GAO 

United States Government Accountability Office

Report to the Chairman, Subcommittee on Federal 

Financial Management, Government Information, 

Federal Services, and International Security, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

INFORMATION 

TECHNOLOGY 

Agencies Need to 

Improve the 

Implementation and 

Use of Earned Value 

Techniques to Help 

Manage Major System 

Acquisitions 

October 2009 

GAO-10-2 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2009

INFORMATION TECHNOLOGY 

Agencies Need to Improve the Implementation and 

Use of Earned Value Techniques to Help Manage 

Highlights of GAO-10-2, a report to the Major System Acquisitions

Chairman, Subcommittee on Federal 

Financial Management, Government 

Information, Federal Services, and 

International Security, Committee on 

Homeland Security and Governmental 

Affairs, U.S. Senate 

In fiscal year 2009, the federal 

government planned to spend 

about $71 billion on information 

technology (IT) investments. To 

more effectively manage such 

investments, in 2005 the Office of 

Management and Budget (OMB) 

directed agencies to implement 

earned value management (EVM). 

EVM is a project management 

approach that, if implemented 

appropriately, provides objective 

reports of project status, produces 

early warning signs of impending 

schedule delays and cost overruns, 

and provides unbiased estimates of 

anticipated costs at completion. 

GAO was asked to assess selected 

agencies’ EVM policies, determine 

whether they are adequately using 

earned value techniques to manage 

key system acquisitions, and evaluate selected investments’ earned 

value data to determine their cost 

and schedule performances. To do 

so, GAO compared agency policies 

with best practices, performed case 

studies, and reviewed documentation from eight agencies and 16 

major investments with the highest 

levels of IT development-related 

spending in fiscal year 2009. 

What GAO Recommends

GAO is recommending that the 

selected agencies modify EVM 

policies to be consistent with best 

practices, implement EVM 

practices that address identified 

weaknesses, and manage negative 

earned value trends. Seven 

agencies that commented on a 

draft of this report generally agreed 

with GAO’s results and 

recommendations. 

While all eight agencies have established policies requiring the use of EVM on 

major IT investments, these policies are not fully consistent with best 

practices. In particular, most lack training requirements for all relevant 

personnel responsible for investment oversight. Most policies also do not have 

adequately defined criteria for revising program cost and schedule baselines. 

Until agencies expand and enforce their EVM policies, it will be difficult for 

them to gain the full benefits of EVM. 

GAO’s analysis of 16 investments shows that agencies are using EVM to 

manage their system acquisitions; however, the extent of implementation 

varies. Specifically, for 13 of the 16 investments, key practices necessary for 

sound EVM execution had not been implemented. For example, the project 

schedules for these investments contained issues—such as the improper 

sequencing of key activities—that undermine the quality of their performance 

baselines. This inconsistent application of EVM exists in part because of the 

weaknesses contained in agencies’ policies, combined with a lack of 

enforcement of policies already in place. Until key EVM practices are fully 

implemented, these investments face an increased risk that managers cannot 

effectively optimize EVM as a management tool. 

Furthermore, earned value data trends of these investments indicate that most 

are currently experiencing shortfalls against cost and schedule targets. The 

total life-cycle costs of these programs have increased by about $2 billion. 

Based on GAO’s analysis of current performance trends, 11 programs will 

likely incur cost overruns that will total about $1 billion at contract 

completion—in particular, 2 of these programs account for about 80 percent 

of this projection. As such, GAO estimates the total cost overrun to be about 

$3 billion at program completion (see figure). However, with timely and 

effective management action, it is possible to reverse negative trends so that 

the projected cost overruns may be reduced. 

Cost Overruns Incurred and Projected Overruns of 16 Programs 

Source: GAO analysis of program data. 

Billions of dollars

$3.0

GAO-estimated total 

cost overrun at 

completion

0123

$1.0

GAO-estimated 

most likely cost 

overruns

$2.0

Life-cycle cost 

overruns already 

incurred

View GAO-10-2 or key components.

For more information, contact David A. 

Powner at (202) 512-9286 or 

pownerd@gao.gov. 
Page i GAO-10-2 

Contents 

Letter 1

Background 2 

Agencies’ EVM Policies Are Not Comprehensive 7 

Agencies’ Key Acquisition Programs Are Using EVM, but Are Not 

Consistently Implementing Key Practices 12 

Earned Value Data Show Trends of Cost Overruns and Schedule 

Slippages on Most Programs 18 

Conclusions 22 

Recommendations for Executive Action 23 

Agency Comments and Our Evaluation 23 

Appendix I Objectives, Scope, and Methodology 27 

Appendix II Case Studies of Selected Programs’ 

Implementation of Earned Value Management 30 

Appendix III Comments from the Department of Commerce 65 

Appendix IV Comments from the Department of Defense 67 

Appendix V Comments from the Department of Justice 70 

Appendix VI Comments from the National Aeronautics and 

Space Administration 72 

Appendix VII Comments from the Department of Veterans Affairs 75 

Appendix VIII GAO Contact and Staff Acknowledgments 77 

 Information Technology 
Related GAO Products 78 

Tables 

Table 1: Key Components of an Effective EVM Policy 8 

Table 2: Assessment of Key Agencies’ EVM Policies 9 

Table 3: Eleven Key EVM Practices for System Acquisition 

Programs 12 

Table 4: Assessment of EVM Practices for Case Study Programs 13 

Table 5: Program Life-cycle Cost Estimate Changes 18 

Table 6: Contractor Cumulative Cost and Schedule Performances 20 

Table 7: Sixteen Case Study Programs 30 

Table 8: GAO EVM Practice Assessment of Agriculture’s MIDAS 

Program 33 

Table 9: GAO EVM Practice Assessment of Commerce’s DRIS 

Program 35 

Table 10: GAO EVM Practice Assessment of Commerce’s FDCA 

Program 37 

Table 11: GAO EVM Practice Assessment of Defense’s AOC 

Program 39 

Table 12: GAO EVM Practice Assessment of Defense’s JTRS-HMS 

Program 41 

Table 13: GAO EVM Practice Assessment of Defense’s WIN-T 

Program 43 

Table 14: GAO EVM Practice Assessment of Homeland Security’s 

ACE Program 45 

Table 15: GAO EVM Practice Assessment of Homeland Security’s 

Deepwater COP Program 47 

Table 16: GAO EVM Practice Assessment of Homeland Security’s 

WHTI Program 49 

Table 17: GAO EVM Practice Assessment of Justice’s NGI Program 51 

Table 18: GAO EVM Practice Assessment of NASA’s JWST Project 53 

Table 19: GAO EVM Practice Assessment of NASA’s Juno Project 55 

Table 20: GAO EVM Practice Assessment of NASA’s MSL Project 57 

Table 21: GAO EVM Practice Assessment of Transportation’s 

ERAM Program 59 

Table 22: GAO EVM Practice Assessment of Transportation’s SBS 

Program 61 

Table 23: GAO EVM Practice Assessment of Veterans Affairs’ 

VistA-FM Program 63 

Page ii GAO-10-2 Information Technology
Figures 

Figure 1: GAO EV Data Analysis of Agriculture’s MIDAS Program 34 

Figure 2: GAO EV Data Analysis of Commerce’s DRIS Program 36 

Figure 3: GAO EV Data Analysis of Commerce’s FDCA Program 38 

Figure 4: GAO EV Data Analysis of Defense’s AOC Program 40 

Figure 5: GAO EV Data Analysis of Defense’s JTRS-HMS Program 42 

Figure 6: GAO EV Data Analysis of Defense’s WIN-T Program 44 

Figure 7: GAO EV Data Analysis of Homeland Security’s ACE 

Program 46 

Figure 8: GAO EV Data Analysis of Homeland Security’s Deepwater 

COP Program 48 

Figure 9: GAO EV Data Analysis of Homeland Security’s WHTI 

Program 50 

Figure 10: GAO EV Data Analysis of Justice’s NGI Program 52 

Figure 11: GAO EV Data Analysis of NASA’s JWST Project 54 

Figure 12: GAO EV Data Analysis of NASA’s Juno Project 56 

Figure 13: GAO EV Data Analysis of NASA’s MSL Project 58 

Figure 14: GAO EV Data Analysis of Transportation’s ERAM 

Program 60 

Figure 15: GAO EV Data Analysis of Transportation’s SBS Program 62 

Figure 16: GAO EV Data Analysis of Veterans Affairs’ VistA-FM 

Program 64 

Page iii GAO-10-2 Information Technology
Abbreviations 

ACE Automated Commercial Environment 

ANSI American National Standards Institute 

AOC Air and Space Operations Center—Weapon System 

COP Integrated Deepwater System—Common Operational 

 Picture 

DOD Department of Defense 

DRIS Decennial Response Integration System 

EIA Electronic Industries Alliance 

ERAM En Route Automation Modernization 

EV earned value 

EVM earned value management 

FDCA Field Data Collection Automation 

IT information technology 

JTRS-HMS Joint Tactical Radio System—Handheld, Manpack, Small 

 Form Fit 

JWST James Webb Space Telescope 

MIDAS Farm Program Modernization 

MSL Mars Science Laboratory 

NASA National Aeronautics and Space Administration 

NGI Next Generation Identification 

OMB Office of Management and Budget 

SBS Surveillance and Broadcast System 

VistA-FM Veterans Health Information Systems and Technology 

 Architecture—Foundations Modernization 

WHTI Western Hemisphere Travel Initiative 

WIN-T Warfighter Information Network—Tactical 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately. 

Page iv GAO-10-2 Information Technology
Page 1 GAO-10-2 

 

United States Government Accountability Office

Washington, DC 20548 

 

October 8, 2009 

The Honorable Thomas R. Carper 

Chairman 

Subcommittee on Federal Financial Management, 

 Government Information, Federal Services, 

 and International Security 

Committee on Homeland Security and 

 Governmental Affairs 

United States Senate 

Dear Mr. Chairman: 

In fiscal year 2009, the federal government planned to spend over $70 

billion on information technology (IT) investments, many of which involve 

systems and technologies to modernize legacy systems, increase 

communication and networking capabilities, and transition to new 

systems designed to significantly improve the government’s ability to carry 

out critical mission functions into the 21st century. To more effectively 

manage such investments, the Office of Management and Budget (OMB) 

has a number of key initiatives under way—one of which was established 

in 2005 and directs agencies to implement earned value management 

(EVM).1

 EVM is a project management approach that, if implemented 

appropriately, provides objective reports of project status, produces early 

warning signs of impending schedule slippages and cost overruns, and 

provides unbiased estimates of anticipated costs at completion. 

This report responds to your request that we review the federal 

government’s use of EVM. Specifically, our objectives were to (1) assess 

whether key departments and agencies have appropriately established 

EVM policies, (2) determine whether these agencies are adequately using 

earned value techniques to manage key system acquisitions, and 

(3) evaluate the earned value data of these selected investments to 

determine their cost and schedule performances. 

To address our objectives, we reviewed agency EVM policies and 

individual programs’ EVM-related documentation, including cost 

performance reports and project schedules, from eight agencies and 16 

1

OMB Memorandum, M-05-23 (Aug. 4, 2005). 

 Information Technology 
 

major investments from those agencies, respectively.2 The eight agencies 

account for about 75 percent of the planned IT spending for fiscal year 

2009. The 16 programs selected for case study represent investments with 

about $3.5 billion in total planned spending for system development work 

in fiscal year 2009. We compared the agencies’ policies and practices with 

federal standards and best practices of leading organizations to determine 

the effectiveness of their use of earned value data in managing IT 

investments. We also analyzed the earned value data from the programs to 

determine whether they are projected to finish within planned cost and 

schedule targets. In addition, we interviewed relevant agency officials, 

including key personnel on programs that we selected for case study and 

officials responsible for implementing EVM. 

We conducted this performance audit from February to October 2009, in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objective. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objective. Appendix I contains further details about our 

objectives, scope, and methodology. See also the page of related products 

at the end of this report for previous work that we have done on certain 

programs in our case studies. 

Each year, OMB and federal agencies work together to determine how 

much the government plans to spend on IT projects and how these funds 

are to be allocated. Planned federal IT spending in fiscal year 2009 totaled 

about $71 billion—of which $22 billion was planned for IT system 

development work, and the remainder was planned for operations and 

maintenance of existing systems. OMB plays a key role in overseeing 

federal agencies’ IT investments and how they are managed, stemming 

from its functions of assisting the President in overseeing the preparation 

of the federal budget and supervising budget preparation in executive 

branch agencies. In helping to formulate the President’s spending plans, 

OMB is responsible for evaluating the effectiveness of agency programs, 

policies, and procedures; assessing competing funding demands among 

Background 

 

2

The eight agencies were the Departments of Agriculture, Commerce, Defense, Homeland 

Security, Justice, Transportation, and Veterans Affairs, and the National Aeronautics and 

Space Administration. 

Page 2 GAO-10-2 Information Technology
 

agencies; and setting funding priorities. To carry out these responsibilities, 

OMB depends on agencies to collect and report accurate and complete 

information; these activities depend, in turn, on agencies having effective 

IT management practices. 

To drive improvement in the implementation and management of IT 

projects, Congress enacted the Clinger-Cohen Act in 1996, expanding the 

responsibilities delegated to OMB and agencies under the Paperwork 

Reduction Act.3

 The Clinger-Cohen Act requires agencies to engage in 

performance- and results-based management, and to implement and 

enforce IT management policies and guidelines. The act also requires OMB 

to establish processes to analyze, track, and evaluate the risks and results 

of major capital investments in information systems made by executive 

agencies. 

Over the past several years, we have reported and testified on OMB’s 

initiatives to highlight troubled projects,4

 justify IT investments,5 and use 

project management tools.6

 We have made multiple recommendations to 

OMB and federal agencies to improve these initiatives to further enhance 

the oversight and transparency of federal IT projects. As a result, OMB 

recently used this body of work to develop and implement improved 

processes to oversee and increase transparency of IT investments. 

Specifically, in June 2009, OMB publicly deployed a Web site that displays 

dashboards of all major federal IT investments to provide OMB and others 

with the ability to track the progress of these investments over time. 

 

3

44 U.S.C. § 3504(h), 3506(h). 

4

GAO, Information Technology: Management and Oversight of Projects Totaling Billions 

of Dollars Need Attention, GAO-09-624T (Washington, D.C.: Apr. 28, 2009); Information 

Technology: Treasury Needs to Better Define and Implement Its Earned Value 

Management Policy, GAO-08-951 (Washington, D.C.: Sept. 22, 2008); Information 

Technology: Further Improvements Needed to Identify and Oversee Poorly Planned and 

Performing Projects, GAO-07-1211T (Washington, D.C.: Sept. 20, 2007); Information 

Technology: Improvements Needed to More Accurately Identify and Better Oversee Risky 

Projects Totaling Billions of Dollars, GAO-06-1099T (Washington, D.C.: Sept. 7, 2006); and 

Information Technology: Agencies and OMB Should Strengthen Processes for Identifying 

and Overseeing High Risk Projects, GAO-06-647 (Washington, D.C.: June 15, 2006). 

5

GAO, Information Technology: OMB Can Make More Effective Use of Its Investment 

Reviews, GAO-05-276 (Washington, D.C.: Apr. 15, 2005). 

6

GAO-08-951 and GAO, Air Traffic Control: FAA Uses Earned Value Techniques to Help 

Manage Information Technology Acquisitions, but Needs to Clarify Policy and 

Strengthen Oversight, GAO-08-756 (Washington, D.C.: July 18, 2008). 

Page 3 GAO-10-2 Information Technology
 

EVM Provides Insight on 

Program Cost and 

Schedule 

Given the size and significance of the government’s investment in IT, it is 

important that projects be managed effectively to ensure that public 

resources are wisely invested. Effectively managing projects entails, 

among other things, pulling together essential cost, schedule, and 

technical information in a meaningful, coherent fashion so that managers 

have an accurate view of the program’s development status. Without 

meaningful and coherent cost and schedule information, program 

managers can have a distorted view of a program’s status and risks. To 

address this issue, in the 1960s, the Department of Defense (DOD) 

developed the EVM technique, which goes beyond simply comparing 

budgeted costs with actual costs. This technique measures the value of 

work accomplished in a given period and compares it with the planned 

value of work scheduled for that period and with the actual cost of work 

accomplished. 

Differences in these values are measured in both cost and schedule 

variances. Cost variances compare the value of the completed work (i.e., 

the earned value) with the actual cost of the work performed. For 

example, if a contractor completed $5 million worth of work and the work 

actually cost $6.7 million, there would be a negative $1.7 million cost 

variance. Schedule variances are also measured in dollars, but they 

compare the earned value of the completed work with the value of the 

work that was expected to be completed. For example, if a contractor 

completed $5 million worth of work at the end of the month but was 

budgeted to complete $10 million worth of work, there would be a 

negative $5 million schedule variance. Positive variances indicate that 

activities are costing less or are completed ahead of schedule. Negative 

variances indicate activities are costing more or are falling behind 

schedule. These cost and schedule variances can then be used in 

estimating the cost and time needed to complete the program. 

Without knowing the planned cost of completed work and work in 

progress (i.e., the earned value), it is difficult to determine a program’s 

true status. Earned value allows for this key information, which provides 

an objective view of program status and is necessary for understanding the 

health of a program. As a result, EVM can alert program managers to 

potential problems sooner than using expenditures alone, thereby 

reducing the chance and magnitude of cost overruns and schedule 

slippages. Moreover, EVM directly supports the institutionalization of key 

processes for acquiring and developing systems and the ability to 

effectively manage investments—areas that are often found to be 

inadequate on the basis of our assessments of major IT investments. 

Page 4 GAO-10-2 Information Technology
 

In August 2005, OMB issued guidance outlining steps that agencies must 

take for all major and high-risk development projects to better ensure 

improved execution and performance and to promote more effective 

oversight through the implementation of EVM.7

 Specifically, this guidance 

directs agencies to (1) develop comprehensive policies to ensure that their 

major IT investments are using EVM to plan and manage development; 

(2) include a provision and clause in major acquisition contracts or agency 

in-house project charters directing the use of an EVM system that is 

compliant with the American National Standards Institute (ANSI) 

standard;8

 (3) provide documentation demonstrating that the contractor’s 

or agency’s in-house EVM system complies with the national standard; 

(4) conduct periodic surveillance reviews; and (5) conduct integrated 

baseline reviews9

 on individual programs to finalize their cost, schedule, 

and performance goals. 

Federal Guidance Calls for 

Using EVM to Improve IT 

Management 

Building on OMB’s requirements, in March 2009, we issued a guide on best 

practices for estimating and managing program costs.10 This guide 

highlights the policies and practices adopted by leading organizations to 

implement an effective EVM program. Specifically, in the guide, we 

identify the need for organizational policies that establish clear criteria for 

which programs are required to use EVM, specify compliance with the 

ANSI standard, require a standard product-oriented structure for defining 

work products, require integrated baseline reviews, provide for specialized 

training, establish criteria and conditions for rebaselining programs, and 

require an ongoing surveillance function. In addition, we identify key 

practices that individual programs can use to ensure that they establish a 

sound EVM system, that the earned value data are reliable, and that the 

data are used to support decision making. 

 

7

OMB Memorandum, M-05-23 (Aug. 4, 2005). 

8

Recognizing the importance of ensuring quality earned value data, ANSI and the Electronic 

Industries Alliance (EIA) jointly established a national standard for EVM systems in May 

1998 (ANSI/EIA-748-A-1998). This standard, commonly called the ANSI standard, is 

comprised of guidelines to instruct programs on how to establish a sound EVM system. 

This document was updated in July 2007 and is referred to as ANSI/EIA-748-B. 

9

An integrated baseline review is an evaluation of a program’s baseline plan to determine 

whether all program requirements have been addressed, risks have been identified, 

mitigation plans are in place, and available and planned resources are sufficient to 

complete the work. 

10GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009). 

Page 5 GAO-10-2 Information Technology
 

We have previously reported on the weaknesses associated with the 

implementation of sound EVM programs at various agencies, as well as on 

the lack of aggressive management action to correct poor cost and 

schedule performance trends based on earned value data for major system 

acquisition programs: 

Prior Reviews on Agency 

Use of EVM to Acquire and 

Manage IT Systems Have 

Identified Weaknesses 

• In July 2008, we reported that the Federal Aviation Administration’s EVM 

policy was not fully consistent with best practices.11 For example, the 

agency required its program managers to obtain EVM training, but did not 

enforce completion of this training or require other relevant personnel to 

obtain this training. In addition, although the agency was using EVM to 

manage IT acquisitions, not all programs were ensuring that their earned 

value data were reliable. Specifically, of the three programs collecting 

EVM data, only one program adequately ensured that its earned value data 

were reliable. As a result, the agency faced an increased risk that 

managers were not getting the information they needed to effectively 

manage the programs. In response to our findings and recommendations, 

the Federal Aviation Administration reported that it had initiatives under 

way to improve its EVM oversight processes. 

• In September 2008, we reported that the Department of the Treasury’s 

EVM policy was not fully consistent with best practices.12 For example, 

while the department’s policy addressed some practices, such as 

establishing clear criteria for which programs are to use EVM, it did not 

address others, such as requiring and enforcing EVM training. In addition, 

six programs at Treasury and its bureaus were not consistently 

implementing practices needed for establishing a comprehensive EVM 

system. For example, when executing work plans and recording actual 

costs, a key practice for ensuring that the data resulting from the EVM 

system are reliable, only two of the six investments that we reviewed 

incorporated government costs with contractor costs. As a result, we 

reported that Treasury may not be able to effectively manage its critical 

programs. In response to our findings and recommendations, Treasury 

reported that it would release a revised EVM policy and further noted that 

initiatives to improve EVM-related training were under way. 

• In a series of reports and testimonies from September 2004 to June 2009, we 

reported that the National Oceanic and Atmospheric Administration’s 

National Polar-orbiting Operational Environmental Satellite System program 

 

11GAO-08-756. 

12GAO-08-951. 

Page 6 GAO-10-2 Information Technology
 

was likely to overrun its contract at completion on the basis of our analysis of 

contractor EVM data.13 Specifically, the program had delayed key milestones 

and experienced technical issues in the development of key sensors, which 

we stated would affect cost and schedule estimates. As predicted, in June 

2006 the program was restructured, decreasing its complexity, delaying the 

availability of the first satellite by 3 to 5 years, and increasing its cost estimate 

from $6.9 billion to $12.5 billion. However, the program has continued to face 

significant technical and management issues. As of June 2009, launch of the 

first satellite was delayed by 14 months, and our current projected total cost 

estimate is approximately $15 billion. We made multiple recommendations to 

improve this program, including establishing a realistic time frame for 

revising the cost and schedule baselines, developing plans to mitigate the risk 

of gaps in satellite continuity, and tracking the program executive 

committee’s action items from inception to closure. 

While the eight agencies we reviewed have established policies requiring 

the use of EVM on their major IT investments, none of these policies are 

fully consistent with best practices, such as standardizing the way work 

products are defined. We recently reported14 that leading organizations 

establish EVM policies that 

Agencies’ EVM 

Policies Are Not 

Comprehensive 

• establish clear criteria for which programs are to use EVM; 

• require programs to comply with the ANSI standard; 

• require programs to use a product-oriented structure for defining work 

products; 

• require programs to conduct detailed reviews of expected costs, 

schedules, and deliverables (called an integrated baseline review); 

 

13GAO, Polar-Orbiting Environmental Satellites: With Costs Increasing and Data 

Continuity at Risk, Improvements Needed in Tri-agency Decision Making, GAO-09-564 

(Washington, D.C.: June 17, 2009); Polar-Orbiting Operational Environmental Satellites: 

Restructuring Is Under Way, but Technical Challenges and Risks Remain, GAO-07-498 

(Washington, D.C.: Apr. 27, 2007); Polar-Orbiting Operational Environmental Satellites: 

Cost Increases Trigger Review and Place Program’s Direction on Hold, GAO-06-573T 

(Washington, D.C.: Mar. 30, 2006); Polar-Orbiting Operational Environmental Satellites: 

Technical Problems, Cost Increases, and Schedule Delays Trigger Need for Difficult 

Trade-off Decisions, GAO-06-249T (Washington, D.C.: Nov. 16, 2005); and Polar-Orbiting 

Environmental Satellites: Information on Program Cost and Schedule Changes, 

GAO-04-1054 (Washington, D.C.: Sept. 30, 2004). 

14GAO-09-3SP. 

Page 7 GAO-10-2 Information Technology
 

• require and enforce EVM training; 

• define when programs may revise cost and schedule baselines (called 

rebaselining); and 

• require system surveillance—that is, routine validation checks to ensure 

that major acquisitions are continuing to comply with agency policies and 

standards. 

Table 1 describes the key components of an effective EVM policy. 

Table 1: Key Components of an Effective EVM Policy 

Component Description 

Clear criteria for implementing 

EVM on all major IT investments 

OMB requires agencies to implement EVM on all major IT investments and ensure that the 

corresponding contracts include provisions for using EVM systems. However, each agency is 

responsible for establishing its own definition of a “major” IT investment. As a result, agencies 

should clearly define the conditions under which a new or ongoing acquisition program is 

required to implement EVM. 

Compliance with the ANSI 

standard 

OMB requires agencies to use EVM systems that are compliant with a national standard 

developed by ANSI and EIA (ANSI/EIA-748-B). This standard consists of 32 guidelines that an 

organization can use to establish a sound EVM system, ensure that the data resulting from the 

EVM system are reliable, and use earned value data for decision-making purposes. 

Standard structure for defining 

the work products 

The work breakdown structure defines the work necessary to accomplish a program’s 

objectives. It is the first criterion stated in the ANSI standard and the basis for planning the 

program baseline and assigning responsibility for the work. It is a best practice to establish a 

product-oriented work breakdown structure because it allows a program to track cost and 

schedule by defined deliverables, such as a hardware or software component. This allows a 

program manager to more precisely identify which components are causing cost or schedule 

overruns and to more effectively mitigate the root cause of the overruns. Standardizing the work 

breakdown structure is also considered a best practice because it enables an organization to 

collect and share data among programs. 

Integrated baseline review An integrated baseline review is an evaluation of the performance measurement baseline—the 

foundation for an EVM system—to determine whether all program requirements have been 

addressed, risks have been identified, mitigation plans are in place, and available and planned 

resources are sufficient to complete the work. The main goal of an integrated baseline review is 

to identify potential program risks, including risks associated with costs, management 

processes, resources, schedules, and technical issues. 

Training requirements EVM training should be provided and enforced for all personnel with investment oversight and 

program management responsibilities. Executive personnel with oversight responsibilities need 

to understand EVM terms and analysis products to make sound investment decisions. Program 

managers and staff need to be able to interpret and validate earned value data to effectively 

manage deliverables, costs, and schedules. 

Page 8 GAO-10-2 Information Technology
 

Component Description 

Rebaselining criteria At times, management may conclude that the remaining budget and schedule targets for 

completing a program (including the contract) are significantly insufficient, and that the current 

baseline is no longer valid for realistic performance measurement. Management may decide that 

a revised baseline for the program is needed to restore its control of the remaining work effort. 

An agency’s rebaselining criteria should define acceptable reasons for rebaselining and require 

programs to (1) explain why the current plan is no longer feasible and what measures will be 

implemented to prevent recurrence and (2) develop a realistic cost and schedule estimate for 

remaining work that has been validated and spread over time to the new plan. 

System surveillance Surveillance is the process of reviewing a program’s (including contractors’) EVM system as it is 

applied to one or more programs. The purpose of surveillance is to focus on how well a program 

is using its EVM system to manage cost, schedule, and technical performances. The following 

two goals are associated with EVM system surveillance: (1) ensure that the program is following 

corporate processes and procedures and (2) confirm that the program’s processes and 

procedures continue to satisfy ANSI guidelines. 

Source: GAO-09-3SP. 

The eight agencies we reviewed do not have comprehensive EVM policies. 

Specifically, none of the agencies’ policies are fully consistent with all 

seven key components of an effective EVM policy. Table 2 provides a 

detailed assessment, by agency, and a discussion of the agencies’ policies 

follows the table. 

Table 2: Assessment of Key Agencies’ EVM Policies 

Agency 

Clear criteria 

for 

implementing 

EVM on all 

major IT 

investments 

Compliance 

with the 

ANSI 

standard 

Standard 

structure for 

defining the 

work 

products 

Integrated 

baseline 

review 

Training 

requirements 

Rebaselining 

criteria 

System 

surveillance 

Agriculture ● ● ◌ ● ◐ ◐ ●

Commerce ● ● ◌ ● ● ● ●

Defense ● ● ● ● ◐ ● ●

Homeland Security ● ● ◐ ● ◐ ◐ ●

Justice ● ● ◐ ● ◐ ● ●

National 

Aeronautics and 

Space 

Administration 

● ● ◐ ● ◐ ◐ ●

Transportation ● ◐ ◌ ● ◐ ◐ ●

Veterans Affairs ◐ ● ◌ ● ◐ ◐ ●

Key 

●=The agency addressed all EVM practices in this policy area. 

◐=The agency addressed some EVM practices in this policy area. 

◌=The agency did not address any EVM practices in this policy area. 

Source: GAO analysis of agency data. 

Page 9 GAO-10-2 Information Technology
 

• Criteria for implementing EVM on all IT major investments: Seven of 

the eight agencies fully defined criteria for implementing EVM on major IT 

investments. The agencies with sound policies typically defined “major” 

investments as those exceeding a certain cost threshold, and, in some 

cases, agencies defined lower tiers of investments requiring reduced levels 

of EVM compliance. Veterans Affairs only partially met this key practice 

because its policy did not clearly state whether programs or major 

subcomponents of programs (projects and subprojects) had to comply 

with EVM requirements. According to agency officials, this lack of clarity 

may cause EVM to be inconsistently applied across the investments. 

Without an established policy that clearly defines the conditions under 

which new or ongoing acquisition programs are required to implement 

EVM, these agencies cannot ensure that EVM is being appropriately 

applied on their major investments. 

• Compliance with the ANSI standard: Seven of the eight agencies required 

that all work activities performed on major investments be managed by an 

EVM system that complies with industry standards. One agency, 

Transportation, partially met this key practice because its policy contained 

inconsistent criteria for when investments must comply with standards. 

Specifically, in one section, the policy requires a certain class of 

investments to adhere to a subset of the ANSI standard; however, in 

another section, the policy merely states that the investments must comply 

with general EVM principles. This latter section is vague and could be 

interpreted in multiple ways, either more broadly or narrowly than the 

specified subset of the ANSI standard. Without consistent criteria on 

investment compliance, Transportation may be unable to ensure that the 

work activities for some of its major investments are establishing sound 

EVM systems that produce reliable earned value data and provide the 

basis for informed decision making. 

• Standard structure for defining the work products: DOD was the only 

agency to fully meet this key practice by developing and requiring the use 

of standard product-oriented work breakdown structures. Four agencies 

did not meet this key practice, while the other three only partially 

complied. Of those agencies that partially complied, National Aeronautics 

and Space Administration (NASA) policy requires mission (or space flight) 

projects to use a standardized product-oriented work breakdown 

structure; however, IT projects do not have such a requirement. NASA 

officials reported that they are working to develop a standard structure for 

their IT projects; however, they were unable to provide a time frame for 

completion. Homeland Security and Justice have yet to standardize their 

product structures. 

Page 10 GAO-10-2 Information Technology
 

Among the agencies that did not implement this key practice, reasons 

included, among other things, the difficulty in establishing a standard 

structure for component agencies that conduct different types of work 

with varying complexity. While this presents a challenge, agencies could 

adopt an approach similar to DOD’s and develop various standard work 

structures based on the kinds of work being performed by the various 

component agencies (e.g., automated information system, IT 

infrastructure, and IT services). Without fully implementing a standard 

product-oriented structure (or structures), agencies will be unable to 

collect and share data among programs and may not have the information 

they need to make decisions on specific program components. 

• Integrated baseline review: All eight agencies required major IT 

investments to conduct an integrated baseline review to ensure that 

program baselines fully reflect the scope of work to be performed, key 

risks, and available resources. For example, DOD required that these 

reviews occur within 6 months of contract award and after major 

modifications have taken place, among other things. 

• Training requirements: Commerce was the only agency to fully meet this 

key practice by requiring and enforcing EVM training for all personnel 

with investment oversight and program management responsibilities. 

Several of the partially compliant agencies required EVM training for 

project managers—but did not extend this requirement to other program 

management personnel or executives with investment oversight 

responsibilities. Many agencies told us that it would be a significant 

challenge to require and enforce EVM training for all relevant personnel, 

especially at the executive level. Instead, most agencies have made 

voluntary EVM training courses available agencywide. However, without 

comprehensive EVM training requirements and enforcement, agencies 

cannot effectively ensure that programs have the appropriate skills to 

validate and interpret EVM data, and that their executives will be able to 

make fully informed decisions based on the EVM analysis. 

• Rebaselining criteria: Three of the eight agencies fully met this key 

practice. For example, the Justice policy outlines acceptable reasons for 

rebaselining, such as when the baseline no longer reflects the current 

scope of work being performed, and requires investments to explain why 

their current plans are no longer feasible and to develop realistic cost and 

schedule estimates for remaining work. Among the five partially compliant 

agencies, Agriculture and Veterans Affairs provided policies, but in draft 

form; NASA was in the process of updating its policy to include more 

detailed criteria for rebaselining; and Homeland Security did not define 

acceptable reasons but did require an explanation of the root causes for 

Page 11 GAO-10-2 Information Technology
 

cost and schedule variances and the development of new cost and 

schedule estimates. In several cases, agencies were unaware of the 

detailed rebaselining criteria to be included in their EVM policies. Until 

their policies fully meet this key practice, agencies face an increased risk 

that their executive managers will make decisions about programs with 

incomplete information, and that these programs will continue to overrun 

costs and schedules because their underlying problems have not been 

identified or addressed. 

• System surveillance: All eight agencies required ongoing EVM system 

surveillance of all programs (and contracts with EVM requirements) to 

ensure their continued compliance with industry standards. For example, 

Agriculture required its surveillance teams to submit reports—to the 

programs and the Chief Information Officer—with documented findings 

and recommendations regarding compliance. Furthermore, the agency 

also established a schedule to show when EVM surveillance is expected to 

take place on each of its programs. 

Our studies of 16 major system acquisition programs showed that all 

agencies are using EVM; however, the extent of that implementation varies 

among the programs. Our work on best practices in EVM identified 11 key 

practices that are implemented on acquisition programs of leading 

organizations. These practices can be organized into three management 

areas: establishing a sound EVM system, ensuring reliable data, and using 

earned value data to make decisions. Table 3 lists these 11 key EVM 

practices by management area. 

Agencies’ Key 

Acquisition Programs 

Are Using EVM, but 

Are Not Consistently 

Implementing Key 

Practices 

Table 3: Eleven Key EVM Practices for System Acquisition Programs 

Program management area of responsibility EVM practice 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure 

Identify who in the organization will perform the work 

Schedule the work 

Estimate the labor and material required to perform the work and authorize the 

budgets, including management reserve 

Determine objective measure of earned value 

Develop the performance measurement baseline 

Ensure that the data resulting from the EVM system 

are reliable 

Execute the work plan and record all costs 

Analyze EVM performance data and record variances from the performance 

measurement baseline plan 

Page 12 GAO-10-2 Information Technology
 

Program management area of responsibility EVM practice 

Forecast estimates at completion 

Ensure that the program management team is using 

earned value data for decision-making purposes 

Take management action to mitigate risks 

Update the performance measurement baseline as changes occur 

Source: GAO-09-3SP. 

Of the 16 case study programs, 3 demonstrated a full level of maturity in 

all three management areas; 3 had full maturity in two areas; and 4 had 

reached full maturity in one area. The remaining 6 programs did not 

demonstrate full levels of maturity in any of the management areas; 

however, in all but 1 case, they were able to demonstrate partial 

capabilities in each of the three areas. Table 4 identifies the 16 case study 

programs and summarizes our results for these programs. Following the 

table is a summary of the programs’ implementation of each key area of 

EVM program management responsibility. Additional details on the 16 

case studies are provided in appendix II. 

Table 4: Assessment of EVM Practices for Case Study Programs 

Agency Program 

Establishing a 

comprehensive EVM 

system 

Ensuring that data 

resulting from the 

EVM system are 

reliable 

Ensuring that the 

program 

management team is 

using earned value 

data for decisionmaking purposes 

Agriculture Farm Program Modernization ◐ ● ●

Commerce Decennial Response Integration System ● ● ●

Field Data Collection Automation ◐ ◐ ◐

Defense Air and Space Operations Center—Weapon 

System ◐ ◐ ●

Joint Tactical Radio System—Handheld, 

Manpack, Small Form Fit ◐ ● ●

Warfighter Information Network—Tactical ◐ ● ◐

Homeland 

Security 

Automated Commercial Environment ◐ ◐ ●

Integrated Deepwater System—Common 

Operational Picture ◐ ◐ ◐

Western Hemisphere Travel Initiative ◐ ◐ ◐

Justice Next Generation Identification ● ● ●

National 

Aeronautics 

and Space 

Administration 

James Webb Space Telescope 

◐ ◐ ◐

Page 13 GAO-10-2 Information Technology
 

Agency Program 

Establishing a 

comprehensive EVM 

system 

Ensuring that data 

resulting from the 

EVM system are 

reliable 

Ensuring that the 

program 

management team is 

using earned value 

data for decisionmaking purposes 

Juno ◐ ● ●

Mars Science Laboratory ◐ ◐ ◐

Transportation En Route Automation Modernization ◐ ◐ ●

Surveillance and Broadcast System ● ● ●

Veterans 

Affairs 

Veterans Health Information Systems and 

Technology Architecture—Foundations 

Modernization 

◐ ◐ ◌

Ke

●=The program fully implemented all EVM practices in this program management area. 

y 

◐=The program partially implemented the EVM practices in this program management area. 

◌=The program did not implement the EVM practices in this program management area. 

Source: GAO analysis of program data. 

Most Programs Did Not 

Fully Establish 

Comprehensive EVM 

Systems 

Most programs did not fully implement the key practices needed to 

establish comprehensive EVM systems. Of the 16 programs, 3 fully 

implemented the practices in this program management area, and 13 

partially implemented the practices. The Decennial Response Integration 

System, Next Generation Identification, and Surveillance and Broadcast 

System programs demonstrated that they had fully implemented the six 

practices in this area. For example, our analysis of the Decennial 

Response Integration System program schedule showed that activities 

were properly sequenced, realistic durations were established, and labor 

and material resources were assigned. The Surveillance and Broadcast 

System program conducted a detailed integrated baseline review to 

validate its performance baseline. It was also the only program to fully 

institutionalize EVM at the program level—meaning that it collects 

performance data on the contractor and government work efforts—in 

order to get a complete view into program status. 

Thirteen programs demonstrated that they partially implemented the six 

key practices in this area. In most cases, programs had work breakdown 

structures that defined work products to an appropriate level of detail and 

had identified the personnel responsible for delivering these work 

products. However, for all 13 programs, the project schedules contained 

issues that undermined the quality of their performance baselines. 

Page 14 GAO-10-2 Information Technology
 

Weaknesses in these schedules included the improper sequencing of 

activities, such as incomplete or missing linkages between tasks; a lack of 

resources assigned to all activities; invalid critical paths (the sequence of 

activities that, if delayed, will impact the planned completion date of the 

project); and the excessive or unjustified use of constraints, which impairs 

the program’s ability to forecast the impact of ongoing delays on future 

planned work activities. These weaknesses are of concern because the 

schedule serves as the performance baseline against which earned value is 

measured. As such, poor schedules undermine the overall quality of a 

program’s EVM system. Other key weaknesses included the following 

examples: 

• Nine programs did not adequately determine an objective measure of 

earned value and develop the performance baseline—that is, key practices 

most appropriately addressed through a comprehensive integrated 

baseline review, which none of them fully performed. For example, the Air 

and Space Operations Center—Weapon System program conducted an 

integrated baseline review in May 2007 to validate one segment of work 

contained in the baseline; however, the program had not conducted 

subsequent reviews for the remaining work because doing so would 

preclude staff from completing their normal work activities. Other reasons 

cited by the programs for not performing these reviews included the lack 

of a fully defined scope of work or management’s decision to use ongoing 

EVM surveillance to satisfy these practices. Without having performed a 

comprehensive integrated baseline review, programs have not sufficiently 

evaluated the validity of their baseline plan to determine whether all 

significant risks contained in the plan have been identified and mitigated, 

and that the metrics used to measure the progress made on planned work 

elements are appropriate. 

• Four programs did not define the scope of effort using a work breakdown 

structure. For example, the Veterans Health Information Systems and 

Technology Architecture—Foundations Modernization program provided 

a list of its subprograms; however, it did not define the scope of the 

detailed work elements that comprise each subprogram. Without a work 

breakdown structure, programs lack a basis for planning the performance 

baseline and assigning responsibility for that work, both of which are 

necessary to accomplish a program’s objectives. 

Many Programs Did Not 

Fully Implement Practices 

to Ensure Data Reliability 

Many programs did not fully ensure that their EVM data were reliable. Of 

the 16 programs, 7 fully implemented the practices for ensuring the 

reliability of the prime contractor and government performance data, and 

9 partially implemented the practices. All 7 programs that demonstrated 

Page 15 GAO-10-2 Information Technology
 

full implementation conduct monthly reviews of earned value data with 

technical engineering staff and other key personnel to ensure that the data 

are consistent with actual performance; perform detailed performance 

trend analyses to track program progress, cost, and schedule drivers; and 

make estimates of cost at completion. Four programs that we had 

previously identified as having schedule weaknesses (Farm Program 

Modernization; Joint Tactical Radio System—Handheld, Manpack, Small 

Form Fit; Juno; and Warfighter Information Network—Tactical) were 

aware of these issues and had sufficient controls in place to mitigate them 

in order to ensure that the earned value data are reliable. 

Nine programs partially implemented the three practices for ensuring that 

earned value data are reliable. In all cases, the program had processes in 

place to review earned value data (from monthly contractor EVM reports 

in all but one case), identify and record cost and schedule variances, and 

forecast estimates at completion. However, 5 of these programs did not 

adequately analyze EVM performance data and properly record variances 

from the performance baseline. For example, 2 programs did not 

adequately document justifications for cost and schedule variances, 

including root causes, potential impacts, and corrective actions. Other 

weaknesses in this area include anomalies in monthly performance 

reports, such as negative dollars being spent for work performed, which 

impacts the validity of performance data. In addition, 7 of these programs 

did not demonstrate that they could adequately execute the work plan and 

record costs because, among other things, they were unaware of the 

schedule weaknesses we identified and did not have sufficient internal 

controls in place to deal with these issues to improve the reliability of the 

earned value data. Lastly, 2 of these programs could not adequately 

forecast estimates at completion due, in part, to anomalies in the prime 

contractor’s EVM reports, in combination with the weaknesses contained 

in the project schedule. 

Most Programs Used 

Earned Value Data for 

Decision-making Purposes 

Programs were uneven in their use of earned value data to make decisions. 

Of the 16 programs, 9 fully implemented the practices for using earned 

value data for decision making, 6 partially implemented them, and 1 did 

not implement them. Among the 9 fully implemented programs, both the 

Automated Commercial Environment and Juno programs integrated their 

EVM and risk management processes to support the program manager in 

making better decisions. The Automated Commercial Environment 

program actively recorded risks associated with major variances from the 

EVM reports in the program’s risk register. Juno further used the earned 

Page 16 GAO-10-2 Information Technology
 

value data to analyze threats against remaining management reserve and 

to estimate the cost impact of these threats. 

Six programs demonstrated limited capabilities in using earned value data 

for making decisions. In most cases, these programs included earned value 

performance trend data in monthly program management review briefings. 

However, the majority had processes for taking management action to 

address the cost and schedule drivers causing poor trends that were ad 

hoc and separate from the programs’ risk management processes—and, in 

most cases, the risks and issues found in the EVM reports did not 

correspond to the risks contained in the program risk registers. In 

addition, 4 of these programs were not able to adequately update the 

performance baseline as changes occurred because, in many cases, the 

original baseline was not appropriately validated. For example, the Mars 

Science Laboratory program just recently updated its performance 

baseline as part of a recent replan effort. However, without validating the 

original and current baselines with a project-level integrated baseline 

review, it is unclear whether the changes to the baseline were reasonable, 

and whether the risks assumed in the baseline have been identified and 

appropriately mitigated. 

One program (Veterans Health Information Systems and Technology 

Architecture—Foundations Modernization) was not using earned value 

data for decision making. Specifically, the program did not actively 

manage earned value performance trends, nor were these data 

incorporated into programwide management reviews. 

Inconsistent 

Implementation Is Due in 

Part to Weaknesses in 

Policy and Lack of 

Enforcement 

The inconsistent application of EVM across the investments exists in part 

because of the weaknesses we previously identified in the eight agencies’ 

policies, as well as a lack of enforcement of the EVM policy components 

already in place. For example, deficiencies in all three management areas 

can be attributed, in part, to a lack of comprehensive EVM training 

requirements—which was a policy component that most agencies did not 

fully address. The only 3 programs that had fully implemented all key EVM 

practices either had comprehensive training requirements in their agency 

EVM policy or enforced rigorous training requirements beyond that for 

which the policy called. Most of the remaining programs met the minimum 

requirements of their agencies’ policies. However, all programs that had 

attained full maturity in two management areas had also implemented 

more stringent training requirements, although none could match the 

efforts made on the other 3 programs. Without making this training a 

comprehensive requirement, these agencies are at risk that their major 

Page 17 GAO-10-2 Information Technology
 

system acquisition programs will continue to have management and 

technical staff who lack the skills to fully implement key EVM practices. 

Our case study analysis also highlighted multiple areas in which programs 

were not in compliance with their agencies’ established EVM policies. This 

is an indication that agencies are not adequately enforcing program 

compliance. These policy areas include requiring EVM compliance at the 

start of the program, validating the baseline with an integrated baseline 

review, and conducting ongoing EVM surveillance. 

Until key EVM practices are fully implemented, selected programs face an 

increased risk that program managers cannot effectively optimize EVM as 

a management tool to mitigate and reverse poor cost and schedule 

performance trends. 

Earned value data trends of the 16 case study programs indicate that most 

are currently experiencing cost overruns and schedule slippages, and, 

based on our analysis, it is likely that when these programs are completed, 

the total cost overrun will be about $3 billion. To date, these programs, 

collectively, have already overrun their original life-cycle cost estimates by 

almost $2 billion (see table 5). 

Earned Value Data 

Show Trends of Cost 

Overruns and 

Schedule Slippages on 

Most Programs 

Table 5: Program Life-cycle Cost Estimate Changes 

Dollars in millions

Agency Program 

Original lifecycle cost 

estimate

Current life-cycle 

cost estimate 

Cost overruns in 

excess of original 

cost estimate

Agriculture Farm Program Modernization $451.0 $451.0 $0.0

Commerce Decennial Response Integration System 574.0a946.0a372.0 

Field Data Collection Automation 595.7 801.1 205.4 

Defense Air and Space Operations Center—Weapon System 4,425.0 4,425.0 0.0

Joint Tactical Radio System—Handheld, Manpack, 

Small Form Fit 

19,214.0 11,599.0 n/ab

Warfighter Information Network—Tactical 38,157.1 38,157.1 0.0

Homeland 

Security 

Automated Commercial Environment 1,500.0c2,241.0c741.0

Integrated Deepwater System—Common 

Operational Picture 

1,353.0c1,353.0c0.0

Page 18 GAO-10-2 Information Technology
 

Dollars in millions

Agency Program 

Original lifecycle cost 

estimate

Current life-cycle 

cost estimate 

Cost overruns in 

excess of original 

cost estimate

Western Hemisphere Travel Initiative 1,228.0 1,228.0 0.0

Justice Next Generation Identification 1,075.9 1,075.9 0.0

National 

Aeronautics 

and Space 

Administration 

James Webb Space Telescope 4,964.0 4,964.0 0.0 

Juno 1,050.0 1,050.0 0.0 

Mars Science Laboratory 1,634.0 2,286.0 652.0 

Transportation En Route Automation Modernization 3,649.4 3,649.4 0.0

Surveillance and Broadcast System 4,313.0 4,328.9 15.9 

Veterans 

Affairs 

Veterans Health Information Systems and 

Technology Architecture—Foundations 

Modernization 

1,897.4 1,897.4 0.0

Total $1,986.3

billion

Source: GAO analysis of program and contractor data. 

a

We removed $37 million from the original estimate, which represented costs associated with the 

closeout of the program. We did this because the current estimate does not include costs for these 

activities. An estimate for these activities is currently being revised. In addition, the cost increase 

associated with the current estimate is due, in part, to an agency-directed expansion of program 

scope (related to the system’s ability to process a higher volume of paper forms) in April 2008. 

b

It is not appropriate to compare the original and current life-cycle cost estimates for this program 

because the scope has significantly changed since inception (such as newly imposed security 

requirements). In addition, due to a change in the agency’s migration strategy for replacing legacy 

radios with new tactical radios, the planned quantity of radios procured was decreased from 328,514 

to 95,551. As a result, the life-cycle cost estimate was reduced and no longer represents the original 

scope of the program. 

c

The original and current life-cycle costs do not include operations and maintenance costs. 

Taking the current earned value performance15 into account, our analysis 

of the 16 case study programs indicated that most are experiencing 

shortfalls against their currently planned cost and schedule targets. 

Specifically, earned value performance data over a 12-month period 

 

15In 13 cases, programs limited the use of EVM to system development work on contract. 

As such, earned value data will reflect contractor performance only. In the 3 other cases, 

the Farm Program Modernization, Surveillance and Broadcast System, and Veterans Health 

Information Systems and Technology Architecture—Foundations Modernization, programs 

expanded the use of EVM to the entire program; therefore, the earned value data will 

reflect total program performance (contractor and government). 

Page 19 GAO-10-2 Information Technology
 

showed that the 16 programs combined have exceeded their cost targets 

by $275 million. During that period, they also experienced schedule 

variances and were unable to accomplish almost $93 million worth of 

planned work. In most cases, the negative cost and schedule performance 

trends were attributed to ongoing technical issues in the development or 

testing of system components. 

Furthermore, our projections of future estimated costs at completion 

based on our analysis of current contractor performance trends indicate 

that these programs will most likely continue to experience cost overruns 

to completion, totaling almost $1 billion. In contrast, the programs’ 

contractors estimate the cost overruns at completion will be 

approximately $469.7 million. These estimates are based on the 

contractors’ assumption that their efficiency in completing the remaining 

work will significantly improve over what has been done to date. 

Furthermore, it should be noted that in 4 cases, the contractor-estimated 

overrun is smaller than the cost variances they have already 

accumulated—which is an indication that these estimates are aggressively 

optimistic.16

With the inclusion of the overruns already incurred to date, the total 

increase in life-cycle costs will be about $3 billion. Our analysis is 

presented in table 6. Additional details on the 16 case studies are provided 

in appendix II. 

Table 6: Contractor Cumulative Cost and Schedule Performances 

Dollars in millions 

Agency Program 

Contractor 

budget at 

completion

Percentage 

complete

Cumulative 

cost 

variance

Cumulative 

schedule 

variance 

Contractorestimated 

cost overrun/ 

underrun at 

completion

GAO most 

likely cost 

overrun/ 

underrun at 

completion

Agriculture Farm Program 

Modernizationa,b

$7.0 94% $<0.1 ($0.2) $<0.1 $<0.1

Commerce Decennial Response 

Integration System 

468.6 50 13.6 2.3 7.0 underrun 7.0 underrun

 

16These programs include the Field Data Collection Automation, Automated Commercial 

Environment, Juno, and Veterans Health Information Systems and Technology 

Architecture—Foundations Modernization. 

Page 20 GAO-10-2 Information Technology
 

Dollars in millions 

Agency Program 

Contractor 

budget at 

completion

Percentage 

complete

Cumulative 

cost 

variance

Cumulative 

schedule 

variance 

Contractorestimated 

cost overrun/ 

underrun at 

completion

GAO most 

likely cost 

overrun/ 

underrun at 

completion

Field Data Collection 

Automation 

555.6 75 (3.5) 0.4 2.9 overrun 4.6 overrun

Defense Air and Space Operations 

Center—Weapon System 

171.3 86 (0.1) 0.4 0.8 overrun 0.8 overrrun

Joint Tactical Radio 

System—Handheld, 

Manpack, Small Form Fit 

530.8 74 (62.4) (8.8) 70.1 overrun 89.1 overrun

Warfighter Information 

Network—Tactical 

747.0 34 0.8 (12.0) 3.7 underrun 15.1 overrun

Homeland 

Security 

Automated Commercial 

Environment 

382.3 83 (18.8) (13.2) 0.5 underrun 24.1 overrun

Integrated Deepwater 

System—Common 

Operational Picture 

130.2 99 (4.2) 0.0 4.2 overrun 4.2 overrun

Western Hemisphere 

Travel Initiativec

45.3 100 n/a n/a n/a n/a

Justice Next Generation 

Identification 

37.5 91 (1.4) (0.5) 1.5 overrun 1.6 overrun

National 

Aeronautics 

and Space 

Administration 

James Webb Space 

Telescope 

1,271.6 64 (224.7) (9.4) 448.5 

overrund

448.5 overrun

Juno 369.0 32 (13.2) (12.3) 6.4 overrun 49.8 overrun

Mars Science Laboratorye 1,223.0 77 2.2 (6.2) 4.1 overrun n/a

Transportation En Route Automation 

Modernization 

1,480.2 89 36.9 15.9 15.3 underrun 15.3 underrun

Surveillance and Broadcast 

Systema

1,007.9 27 14.7 (24.0) 41.6 underrun 21.7 overrun

Veterans 

Affairs 

Veterans Health 

Information Systems and 

Technology Architecture—

Foundations Modernizationa

1,897.4 10 (14.9) (24.9) 0.7 underrun 350.2 overrun

Total $10,324.7 $275.0 

overrun

$92.5 

overrun 

$469.7 

overrun

$987.4 

overrun

Source: GAO analysis of program and contractor data. 

a

Earned value data reflect performance for the full scope of the program. 

b

This program is currently in the initiation phase of its life cycle, and the budget at completion reflects 

only work planned to be completed in this phase. 

c

The program’s contractor completed development work in June 2009. 

Page 21 GAO-10-2 Information Technology
 

d

Project officials stated that they have adequate contingency reserves built into their life-cycle cost 

estimate to cover this estimated overrun and any additional overruns (should performance continue to 

degrade) through contract completion. 

e

EVM reporting was suspended between November 2008 and February 2009 while the project was 

being replanned; therefore, we did not have sufficient data to make a reliable independent estimate at 

completion. 

Eleven programs are expected to incur a cost overrun at contract 

completion. In particular, two programs (i.e., the James Webb Space 

Telescope and Veterans Health Information Systems and Technology 

Architecture—Foundations Modernization programs) will likely 

experience a combined overrun of $798.7 million, which accounts for 

about 80 percent of our total projection. 

With timely and effective action taken by program and executive 

management, it is possible to reverse negative performance trends so that 

the projected cost overruns at completion may be reduced. To get such 

results, management at all levels could be strengthened, including 

contractor management, program office management, and executive-level 

management. For example, programs could strengthen program office 

controls and contractor oversight by obtaining earned value data weekly 

(instead of monthly) so that they can make decisions with immediate and 

greater impact. Additionally, key risks could be elevated to the program 

level and, if necessary, to the executive level to ensure that appropriate 

mitigation plans are in place and that they are tracked to closure. 

Key agencies have taken a number of important steps to improve the 

management of major acquisitions through the implementation of EVM. 

Specifically, the agencies have established EVM policies and require their 

major system acquisition programs to use EVM. However, none of the 

eight agencies that we reviewed have comprehensive EVM policies. Most 

of these policies omit or lack sufficient guidance on the type of work 

structure needed to effectively use EVM data and on the training 

requirements for all relevant personnel. Without comprehensive policies, it 

will be difficult for the agencies to gain the full benefits of EVM. 

Conclusions 

Few of our 16 case study programs had fully implemented EVM 

capabilities, raising concerns that programs cannot efficiently produce 

reliable estimates of cost at completion. Many of these weaknesses found 

on these programs can be traced back to inadequate agency EVM policies 

and raise questions concerning the agencies’ enforcement of the policies 

already established, including the completion of the integrated baseline 

reviews and system surveillance. Until agencies expand and enforce their 

Page 22 GAO-10-2 Information Technology
 

EVM policies, it will be difficult for them to optimize the effectiveness of 

this management tool, and they will face an increased risk that managers 

are not getting the information they need to effectively manage the 

programs. 

In addition to concerns about their implementation of EVM, the programs’ 

earned value data show trends toward cost overruns that are likely to 

collectively total about $3 billion. Without timely and aggressive 

management action, this projected overrun will be realized, resulting in 

the expenditure of over $1 billion more than currently planned. 

To address the weaknesses identified in agencies’ policies and practices in 

using EVM, we are making recommendations to the eight major agencies 

included in this review. Specifically, we recommend that the following 

three actions be taken by the Secretaries of the Departments of 

Agriculture, Commerce, Defense, Homeland Security, Justice, 

Transportation, and Veterans Affairs and the Administrator of the National 

Aeronautics and Space Administration: 

• modify policies governing EVM to ensure that they address the 

weaknesses that we identified, taking into consideration the criteria used 

in this report; 

• direct key system acquisition programs to implement the EVM practices 

that address the detailed weaknesses that we identified in appendix II, 

taking into consideration the criteria used in this report; and 

• direct key system acquisition programs to take action to reverse current 

negative performance trends, as shown in the earned value data, to 

mitigate the potential cost and schedule overruns. 

We provided the selected eight agencies with a draft of our report for 

review and comment. The Department of Homeland Security responded 

that it had no comments. The remaining seven agencies generally agreed 

with our results and recommendations. Agencies also provided technical 

comments, which we incorporated in the report as appropriate. 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 

The comments of the agencies are summarized in the following text: 

• In e-mail comments on a draft of the report, officials from the U.S. 

Department of Agriculture’s Office of the Chief Information Officer stated 

Page 23 GAO-10-2 Information Technology
 

that the department has begun to address the weaknesses in its EVM 

policy identified in the report. 

• In written comments on a draft of the report, the Secretary of Commerce 

stated that, regarding the second and third recommendations, the 

Department of Commerce was pleased that the Decennial Response 

Integration System was found to have fully implemented all 11 key EVM 

practices, and that the Field Data Collection Automation program fully 

implemented six key practices. The department added that its recent 

actions on the Field Data Collection Automation program should move 

this program to full compliance with the key EVM practices. Furthermore, 

regarding the first recommendation, the Secretary stated that while the 

department understands and appreciates the value of standardized work 

breakdown structures, it maintained that the development of these work 

structures should take place at the department’s operating units (e.g., 

Census Bureau), given the wide diversity of missions and project 

complexity among these units. As noted in our report, we agree that 

agencies could develop standard work structures based on the kinds of 

work being performed by the various component agencies. Therefore, we 

support these efforts described by the department because they are 

generally consistent with the intent of our recommendation. Commerce’s 

comments are printed in appendix III. 

• In written comments on a draft of the report, the Department of Defense’s 

Director of Defense Procurement and Acquisition Policy stated that the 

department concurred with our recommendations. Among other things, 

DOD stated that it is essential to maintain the appropriate oversight of 

acquisition programs, including the use of EVM data to understand 

program status and anticipate potential problems. DOD’s comments are 

printed in appendix IV. 

• In written comments on a draft of the report, the Department of Justice’s 

Assistant Attorney General for Administration stated that, after discussion 

with our office, it was agreed that the second recommendation, related to 

implementing EVM practices that address identified weakness, was 

inadvertently directed to the department, and that no response was 

necessary. We agreed because the case study program reviewed fully met 

all key EVM practices. The department concurred with the two remaining 

recommendations related to modifying EVM policies and reversing 

negative performance trends. Furthermore, the Assistant Attorney General 

noted that Justice had begun to take steps to improve its use of EVM, such 

as modifying its policy to require EVM training for all personnel with 

investment oversight and program management responsibilities. Justice’s 

comments are printed in appendix V. 

Page 24 GAO-10-2 Information Technology
 

• In written comments on a draft of the report, the National Aeronautics and 

Space Administration’s Deputy Administrator stated that the agency 

concurred with two recommendations and partially concurred with one 

recommendation. In particular, the Deputy Administrator agreed that 

opportunities exist for improving the implementation of EVM, but stated 

that NASA classifies the projects included in the scope of the audit as space 

flight projects (not as IT-specific projects), which affects the applicability of 

the agency’s EVM policies and guidance that were reviewed. We recognize 

that different classifications of IT exist; however, consistent with other 

programs included in the audit, the selected NASA projects integrate and 

rely on various elements of IT. As such, we reviewed both the agency’s 

space flight and IT-specific guidance. Furthermore, the agency partially 

concurred with one recommendation because it stated that efforts were 

either under way or planned that will address the weaknesses we identified. 

We support the efforts that NASA described in its comments because they 

are generally consistent with the intent of our recommendation. NASA’s 

comments are printed in appendix VI. 

• In e-mail comments on a draft of the report, the Department of 

Transportation’s Director of Audit Relations stated that the department is 

taking immediate steps to modify its policies governing EVM, taking into 

consideration the criteria used in the draft report. 

• In written comments on a draft of the report, the Secretary of Veterans 

Affairs stated that the Department of Veterans Affairs generally agreed 

with our conclusions and concurred with our recommendations. 

Furthermore, the Secretary stated that Veterans Affairs has initiatives 

under way to address the weaknesses identified in the report. Veterans 

Affairs’ comments are printed in appendix VII. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to interested 

congressional committees; the Secretaries of the Departments of 

Agriculture, Commerce, Defense, Homeland Security, Justice, 

Transportation, and Veterans Affairs; the Administrator of the National 

Aeronautics and Space Administration; and other interested parties. In 

addition, the report will be available at no charge on our Web site at 

http://www.gao.gov. 

Page 25 GAO-10-2 Information Technology
 

If you or your staff have any questions on the matters discussed in this 

report, please contact me at (202) 512-9286 or pownerd@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. GAO staff who made major 

contributions to this report are listed in appendix VIII. 

Sincerely yours, 

David A. Powner 

Director, Information Technology 

 Management Issues 

Page 26 GAO-10-2 Information Technology
Appendix I: Objectives, Scope, and 

Methodology 

Page 27 GAO-10-2 

Appendix I: Objectives, Scope, and 

Methodology 

Our objectives were to (1) assess whether key departments and agencies 

have appropriately established earned value management (EVM) policies, 

(2) determine whether these agencies are adequately using earned value 

techniques to manage key system acquisitions, and (3) evaluate the earned 

value data of these selected investments to determine their cost and 

schedule performances. 

For this governmentwide review, we assessed eight agencies and 16 

investments. We initially identified the 10 agencies with the highest 

amount of spending for information technology (IT) development, 

modernization, and enhancement work as reported in the Office of 

Management and Budget’s (OMB) Fiscal Year 2009 Exhibit 53. These 

agencies were the Departments of Agriculture, Commerce, Defense, 

Health and Human Services, Homeland Security, Justice, Transportation, 

the Treasury, and Veterans Affairs and the National Aeronautics and Space 

Administration. We excluded Treasury from our selection because we 

recently performed an extensive review of EVM at that agency.1

 We also 

subsequently removed Health and Human Services from our selection 

because the agency did not have investments in system acquisition that 

met our dollar threshold (as defined in the following text). The resulting 

eight agencies also made up about 75 percent of the government’s planned 

IT spending for fiscal year 2009. 

To ensure that we examined significant investments, we chose from 

investments (related to system acquisition) that were expected to receive 

development, modernization, and enhancement funding in fiscal year 2009 

in excess of $90 million.2

 We limited the number of selected investments to 

a maximum of 3 per agency. For agencies with more than 3 investments 

that met our threshold, we selected the top 3 investments with the highest 

planned spending. For agencies with 3 or fewer such investments, we 

chose all of the investments meeting our dollar threshold. Lastly, we 

excluded investments with related EVM work already under way at GAO.3

 

1

GAO, Information Technology: Treasury Needs to Better Define and Implement Its 

Earned Value Management Policy, GAO-08-951 (Washington, D.C.: Sept. 22, 2008). 

2

There were 30 investments that met this criterion. 

3

These investments include the Department of Defense’s Navy Enterprise Resource 

Planning, and the Department of Homeland Security’s Secure Border Initiative net and U.S. 

Visitor and Immigration Status Indicator Technology. 

 Information Technology 
Appendix I: Objectives, Scope, and 

Methodology 

To assess whether key agencies have appropriately established EVM 

policies, we analyzed agency policies and guidance for EVM. Specifically, 

we compared these policies and guidance documents with both OMB’s 

requirements and key best practices recognized within the federal 

government and industry for the implementation of EVM. These best 

practices are contained in the GAO cost guide.4

 We also interviewed key 

agency officials to obtain information on their ongoing and future EVM 

plans. 

To determine whether these agencies are adequately using earned value 

techniques to manage key system acquisitions, we analyzed program 

documentation, including project work breakdown structures, project 

schedules, integrated baseline review briefings, risk registers, and monthly 

management briefings for the 16 selected investments. Specifically, we 

compared program documentation with EVM and scheduling best 

practices as identified in the cost guide.5

 We determined whether the 

program implemented, partially implemented, or did not implement each 

of the 11 practices. We also interviewed program officials (and observed 

key program status review meetings) to obtain clarification on how EVM 

practices are implemented and how the data are used for decision-making 

purposes. 

To evaluate the earned value data of the selected investments to determine 

their cost and schedule performances, we analyzed the earned value data 

contained in contractor EVM performance reports obtained from the 

programs. To perform this analysis, we compared the cost of work 

completed with budgeted costs for scheduled work for a 12-month period 

to show trends in cost and schedule performances. We also used data from 

these reports to estimate the likely costs at completion through 

established earned value formulas. This resulted in three different values, 

with the middle value being the most likely. To assess the reliability of the 

cost data, we compared it with other available supporting documents 

(including OMB and agency financial reports); electronically tested the 

data to identify obvious problems with completeness or accuracy; and 

interviewed agency and program officials about the data. For the purposes 

of this report, we determined that the cost data were sufficiently reliable. 

We did not test the adequacy of the agency or contractor cost-accounting 

 

4

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009). 

5

GAO-09-3SP. 

Page 28 GAO-10-2 Information Technology
Appendix I: Objectives, Scope, and 

Methodology 

systems. Our evaluation of these cost data was based on what we were 

told by the agency and the information they could provide. 

We conducted this performance audit from February to October 2009 at 

the agencies’ offices in the Washington, D.C., metropolitan area; Fort 

Monmouth, New Jersey; Jet Propulsion Lab, Pasadena, California; 

Hanscom Air Force Base, Massachusetts; and Naval Base San Diego, 

California. Our work was done in accordance with generally accepted 

government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objectives. 

Page 29 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value Appendix II: Case Studies of Selected Management 

Programs’ Implementation of Earned Value 

Management 

We conducted case studies of 16 major system acquisition programs (see 

table 7). For each of these programs, the remaining sections of this 

appendix provide the following: a brief description of the program, 

including a graphic illustration of the investment’s life cycle; an 

assessment of the program’s implementation of the 11 key EVM practices; 

and an analysis of the program’s recent earned value (EV) data and trends. 

These data and trends are often described in terms of cost and schedule 

variances. Cost variances compare the earned value of the completed 

work with the actual cost of the work performed. Schedule variances are 

also measured in dollars, but they compare the earned value of the 

completed work with the value of the work that was expected to be 

completed. Positive variances are good—they indicate that activities are 

costing less than expected or are completed ahead of schedule. Negative 

variances are bad—they indicate activities are costing more than expected 

or are falling behind schedule. 

Table 7: Sixteen Case Study Programs 

Agency Program 

Agriculture Farm Program Modernization 

Commerce Decennial Response Integration System 

Field Data Collection Automation 

Defense Air and Space Operations Center—Weapon System 

Joint Tactical Radio System—Handheld, Manpack, Small Form Fit

Warfighter Information Network—Tactical 

Homeland Security Automated Commercial Environment 

Integrated Deepwater System—Common Operational Picture 

Western Hemisphere Travel Initiative 

Justice Next Generation Identification 

National Aeronautics 

and Space 

Administration 

James Webb Space Telescope 

Juno 

Mars Science Laboratory 

Transportation En Route Automation Modernization 

Surveillance and Broadcast System 

Veterans Affairs Veterans Health Information Systems and Technology 

Architecture—Foundations Modernization 

Source: GAO analysis of program data. 

Page 30 GAO-10-2 Information Technology 
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

The following information describes the key that we used in tables 8 

through 23 to convey the results of our assessment of the 16 case study 

programs’ implementation of the 11 EVM practices. 

Key description Key symbol 

The program fully implemented all EVM 

practices in this program management area. 

●

The program partially implemented the EVM 

practices in this program management area. 

◐

The program did not implement the EVM 

practices in this program management area. 

◌

Page 31 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

[This page is intentionally left blank.] 

Page 32 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Page 33 GAO-10-2 

The Farm Program Modernization (MIDAS) program is intended to 

address the long-term needs in delivering farm benefit programs via 

business process reengineering and implementation of a commercial offthe-shelf enterprise resource planning solution. MIDAS is an initiative of 

the Farm Service Agency, which is responsible for administering 35 farm 

benefit programs. To support these programs, the agency uses two 

primary systems—a distributed network of legacy computers and a 

centralized Web farm (to store customer data and host Web-based 

applications)—both of which have shortcomings. While MIDAS is to 

replace these computers, it is also intended to provide new applications 

and redesigned business processes. The Web farm is expected to remain in 

operation in a supporting role for the program. Currently, MIDAS is in the 

initiation phase of its life cycle and plans to award the system integration 

contract in the first quarter of fiscal year 2010. 

Farm Program 

Modernization 

Investment Details

Department of Agriculture 

(Farm Service Agency)

Program start date: 2004

Total life-cycle cost: 

• Current: $451 million

• Original: $451 million

Program end date: 

• Current: 2018

• Original: 2017

Rebaselines: 1 (September 2008)

Major contractor: Prime contract to be 

awarded in the first quarter of FY 2010

Initiation Development Operations and

maintenance

Source: GAO analysis of U.S. Department of Agriculture (Farm Service Agency) data.

Table 8: GAO EVM Practice Assessment of Agriculture’s MIDAS Program 

Program management area of responsibility Key practice GAO assessment

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ◐

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work and 

authorize the budgets, including management reserve ◐

Determine objective measure of earned value ◐

Develop the performance measurement baseline ◐

Ensure that the data resulting from the EVM 

system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management team is 

using earned value data for decision-making 

purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of U.S. Department of Agriculture (Farm Service Agency) data. 

 Information Technology 
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

MIDAS fully met 6 of the 11 key practices for implementing EVM and 

partially met 5 practices. Specifically, a key weakness in the EVM system 

is the lack of a comprehensive integrated baseline review. Instead, MIDAS 

focused solely on evaluating the program’s compliance with industry 

standards and chose not to validate the quality of the baseline. Program 

officials stated that they plan to conduct a full review to address the risks 

and realism of the baseline after the prime contract has been awarded. 

Furthermore, while the MIDAS schedule is generally sound, resources 

were not assigned to all activities, and the critical path (the longest 

duration path through the sequenced list of key activities) could not be 

identified because the current schedule ends in September 2009. Finally, 

MIDAS met all key practices associated with data reliability, such as 

executing the work plan and recording costs, as well as all key practices 

for decision making. 

EV Performance Details

Based on performance data from June 

2008 to May 2009, MIDAS generally met 

its planned cost targets. However, at the 

same time the program consistently has

had negative schedule variances, 

indicating that work is slightly behind 

schedule. Reasons for this slippage 

include work being accomplished less

efficiently than planned, with some 

activities, such as the acquisition of a

project management information system, 

being delayed. We concur with the 

program’s estimate that it will meet its

current budget at completion—worth 

approximately $7.0 million—for program 

initiation activities.

Program percent complete: 94%

Estimates at completion: 

• Program: $6.9 million

• GAO: $6.9 million

Figure 1: GAO EV Data Analysis of Agriculture’s MIDAS Program 

Cumulative schedule variance

Cumulative cost variance

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of U.S. Department of Agriculture (Farm Service Agency) data.

2008

Year

2009

Page 34 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Decennial Response 

Integration System 

The Decennial Response Integration System (DRIS) is to be used during 

the 2010 Census for collecting and integrating census responses from all 

sources, including forms and telephone interviews. The system is to 

improve accuracy and timeliness by standardizing the response data and 

providing the data to other Census Bureau systems for analysis and 

processing. Among other things, DRIS is expected to process census data 

provided by respondents via census forms, telephone agents, and 

enumerators; assist the public via telephone; and monitor the quality and 

status of data capture operations. The DRIS program’s estimated life-cycle 

costs have increased by $372 million, which is mostly due to increases in 

both paper and telephone workloads. For example, the paper workload 

increased due to an April 2008 redesign of the 2010 Census that reverted 

planned automated operations to paper-based processes and requires 

DRIS to process an additional estimated 40 million paper forms. 

Investment Details

Department of Commerce 

(Census Bureau)

Program start date: March 2006

Total life-cycle cost:

• Current: $946 million

• Original: $574 million

Program end date: 

• Current: September 2013

• Original: September 2013

Rebaselines: 0

Major contractor: Lockheed Martin Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Commerce (Census Bureau) data.

Table 9: GAO EVM Practice Assessment of Commerce’s DRIS Program 

Program management area of 

responsibility Key practice GAO assessment

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ●

Estimate the labor and material required to perform the work and 

authorize the budgets, including management reserve ●

Determine objective measure of earned value ●

Develop the performance measurement baseline ●

Ensure that the data resulting from the EVM 

system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management team is 

using earned value data for decision-making 

purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Commerce (Census Bureau) data. 

Page 35 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

DRIS fully implemented all 11 of the key EVM practices necessary to 

manage its system acquisition program. Specifically, the program 

implemented all practices for establishing a comprehensive EVM system, 

such as defining the scope of work and scheduling the work. The 

program’s schedule appropriately captured and sequenced key activities 

and assigned realistic resources to all key activities. Furthermore, the 

DRIS team ensured that the resulting EVM data were appropriately 

verified and validated for reliability by analyzing performance data to 

identify the magnitude and effect of problems causing key variances, 

tracking related risks in the program’s risks register, and performing 

quality checks of the schedule and critical path. Lastly, the DRIS program 

management team conducted rigorous reviews of EV performance on a 

monthly basis and took the appropriate management actions to mitigate 

risks. 

EV Performance Details

Based on performance data from June 

2008 to May 2009, the DRIS contractor 

has outperformed its planned cost targets

by $13.6 million. For this same period, it 

has also outperformed its schedule 

targets by completing $2.3 million worth 

of work ahead of schedule. We concur 

with the contractor’s estimate that it will 

underrun its current budget—worth 

approximately $468.6 million—by $7.0 

million.

Contract percent complete: 50%

Estimates at completion:

• Contractor: $461.7 million

• GAO: $461.7 million

Note: The DRIS contractor did not report 

EV data in November 2008.

Figure 2: GAO EV Data Analysis of Commerce’s DRIS Program 

Cumulative schedule variance

Cumulative cost variance

-2

0

2

4

6

8

10

12

14

16

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Commerce (Census Bureau) data.

2008

Year

2009

Page 36 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

The Field Data Collection Automation (FDCA) program is intended to 

provide automation support for the 2010 Census field data collection 

operations. The program includes the development of handheld computers 

for identifying and correcting addresses for all known living quarters in the 

United States (known as address canvassing) and the systems, equipment, 

and infrastructure that field staff will use to collect data. FDCA handheld 

computers were originally to be used for other census field operations, 

such as following up with nonrespondents through personal interviews. 

However, in April 2008, due to problems identified during testing and cost 

overruns and schedule slippages in the FDCA program, the Secretary of 

Commerce announced a redesign of the 2010 Census, and rebaselined 

FDCA in October 2008. As a result, FDCA’s life-cycle costs have increased 

from an estimated $596 million to $801 million, a $205 million increase. 

Furthermore, the responsibility for the design, development, and testing of 

IT systems for other key field operations was moved from the FDCA 

contractor to the Census Bureau. 

Field Data Collection 

Automation 

Investment Details

Department of Commerce 

(Census Bureau)

Program start date: March 2006

Total life-cycle cost: 

• Current: $801.1 million

• Original: $595.7 million

Program end date: 

• Current: December 2011

• Original: December 2011

Rebaselines: 1 (October 2008)

Major contractor: Harris Corporation

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Commerce (Census Bureau) data.

Table 10: GAO EVM Practice Assessment of Commerce’s FDCA Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work and 

authorize the budgets, including management reserve ●

Determine objective measure of earned value ●

Develop the performance measurement baseline ●

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ◐

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ◐

Forecast estimates at completion ◐

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

◐

Update the performance measurement baseline as changes occur ●

Source: GAO analysis of Department of Commerce (Census Bureau) data. 

Page 37 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

FDCA fully met 6 of the 11 key practices for implementing EVM and 

partially met 5 others. Specifically, the program fully met most practices 

for establishing a comprehensive EVM system, such as defining the scope 

of the work effort; however, it only partially met the practice for 

scheduling the work. Specifically, the program schedule contained 

weaknesses, including key milestones with fixed completion dates—which 

hampers the program’s ability to see the impact of delays experienced on 

open tasks on successor tasks. As such, the FDCA program cannot use the 

schedule as an active management tool. Furthermore, anomalies in the 

prime contractor’s EVM reports, combined with weaknesses in the master 

schedule, affect FDCA’s ability to execute the work plan, analyze 

variances, and make reliable estimates of cost at completion. Lastly, cost 

and schedule drivers identified in EVM reports were not fully consistent 

with the program’s risk register, which prevents the program from taking 

the appropriate management action to mitigate risks and effectively using 

EV data for decisions. 

EV Performance Details

Due to contractor performance issues, the 

FDCA program established a new 

program baseline in October 2008. Based 

on performance data from October 2008

to May 2009, the contractor has currently 

exceeded its revised cost target by $3.5 

million. We estimate that the FDCA 

contract will overrun its current 

budget—worth approximately $555.6 

million—by $4.6 million. Our analysis

indicates that the rebaselined contract is

currently on schedule.

Contract percent complete: 75%

Estimates at completion:

• Contractor: $558.5 million

• GAO: $560.2 million

Note: EV data between June 2008 and 

September 2008 did not reflect actual 

program performance because the 

program was rebaselining; therefore, 

these data have been omitted.

Figure 3: GAO EV Data Analysis of Commerce’s FDCA Program 

Cumulative schedule variance

Cumulative cost variance

-6

-4

-2

0

2

4

6

8

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Commerce (Census Bureau) data.

2008

Year

2009

Page 38 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Air and Space 

Operations Center—

Weapon System 

The Air and Space Operations Center—Weapon System (AOC) is the air 

and space operations planning, execution, and assessment system for the 

Joint Force Air Component Commander. According to the agency, there 

are currently 11 AOCs located around the world, each aligned to the 

Combatant Commands of the Unified Command Plan, with additional 

support units for training, help desk, testing, and contingency manpower 

augmentation. Each AOC is designed to enable commanders to exercise 

command and control of air, space, information operations, and combat 

support forces to achieve the objectives of the joint force commander and 

combatant commander in joint and coalition military operations. As such, 

the AOC system is intended as the planning and execution engine of any 

air campaign. 

Investment Details

Department of Defense

(Department of the Air Force)

Program start date: September 2000

Total life-cycle cost: 

• Current: $4.425 billion 

• Original: $4.425 billion

Program end date: 

• Current: September 2023

• Original: September 2023

Rebaselines: 0

Major contractor: Lockheed Martin

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Defense (Department of the Air Force) data.

Table 11: GAO EVM Practice Assessment of Defense’s AOC Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ◐

Develop the performance measurement baseline ◐

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ◐

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Defense (Department of the Air Force) data. 

Page 39 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

AOC fully met 7 of the 11 key practices and partially met 4 others. AOC 

applied EVM at the contract level and has a capable government team that 

has made it an integral part of project management. AOC performed 

detailed analyses of the EV data and reviews the data with engineering 

staff to ensure that the appropriate metrics have been applied for accurate 

reporting. AOC has also integrated EVM with its risk management 

processes to ensure that resources are applied to watch or mitigate risks 

associated with the cost and schedule drivers reported in the EVM reports. 

Weaknesses found in AOC’s EVM processes relate to the development and 

validation of the contractor baseline. In particular, AOC has not performed 

an integrated baseline review for all work that is currently on contract. 

The master schedule also contained issues, such as a high number of 

converging tasks and out-of-sequence tasks, that hamper AOC’s ability to 

determine the start dates of future tasks. Taken together, these issues 

undermine the reliability of the schedule as a baseline to measure EV 

performance. 

Information Technology

Figure 4: GAO EV Data Analysis of Defense’s AOC Program EV Performance Details

As of April 2009, the AOC contractor has

overrun its planned cost targets by $58,000. 

However, for this same period, it has

completed $422,000 worth of work ahead of 

schedule. Based on the performance data

from May 2008 to April 2009, we concur 

with the contractor’s estimate that it will 

overrun its current budget—worth 

approximately $171.3 million—by $793,000. 

Contract percent complete: 86%

Estimates at completion:

• Contractor: $172.1 million

• GAO: $172.1 million

Page 40 GAO-10-2 
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Joint Tactical Radio 

System—Handheld, 

Manpack, Small Form 

Fit 

The Joint Tactical Radio System (JTRS) program is developing softwaredefined radios that are expected to interoperate with existing radios and 

increase communications and networking capabilities. The JTRSHandheld, Manpack, Small Form Fit (HMS) product office, within the 

JTRS Ground Domain program office, is developing handheld, manpack, 

and small form fit radios. In 2006, the program was restructured to include 

two concurrent phases of development. Phase I includes select small form 

fit radios, while Phase II includes small form fit radios with enhanced 

security as well as handheld and manpack variants. Subsequent to the 

program’s restructure, the department updated its migration strategy for 

replacing legacy radios with new tactical radios. As such, the total planned 

quantity of JTRS-HMS radios was reduced from an original baseline of 

328,514—established in May 2004—to 95,551. As a result, the total lifecycle cost of the JTRS-HMS program was reduced from an estimated $19.2 

billion to $11.6 billion, a $7.6 billion decrease. 

Investment Details

Department of Defense

(Joint—Department of the Navy Lead)

Program start date: April 2004

Total life-cycle cost:

• Current: $11.559 billion

• Original: $19.214 billion

Program end date:

• Current: 2048

• Original: 2045

Rebaselines: 1 (June 2006)

Major contractor: General Dynamics C4 

Systems

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Defense (Joint—Department of the Navy Lead) data.

Table 12: GAO EVM Practice Assessment of Defense’s JTRS-HMS Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work and 

authorize the budgets, including management reserve ●

Determine objective measure of earned value ●

Develop the performance measurement baseline ●

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes occur ●

Source: GAO analysis of Department of Defense (Joint—Department of the Navy Lead) data. 

Page 41 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

JTRS-HMS fully met 10 of the 11 key practices and partially met 1 practice. 

Specifically, JTRS-HMS implemented most practices for establishing a 

comprehensive EVM system, such as performing rigorous reviews to 

validate the baseline; however, the current schedule contained some 

weaknesses, such as out-of-sequence logic and activities without 

resources assigned. Program officials were aware of these issues and 

attributed them to weaknesses in subcontractor schedules that are 

integrated on a monthly basis. The JTRS-HMS program fully met practices 

for ensuring that the resulting EV data were appropriately verified and 

validated for reliability and demonstrated that the program management 

team was using these data for decision-making purposes. 

EV Performance Details

Based on performance data from June 2008

to May 2009, the JTRS-HMS contractor has

experienced negative cost and schedule 

variances. Specifically, as of May 2009, the 

contractor has exceeded its planned cost 

target by $62.4 million. We estimate that the 

JTRS-HMS contract will overrun its current 

budget—worth approximately $530.8

million—by $89.1 million. Furthermore, as of 

May 2009, JTRS-HMS has not completed 

$8.8 million in planned work. Both cost and 

schedule variances are primarily due to 

radio hardware development, including 

design issues related to hardware 

miniaturization.

Contract percent complete: 74%

Estimates at completion:

• Contractor: $600.9 million

• GAO: $619.9 million

Figure 5: GAO EV Data Analysis of Defense’s JTRS-HMS Program 

Cumulative schedule variance

Cumulative cost variance

-70

-60

-50

-40

-30

-20

-10

0

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Defense (Joint—Department of the Navy Lead) data.

2008

Year

2009

Page 42 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Warfighter 

Information 

Network—Tactical 

The Warfighter Information Network—Tactical (WIN-T) program is 

designed to be the Army’s high-speed and high-capacity backbone 

communications network. The program connects Department of the Army 

units with higher levels of command and provides the Army’s tactical 

portion of the Global Information Grid—a Department of Defense 

initiative aimed at building a secure network and set of information 

capabilities modeled after the Internet. WIN-T was restructured in June 

2007 following a unit cost increase above the critical cost growth 

threshold (known as a Nunn-McCurdy breach). As a result of the 

restructuring, it was determined that WIN-T would be fielded in four 

increments. The third increment is expected to provide the Army with a 

full networking on-the-move capability and fully support the Army’s 

Future Combat Systems. In May 2009, the Increment 3 program baseline 

was approved, and the life-cycle cost for the program was estimated at 

$38.2 billion. Our assessment of EVM practices and EV data was 

performed on WIN-T Increment 3. 

Investment Details

Department of Defense

(Department of the Army)

Program start date: July 2003

Total life-cycle cost: 

• Current: $38.157 billion

• Original: $38.157 billion

Program end date: 

• Current: 2025 

• Original: 2025

Rebaselines: 1 (June 2007)

Major contractor: General Dynamics C4 

Systems

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Defense (Department of the Army) data.

Table 13: GAO EVM Practice Assessment of Defense’s WIN-T Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ◌

Develop the performance measurement baseline ◌

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

◌

Source: GAO analysis of Department of Defense (Department of the Army) data. 

Page 43 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

WIN-T fully met 7 of the 11 key practices for implementing EVM, partially 

met 1 practice, and did not meet 3 practices. Specifically, WIN-T only 

partially met the practices for establishing a comprehensive EVM system. 

The schedule contained weaknesses, including fixed completion dates—

which prevented the schedule from showing the impact of delays 

experienced on open or successor tasks or the expected completion dates 

of key activities. Furthermore, WIN-T has not conducted an integrated 

baseline review on the current scope of work since rebaselining the prime 

contract in December 2007. According to program officials, this review has 

not been conducted because they have not yet finalized the contract. 

However, as of August 2009, it has been 20 months since work began, 

which increases the risk that the program has not been measuring 

progress against a reasonable baseline. Without conducting this review to 

validate the performance baseline, the baseline cannot be adequately 

updated as changes occur, and EV data cannot be used effectively for 

decision-making purposes. 

EV Performance Details

Based on contractor performance data from 

June 2008 to May 2009, the WIN-T contract 

has outperformed its planned cost targets

by $880,000. However, for the same period, 

it has not completed $12.0 million in 

planned work. These schedule variances

are due, in part, to issues found during initial 

testing that were addressed in subsequent 

software releases, resulting in planned 

software development work being delayed 

to future releases. Based on these data, we 

estimate that the WIN-T contract will 

overrun its current budget—worth 

approximately $747.0 million—by $15.1 

million. 

Contract percent complete: 34%

Estimates at completion:

• Contractor: $743.3 million

• GAO: $762.1 million

Figure 6: GAO EV Data Analysis of Defense’s WIN-T Program 

Cumulative schedule variance

Cumulative cost variance

-15

-12

-9

-6

-3

0

3

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Defense (Department of the Army) data.

2008

Year

2009

Page 44 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Automated 

Commercial 

Environment 

The Automated Commercial Environment (ACE) program is the 

commercial trade processing system being developed by the U.S. Customs 

and Border Protection to facilitate trade while strengthening border 

security. The program is to provide trade compliance and border security 

staff with the right information at the right time, while minimizing 

administrative burden. Deployed in phases, ACE is expected to be 

expanded to provide cargo processing capabilities across all modes of 

transportation and intended to replace existing systems with a single, 

multimodal manifest system for land, air, rail, and sea cargo. Ultimately, 

ACE is expected to become the central data collection system for the 

federal agencies that, by law, require international trade data, and should 

deliver these capabilities in a secure, paper-free, Web-enabled 

environment. As a result of poorly managed requirements, the total lifecycle development cost of the ACE program increased from an estimated 

$1.5 billion to $2.2 billion—a $700 million increase. 

Investment Details

Department of Homeland Security

(U.S. Customs and Border Protection)

Program start date: 2001

Total life-cycle development cost: 

• Current: $2.2 billion

• Original: $1.5 billion 

Program end date: 

• Current: 2016

• Original: 2016

Rebaselines: 0

Major contractor: IBM

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Homeland Security (U.S. Customs and Border Protection) data.

Table 14: GAO EVM Practice Assessment of Homeland Security’s ACE Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ●

Develop the performance measurement baseline ●

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ◐

Analyze EVM performance data and record variances from 

the performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Homeland Security (U.S. Customs and Border Protection) data. 

Page 45 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Page 46 GAO-10-2 Information Technology 

ACE fully met 9 of the 11 key practices for implementing EVM and 

partially met the remaining 2 practices. Specifically, ACE fully met 5 of 6 

practices for establishing a comprehensive EVM system, such as defining 

the scope of the work effort and developing the performance baseline, but 

partially met the practice for scheduling the work, in part, because 

resources were not assigned to all activities in the master schedule. ACE 

fully met 2 practices for ensuring that the data resulting from the EVM 

system were reliable, such as adequately analyzing EV performance data, 

but could not fully execute the work plan because of the weaknesses 

found in the schedule. Lastly, ACE demonstrated that the program 

management team was basing decisions on EVM data. 

It should be noted that the ACE program is being defined incrementally—

whereby the performance baseline is continuously updated as task orders 

for new work are issued. As such, the use of EVM to determine the true 

progress made and to project reliable final costs at completion is limited. 

Figure 7: GAO EV Data Analysis of Homeland Security’s ACE Program EV Performance Details

Based on contractor performance data from 

June 2008 to May 2009, the ACE program 

has experienced negative cost and 

schedule variances. Specifically, as of May 

2009, the program has exceeded its 

planned cost target by $19.0 million. These 

variances are due, in part, to additional 

development and testing work needed to 

meet program milestones. We estimate that 

the program will overrun its current 

budget—approximately $382.3 million—by 

$24.1 million.

Contract percent complete: 83%

Estimates at completion:

• Contractor: $381.8 million

• GAO: $406.4 million

Cumulative schedule variance

Cumulative cost variance

-20

-18

-16

-14

-12

-10

-8

-6

-4

-2

0

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Homeland Security (U.S. Customs and Border Protection) data.

2008

Year

2009
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Integrated Deepwater 

System—Common 

Operational Picture 

The Integrated Deepwater System is a 25-year, $24 billion major 

acquisition program to recapitalize the U.S. Coast Guard’s aging fleet of 

boats, airplanes, and helicopters, ensuring that all work together through a 

modern, capable communications system. This initiative is designed to 

enhance maritime domain awareness and enable the Coast Guard to meet 

its post-September 11 mission requirements. The program is composed of 

15 major acquisition projects, including the Common Operational Picture 

(COP) program. 

Investment Details

Department of Homeland Security

(U.S. Coast Guard)

Program start date: August 2002

Total life-cycle development cost:

• Current: $1.4 billion

• Original: $1.4 billion

Program end date: 

• Current: 2014

• Original: 2014

Rebaselines: 1 (July 2007)

Major contractors: Lockheed Martin and 

Northrop Grumman

Deepwater COP is to provide relevant, real-time operational intelligence 

and surveillance data to human capital managers, allowing them to direct 

and monitor all assigned forces and first responders. This is expected to 

allow commanders to distribute critical information to federal, state, and 

local agencies quickly; reduce duplication; enable earlier alerting; and 

enhance maritime awareness. 

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Homeland Security (U.S. Coast Guard) data.

Table 15: GAO EVM Practice Assessment of Homeland Security’s Deepwater COP Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ●

Develop the performance measurement baseline ●

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ◐

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ◐

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

◐

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Homeland Security (U.S. Coast Guard) data. 

Page 47 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Deepwater COP fully met 7 of the 11 key practices and partially met 4 

others. Specifically, COP fully met 5 of the 6 practices for establishing a 

comprehensive EVM system, such as adequately defining all major 

elements of the work breakdown structure and developing the 

performance baseline. However, the program’s master schedule contained 

weaknesses, such as a large number of concurrent tasks and activities 

without resources assigned. Officials were aware of some, but not all, of 

the weaknesses in the schedule and had controls in place to mitigate the 

weakness they were aware of in order to improve the reliability of the 

resulting EV data. Lastly, COP was unable to fully meet 1 of the practices 

for using EV data for management decisions because it could not 

demonstrate that cost and schedule drivers impacting EV performance 

were linked to its risk management processes. 

EV Performance Details

Based on performance data from June 2008

to May 2009, the Deepwater COP 

contractor has experienced negative cost 

and schedule variances. Specifically, as of 

May 2009, the contractor has exceeded its

planned cost target by $4.2 million. These 

cost variances are due, in part, to design 

and development tasks requiring more work 

than originally planned. We estimate that 

the contract will overrun its current 

budget—worth approximately $130.2 

million—by $4.2 million. Our analysis

indicates that the contract is currently on 

schedule.

Contract percent complete: 99%

Estimates at completion:

• Contractor: $134.3 million

• GAO: $134.3 million

Figure 8: GAO EV Data Analysis of Homeland Security’s Deepwater COP Program 

Cumulative schedule variance

Cumulative cost variance

-5

-4

-3

-2

-1

0

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Homeland Security (U.S. Coast Guard) data.

2008

Year

2009

Page 48 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Western Hemisphere 

Travel Initiative 

The Western Hemisphere Travel Initiative (WHTI) program made 

modifications to vehicle processing lanes at ports of entry on the nation’s 

northern and southern borders. WHTI is designed to allow U.S. Customs 

and Border Protection to effectively address new requirements imposed 

by the Intelligence Reform and Terrorism Prevention Act of 2004 

(completing these requirements by June 1, 2009). WHTI development was 

completed and its implementation addressed the 39 highest volume ports 

of entry, which support 95 percent of land border traffic. The initiative 

requires travelers to present a passport or other authorized travel 

document that denotes identity and citizenship when entering the United 

States. 

Investment Details

Department of Homeland Security

(U.S. Customs and Border Protection)

Program start date: January 2007

Total life-cycle cost:

• Current: $1.2 billion

• Original: $1.2 billion

Program end date: June 1, 2009

Rebaselines: 1 (March 2008)

Major contractor: Unisys

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Homeland Security (U.S. Customs and Border Protection) data.

Table 16: GAO EVM Practice Assessment of Homeland Security’s WHTI Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ◐

Develop the performance measurement baseline ◐

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ◐

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

◐

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Homeland Security (U.S. Customs and Border Protection) data. 

Page 49 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

WHTI fully met 6 of the 11 key practices for implementing EVM and 

partially met the remaining 5 practices. Specifically, weaknesses identified 

in validating the performance baseline and scheduling the work limited the 

program’s ability to establish a comprehensive EVM system. Although the 

program held an integrated baseline review to validate the baseline in 

March 2008, the review did not cover many key aspects, such as 

identifying corrective actions needed to mitigate program risks. 

Furthermore, the master schedule contained deficiencies, such as 

activities that were out of sequence or lacking dependencies. While 

program officials described their use of processes for ensuring the 

reliability of the EVM system’s data, such as capturing significant cost and 

schedule drivers in the risk register, the provided documentation did not 

corroborate what we were told. When combined, these weaknesses 

preclude the program from effectively making decisions about the 

program based on EV data. 

EV Performance Details

Based on performance data from June 2008

to May 2009, the WHTI contractor 

experienced schedule variances. However, 

as of June 2009, program officials stated 

that the WHTI contract was successfully 

completed on time. The contractor did not 

report any cost variances because it was a

firm-fixed-price contract. Additionally, 

program officials stated that the contract 

was completed on budget.

Contract percent complete: 100%

Figure 9: GAO EV Data Analysis of Homeland Security’s WHTI Program 

-16

-14

-12

-10

-8

-6

-4

-2

0

2

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Homeland Security (U.S. Customs and Border Protection) data.

2008

Year

2009

Cumulative schedule variance

Cumulative cost variance

Page 50 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Next Generation 

Identification 

The Next Generation Identification (NGI) program is designed to support 

the Federal Bureau of Investigation’s mission to reduce terrorist and 

criminal activities by providing timely, relevant criminal justice 

information to the law enforcement community. Today, the bureau 

operates and maintains one of the largest repositories of biometricsupported criminal history records in the world. The electronic 

identification and criminal history services support more than 82,000 

criminal justice agencies, authorized civil agencies, and international 

organizations. NGI is intended to ensure that the bureau’s biometric 

systems are able to seamlessly share data that are complete, accurate, 

current, and timely. To accomplish this, the current system will be 

replaced or upgraded with new functionalities and state-of-the-art 

equipment. NGI is expected to be scaleable to accommodate five times the 

current workload volume with no increase in support manpower and will 

be flexible to respond to changing requirements. 

Investment Details

Department of Justice

(Federal Bureau of Investigation)

Program start date: February 2008

Total life-cycle cost:

• Current: $1.076 billion

• Original: $1.076 billion

Program end date: 

• Current: June 2018

• Original: April 2018

Rebaselines: 0

Major contractor: Lockheed Martin

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Justice (Federal Bureau of Investigation) data.

Table 17: GAO EVM Practice Assessment of Justice’s NGI Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ●

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ●

Develop the performance measurement baseline ●

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Justice (Federal Bureau of Investigation) data. 

Page 51 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

NGI fully implemented all 11 key EVM practices. Specifically, the program 

implemented all practices for establishing a comprehensive EVM system, 

such as defining the scope of work and scheduling the work. For example, 

the schedule properly captured key activities, established reasonable 

durations, and established a sound critical path, all of which contribute to 

establishing a reliable baseline that performance can be measured against. 

Furthermore, the NGI team ensured that the resulting EV data were 

appropriately verified and validated for reliability by, for example, 

integrating the analysis of cost and schedule variances with the program’s 

risk register to mitigate emerging and existing risks associated with key 

drivers causing major variances. In addition, the program’s risk register 

includes cost and schedule impacts for every risk and links to the 

management reserve process. Lastly, NGI demonstrated that it is using EV 

data to make decisions by performing continuous quality checks of the 

schedule, reviewing open risks and opportunities, and reviewing EV data 

in weekly management reports. 

EV Performance Details

Based on contractor performance data from 

October 2008 to April 2009, NGI 

experienced negative cost and schedule 

variances. Specifically, as of April 2009, the 

contractor has exceeded its planned cost 

targets by $1.4 million. Furthermore, as of 

April 2009, the contractor has not completed 

$0.5 million in planned work. These 

variances were due, in part, to the need for 

additional testing resources. We estimate 

that the NGI contract will overrun its current 

budget—worth approximately $37.5 

million—by $1.6 million.

Contract percent complete: 91%

Estimates at completion:

• Contractor: $39.0 million

• GAO: $39.1 million

Note: NGI established its EV reporting 

baseline in October 2008. 

Figure 10: GAO EV Data Analysis of Justice’s NGI Program 

Cumulative schedule variance

Cumulative cost variance

-2

-1

0

1

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Justice (Federal Bureau of Investigation) data.

2008

Year

2009

Page 52 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

James Webb Space 

Telescope 

The James Webb Space Telescope (JWST) is designed to be the scientific 

successor to the Hubble Space Telescope and expected to be the premier 

observatory of the next decade. It is intended to seek to study and answer 

fundamental astrophysical questions, ranging from the formation and 

structure of the Universe to the origin of planetary systems and the origins 

of life. The telescope is an international collaboration of the National 

Aeronautics and Space Administration (NASA), the Canadian Space 

Agency, and the European Space Agency. JWST required the development 

of several new technologies, including a folding segmented primary mirror 

that will unfold after launch and a cryocooler for cooling midinfrared 

detectors to 7 degrees Kelvin. 

Investment Details

National Aeronautics and Space 

Administration

Project start date: March 1999

Total life-cycle cost: 

• Current: $4.964 billion 

• Original: $4.964 billion

Project end date: 

• Current: December 2021

• Original: December 2021

Rebaselines: 0

Major contractor: Northrop Grumman

Operations and

maintenance

Initiation Development

Source: GAO analysis of National Aeronautics and Space Administration data.

Table 18: GAO EVM Practice Assessment of NASA’s JWST Project 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ◐

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ◐

Develop the performance measurement baseline ◐

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ◐

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

◐

Update the performance measurement baseline as changes 

occur 

◐

Source: GAO analysis of National Aeronautics and Space Administration data. 

Page 53 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

JWST fully met 4 of the 11 key practices and partially met 7 practices. The 

project only partially met practices for establishing a comprehensive EVM 

system because of weaknesses in the work breakdown structure, in which 

the prime contractor has not fully defined the scope of each work element. 

In addition, the project only partially met the practice for scheduling work 

because of weaknesses resulting from manual integration of 

approximately 30 schedules, although officials did explain some 

mitigations for this risk. We also found deficiencies in the lower-level 

schedules, such as missing linkages between tasks, resources not being 

assigned, and excessively high durations. Furthermore, JWST only 

partially implemented practices to ensure that the data resulting from the 

EVM system are reliable, due, in part, to variance analysis reports being 

done quarterly (instead of monthly), which limits the project’s ability to 

analyze and respond to cost and schedule variances in a timely manner. 

When combined, these weaknesses preclude the program from effectively 

making decisions about the program based on EV data. 

EV Performance Details

EVM for the JWST project is being 

performed by the prime contractor and its

major subcontractors. The scope of this

work includes designing and developing the 

telescope, the spacecraft, and the 

sunshield; integrating and testing the 

observatory; and supporting launch 

operations.

Based on contractor performance data from 

June 2008 to May 2009, the JWST project 

has experienced negative cost and 

schedule variances. Specifically, as of May 

2009, the contractor has exceeded its

planned cost target by $224.7 million. A key 

driver in this cost overrun was

greater-than-expected complexity in the 

work, which required additional resources. 

We concur with the contractor estimate that 

it will overrun its budget—worth 

approximately $1.3 billion—by $448.5 

million. Furthermore, as of May 2009, the 

project has not completed $9.4 million in 

planned work.

Contract percent complete: 64%

Estimates at completion:

• Contractor: $1.7 billion

• GAO: $1.7 billion

Note: The project suspended earned value 

reporting during November 2008 while 

undergoing a replan.

Figure 11: GAO EV Data Analysis of NASA’s JWST Project 

Cumulative schedule variance

Cumulative cost variance

-225

-200

-175

-150

-125

-100

-75

-50

-25

0

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of National Aeronautics and Space Administration data.

2008

Year

2009

Page 54 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Juno Juno is part of the New Frontiers Program. The overarching scientific goal 

of the Juno mission is to improve our understanding of the origin and 

evolution of Jupiter. As the archetype of giant planets, Jupiter may provide 

knowledge that will improve our understanding of both the origin of our 

solar system and the planetary systems being discovered around other 

stars. The Juno project is expected to use a solar-powered spacecraft to 

make global maps of the gravity, magnetic fields, and atmospheric 

composition of Jupiter. The spacecraft is to make 33 orbits of Jupiter to 

sample the planet’s full range of latitudes and longitudes. 

Investment Details

National Aeronautics and Space 

Administration

Project start date: June 2005

Total life-cycle cost: 

• Current: $1.05 billion

• Original: $1.05 billion

Project end date: 

• Current: October 2018

• Original: October 2018

Rebaselines: 0

Major contractor: Lockheed Martin

Operations and

maintenance

Initiation Development

Source: GAO analysis of National Aeronautics and Space Administration data.

Table 19: GAO EVM Practice Assessment of NASA’s Juno Project 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ◐

Develop the performance measurement baseline ◐

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from 

the performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of National Aeronautics and Space Administration data. 

Page 55 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Juno fully met 8 of the 11 key practices for implementing EVM and 

partially met 3 practices. Specifically, the project fully met 3 practices for 

establishing a comprehensive EVM system, but only partially met the 

practices for scheduling the work, determining the objective measure of 

earned value, and establishing the performance baseline. Juno was unable 

to fully meet these practices because the project’s master schedule 

contained issues with the sequencing of work activities and lacked a 

comprehensive integrated baseline review. Although an integrated 

baseline review was conducted for a major contract in February 2009, the 

program did not validate the baseline, scope of work to be performed, or 

key risks and mitigation plans for the Juno project as a whole, which 

increases the risk that the project is measuring performance against an 

unreasonable baseline. Juno fully implemented all 3 practices associated 

with data reliability and the 2 practices associated with using EV data for 

decision-making purposes. 

EV Performance Details

Based on performance data from December 

2008 to May 2009, the Juno project has

experienced negative cost and schedule 

variances. Specifically, as of May 2009, the 

project has exceeded its cost target by 

$13.2 million. Based on these data, we 

estimate that the Juno project will overrun 

its current budget—worth approximately 

$369.0 million—by $49.8 million. 

Furthermore, as of May 2009, the project 

has not completed $12.3 million in planned 

work.

Project percent complete: 32%

Estimates at completion:

• Project: $375.5 million

• GAO: $418.8 million

Note: Juno established its EV reporting 

baseline in December 2008.

Figure 12: GAO EV Data Analysis of NASA’s Juno Project 

Cumulative schedule variance

Cumulative cost variance

-14

-12

-10

-8

-6

-4

-2

0

2

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of National Aeronautics and Space Administration data.

2008

Year

2009

Page 56 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

Mars Science 

Laboratory 

The Mars Science Laboratory (MSL) is part of the Mars Exploration 

Program. The program seeks to understand whether Mars was, is, or can 

be a habitable world. To answer this question, the MSL project is expected 

to investigate how geologic, climatic, and other processes have worked to 

shape Mars and its environment over time, as well as how they interact 

today. To accomplish this, the MSL project plans to place a mobile science 

laboratory on the surface of Mars to quantitatively assess a local site as a 

potential habitat for life, past or present. The project is considered one of 

NASA’s flagship projects and designed to be the most advanced rover ever 

sent to explore the surface of Mars. Due to technical issues identified 

during the development of key components, the MSL launch date has 

recently slipped 2 years—from September 2009 to October 2011, and the 

project’s life-cycle cost estimate has increased from about $1.63 billion to 

$2.29 billion, a $652 million increase. 

Investment Details

National Aeronautics and Space 

Administration

Project start date: November 2003

Total life-cycle cost: 

• Current: $2.286 billion 

• Original: $1.634 billion

Project end date: 

• Current: September 2015

• Original: September 2013

Rebaselines: 1 (March 2009) 

Major contractor: None—in-house 

development

Operations and

maintenance

Initiation Development

Source: GAO analysis of National Aeronautics and Space Administration data.

Table 20: GAO EVM Practice Assessment of NASA’s MSL Project 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ◐

Develop the performance measurement baseline ◐

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ◐

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

◐

Update the performance measurement baseline as changes 

occur 

◐

Source: GAO analysis of National Aeronautics and Space Administration data. 

Page 57 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

MSL fully met 5 of the 11 key practices and partially met 6 others. 

Specifically, MSL fully met 3 practices for establishing a comprehensive 

EVM system, but only partially met 3 others because of weaknesses in the 

sequencing of all activities in the schedule and the lack of an integrated 

baseline review to validate the baseline and assess the achievability of the 

plan. While the project has taken steps to mitigate the latter weakness by 

requiring work agreements that document, among other things, the 

objective value of work and related risks for planned work packages, this 

is not a comprehensive review of the project’s baseline. Furthermore, MSL 

only partially implemented practices associated with data reliability 

because its analysis of cost and schedule variances did not include the 

root causes for variances and corrective actions, which prevents the 

project from tracking and mitigating related risks. Lastly, without an initial 

validation of the performance baseline, the baseline cannot be 

appropriately updated to reflect program changes, thereby limiting the use 

of EV data for management decisions. 

EV Performance Details

Due to significant cost and schedule 

overruns, the MSL project recently 

completed a project replan between 

November 2008 and February 2009. 

Specifically, as of October 2008, MSL had 

exceeded its cost targets by $189.8 million 

and had not completed $24.1 million in 

planned work, due primarily to technical 

issues experienced in the development of 

rover’s mechanical gears and avionics

components. As a result of the replan, the 

project’s launch date was delayed 2 years, 

and the budget was increased from $768.7 

million to $1.223 billion. Since the replan, 

the project is meeting cost targets but, as of 

May 2009, has not completed $6.2 million in 

planned work.

Project percent complete: 77%

Estimates at completion: 

• Project: $1.227 billion

• GAO: N/A

Note: MSL suspended EVM reporting 

between November 2008 and February 

2009 while undergoing a project replan. 

Therefore, we did not have sufficient data to 

make a reliable independent estimate at 

completion. The project’s EV baseline does

not include components being provided by 

external parties, such as other NASA 

centers and the Department 

of Energy.

Figure 13: GAO EV Data Analysis of NASA’s MSL Project 

Cumulative schedule variance

Cumulative cost variance

-200

-175

-150

-125

-100

-75

-50

-25

0

25

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of National Aeronautics and Space Administration data.

2008

Year

2009

Page 58 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

En Route Automation 

Modernization 

The En Route Automation Modernization (ERAM) program is to replace 

existing software and hardware in the air traffic control automation 

computer system and its backup system, the Direct Radar Channel, and 

other associated interfaces, communications, and support infrastructure at 

en route centers across the country. This is a critical effort because ERAM 

is expected to upgrade hardware and software for facilities that control 

high-altitude air traffic. ERAM consists of two major components. One 

component has been fully deployed and is currently in operation at 

facilities across the country. The other component is scheduled for 

deployment through fiscal year 2011. 

Investment Details

Department of Transportation 

(Federal Aviation Administration)

Program start date: August 2002

Total life-cycle cost: 

• Current: $3.65 billion

• Original: $3.65 billion

Program end date: 

• Current: September 2020

• Original: September 2020

Rebaselines: 0 

Major contractor: Lockheed Martin

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Transportation (Federal Aviation Administration) data.

Table 21: GAO EVM Practice Assessment of Transportation’s ERAM Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ◐

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ◐

Develop the performance measurement baseline ◐

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ◐

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Transportation (Federal Aviation Administration) data. 

Page 59 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

ERAM fully met 7 of the 11 key practices and partially met 4 others. ERAM 

applies EVM at the contract level and incorporates EV data into its overall 

management of the program. However, ERAM did not perform a 

comprehensive review of the baseline when the contract was finalized, or 

take similar actions to validate the baseline and ensure that the appropriate 

EV metrics had been applied. While ERAM does perform limited checks of 

the contractor schedule, our analysis showed some issues with the 

sequencing of activities and the use of constraints that may undermine the 

reliability of the schedule as a baseline to measure performance. 

However, it should be noted that the EV data are not a reflection of the 

total ERAM program. The government is also responsible for acquisition 

work—to which EVM is not being applied. Our analysis of the master 

schedule showed that ERAM would be unable to meet four major 

upcoming initial operating capability milestones due to issues associated 

with government work activities. Program officials noted that these 

milestones have since been pushed out. Since EVM is not applied at the 

program level, it is unclear whether these delays will impact overall cost. 

EV Performance Details

As of April 2009, the ERAM contractor has

outperformed its planned cost targets by 

$36.9 million; for this same period, it has

also outperformed its schedule targets by 

completing $15.9 million worth of work 

ahead of schedule. This strong performance 

is attributed to significant cost savings in 

hardware production and unplanned 

efficiencies in integration and testing at 

ERAM deployment sites. This has offset 

cost overruns associated with software 

development, such as code growth; an 

unexpectedly high number of defects

delivered; and the resolution of defects at 

lower productivity rates than planned. 

Based on performance data from May 2008

to April 2009, we concur with the contractor 

estimate that it will underrun the current 

budget—worth $1.5 billion—by $15.0 million 

at completion. 

Contract percent complete: 89%

Estimates at completion:

• Contractor: $1.465 billion

• GAO: $1.465 billion

Figure 14: GAO EV Data Analysis of Transportation’s ERAM Program 

Cumulative schedule variance

Cumulative cost variance

-5

0

5

10

15

20

25

30

35

40

May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.

Dollars in millions

Source: GAO analysis of Department of Transportation (Federal Aviation Administration) data.

2008

Year

2009

Page 60 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

The Surveillance and Broadcast System (SBS) is to provide new 

surveillance solutions that employ technology using avionics and ground 

stations for improved accuracy and update rates and to provide shared 

situational awareness (including visual updates of traffic, weather, and 

flight notices) between pilots and air traffic control. These technologies 

are considered critical to achieving the Federal Aviation Administration’s 

strategic goals of decreasing the rate of accidents and incursions, 

improving the efficiency of air traffic, and reducing congestion. 

Surveillance and 

Broadcast System 

Investment Details

Department of Transportation

(Federal Aviation Administration)

Program start date: August 2007

Total life-cycle cost: 

• Current: $4.33 billion

• Original: $4.31 billion

Program end date: 

• Current: September 2035

• Original: September 2035

Rebaselines: 0 

Major contractor: ITT Corporation 

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Transportation (Federal Aviation Administration) data.

Table 22: GAO EVM Practice Assessment of Transportation’s SBS Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ●

Identify who in the organization will perform the work ●

Schedule the work ●

Estimate the labor and material required to perform the work 

and authorize the budgets, including management reserve ●

Determine objective measure of earned value ●

Develop the performance measurement baseline ●

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ●

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ●

Forecast estimates at completion ●

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

●

Update the performance measurement baseline as changes 

occur 

●

Source: GAO analysis of Department of Transportation (Federal Aviation Administration) data. 

Page 61 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

SBS fully implemented all 11 key EVM practices. Specifically, SBS has 

institutionalized EVM at the program level—meaning that it collects and 

manages performance data on the contractor and government work 

efforts—in order to get a comprehensive view into program status. As part 

of this initiative, SBS performed detailed validation reviews of the 

contractor and program baselines; issued various process rules on 

resource planning, EV metrics, and data analysis; and collected 

government timecard data in order to ensure consistent EV application. In 

addition, the program management team conducted rigorous reviews of 

EV performance with the SBS program manger and the program’s internal 

management review board on a monthly basis. Our analysis of the SBS 

master schedule showed that it was developed in accordance with 

scheduling best practices. For example, the schedule was properly 

sequenced, and the resources were assigned. Furthermore, SBS briefed 

the program manager monthly on the quality of the schedule to identify, 

for example, tasks without predecessors. 

EV Performance Details

As of May 2009, SBS outperformed its

planned cost targets by $14.7 million. 

However, for this same period, it has been 

unable to complete $24.0 million worth of 

work. The strong cost performance is

attributed to the ITT Corporation’s

overestimation of systems engineering 

resources needed to complete work and 

better-than-expected performance for 

activities associated with system safety, 

among other things. The negative schedule 

variances are due in part to delays caused 

by the resolution of radio hardware issues

found during testing.

Based on performance data from June 2008

to May 2009, we estimate that SBS will 

most likely exceed the program’s current 

budget—which is currently worth about $1 

billion—by about $21 million.

Program percent complete: 27%

Estimates at completion:

• Program: $966.3 million

• GAO: $1.015 billion

Figure 15: GAO EV Data Analysis of Transportation’s SBS Program 

Cumulative schedule variance

Cumulative cost variance

-25

-20

-15

-10

-5

0

5

10

15

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Transportation (Federal Aviation Administration) data.

2008

Year

2009

Page 62 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

The Veterans Health Information Systems and Technology Architecture—

Foundations Modernization (VistA-FM) program addresses the need to 

transition the Veterans Affairs electronic medical record system to a new 

architecture. According to the department, the current system is costly 

and difficult to maintain and does not integrate well with newer software 

packages. VistA-FM is designed to provide a new architectural framework 

as well as additional standardization and common services components. 

This is intended to eliminate redundancies in coding and support 

interoperability among applications. Ultimately, the new architecture will 

lay the foundation for a new generation of computer systems in support of 

caring for America’s veterans. During the course of our review, the 

department’s Chief Information Officer suspended multiple components of 

the VistA-FM program until a new development plan can be put in place. 

This action was taken as part of a new departmentwide initiative to 

identify troubled IT projects and improve their execution. 

Veterans Health 

Information Systems 

and Technology 

Architecture—

Foundations 

Modernization 

Investment Details

Department of Veterans Affairs

Program start date: 2006

Total life-cycle cost: 

• Current: $1.897 billion

• Original: $1.897 billion

Program end date: 

• Current: 2016

• Original: 2016

Rebaselines: 0

Major contractor: None—in-house 

development

Operations and

maintenance

Initiation Development

Source: GAO analysis of Department of Veterans Affairs data.

Table 23: GAO EVM Practice Assessment of Veterans Affairs’ VistA-FM Program 

Program management area of 

responsibility Key practice GAO assessment 

Establish a comprehensive EVM system Define the scope of effort using a work breakdown structure ◌

Identify who in the organization will perform the work ◌

Schedule the work ◌

Estimate the labor and material required to perform the work and 

authorize the budgets, including management reserve ◐

Determine objective measure of earned value ◌

Develop the performance measurement baseline ◌

Ensure that the data resulting from the 

EVM system are reliable 

Execute the work plan and record all costs ◐

Analyze EVM performance data and record variances from the 

performance measurement baseline plan ◐

Forecast estimates at completion ◐

Ensure that the program management 

team is using earned value data for 

decision-making purposes 

Take management action to mitigate risks 

◌

Update the performance measurement baseline as changes occur ◌

Source: GAO analysis of Department of Veterans Affairs data. 

Page 63 GAO-10-2 Information Technology
Appendix II: Case Studies of Selected 

Programs’ Implementation of Earned Value 

Management 

VistA-FM partially met 4 key practices and did not meet 7 others, despite 

reporting compliance with the American National Standards Institute 

(ANSI) standard in its 2010 business case submission. Specifically, the 

program is still working to establish a comprehensive EVM system to meet 

ANSI compliance, among other things. For example, the work breakdown 

structure is organized around key program milestones instead of product 

deliverables, and does not fully describe the scope of work to be 

performed. Although the program’s subprojects maintain their own 

schedules, VistA-FM does not currently have an integrated master 

schedule at the program level. This is of concern because it is not possible 

to establish the program’s critical path and the time-phased budget 

baseline, a key component of EVM. The reliability of the data is also a 

potential issue because the program’s EVM reports do not offer adequate 

detail to provide insight into data reliability issues. Additionally, the 

performance baseline has not been appropriately updated; program 

officials stated this update is in progress, but they did not have a 

completion date. 

EV Performance Details

Based on performance data from June 2008

to May 2009, VistA-FM has experienced 

continual negative cost and schedule 

variances. Specifically, as of May 2009, the 

program has exceeded its planned cost 

target by $14.9 million, and has not 

completed $24.9 million in planned work. 

Program officials cited resource availability 

and interdependencies among projects as

key drivers of cost and schedule variances. 

We estimate that the program will overrun 

its current budget—worth approximately 

$1.897 billion—by $350.2 million. 

Program percent complete: 10%

Estimates at complete: 

• Program: $1.897 billion

• GAO: $2.248 billion

Figure 16: GAO EV Data Analysis of Veterans Affairs’ VistA-FM Program 

Cumulative schedule variance

Cumulative cost variance

-28

-24

-20

-16

-12

-8

-4

0

4

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May

Dollars in millions

Source: GAO analysis of Department of Veterans Affairs data.

2008

Year

2009

Page 64 GAO-10-2 Information Technology
Appendix III: Comments from the Department Appendix III: Comments from the of Commerce 

Department of Commerce 

Page 65 GAO-10-2 Information Technology 
Appendix III: Comments from the Department 

of Commerce 

Page 66 GAO-10-2 Information Technology
Appendix IV: Comments from the Department Appendix IV: Comments from the of Defense 

Department of Defense 

Page 67 GAO-10-2 Information Technology 
Appendix IV: Comments from the Department 

of Defense 

Page 68 GAO-10-2 Information Technology
Appendix IV: Comments from the Department 

of Defense 

Page 69 GAO-10-2 Information Technology
Appendix V: Comments from the Department Appendix V: Comments from the Department of Justice 

of Justice 

Page 70 GAO-10-2 Information Technology 
Appendix V: Comments from the Department 

of Justice 

Page 71 GAO-10-2 Information Technology
Appendix VI: Comments from the National Appendix VI: Comments from the National Aeronautics and Space Administration 

Aeronautics and Space Administration 

Page 72 GAO-10-2 Information Technology 
Appendix VI: Comments from the National 

Aeronautics and Space Administration 

Page 73 GAO-10-2 Information Technology
Appendix VI: Comments from the National 

Aeronautics and Space Administration 

Page 74 GAO-10-2 Information Technology
Appendix VII: Comments from the Appendix VII: Comments from the Department of Veterans Affairs 

Department of Veterans Affairs 

Page 75 GAO-10-2 Information Technology 
Appendix VII: Comments from the 

Department of Veterans Affairs 

Page 76 GAO-10-2 Information Technology
Appendix VIII: 

A

GAO Contact and Staff 

cknowledgments 

Page 77 GAO-10-2 

Appendix VIII: GAO Contact and Staff 

Acknowledgments 

David A. Powner, (202) 512-9286 or pownerd@gao.gov

In addition to the contact name above, individuals making contributions to 

this report included Carol Cha (Assistant Director), Neil Doherty, Kaelin 

Kuhn, Jason Lee, Lee McCracken, Colleen Phillips, Karen Richey, Teresa 

Smith, Matthew Snyder, Jonathan Ticehurst, Kevin Walsh, and China 

Williams. 

GAO Contact 

Staff 

Acknowledgments 

 Information Technology 
Related GAO Products Related GAO Products 

Defense Acquisitions: Assessments of Selected Weapon Programs. 

GAO-09-326SP. Washington, D.C.: March 30, 2009. 

Discusses the Department of Defense’s Joint Tactical Radio System—

Handheld, Manpack, Small Form Fit and Warfighter Information 

Network—Tactical programs. 

Information Technology: Census Bureau Testing of 2010 Decennial 

Systems Can Be Strengthened. GAO-09-262. Washington, D.C.: March 5, 

2009. 

Discusses the Department of Commerce’s Decennial Response Integration 

System and Field Data Collection Automation programs. 

NASA: Assessments of Selected Large-Scale Projects. GAO-09-306SP. 

Washington, D.C.: March 2, 2009. 

Discusses the National Aeronautics and Space Administration’s James 

Webb Space Telescope and Mars Science Laboratory programs. 

Air Traffic Control: FAA Uses Earned Value Techniques to Help Manage 

Information Technology Acquisitions, but Needs to Clarify Policy and 

Strengthen Oversight. GAO-08-756. Washington, D.C.: July 18, 2008. 

Discusses the Department of Transportation’s En Route Automation 

Modernization and Surveillance and Broadcast System programs. 

Information Technology: Agriculture Needs to Strengthen Management 

Practices for Stabilizing and Modernizing Its Farm Program Delivery 

Systems. GAO-08-657. Washington, D.C.: May 16, 2008. 

Discusses the U.S. Department of Agriculture’s Farm Program 

Modernization program. 

Information Technology: Improvements for Acquisition of Customs 

Trade Processing System Continue, but Further Efforts Needed to Avoid 

More Cost and Schedule Shortfalls. GAO-08-46. Washington, D.C.: October 

25, 2007. 

Discusses the Department of Homeland Security’s Automated Commercial 

Environment program. 

Defense Acquisitions: The Global Information Grid and Challenges 

Facing Its Implementation. GAO-04-858. Washington, D.C.: July 28, 2004. 

Discusses the Department of Defense’s Warfighter Information Network—

Tactical program. 

(310894) Page 78 GAO-10-2 Information Technology
GAO’s Mission The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday afternoon, GAO 

posts on its Web site newly released reports, testimony, and 

correspondence. To have GAO e-mail you a list of newly posted products, 

go to www.gao.gov and select “E-mail Updates.” 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s Web site, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Ralph Dawn, Managing Director, dawnr@gao.gov, (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, DC 20548 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

Public Affairs 

Please Print on Recycled Paper