BENEFITS OF USE AND VALUE ADDEDWith the use of EVM to measure project performance,management can have more certainty of a project’sposition in terms of what work has been achievedagainst the baseline and also what it has cost toachieve that amount of work.The value for money equation (CPI) gives a goodindication of whether the work done has been achievedefficiently. Earned Value Management provides datathat can inform time and cost recovery action plans toavoid or mitigate major cost and time overruns. If theChange Control System behind EVM is set up correctlyit can help manage the risks associated with scopecreep throughout the project. If EVM is applied acrossan organisation’s portfolio of projects, it can assist withgood governance of how progress and performance ofthat portfolio is managed. With the cost managementcapabilities of EVM, cash-flow can be measuredcorrectly and optimised if appropriate corrective actionsare taken.EVM is also one of the industry recommendedmethodologies for measuring loss of productivity, andone of the most common approaches followed whendetermining loss of productivity compensation viaconstruction claims, as we shall develop further in ourregional analysis. The following is an example of whereEVM has been very effectively used.London 2012 Olympics is one of the greatexamples of EVM usage to complete thevenues on time and to the set budget by theU.K. government and the Olympic Committee.At the Olympics it can be seen that the systemrequirement to integrate several systemslike Primavera P6 planning tool with the costsystem through COBRA was fundamentalto the setup. The EVM system bene昀椀ted the2012 Olympics with disciplined approach tomeasuring performance against a plan, it wasa powerful tool for establishing Trends andgiving Early Warnings. It acted as an enablerfor Risk identi昀椀cation & implementationof successful mitigation action plans, alsofacilitated effective forecasting.5A similar approach has been used at theLondon Power Tunnels project where therewire of the capital electricity system used thesame EVM approach to manage and control theproject performance.6EARNED VALUE AS A RECOMMENDED TOOL TOMEASURE LOSS OF PRODUCTIVITY IN CLAIMPREPARATION AND IN DISPUTE RESOLUTIONPROCEEDINGSLoss of productivity is often one of the major causesof additional costs incurred in a project. EVM is one ofthe most common methods used to calculate loss ofproductivity where a claim is made for the same.Loss of productivity occurs if a contracting entity doesnot reach its expected or achievable production rate. Itcan be described for example as that entity producingless than its anticipated output per hour of work. Insuch instances, the entity is spending more effort perunit of production than initially anticipated.Two of the most internationally recognised advisorybodies in the fields of construction and engineeringdispute resolution and project controls are the Societyof Construction Law (SCL) and the Association ofAmerican Cost Engineers (AACE).The SCL´s “Delay and Disruption Protocol 2nd Edition2017"6 under its chapter “Methods of DisruptionAnalysis” and the AACE´s “Recommended Practice25R-03 – Estimating lost labour productivity inconstruction claims"7 consider certain methodologiesto be used to measure/analyse disruption. Both bodiesrecommend the use of project specific methodologiesin order to assess disruption. The SCL set out thefollowing methodologies which it considers appropriate.Figure 3. SCL Methods of Disruption Analysis5. Marshall, A. (2019). Olympic Delivery Authority* EarnedValue in the London 2012 Programme. Retrieved fromSlidePlayer: https://slideplayer.com/slide/15019922/6. SCL´s “Delay and Disruption Protocol 2nd Edition 2017”– Methods of Disruption Analysis.7. AACE´s “Recomended Practice 25R-03” – EstimatingLost labor productivity in Construction Claims.
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