3.25 EVMS is a method of using actual cost and schedule information to measure and report project performance, as well as forecast future performance, and can be used to ensure that project payments do not exceed the value of work performed. Information on the application of EVMS by the DMO at an enterprise and project level has been provided by the DMO at Part 2, paragraphs 2.41 to 2.46 of this report.
3.26 In the JCPAA's November 2009 report, the committee asked the DMO and the ANAO to investigate the possible inclusion of data from EVMS in the PDSSs.64 As a result, during the course of the 2009-10 MPR review, the ANAO enquired about the extent to which the EVMS was being used in projects.
3.27 The Defence Procurement Policy Manual (DPPM) states that projects must apply earned value management to all contracts valued at $20 million or more, except where the procurement has been categorised as low risk and the responsible Division Head has approved the decision not to use EVMS.65 In this context, the ANAO noted that 1466 of the 2267 projects reviewed have at one stage used, or intend to use, EVMS to either make contract payments or as part of their project or contractor's performance management.
3.28 It was also noted that where projects' contracts and schedules had been re-baselined, EVMS was no longer linked to contractor payments, and instead those projects use a milestone-only approach (that is, all payments are made on the achievement of the agreed milestones).68
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64 Joint Committee of Public Accounts and Audit, Report 416, Review of the Major Projects Report 2007-2008, November 2009, pp.12-13.
65 Defence Materiel Organisation, Defence Procurement Policy Manual (April 2010), Section 3, Chapter 3.4 Earned Value Management.
66 AWD Ships, MRH90 Helicopters, Wedgetail, ARH Tiger Helicopters, Air to Air Refuel, FFG Upgrade, HF Modernisation, LHD Ships, Overlander Vehicles, Next Gen Satellite, ANZAC ASMD Phase 2A, ANZAC ASMD Phase 2B, Collins RCS and Collins R&S.
67 It should be noted that projects with Foreign Military Sales cases and MOU arrangements would not use EVMS, which would include Super Hornets, C-17 Heavy Airlift and Hw Torpedo.
68 HF Modernisation, Collins RCS, ARH Tiger Helicopters and FFG Upgrade.