Question 2

a. It has been said that Earned Value Management (EVM) came about because the federal government often used cost-plus contractors with project organizations. Cost-plus contracting allows the contractor to recover full project development costs plus accumulated profit from these contracts. Discuss how contractor firms to employ Earned Value Management help the government hold the line against project cost overruns.

(5 Marks)

b. Using the data in the Table-1 below, complete the table by calculating the cumulative planned and cumulative actual monthly budgets through the end of June. Assume the project is planned for a 12-month duration and RM119,000 budget. Calculate the earned value (EV) column on the right.

(10 Marks)

Table-1: Earned Value Table (end of June) for RM119,000 Project Alpha (in RM'000)
Activity	Jan	Feb	Mar	Apr	May	Jun	Jul	Plan	% Comp.	EV
Staffing	6	9							100
Blueprinting			3	4					100
Prototype Dev			3	9					80
Full Design				4	9	12			30
Construction					4	25			20
Transfer							12		0
Punch List						13	6		0
							Total	119		0
Monthly Plan
Cumulative Plan
Monthly Actual	8	11	8	11	10	30	0
Cumulative Actual

c. Based on your answer in (b), discuss what conclusion with regards to the performance for this Project Alpha at the end of June that you can make.

(5 Marks)

very urgent question