Performance Reporting: Construction Project Analysis Report

This report provides a detailed performance analysis of a construction project, utilizing the Earned Value Analysis (EVA) technique. The analysis reveals that the project is experiencing both budget overruns and schedule delays. Key metrics such as Planned Value (PV), Earned Value (EV), and Actual Cost (AC) are used to determine Cost Variance (CV), Schedule Variance (SV), Cost Performance Index (CPI), and Schedule Performance Index (SPI). The report indicates negative CV and SV, signifying budget overruns and schedule delays, respectively. The CPI and SPI values further confirm these issues. The report forecasts future performance, estimating the Estimation at Completion (EAC) and Variance at Completion (VAC). Recommendations include allocating more resources to expedite the project and shortening the duration of certain activities, while considering a contingency plan to mitigate increased costs.

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PERFORMANCE REPORTING
Executive Summary:
In this report, performance analysis pf the construction project has been studied. Project
performance can be assessed and evaluated using the Earned Value Analysis (EVA)
technique and these are done at specified time intervals during the project timeline.
Analysis showed that project is over-run the budget and lagging behind the project
schedule. It can be brought back on track but that would in turn increases the cost of the
project hence contingency can be considered along with shortening the duration of long
activities.
Current Status of Project:
There are three primary parameters that are associated and are used in this technique.
Planned Value (PV) – It is the project cost that is estimated on the basis of the planned
scope and schedule of a project. It is the cost that is approved by the project client.
Earned Value (EV) – It is the value of work that is successfully accomplished in the
project over a specified period of time. The cost spent in carrying out the work is referred
as the EV for the project.
Actual Cost (AC) – The real costs spent in the project to accomplish the project
deliverables in a specified period of time.
Once the above three values are known, the cost variance and schedule variance for the
project can be determined which are referred as CV and SV respectively. Similarly, cost
performance and schedule performance index can also be determined.
The calculated of actual costs and cost variance can be used to assess the project
performance. In the projects wherein CV is zero or has a positive value, the performance
is considered as good. However, in the projects that have a negative CV, there is a
situation of budget overrun which is not appreciated in terms of the project performance.
Similarly, the use of planned value and earned value is done to determine the schedule
variance. If the value is zero or positive then it indicates good project performance.
However, in the case of negative value, the project performance will be bad as schedule
overrun will be observed in the project.
The CPI and SPI are determined and are represented as a ratio. It is ideal to have the ratio
as 1 as it indicates that the project adheres with the estimated values of cost and schedule.
However, if the ratio is less than 1 then the project performance is considered as poor. It
is because the project may suffer from schedule or budget overrun or both in such cases
(Institute, 2014).
The status of project is taken on date: 21st November 2017. At this point of time:

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 Current value of cost variance = -$38,132.27
 Current value of schedule variance = - $5,675
The values of both cost and schedule variances are negative. As mentioned, a negative
cost variance means that project is going over budget than allotted and similarly, a
negative schedule variance means that project is behind the schedule and may take more
time than assigned timeline. By 21st November, following tasks should have been
finished:
 Gather Required Documents
 Complete Permit Applications
 Submit Permit Applications
 Post Construction Permit
 Initial Site Survey
 Develop Site Plan
 Approve Site Plan
 Dig Foundation Footers
 Pour Foundation Footers
 Inspect Foundation Footers
 Build Foundation Wall
 Inspect Foundation Wall
 Order Framing Materials
 Frame Floor & Walls & Roof
 Install Widows & Doors
 Perform Framing Inspection
 Perform HVAC Rough In
 Perform Plumbing Rough In
 Perform Electrical Rough In
 Insect Rough In by PM
 Inspect Rough In by Code Officer
 Install Wall & Floor Insulation
 Perform Insulation Inspection
 Apply Foundation Siding
 Lay Brick & Rock Siding
 Install Exterior Trim
 Inspect Exterior Siding & Trim
 Paint Exterior Trim
 Hang Interior Drywall
 Finish Interior Drywall
 Install Interior Doors & Locks
 Pour concrete driveway
 Install concrete patio pavers
 Perform Final Grading
 Build Exterior Deck
 Stain Exterior Deck
 Install Exterior Landscaping
However, among them:

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 Finish Interior Drywall was completed only 69%
 Install Interior Doors & Locks was not even started i.e. 0% completed
 Perform Final Grading was also not started i.e. 0% completed
 Build Exterior Deck was completed only 19% completed
 Stain Exterior Deck was 0% completed
 Install exterior landscaping was 0% completed
It can be inferred that almost 60% tasks were completed as desire but rest 40% tasks
which are foundation for future tasks are not even started or are incomplete.
Besides variances, another data which depicts the performance of the project (Fleming
and Koppelman, 2010):
 Cost Performance Index = 0.96
 Schedule Performance Index = 0.78
As mentioned in the definition of these indices, if CPI is lesser than 1 then it means that
project is going beyond the allocated budget. But here, the deviation is very less from 1
i.e. only 0.04%. This shows that although the project is going over-budget but that would
be very less.
Following are potential causes of under-performing schedule performance:
 Shortage of manpower
 Revision of execution plan
 Late delivery by vendor
 Delay in customer feedbacks
 Work more complicated than expected
 Unclear and ambiguous requirements
 Scope creep
SPI is also less than 1 which means that project is going over the schedule but in this case
deviation is considerably more as compare to CPI i.e. 0.22. This shows that until more
resources are allocated to the project or some tasks are not shortened, project will not be
able to complete on time (Earned value management, 2010).
Forecast Future Performance:
Anticipation of future progress typically needs determination of the duration of
completion of the project. At the same time it involves, the cost required to complete it.
In order to complete the analysis, the EAC or Estimation at Completion as well as BAC
or the Budget at Completion needs to be looked at. The Estimation at Completion (EAC)
had already been defined in this report, which is nothing but the actual cost that has
occurred till date as well as the estimation of costs remaining for the project. The
objective which is to prepare an Estimation of Completion is meant to provide for an
accurate representation of cost when the project is completed.

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On the other hand the BAC or Budget at Completion is the total of all financial resources
i.e., the budget allocated to complete the project. The Project BAC would always need to
equal the Project's Total PV. If they are not equivalent, then the earned value calculations
would need to be inaccurate. EAC = AC or Actual Cost + ETC or Estimation to
Completion. The ETC or Estimate to Complete is the overall cost associate to complete
the remaining authorized work. The Detailed ETC would include a description for the
work remaining as well as revisions to estimated resources or the cost needed to complete
the project. This formula would assume that all of the work remaining remains
independent of the rate at which the budget is burned till date.
As per the given construction example, EAC is $2,41,687.00 and Actual Cost is
$1,42,325.01. The difference between them is Estimation required to complete which is
$99,362. With the help of EAC, the total cost at the completion can be estimated. It can
also be used to determine Variance at Completion (VAC) i.e. BAC – VAC (Blackstone
and Christian, 2010).
BAC, as given, is $2,32,050.00.
VAC is calculated as BAC – EAC
 -9637
If the VAC is positive that means that project is under-run and if it is negative that means
that project is overrun.
Here, the VAC is negative i.e. project is over-run by -$9,637.
Recommendations:
The project is both over-budget and behind the schedule. The key areas of concerns are
the time and resources. Though the project is going beyond the budget but that is
manageable because of less deviation of CPI. But, project is way behind the estimated
schedule. In order to bring the project back on track with respect to time, either more
resources should be allocated to complete the task faster than scheduled. Focus should be
given more to the longer activities such as “Finish Interior Drywall”, “Perform Building
Code Inspections”. But, another concern arises when resources are allotted, time will be
shortened but then budget will increase. Hence, the best way would be to shorten the
duration of some activities and go within the slack of the project. 10% contingency can
be used to combat the high cost of the project.

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Supporting Data:
From MS Project
Planned Value (PV
or BCWS) $1,74,782.14
Actual Cost $1,42,325.01
Earned Value (EV or
BCWP) $1,36,649.87
Budget at
Completion (BAC) $2,32,050.00
Metric Formula EV PV AC Result
Cost variance (EV - AC) 136649.87
174782.
1 142325 -5675.14
Schedule
Variance (EV - PV) 136649.87
174782.
1 142325 -38132.3
CPI (EV / AC) 136649.87
174782.
1 142325
0.96012
5
SPI (EV / PV) 136649.87
174782.
1 142325 0.78183
BAC Given 136649.87
174782.
1 142325 232050
EAC (BAC / CPI) 136649.87
174782.
1 142325
241687.
2
ETC (EAC - AC) 136649.87
174782.
1 142325
99362.1
5
VAC (BAC - EAC) 136649.87
174782.
1 142325 -9637.16
References
Blackstone, W. and Christian, E. (2010). Commentaries on the laws of England. 2nd ed.
USA: Pearson, pp.34-36.
Earned value management. (2010). 2nd ed. Hinjewadi, Pune, India: PELCON,
Compulink Systems Ltd., pp.14-16.
Fleming, Q. and Koppelman, J. (2010). Earned value project management. 2nd ed.
Newtown Square, Pa.: Project Management Institute, pp.22-25.
Institute, P. (2014). Practice Standard for Earned Value Management. 2nd ed. Newtown
Square, PA: Project Management Institute, pp.45-47.