ART - Example of Earned Value Concept and Cost and Schedule Variances for Capital Assets 2001

The document is a journal article from the Journal of Public Procurement, Volume 1, Issue 1, published in 2001. The article discusses the concept of earned value in procurement management and provides an example of how it is used to measure cost and schedule variances for capital assets. The article explains that earned value is a management technique that relates resource planning to schedules and requirements. It is used to encourage contractors to use effective internal cost and schedule management control systems and to provide the government with timely data for determining contract status. The example in the article shows a baseline plan for completing work units at a cost of $100. It then demonstrates how to calculate schedule variance and cost variance based on the actual work performed and the actual cost incurred. The article emphasizes that the spend comparison approach, which compares actual expenditures against planned expenditures, is not a valid measure of program status under an earned value system.