office issue report on cladding remediation.