Earned Value Management — The Truth, the Whole Truth
And Nothing but the Truth
Given the dynamic resurgence of MAGA, under the leadership of President Trump, now is a great opportunity to set the record straight regarding research that has failed to meet the Model Standards of Academic Information and Technology Literacy. As a result, “false or misleading” information has become the basis for teaching and learning Earned Value Management, specifically that “Earned Time” and “Earned Schedule”, as recognized and rewarded by PMI and the efforts of the US Government to divorce payment from performance. To the contrary, as this paper will validate, the concept of “Earned Schedule” or “Earned Time” originated as a core element of what is commonly known today as Earned Value Management (EVM), and “payment for performance” was the “raison d’être” for the adoption of Earned Value Management 120+ years ago.
And given that President Trump recently signed Executive Order 14094, “Restoring Gold Standard Science,” on May 23, 2025. The order aims to ensure federal scientific research is conducted according to “Gold Standard Science” principles and rebuild public trust in science. It requires agencies to align their research practices with these principles, which include transparency, reproducibility, and unbiased peer review.[1]
[1] White House (May 23, 2025) Fact Sheet for EO #14094, “Restoring Gold Standard in Science”.
Combine this with the US Defense Acquisition University (DAU- Ft. Belvoir, VA), finally admitting that Earned Value Management, as defined under ANSI 748, has not worked. The Federal Acquisition Regulation, specifically Subpart 34.2 — Earned Value Management System, has posted an informal input invitation on Acquisition.gov, open until noon Eastern Time on September 30, 2025. Here’s the link inviting our inputs — https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-34.
Why is all this so important? As we are already using generative AI, which has typically focused on administrative (“back-office”) tasks, such as cost estimating, forecasting, and progress reporting. The focus now is on agentic AI, a more advanced form of artificial intelligence with enhanced reasoning capabilities that can independently plan and execute a series or network of complex tasks. Before we can do this, we MUST purge the system of any and all “fake news” (false or misleading theories, tools, or techniques) or systems that have failed to prove their effectiveness. (e.g., ANSI 748)
Under these circumstances, now is a great time to revisit and re-establish the TRUTH about the origins of Earned Value Management, and to move forward, we need to apply the “lessons learned” from 120+ years of TESTED and PROVEN methods that serve to protect the interests of both BUYER and SELLER. As “We the People” recognize that the U.S. government, like other governments, operates under a FIDUCIARY OBLIGATION[1] to its citizens, meaning it has a responsibility to act in our best interests and manage public resources and assets with care and integrity.
[1] Johnson, Vincent R. (2019) “The Fiduciary Obligations of Public Officials” St Mary’s School of Law
THE IMPACTS OF SLOPPY, INCOMPLETE, OR POOR RESEARCH
As the philosopher Umberto Eco told us, “Social media gives legions of idiots the right to speak when they once only spoke at a bar after a glass of wine, without harming the community… but now they have the same right to speak as a Nobel Prize winner. It’s the invasion of the idiots.” Goodreads. This undesirable reality of social media is what drove Trump to issue the “Restoring Gold Standard Science,” which puts the burden on professionals and the societies that we’ve chosen to represent us to be more responsible in researching what we publish, consistent with the 5 Attributes of the Scientific Method.[1]
- “Empirical Observation
The scientific method is empirical. That is, it relies on direct observation of the world, and disdains hypotheses that run counter to observable fact. This contrasts with methods that rely on pure reason (including that proposed by Plato) and with methods that rely on emotional or other subjective factors.
2) Replicable Experiments
Scientific experiments are replicable. That is, if another person replicates the experiment, they will obtain the same results. Scientists are expected to publish sufficient details of their methods so that another person, with appropriate training, can replicate the results. This contrasts with methods that rely on experiences that are unique to a particular individual or a small group of individuals.
3) Provisional Results
Results obtained through the scientific method are provisional; they are (or ought to be) open to question and debate. If new data arise that contradict a theory, that theory must be modified. For example, the phlogiston theory of fire and combustion was rejected when evidence against it arose.
4) Objective Approach
The scientific method is objective. It relies on facts and the world as it is, rather than on beliefs, wishes, or desires. Scientists attempt (with varying degrees of success) to remove their biases when making observations.
5) Systematic Observation
Strictly speaking, the scientific method is systematic; that is, it relies on carefully planned studies rather than on random or haphazard observation. Nevertheless, science can begin from a random observation. Isaac Asimov said that the most exciting phrase to hear in science is not “Eureka!” but “That’s funny.” After the scientist notices something unusual, they proceed to investigate it systematically.”[2]
[1] Flom, Peter. (2018, April 16). Five Characteristics Of The Scientific Method. sciencing.com. Retrieved from https://www.sciencing.com/five-characteristics-scientific-method-10010518/
[2] Flom, Peter. (2018, April 16). Five Characteristics Of The Scientific Method. sciencing.com. Retrieved from https://www.sciencing.com/five-characteristics-scientific-method-10010518/
Read More: https://www.sciencing.com/five-characteristics-scientific-method-10010518/
This is the standard applied to this paper and is the standard that, as professional practitioners, we should all be applying and expecting the professional societies we support to adopt. If we fail to adhere to the standards that apply to other professions, it will only reduce the respect we earn from those who engage our services in the future. We need to reject the standard that PMI has adopted for many years, which is the tools, techniques, and methodologies “used on most projects, most of the time,” translating into at best average practices, which is made even worse by credible research by AIPM and KPMG, indicating only 36% of our projects finish within budget and only 32% finish on time.[1]
Figure 1 below shows quotes taken from Quentin Fleming and Joel Koppelman’s “Earned Value Project Management, 2nd Edition (2000)[2] that clearly and unequivocally explain that Earned Value Management is a “cost engineering” function that evolved and matured alongside Industrial Engineers from the 18th-century Industrial Revolution.
[1] AIPM and KPMG (2019–2022). The State of Project Management in Australia 2022: Leading Projects through Volatility. volatility.https://info.aipm.com.au/hubfs/Reports%20and%20major%20content%20assets/The%20State%20of%20PM%202022%20Report%20FINAL.pdf
[2] Fleming and Koppelman (2000) “Earned Value Management, 2nd Edition” https://www.amazon.com/Earned-Value-Project-Management-Second/dp/1880410273/ref=sr_1_2?s=books&sr=1-2FlemFl
[1] Fleming and Koppelman (2000) “Earned Value Management, 2nd Edition”
What is especially ironic is how clearly General Driessnack explained that “all the earned value was an adaptation of the same methods used by the Industrial Engineers, direct from the factory floors.” How this was misinterpreted to indicate that the Air Force discovered Earned Time or Earned Schedule can only reinforce the importance of sound research practices, especially requiring a complete literature review.
THE MISSING LINKS
While Fleming and Koppelman were clear in referencing the work of Taylor, Gantt, Fayol, the Gilbreths, and others, they were not more specific in the details.
This paper will take us to the next levels of details showing us a more practical look at exactly what the Earned Value from the 1800s and how they have evolved over the past 120+ years, as this author learned Earned Value Management from Prof. Marvin Gates, PE, Adjunct Professor at Worcester Polytechnic Institute, between late 1969 to the early 1970s.
Contributions of Frank and Lilian Gilbreth-[1]
“Frank Bunker Gilbreth (1868–1924) and Lillian Moller Gilbreth (1878–1972) are respected for their unique contributions to the advancement of motion study, fatigue study, and work simplification. Their humanistic approach to the problems of management utilized the principles of psychology and the application of experimental results to improve industrial procedures.”[2] Of particular relevance today was the work of the Gilbreths in advocating for the establishment of standard operating procedures. (SoP) They researched and supported efforts to define the “one best way” to perform any single task, thereby completing the work as efficiently and cost-effectively as possible while reducing fatigue and physical risks to the worker.
Contributions of Henri Fayol-[3]
Henri Fayol, a French mining engineer and management theorist, laid out the fundamental principles of modern management. First published in 1916, “General and Industrial Management” remains a foundational text in the field of organizational management today.[4]
Fayol believed managers should interact with personnel in five basic ways to control and plan production:
- “Prevoyance,” also known today as Planning & Scheduling or “PMOs”: This involves FORESIGHT- determining what needs to be done, how it will be accomplished, when it will be completed, and who will be responsible. Fayol’s emphasis on prevoyance highlights the importance of foresight and both tactical and strategic thinking in successful management.[5]
- Organizing: Management must ensure that all necessary resources, including raw materials, equipment, and personnel, are assembled at the appropriate time for production or execution. For today’s relevance, see this reference: “Peeling the Onion: Why Centralized Control / Decentralized Execution Works” (2014) by Lt Col Alan Docauer, USAF.
- Commanding: Management must encourage and direct workers’ activity.
- Coordinating: Management must ensure that workers collaborate.
- Controlling: Managers evaluate and ensure that personnel follow management’s commands.
Fayol’s management theory included 14 key principles:
- Division of work: Dividing work among employees helps improve productivity, accuracy, and efficiency. Fayol was an early advocate for the use of WBS/CBS/OBS structures.
- Authority: Managers have the authority to enforce processes that make employees work as efficiently as possible; they are responsible for their team’s output. This is where ANSI 748 has failed “We the People” who pay the taxes that support the government.
- Discipline: It is the responsibility of managers to discipline workers to ensure compliance and collaboration. You can see this in action with the DOGE team and the Federal Government layoffs and downsizing.
- Unity of command: To streamline the chain of command and avoid confusion, employees should answer to only one manager. This is often MISSING in today’s companies.
- Unity of direction: Everyone in an organization should work toward a single, unified goal. E.g., MAGA Efforts? SPI & CPI +/-5%?
- Subordination of individual interest: All employees, including managers, should set aside their interests and focus solely on the company’s success. “That which gets rewarded gets done.”
- Remuneration of employees: Managers must reward their employees, either monetarily or otherwise, for their efforts. Reference Figure 3 and the Incentive formulas under EVM.
- Centralization: Management’s authority should be centralized, but decision-making should be divided equally among leaders, ensuring that no single entity has the autonomy to make decisions unilaterally. Reference Centralized Decision Making/Decentralized Execution, by Docauer.
- Scalar chain: Managers must communicate the leadership hierarchy across the company so everyone knows whom they report to. Reference the relationships between the WBS and SCHEDULE, showing CONTROL ACCOUNTS, WORK PACKAGES, and PLANNING PACKAGES from the GAO’s Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Program Costs.
- Order: Maintaining order across the business increases productivity and output. Reference Figure 3 and the Incentive formulas under EVM.
- Equity: All employees should be treated equally, and it is the managers’ responsibility to protect their teams from discrimination. “Equal pay for Equal Work”
- Stability: Employees who feel secure in their positions perform better, and managers are responsible for providing job security to their teams. Just how “stable” is Trillions of dollars in DEBT and no efforts to get government spending under control?
- Initiative: Managers should encourage employees to be proactive whenever possible.
- Esprit de corps: Managers are responsible for motivating their teams and setting a positive, supportive, and collaborative tone. MAGA Efforts?
[5] prévoyance- British & American English: foresight NOUN /ˈfɔːsaɪt/ https://www.collinsdictionary.com/dictionary/french-english/pr%C3%A9voyance
Someone’s foresight is their ability to see what is likely to happen in the future and to take appropriate action.
He was later criticized for his lack of foresight.
- Brazilian Portuguese: previdência
- Chinese: 先见之明
- European Spanish: previsión
- French: prévoyance
- German: Voraussicht
- Italian: previdenza
- Japanese: 先見の明
- Korean: 선견지명
- European Portuguese: previdência
- Latin American Spanish: previsión
Contributions of Henry Gantt-[5]
Henry Laurence Gantt (1861–1919) was a mechanical engineer & management consultant who is noted for the following contributions:
1. Task and bonus system- Under the Gantt Plan, the worker was guaranteed a minimum wage regardless of how slowly the worker produced any deliverables. However, if he/she could produce each deliverable at or faster than the STANDARD TIME, he/she would earn a bonus equal to the % that the standard was met or better. (For more, see Figure 3)
2. The perspective of the worker- The worker is entitled to a “fair day’s pay for a fair day’s work,” and to work in a safe and healthy working environment.
3. The social responsibility of business- “The business system must accept its social responsibility and devote itself primarily to service, or the community will ultimately make the attempt to take it over to operate it in its interest .” — Henry Laurence Gantt
Gantt is often, but incorrectly, credited with inventing the Gantt Chart, which bears his name. “Bar Charts” were invented more than 100 years ago by William Playfair.[6]
Contributions of Frederick Taylor –[7]
Frederick Winslow Taylor (Born March 20, 1856, and died March 21, 1915) was an American Mechanical Engineer, inventor, and Management Consultant, known as the “father of scientific management.”[8] See Authors Note[9]
His major contribution was the development of scientific management, also known as Taylorism. He sought to improve industrial efficiency through the systematic study of work processes (Activity Based Costing/Activity Based Management), breaking down tasks into their smallest components (WBS/CBS) to find the most efficient methods.”[10] This approach, which emphasized scientific analysis over traditional methods, revolutionized manufacturing and production management. “Taylor’s work, while groundbreaking, also faced criticism for potentially dehumanizing the workplace and reducing workers to mere cogs in a machine. However, his contributions laid the foundation for modern management practices and continue to influence industrial engineering and production management today.“[11] Notably, like this author, Taylor came up through the trades and didn’t obtain his academic credentials until after he was well established, having tested and proven his theories in the field.
Taylor evolved FOUR RULES or GUIDELINES to implement his “Time and Motion Studies” successfully:
- Firstly, management working with qualified tradespeople develops a SCIENCE for each element of a worker’s activities, which replaces the old “ad hoc” or “rule of thumb” methods with methods that have been TESTED and PROVEN to produce quality results SAFELY and COST-EFFECTIVELY. An example of what that looks like is one of Elon Musk’s plants.
- Secondly, Management selects and trains, teaches, evaluates, and develops the workpeople to be assigned to perform each TASK or ACTIVITY. (This method embraces Activity Based Costing/Activity Based Management- ABC/ABM)
- Thirdly, Management and Workers COOPERATE to ensure that the work is being EXECUTED as developed by the Standard Operating Procedure (SoP) and that the QUALITY of the produce meets or exceeds the specifications AND that the payment meets the “fair wage for a fair day’s work”. (There is no DEI/ESG in this system.)
- Fourthly and finally, there is SHARED responsibility between MANAGEMENT and the WORKFORCE. MANAGEMENT is responsible for providing a safe and healthy work environment, sufficient and appropriate tools, materials, and equipment, and it is the responsibility of the WORKFORCE to follow the SoP, use the tools & techniques developed, and report any problems with the equipment, materials, or workflow processes that can be improved upon.
[1] Schroyer, H. Q. (1975). CONTRIBUTIONS OF THE GILBRETHS TO THE DEVELOPMENT OF MANAGEMENT THOUGHT. Proceedings — Academy of Management. https://doi.org/10.5465/ambpp.1975.4975789
[2] Contributions Of The Gilbreths To The Development Of Management Thought. Helen Q. Schroyer Published Online:30 Nov 2017
[3] Fayol, Henri (1916) “General and Industrial Management”
[4] IBID
[5] Mosaic Blog Pat Weaver (2012) “Henry L Gantt, 1861–1919 A retrospective view of his work” https://www.mosaicprojects.com.au/PDF_Papers/P158_Henry_L_Gantt.pdf
[6] Mosaic Project Services (2006) “A Brief History of Scheduling” by Patrick Weaver-
[7] Frederick Winslow Taylor Written by John F. Mee for the Encyclopedia Fact-checked by Article History by Encyclopedia Britannica Editors
[9] AUTHOR’S NOTE- Not to be confused with Ibn al-Haytham: The Muslim Scientist Who Birthed the Scientific Method- Method-
[11] Frederick Winston Taylor (1911) “Principles of Scientific Management”
[12] Frederick Winston Taylor (1911) “Principles of Scientific Management”
[1] Frederick Winston Taylor (1911) “Principles of Scientific Management”
[1] Management Education Types of Incentives (n.d.)
As we can see by the names, the time frames they lived, and their INCENTIVE PLANS were developed and tested, we can see three incontestable and undeniable FACTS:
1) Incentives were always an INTEGRAL COMPONENT that formed the basis and “raison d’être” for the adoption of Earned Value Management 120+ years ago;
2) 70% of the INCENTIVE FORMULAS are based on TIME or EFFICIENCY (Productivity)
3) The basis for Earned Time or Earned Schedule was not “invented” or “discovered” by Walt Lipske and the US Air Force, as promulgated and tacitly validated by PMI. Or how the US Government incorrectly divorced payments for performance, when they ADOPTED or ADAPTED the research of Taylor, Gantt, Fayol, the Gilbreth’s et al., as captured and documented by Gillette and Dana in their 1909 book “Cost Keeping and Management Engineering: A Treatise for Engineers, Contractors and Superintendents Engaged in the Management of Engineering Construction”
To be CONSISTENT with Trump’s Executive Order number 14303 for “Restoring Gold Standard Science”, signed on May 23, 2025, and given that the order emphasizes “transparency, rigor, and impact in federally funded research. It also aims to ensure that federal decisions are based on the most credible scientific evidence.”
Then wouldn’t it make sense that not only the US Government, especially the Government Accountability Office (GAO) and US Defense Acquisition University (DAU), but also professional societies such as PMI, AACE, or anyone else that publishes standards or “recommended practices” related to progress or procurement adopt Earned Value Management and should adhere to the 3rd “rule” or “attribute” of the “5 Characteristics of the Scientific Method”
#3- Provisional Results
Results obtained through the scientific method are provisional; they are (or ought to be) open to question and debate. If new data arise that contradict a theory, that theory must be modified. For example, the phlogiston theory of fire and combustion was rejected when evidence against it arose.
One would hope that this “Leadership by Example” will become the driving force for all practitioners and their professional societies, regardless of their country, to adopt the same standards. We have already proven that the EVM System we have been using for our own “FOR PROFIT” companies and teaching them to our clients, is a “best TESTED and PROVEN method. Here is our premier case study for PT Freeport McMoran Indonesia, which has documented savings of USD 65 million and a productivity increase of up to 700% for night shifts, serving as prima facie evidence of a successful PMO that has remained in use for over 20 years.
A CASE STUDY SHOWING TESTED AND PROVEN RESULTS USING GILLETTE & DANA’S METHOD
As you can see in Figure 4, partly due to the Hawthorne Effect but mostly due to the WORKFLOW PROCESS OPTIMIZATION, we were able to achieve significant improvements in both COST and PRODUCTIVITY. We achieved this using nothing more than Excel as the primary project management tool for planning and reporting. (1) The management suggested we move from Excel to MS Project, and in (2), you can see that using MSP increased the costs considerably and slowed the generation of reports by about 25%. Then, management directed us to use Primavera P6 (3), and the costs of administering the Earned Value Management System increased even further, as well as slowing down the ability to publish results within 4 hours after the close of each shift. After documenting the impacts, we convinced Freeport to revert to the use of Excel (4), and as you will see in the follow-on presentation, we continue to rely on Excel, especially as we move to adopt the use of Artificial Intelligence (AI), specifically through the use of Statistical Process Control Charts, Excel Forecasting features and Monte Carlo Simulation software. https://lumivero.com/solutions/
For more on this story, go here, https://build-project-management-competency.com/ptmc-training-standards-and-specifications-individual/.
AND here https://pmworldlibrary.net/authors/ridwan-wibiksana/
Implementing Earned Value Management, not as advocated by ANSI 748, but using the Gillette and Dana method, Freeport Indonesia achieved a 57% reduction in both direct project costs and project overhead costs.
Because the focus was on EFFICIENCY (Using CPI and SPI), we were able to increase productivity by as much as 700% on the night shifts.
The productivity on night shifts suffered because if they ran out of materials, they had to drive 2 hours out of the mine to the laydown yards, load their trucks, and drive 2 hours back into the mine. By requiring the first two shifts to PRESTOCK for the next shift, we increased PRODUCTIVITY.
This is one of the very few PMOs that has remained substantially unchanged since it was designed and rolled out 21 years ago.
This resulted in a total of USD 65 million in savings over four years, leading to the Project Manager for this PMO implementation being promoted from a General Superintendent to a Vice President position by Freeport-McMoRan Indonesia Mining.
One of the “Lessons Learned” from Freeport was the importance of focusing on all levels of management, not just the “Big Bosses”. Ultimately, the most important people on the project are those responsible for executing the work to generate BCWP. Everyone else is overhead, either working on the project or providing support from a home office.
Given that project performance data has about the same half-life as that of a ripe banana, monthly reports are of little or no value. To have any value in informing management in making resource allocation decisions, progress reporting should lag no more than one day behind physical progress in the field. This report is issued three times a day, every day of the year. The report is published online within 4 hours after the completion of each shift. This is done with a PMO team of 6 people.
It covers the following levels of management:
○ Program (Operations Managers)
○ Project Managers
○ Shift (Superintendents)
○ Individual Work Crews (Crew Forepeople)
We utilize Statistical Process Control Charts to MAXIMIZE PRODUCTIVITY without compromising QUALITY of the work or the SAFETY.
BONUSES (incentives) are awarded not only for PRODUCIVITY, but also for meeting or exceeding Safety and Quality, but especially for any INNOVATIVE IDEAS or SUGGESTIONS. These are distributed on a weekly, monthly, and annual basis.
Below is an example from another one of our top graduates from Vale Tin and Nickel, Brazil, who wrote an outstanding paper showing how Earned Value Management is being applied in real mining, using examples from the popular Discovery Channel reality program, “Gold Rush.”- “Enhancing Productivity in Greenfield Mining Projects through Earned Value Management and Timely Contractor Payments.” Pangestu, S. A. (2024). Enhancing Productivity in Greenfield Mining Projects through Earned Value Management and Timely Contractor Payments; PM World Journal, Vol. XIII, Issue X, October/November
Specifically, Ms. Pangestu focused on how EVM is being used today to increase SPI and CPI through her use of well-established “motion and time study” professionals:
- Discovery Channel UK. (2024, September 4). Crab Shells Help Hoffmans Find Big Gold Haul | Hoffman Family Gold [Video]. YouTube. https://youtube.com/watch?v=aiU-xvAaO9M
- Discovery Channel UK. (2019, December 11). Parker Hires An Analyst To Get His Plant Running More Efficiently | Season 10 | Gold Rush [Video]. YouTube. https://www.youtube.com/watch?v=87sLm_JdAmw
- Discovery UK. (2024, March 1). Tony Beets makes $80,000 more by building a new road | Gold Rush [Video]. YouTube. Retrieved from https://www.youtube.com/watch?v=2oSHsXxC3HE&t=528s
And how INCENTIVES were applied on real projects, just as Gillette and Dana explained:
- Discovery UK. (2024, October 30). Hoffman’s End The Season With $2 Million Of Gold Before Winter Shuts Them Down | Hoffman Family Gold [Video]. YouTube. https://www.youtube.com/watch?v=odJu1nqkpDo
To summarize, we do not use ANSI 748 EVM as the basis for our “for-profit” businesses or teach it to our clients.
Under Earned Value Management as structured by Gillette & Dana, we do not need to use MSP, P6, or any dedicated scheduling software. Excel is perfectly sufficient.
We utilize and teach others how to apply Earned Value Management, as developed by Taylor, Gantt, Fayol, the Gilbreths, and others, and published by Gillette and Dana. This approach has been modified to incorporate AI features, including Excel, Statistical Process Controls, and Simulation.
We are currently experimenting with other AI solutions, specifically using generative AI, which has typically focused on administrative (“back-office”) tasks, such as cost estimating and progress reporting. Our focus now is on agentic AI, a more advanced form of artificial intelligence with enhanced reasoning capabilities that can independently plan and execute a series or network of complex tasks, replacing forward pass/backwards pass software with Systems Dynamics models. (Using Boolean Operators- IF/THEN logic)
The FOCUS is on increasing the EFFICIENT UTILIZATION of MONEY (CPI) and ASSETS (SPI) through WORKFLOW OPTIMIZATION. (SPC)
All workflow processes include or incorporate INCENTIVES in the form of cash and/or recognition awards. (i.e., Time, Money, Safety, Quality) and they apply at ALL LEVELS from Top Management to the Janitor.
Many private sector contractors today, including not only tradespeople but also professionals and other service providers, as well as nearly all retail sales outlets (e.g., greengrocers), utilize “Earned Value Management,” even though they may not refer to it by this name.
FUNDAMENTAL CONCEPTS OF APPLIED EARNED VALUE PER GILLETTE & DANA
In the first part of this paper, the author established a basic understanding of the real or true story of the origins and evolution of Earned Value Management. In this, 2nd segment, the author will walk the reader through the pages of Gillette and Dana’s 1909 book “Cost Keeping and Management Engineering: A Treatise for Engineers, Contractors and Superintendents Engaged in the Management of Engineering Construction, and then show you step-by-step how we have updated the work of Taylor, Gantt, Fayol, the Gilbreth’s et al. as compiled and explained by Gillette and Dana for use in Excel and how we have taken advantage of established AI tools & techniques.
While there is sufficient evidence indicating that the fundamental concepts of applied Earned Value Management can be found in the Old and New Testaments[1], the tangible proof indicate that what we know today as Earned Value Management (EVM) ORIGINATED as a “payment for performance” or “cash on delivery” system, which is a tested and PROVEN system that originated with the French and British Guilds in the 16th Century.
A 16th-century farmer would take his/her grain to the local miller. The miller would grind the grain into flour, and the following day, the farmer would return to the miller. Together, they will weigh the flour (the finished product or asset), and the farmer will pay for the “value-added services” provided by the miller.
Do you know if everyone is familiar with this process? Is it UNFAIR to the BUYER? Is it unfair to the SELLER? So why does the US Government not apply this same concept to government contractors? If it works for the private sector and has been in use since biblical times, why can’t or won’t governments adopt a system that has been tested and proven to work?
With the growing dissatisfaction with the US Government’s FIDUCIARY STEWARDSHIP[2], and management of the TAXPAYER’s money, this author is proposing you consider ABANDONING SAE EIA 748D-2019 and REPLACING it with an EVM System that protects the interests of both the SELLER and the BUYER while working to ensure that the US TAXPAYER is getting honest “value for their money”- Quality products/assets delivered on time and within budget designed to substantially fulfill the purpose for which the asset was commissioned to achieve.
Why is all this so important? As we are already using generative AI, which has typically focused on administrative tasks, such as tech support and file management. The focus now is on agentic AI, a more advanced form of artificial intelligence with enhanced reasoning capabilities that can independently plan and execute complex tasks. Before we can do this, we MUST purge the system of any and all “fake news” or systems that have failed to prove their effectiveness.
The primary objective of CONTRACTORS is to earn a profit from the project. Comparing the simplicity of Earned Value Management as the private sector uses it to how the government uses SAE EIA 748D-2019, we developed a simple illustration that shows how simple yet effective it is when we visit the greengrocer or butcher each week.
In this model, no one is cheated. The SELLER (= Contractor) is obligated to provide documented proof that the quality of the PRODUCTS (=ASSETS) being offered or developed for sale to the BUYER (in this case, the US Government) has met these 3 requirements:
✓ Work has been physically completed.
✓ Deliverables are in “substantial conformance” or compliance with the technical requirements.
✓ The SELLER has complied with all other contractual requirements
(This is why your greengrocer provides a peeled orange for you to taste before you buy.)
In their offer to sell, proposal, or tender, the SELLER must comply with these three legal requirements under the Federal Trade Commission Act:
✓ Advertising must be truthful and non-deceptive.
✓ Advertisers must have evidence to back up their claims; and
✓ Advertisements cannot be unfair.
As “for-profit “public sector contractors, this is the EVM System we (the author and his business partners) have used for our successful businesses for 50+ years, and we have documented success after sharing it with many clients.
[1] Taybi, Y. (2019). Is Earned Value Management (EVM) consistent with Sharia Law? Will it help in fighting corruption? PM World Journal, Vol. VIII, Issue VIII, September. Retrieved from https://pmworldlibrary.net/wpcontent/uploads/2019/09/pmwj85-Sep2019-Taybi-is-evm-consistent-with-sharia-law.pdf
[2] Finnerana, Joseph (2018) Stewardship Foundation https://www.stewardshipworks.org/blog/?p=504#:~:text=Where%20money%20and%20investments%20are,more%E2%80%94we%20are%20financial%20stewards.
If people go back and review the work that evolved and was refined during the 18th Century Industrial Revolution by Frederick Taylor, Henri Fayol, Henry Gantt, Frank and Lillian Gilbreth et al and documented by Halbert Powers Gillette, and Richard Turner Dana in their 1909 book “Cost Keeping and Management Engineering: A Treatise for Engineers, Contractors and Superintendents Engaged in the Management of Engineering Construction”, the OBJECTIVE to produce a simple yet very powerful EVM SYSTEM based on “common sense” that has proven to work so effectively at protecting the interests of both the SELLER and the BUYER, it is still in pervasive use today by the private sector.
Despite the “weaknesses” of these systems, especially in light of today’s DEI/ESG considerations, they still proliferate, and hardly anyone alive today does not benefit from the products or assets produced by this system.
Common examples include most tradespeople, especially painters, roofers, and tile layers, who price, bid, quote, and bill based on the square footage or square meters. But we also see examples in other trades and professions:
· Accountants who will charge a flat fee for filing a tax form. (e.g., Pilot, KKSM Business Services.)
· Lawyers who will charge a Firm Fixed Fee for a house closing or uncontested divorce.
· Dentists who charge a flat fee for tooth cleaning or a cavity filling
· Your local mechanic who posts a flat fee for an oil and filter change, or aligning and balancing your wheels and tires.
· And what about Lyft, Uber, or Grab? Don’t they quote a firm fixed price in advance that you are free to choose or reject?
· Or how about your Greengrocer who discounts fruits or vegetables that are approaching the end of their market appeal and need to be eaten promptly before they spoil?
Once we understand the principles underlying Earned Value, we find real-life examples exist all around us. This makes us wonder how or why the US Government missed the importance and effectiveness of linking payment to performance.
In the graph shown in Figure 10, we can see how Gillette and Dana plotted the same efficiencies for money and time, using the same formula we still use today. If you reference the DAU “Gold Card,” you will find the formula to calculate SPI is the BCWP/BCWS X 100, which will yield the % above or below the target or estimated value. To calculate CPI, the formula is BCWP/ACWP X 100, and that will give the percentage by which the targeted or estimated value is exceeded. For both SPI and CPI, the ACCEPTABLE RANGE ESTIMATE (as defined by the GAO, NDIA, and private sector contractors) is between 0.95 and 1.05, OR SPI and CPI between -5% and +5% from the TARGET, ESTIMATED, or BID/QUOTED COST. (Keep in mind that 1.0 is BAD and >1.0 is GOOD.
We use the same formulas developed and employed by Gillette & Dana. However, instead of relying on a manual spreadsheet, we utilize Excel spreadsheets. Unlike Taylor, Gantt, and the Gilbreths, we apply Artificial Intelligence (AI) statistical process control chart tools & techniques. (We use and recommend you consider “SPC For Excel”, but we also use and recommend Luminvero or Oracle’s Crystal Ball. There are many other Excel Statistical Process Control Chart apps you can choose from.
What other pages from Gilette and Dana have we adapted? Figure 36 on page 104 is considerably more complicated to analyze, but as you try to adapt this for use in Excel, you will quickly discover how savvy these people were and really how much “common sense” plays in the evolution of Earned Value Management.
You will find that they incorporated everything we do today, with the exception that when choosing to measure physical progress, they selected not one method; in this example (trenching), they opted to measure physical progress using 3 metrics or KPI’s:
In Column B, they used the physical percent complete method. In Column C, they used linear feet of trenching; in Column D, they used cubic yards; and in Column E, they used Cumulative Costs. Worth noting that the Length shown in Column C is LOWER than the Cubic Yards shown in Column D, indicating that the contractor ended up excavating deeper (or wider?) than they planned, which is great IF the contractor was being paid based on the Cubic Yard (Volume) and not by the Linear Foot. (Distance) This raises an important point for contractors bidding, costing, and billing; they must choose the progress measurement method that most accurately and precisely captures the real or true cost of that progress.
To adapt the manual spreadsheets into Excel spreadsheets, we had to turn their two graphs into three Excel spreadsheets. The first two examples illustrate the SPI and CPI values from two different perspectives. The “target” or “Bullseye” chart displays the SPI and CPI from an end view. By turning the same date to show the right-side view, we can see the SPI and CPI over time, which enables us to apply the appropriate Statistical Process Control Charts to the SPI and CPI Data.
To address the schedule information, we need to create an additional Excel spreadsheet to track physical progress, ACWP, BCWP, BCWS Early Date, BCWS Late Date, and Actual Progress.
CASE STUDIES EXPLAINING HOW TO APPLY EARNED VALUE PER GILLETTE & DANA
Figure 13 (above) explains how to take the manual spreadsheets from Gillette & Dana, page 99, figure 34 and page 104, figure 36, and in the lower right hand corner, you can see the center graphic illustrates the END VIEW of the SPI and CPI Data and on the lower far right, you can see the SPI and CPI data showing the applied Statistical Process Control Chart.
The easiest way to illustrate this is by presenting an actual case study from one of our top graduates from a recent class. To put his experience into perspective, he is a planning/scheduling engineer with 7 years of experience, is working on his master’s degree in project management, and holds his PMP certification. As Gillette and Dana present SPI and CPI as a single chart, we display SPI and CPI as two separate charts: one to show the end view and the other to facilitate the analysis of the Statistical Process Control Chart.
As mentioned above, this is an actual case study from a top student in our 26-week-long, graduate-level competency development and assessment program. In this course, each student is assigned six projects, some of which are individual and some are team-based. They are free to use whatever software they choose, with this team opting for MS Project. This student considers himself an expert scheduler. To view the six projects and how each student is graded using the principles of earned value management, you can go HERE and scroll down to slide #29.
We start by plotting the CPI (1) on the Y axis, ranked descending from low (top) to high (bottom), and the SPI (2) on the X axis, ascending from low (left) to high (right). We then capture the SPI and CPI values on a weekly basis. (3) Note that just as shown in Gillette and Dana’s data (and as hunters, shooters, and archers well know), you will rarely get a reading exactly hitting the bullseye. There is natural randomness to the SPI and CPI readings. (See Deming’s Red and White bead experiment.) We then calculate and plot the Upper and Lower SPECIFICATION LIMITS (USL/LSL). (4) These are NORMALLY set at +/-5% (consistent with GAO recommendations, NDIA, and private sector contractors’ practices), but they can vary. Then we calculate and plot the Upper and Lower CONTROL LIMITS (UCL/LCL) (5) using the appropriate SPC formula.
It is important to note that while this specific student considered himself to be an expert scheduler, consider his performance from the beginning of the program to Week 11. (6) What this illustrates is a common problem with most schedulers. While they can run the software, they lack field experience, so they have no clue how to create a realistic and achievable working plan. While he improved between Week 11 (6) and Week 18 (7), it took him until close to the end of the program, in Week 25, to become competent in creating and following a realistic work plan, maintaining his performance within a range of +/-5%. (SPI and CPI between 0.95 and 1.05) This shows that between W0 and W18, (7) his workflow processes were STATISTICALLY OUT OF CONTROL and thus were INCAPABLE of meeting the specifications. This helps to explain why so many projects finish LATE and/or OVER BUDGET. To see his weekly blog, you can follow his progressive improvements culminating in his “Lessons Learned” in his final blog posting.
In Figure 16 below, we feature a paper written by one of our top students, Mr. Rizkia Arifan Zain. https://pmworldlibrary.net/authors/rizkia-arifani-zain/
He researched and published a paper entitled “Developing Parametric Modelling for Class 4 Estimate of Pier and Jetty Construction — Featured Paper — Zain — April 2024. In this paper, he had access to a historical database of 95 jetty projects executed over a 20-year period.
Due to the extended timeframe, we had to update all the projects to their current year’s value. So the first step in this process was to apply the concept of “Purchasing Power Parity” (PPP), and because gold has long been recognized as maintaining a stable purchasing power parity over long periods, he converted all projects into ounces of gold using this formula:
Cost of the project on the date it was completed/Average Cost of an Ounce of Gold on that date = Value of that project in ounces of gold at the time it was completed. He did that for all 95 projects, and to bring them into “Today” or “Current” dollars, he multiplied by the ounces of gold for each project X TODAY’S average value of gold, which normalized all the projects in terms of today’s value.
The next step was to calculate the SPI and CPI, which is to apply the same formula shown in the DAU’s “Gold Card,” which is to take the Original Budgeted AFE Cost/FINAL Actual Cost of the Project = CPI. (1) Likewise, to calculate the SPI, he divided the ORIGINAL DURATION/ACTUAL DURATION = SPI. (2) As you can see, over 20 years, 100% of the projects finished LATE by on average, 1-.82 = 18% (5), and 98% of the projects finished OVER BUDGET by 1–87 = 13%. (4) We can also see that his COMPANY has an UPPER and LOWER TARGET of projects finishing +/-5% (3), which the company is not even coming close to achieving, indicating that they have a front-end-loaded (FEL) system that is BROKEN. Applying Statistical Process Control Chart tools & techniques, we can see that the UPPER and LOWER CONTROL LIMITS are set at +/-3 Sigma. (6) Applying AI tools and techniques, we can plot the data distribution for the SPI (7) data on the X axis and the CPI data (8) on the Y axis. Lastly, IF we fail to fix what is broken in our WORKFLOW PROCESSES during the FEL System, and we want to hit the bullseye, making management happy, means we would have to make the cost and time adjustments as shown in Step 9. (9)
Now, the question is: Will this information provide something your management needs or wants to see from your PMO? If so, then the way to do this is to adopt EVM as advocated and shown by Gillette and Dana.
This S-curve originated from a paper written by the author while a graduate student at the GWU Master of Science in Project Management program. This case study is used because it spans a sufficient amount of time to keep the lines distinct enough to observe them. As with all schedules, we need to start with both an Early Date Curve (1) and a Late Date Curve. (2) Anyone who shows only the ED curve communicates that he/she clearly do not understand how to use S-Curves as a management tool effectively. In most cases, we recommend using historical data from projects with similar characteristics, or any repetitive “Fragnet” that starts with the Best Case Schedule (2) as the ED curve and the Worst Case Scenario as the LD Curve. (15) That practice will consistently yield more realistic results. Why? Because today’s schedulers have consistently produced schedules (and cost budgets) that are overly optimistic. [1]
Each week or at the latest, each month, we enter the ACWP (5) and the BCWP (4) data. When we want to analyze the progress, we enter a DATA DATE (3), which determines the point at which we are analyzing our PHYSICAL PROGRESS against our ED and LD Plan. This is where the CUMULATIVE BCWP (4) intersects the DATA DATE (3) or TIME NOW line. We draw a horizontal line from the point where the BCWP intersects the Data Date (6) and extend that pink dotted line horizontally until it intersects the ED BCWS Curve (7) and the LD BCWS Curve. By dropping a vertical line to the Date Scale, and comparing that against the number of days between the ED Date and the Data Date, it gives us the amount of TOTAL FLOAT that we are behind schedule against the ED Curve. (9) But by far the more important data is to calculate between the Data Date and the LD Curve intersection, which tells us how much TOTAL FLOAT (10) we have left before we end up with NEGATIVE FLOAT. It is, by far, more important than we know where our physical progress (as measured by BCWP) aligns with the LD Curve. But there is so much MORE we can do with this. By applying Artificial Intelligence (AI) tools, we can utilize the actual ACWP (13) and BCWP (11) data and leverage the Excel feature of best-fit lines. We can then use the historical data from both ACWP and BCWP to forecast the future and see where we are heading. We can also predict the point at which we will have spent our budget (12), which, if the original budget was accurate, will tell us when we should be completed with this project. (15) This also indicates that if we take the full 2 years, 15, most likely, the budget we had allocated will not be sufficient. (14) Is this information IMPORTANT for your management? With 39 years of experience in this business, both as a contractor and as an owner, this author can assure you that this is the information we need from our project managers and PMO Teams.
[1] Flyvbjerg, Bent (2011) “Over Budget, Over Time, Over and Over Again: Managing Major Projects” https://www.researchgate.net/publication/235953357_Over_Budget_Over_Time_Over_and_Over_Again_Managing_Major_Projects
Figure 18 above is the actual Earned Value progress from a recent 26-week-long class. They are now in week 16 of a 26-week program. We selected this as a case study because we want to emphasize why it is so much more important as a management tool to show the relationship between the BCWP and the Late Date Curve. How do we do that? We start with the intersection where the BCWP line intersects the Time Now Line (3) then drawing a HORIZONTAL LINE where it intersects the BCWP and Time Now Line, and extend that line (4) until it crosses both the Early Date Curve (1) and Late Date Curve, (2) by dropping a vertical line from where the line (4) intersects the ED Curve (5) and dropping a vertical line from where the line 4 intersects the LD Curve (7) that will give us the TOTAL FLOAT that belongs to the project. Thus, the IMPORTANCE of the LD Curve is that it provides key stakeholders with ADVANCE NOTICE of IMPENDING PROBLEMS. When comparing the BCWP to the LD Curve, it provides an early warning sign, much like the yellow blinking light on your fuel gauge, indicating how much time you have left or the risk of running out of fuel.
As we can visually appreciate, this class is in serious trouble. Why or How? By simple inspection, we can see that the slope of the BCWP (green) line is insufficient to remain between the ED and LD curves. This is known as the “burn rate,” and what it tells us is that the level of efforts being expended by this team is insufficient to deliver this project on time, which in turn, will mean the project will almost surely finish over budget.
When this team REBASELINED their 6 projects in Week 11, they had 14 days of TOTAL FLOAT. (Between (5) and (7)). They are now in Week 16 (3) and you can see that they have already consumed 10 (6) of the 14 days of total float, leaving them with only 4 more days of FLOAT (8) before their BCWP will CROSS OVER the LD curve, meaning unless they invest considerable effort in the coming week, their project will have NEGATIVE FLOAT. And as we know, NEGATIVE FLOAT is an impossible situation that if we don’t correct it, our project will finish late by that amount of time. (9)
Once again, the question we ask you: “Is this information IMPORTANT to those responsible for managing the project?” “Is this information important to the other key stakeholders?” If the answer is YES, then there is no better “tool” or “technique” than to use Earned Value Management, not as ANSI 748 tells us, but as shown by Gillette and Dana.
FIFTY+ YEARS OF ”LESSONS LEARNED” APPLYING EARNED VALUE PER GILLETTE & DANA
[1] 9 Field Marshall Helmuth von Moltke (1880) https://www.oxfordreference.com/display/10.1093/acref/9780191826719.001.0001/q-oro-ed4- 00007547;jsessionid=1B2F912F0CEDA2AD73C47D6CEEA5A833
[2] 10 General Dwight D Eisenhower (1950) https://quoteinvestigator.com/2017/11/18/planning/
[3] 11 General Omar Bradley (n.d.) https://www.goodreads.com/quotes/8785615-amateurs-study-strategyprofessionals-study-logistics
[4] 12 Drucker, Peter(n.d.) https://www.thecorporategovernanceinstitute.com/insights/lexicon/what-does-cultureeats-strategy-for-breakfast-mean/
[5] 13 Ludwig Mies Van Der Rohe (n.d.) https://www.phrases.org.uk/meanings/the-devil-is-in-the-details.html
These are 5 Simple Truths that 50+ years’ experience as both an owner and contractor have been validated by the “school of hard knocks,” or, as William Ottley quoted, “Experience is a tough teacher. She gives the test first and the lesson afterwards.”
One of General Omar Bradley’s most famous quotes is that “Amateurs study strategy, professionals study logistics.” This is why we try to keep C-level and B-school people away from the projects. We don’t want “Big Picture” thinkers as our project managers. We need people who “sweat the details.” Or as Ben Franklin told us- “For lack of a nail the shoe was lost…” https://www.goodreads.com/quotes/626466-for-the-want-of-a-nail-the-shoe-was-lost
Two other quotes from military leaders are important to project managers: Field Marshal Helmuth von Moltke, who stated in 1865 that “no plan survives first contact with the enemy,” and General Dwight Eisenhower, who said that “plans are useless, but planning is essential.”
We do NOT advocate the creation of “Integrated Master Schedules”. Instead, we advocate to learn how to effectively utilize “Rolling Wave Planning,” also known by our IT colleagues as “Sprints” and/or” SCRUMS.” https://pmworldlibrary.net/wp-content/uploads/2023/09/pmwj133-Sep2023-Giammalvo-futility-of-master-plans-prepared-with-little-or-no-hands-on-experience.pdf.
These quotes help us to understand why one of the most important roles and responsibilities of the PROJECT MANAGER and PROJECT TEAM is to “bridge the gap” between what is happening in the field (Tactical Awareness) and what RESOURCES or ASSETS that the people on the front lines need from the ASSET MANAGERS (functional or line managers) to execute the plan understanding that it is constantly changing. This is why, when people talk about strategy, it is a clear indication that they do not fully understand project management, which is all about logistics and organization. As a construction manager, if I don’t have the latest drawings, the specified materials, and the right number and skillsets of people on a “just in time” basis, I will not be able to maintain the schedule.
One of the most important “Lessons Learned” that none of the professional societies seem to have embraced and that is the critical role that the Project Manager, Project Controls or PMO Team has to IDENTIFY, COMMUNICATE and FACILITATE communications between those in the field who are responsible to EXECUTE the plan and those in the home office who CONTROL the ASSETS (= RESOURCES) necessary by the field to EXECUTE THE PLAN. This means each of the 5 ASSET CLASSES:
1) FINANCIAL ASSETS- by paying bills promptly, not expecting subs & vendors to provide interim financing to the project.
2) HUMAN RESOURCES- providing the necessary people for the project.
3) KNOWLEDGE ASSETS — includes engineering, procurement, legal, and process SOPs.
4) PHYSICAL ASSETS- tools, equipment, buildings, and some software are classified here.
5) INTANGIBLE ASSETS- reputation, some software is classified as an intangible asset.
This contribution by the US Air Force is far more relevant and important than claims that the Air Force “invented” or “adapted” earned time or earned schedule. See the detailed explanation in this paper by Lt Col Alan Docauer in his paper “Peeling the Onion: Why Centralized Control / Decentralized Execution Works.”
Another important KPI that contractors use, but which is not often seen or utilized on government projects, is rolling wave planning and the prioritization of work based on the amount of float or slack on an activity (“IMPORTANCE”) and proximity in terms of time, also known as “URGENCY.”[1]. This enables the contractor to see, for any given shift, where their best crews should be allocated, as well as identify “Plan B” assignments if the first-priority work cannot be accomplished for any reason. Standardizing this process and communicating the priorities in engineering and procurement help ensure that the latest drawings are completed and the necessary materials are procured and on site “just in time” for the work to commence.
We follow in our business and recommend to our clients that (based on the “rule” that “God (or the Devil?) lies in the details,) that we stop and look at:
- Where are we right now? (Done at frequent periods- Usually weekly or less)
- Where do we need to be at the end (or to the next interim milestone) as defined by the contract? (Or expectations for internal projects?) (Time? Budget?)
- What ASSETS or RESOURCES do we have available, and what is their PRODUCTIVITY?
- How can we most EFFICIENTLY/EFFECTIVELY utilize those ASSETS or RESOURCES to meet the contractual time and cost budgets?
- If we are unable to finish on/within the target, who do we need to notify?
Never forget that the half–life of any project data from the field has about the same half-life as that of a ripe banana.
Any field data older than 7 days since it was generated is WORTHLESS as a field management tool. It only tells you what has happened in the PAST, with little or no way to IMPROVE THE WORKFLOW SYSTEM. You will forever be chasing a system that is moving faster than you are. (Like the Whack-a-Mole game at the arcade?)
Figure 12 provides us with a TESTED and PROVEN SYSTEM that Gillette & Dana provided us with. This system has been in use for at least 120 years, and it is likely to have been in use for closer to 600 years.
The fundamental concepts and formulas associated with Earned Value Management date back to the work of Taylor, Fayol, Gantt, the Gilbreths, Gillette, and Dana.
The origins of Earned Value Management were intended to be an incentive-based system.
Incentive payments have been, are, and should remain a core element of applied earned value management, regardless of whether adopted by the private sector or the governmental sector.
For more information on this topic, please visit HERE for a detailed explanation.
[1] Adapted from Covey, Stephen (2005) The 7 Habits of Highly Effective People (Covey S)
[1] Giammalvo, P. D. (2023). The Futility of Integrated Master Plans Prepared by Planner/Schedulers with Little or No Hands-on Field Experience, PM World Journal, Vol. XII, Issue IX, September.
The graphic shown in Figure 22, came from a previous paper by this author showing what the future of Integrated Scheduling and Budgeting is likely going to look like, which closely resembles any GPS packages using Google Maps, where Agentic AI is going to show you all the possible decisions you can choose from, and the costs of each option, understanding that all decisions have both cost and time impacts, and the “best” or “right” decision will most likely require human assessment, at least for the foreseable future.
The author would be remiss in our introduction and exploration of the key points in Gillette and Dana’s 1909 book if we were to overlook a brief discussion of their “10 Laws of Management” in the context of 2025. (No DEI/ESG!!!)
- The law of subdivision of duties- This was a core element from Henri Fayol and is just as relevant and important today, especially as we adopt Building Information Modeling (BIM) and AI. We have long advocated for and on behalf of the adoption of STANDARDIZED, RELATIONAL, or object-oriented WBS/CBS/OBS architecture rather than the use of “flat file” or “hierarchical” organized databases. Strong support for this can be found in NASA’s 2008 Cost Estimating Handbook, particularly in Appendix B — Work Breakdown Structure and Appendix J — Joint Cost and Schedule Analysis (JCL).
- The law of educating supervision- This has evolved just in this authors lifetime. Before World War II, “project managers” were typically chosen from either master carpenters or master masons, and most of these individuals were not engaged as “project” or “construction” managers until they had 40 years of experience and a track record of successful projects. Today, we find “accidental project managers” with less than 5 years of experience, no track record of “successfully” managing projects, but they hold a PMP or PRINCE2 credential and a 4-year degree. Merely holding a university degree and/or passing a multiple-choice exam is NOT evidence of COMPETENCY!
- The law of coordination, as outlined by Henri Fayol with his five responsibilities of management (Prevoyance, Organizing, Commanding, Coordinating, and Controlling), remains as valid today as it was 120 years ago. Even today’s “self-directed teams” appoint or designate SOMEONE responsible for these 5 functions.
- The law of standards of performance based on motion and time studies- Ms. Pangestu in her paper “Enhancing Productivity in Greenfield Mining Projects through Earned Value Management and Timely Contractor Payments, Pangestu, S. A. (2024). ; PM World Journal, Vol. XIII, Issue X, October/November, where she provided three case studies showing that this remains an important aspect of Earned Value Management.
- The law divorcing those who do the planning from those who do the work- This may have been true in the 1800’s but today, one of the “root causes” that so many projects finish late and/or over budget is the result of planner/schedulers and cost estimators/budgeters who lack any practical field experience. This is covered in a previous paper by this author- https://pmworldlibrary.net/wp-content/uploads/2023/09/pmwj133-Sep2023-Giammalvo-futility-of-master-plans-prepared-with-little-or-no-hands-on-experience.pdf
- The law of regular unit cost reports - We covered this in the Freeport case study, where we issued physical progress reports three times a day, 365 days a year. Because we know that project progress data has a half-life similar to that of a ripe banana. We also didn’t explore that topic in depth in this paper, but the importance of Activity-Based Costing/Activity-Based Management is essential to making EVM work.
- The laws of 7. The law of increasing reward with increasing performance, as stated in 8. The law of prompt reward and 9. The law of competition lies at the very heart of getting EVM to work. Those who deliver above and beyond what was required deserve to be compensated accordingly. As we have long called EVM “Doggy Biscuit Project Management,” it tells us that giving a reward is most effective in recognizing performance when it is given immediately upon performing the “trick”. Ivan Pavlov proved that, and it remains valid today. It also makes us cringe when the DAU divorced payment from performance, and then they wonder why the EVM in ANSI 748 failed.
- The law of managerial dignity — Having come up through the trades (as did Taylor and Frank Gilbreth), this author believes that many people today have lost their pride in their work. Especially having been builders, we can look back years later and see evidence of our competency and say, “I did that”. We also see evidence of that from NASA, where people collect “Mission Patches” to show the projects they worked on. Today, many workers who produce soft or intangible deliverables find it is not quite as easy to develop a sense of pride in their work. To address that need for “knowledge workers”, nearly all the ‘professional societies” (PMI, AACE, PRINCE2, APM/APMG) are quick to give recognition, which in many instances, has become to mean little more than “show-up” trophies rather than recognition for producing truly outstanding work. (e.g., PMI’s recognition to Walt Lipske for having “discovered” earned schedule or earned time based on nothing more than incomplete or sloppy research) In the world of academic journals, papers found to contain falsified or incomplete research would be retracted.
As many of the 10 laws outlined by Gillette and Dana remain as relevant and important today as they were over 120 years ago, this author believes they will become even more important in future years, as many jobs are likely to be replaced by or at least significantly altered by Artificial Intelligence. (AI) For anyone serious about implementing EVM, it would be remiss not to heed the 10 laws, updated to reflect the changes in today’s workers.
For 6000+ years, humans have been “initiating, planning, executing, controlling, and closing” projects, and SURELY in those years, we could or should have learned (or relearn?) how to do it.
For reinforcement, IF our Neanderthal ancestors were able to figure out the fundamental tools & techniques of project management to tame fire 300,000 years ago and if 6000 years ago humans were able to master the art and science of project management to invent the wheel and if Ibn al-Haytham, the Muslim Scientist Who Birthed the Scientific Method 1000 years ago, is there any rational argument why we cannot “learn from their lessons” and do so successfully?
Worth reiterating for our Muslim readers, EVM is CONSISTENT with Shariah Law… (Reference Hadist from Baihaqi & Ibnu Majah- “Promptly pay your labor/employee worker salary before his sweat is dry and tell them how much they will be paid while they are working.”) from Farid Malone, CCP
It all comes down to mastering BASICS, as explained to us 120 years ago by Frederick Taylor, Henry Gantt, Henri Fayol, Frank and Lillian Gilbreth and captured for us by Halbert Powers Gillette and Richard Turner Dana in their 1909 book “Cost Keeping and Management Engineering: A Treatise for Engineers, Contractors and Superintendents Engaged in the Management of Engineering Construction” and more recently reinforced by American Football legend, Vince Lombardy, Green Bay Packers.
