ACAP Earned Value Management 1 — Questions and Answers
Question 1: What is the primary purpose of Earned Value Management (EVM) in defense acquisition programs?
- To track contractor profit margins
- To integrate cost, schedule, and technical performance measurement (Correct answer)
- To estimate future contract award fees
- To manage subcontractor relationships
Correct answer: To integrate cost, schedule, and technical performance measurement
EVM integrates cost, schedule, and technical performance to provide objective, data-driven project performance measurement.
Question 2: Which DFARS clause implements Earned Value Management System (EVMS) requirements for defense acquisition contracts?
- DFARS 252.215-7002
- DFARS 252.234-7002 (Correct answer)
- DFARS 252.231-7000
- DFARS 252.242-7005
Correct answer: DFARS 252.234-7002
DFARS 252.234-7002 (Earned Value Management System) is the clause that implements EVMS requirements on applicable defense contracts.
Question 3: What is the Performance Measurement Baseline (PMB)?
- The original contract price before any modifications
- The time-phased budget plan against which project performance is measured (Correct answer)
- The final cost estimate at program completion
- The contractor's negotiated profit margin schedule
Correct answer: The time-phased budget plan against which project performance is measured
The PMB is the time-phased budget baseline against which actual project performance is measured using EVM metrics.
Question 4: In EVM terminology, what does Planned Value (PV) — also called Budgeted Cost of Work Scheduled (BCWS) — represent?
- The actual cost of work performed to date
- The budgeted cost of work scheduled to be completed by a given date (Correct answer)
- The total contract budget at completion
- The contractor's projected final cost
Correct answer: The budgeted cost of work scheduled to be completed by a given date
PV/BCWS represents the authorized budget planned to be accomplished by a specific point in time on the schedule.
Question 5: What does Earned Value (EV), also called Budgeted Cost of Work Performed (BCWP), measure?
- The actual cost incurred for work performed to date
- The budgeted amount for the work that has actually been completed (Correct answer)
- The difference between planned and actual costs
- The contractor's fee earned under an award fee arrangement
Correct answer: The budgeted amount for the work that has actually been completed
EV/BCWP is the budget value assigned to the work that has actually been accomplished, regardless of what it actually cost.
Question 6: What is the formula for the Schedule Performance Index (SPI)?
- SPI = EV / AC
- SPI = EV - PV
- SPI = EV / PV (Correct answer)
- SPI = AC / PV
Correct answer: SPI = EV / PV
SPI = EV / PV; a value below 1.0 indicates the program is behind schedule relative to plan.
Question 7: A Cost Performance Index (CPI) of 0.85 on a defense program indicates which of the following?
- The program is completing work 15% faster than planned
- For every dollar spent, only $0.85 of budgeted work has been accomplished (Correct answer)
- The program has a 15% cost underrun
- The contractor is earning 85 cents of profit per dollar of cost
Correct answer: For every dollar spent, only $0.85 of budgeted work has been accomplished
CPI = EV / AC; a CPI of 0.85 means the program is overrunning costs — only $0.85 of planned work is completed per $1.00 spent.
ACAP Earned Value Management 1
What is the primary purpose of Earned Value Management (EVM) in defense acquisition programs?