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Use of EVM Trends to Forecast Cost Risks

Risk Track



This paper develops a risk burn-down metric based on a forecasted variance at complete estimated from trend (time series) data. Using only the first 18 data points of a 43 point series, projections of the budgeted cost of work performed (BCWP) and the budget at complete (BAC) are solved simultaneously to identify the value of BCWP that equals the value of BAC at some future date in time. Recognizing that BCWP/BAC = 1.0 is the point at which the program is 100% complete, it is possible to use trend data to predict the month at complete, the level of the BAC, the level of the EAC, the associated variance at completion, and to indicate how risks to the program are burned down as time progresses towards the estimated completion date. The application of the resulting trend data will be compared to and contrasted with the usual EVM point estimates based on static end of month formulas.


Roy Smoker
Dr. Roy E. Smoker, Colonel, USAF (Ret) holds a Ph. D. in Economics from the University of Missouri. He is also a graduate of the Defense Acquisition University Executive Management Course taught at the Defense Systems Management College. He is a professional economist who has served in various capacities in the Untied States Air Force and now is serving as the Sr. Technical Director, Space Programs for MCR LLC. In that capacity he has recently worked on an engineering cost model with Advatech Pacific, Inc. (API). The API team develops engineering data on weight, power, and other cost drivers useful for determining the costs of a new satellite or launch system. The model allows engineers to make design changes and evaluate their costs as part of the trade study process before deciding on a final configuration. He has also reviewed the history of the Space Shuttle Main Engine as part of a study on reliabilities with a view to better understanding how testing requirements and reliability are related.
During his 30 year career with the USAF, Dr. Smoker worked in a variety of program management and financial management positions writing test and evaluation master plans, managing integrated master schedules, developing cost estimating relationships and cost models, performing cost estimates and justifying budgets, defending program modernization estimates to HQ USAF and the OSD CAIG. His experience includes cost estimating of defense and non-defense systems, logistics application development, activity based costing, risk analysis, and strategic planning. Dr. Smoker has extensive experience in program management, financial management, cost estimating and analysis, and the application of information system technologies. The following is an abridged list of Dr. Smoker’s capabilities.
As Director of Financial Management and Comptroller, SMC, Los Angeles AFB, CA he led the integration of the Comprehensive Cost and Requirements System with the Air Force Automated Business Services System to obtain a seamless electronic management of cost and financial execution data for all programs at SMC. His office published the Space Environmental Handbook and was responsible for all program office cost estimates and integrated baseline reviews of contractor earned value systems.
As Director of Program Control, Milstar Joint Program Office, he led financial acquisition of the first three secure communications satellites, performed earned value analysis and prepared long range program office budgets, coordinated mission control elements and user terminals for Army, Navy, and Air Force components. He wrote the first Milstar Test and Evaluation Master Plan and briefed the ASD (C3I).
As Director of Business Operations, Titan IV Systems Program Office, he developed and published the program’s first Cost Analysis Requirements Description (CARD). He prepared and staffed the program’s Test and Evaluation Master Plan. He staffed the requirement for a new range safety system on the Titan IV launch vehicle, managed the program’s system launch schedules, and presented a program realignment plan to the Secretaries of the Air Force for Acquisition Management and for Financial Management in response to changes in the world environment resulting from the loss of the Challenger and the fall of the Berlin Wall.
As Chief, Space and Strategic Defense Branch at HQ USAF was a voting member of the Air Force Space Panel. He applied and engineering cost model to estimate SDIO programs, performed monthly analysis of Defense Acquisition Executive Summaries and updated acquisition program office baselines for Air Force programs, entered program budgets into ABIDES and prepared 30 USAF Selected Acquisition Reports for the 1990 submission to OSD and Congress.
As a Manpower Analyst he helped develop the personnel recruiting and training pipeline for the Air Force. In this role he published the first version of AFR 25-58, briefed both the Commander AETC and HQ USAF/MP on how to integrate recruiting, technical training, and personnel assignments to meet manpower requirements.
Since September 2000, he has been associated with the University of California, Irvine Extension Institute. For UCI, he has been an instructor of the Project Cost Management Course X442.29, teaching on-line and in the classroom. He has taught on site in several companies and recently taught an accelerated course at the UCI Learning Center.
He is an active member of the Society of Cost Estimators and Analysts (SCEA), the International Society of Parametric Analysts (ISPA), the Project Management Institute, and a past president of the American Society of Military Comptrollers (Los Angeles Chapter). His papers at the 2004 ISPA Conference and the 2005 SCEA Conference received “Best in Track” recognition. He currently serves as the Chief, Parametric Practitioner for ISPA.

His military decorations include: Legion of Merit; Defense Meritorious Service Medal — 1 Oak Leaf Cluster; AF Meritorious Service Medal — 6 Oak Leaf Clusters; Joint Service Achievement Medal; Humanitarian Service Medal; National Defense Service Medal.