EVM is a project management tool that, when properly used, can provide accurate assessments of project progress, produce early warning signs of impending schedule delays and cost overruns, and provide unbiased estimates of anticipated costs at completion. Pulling together essential cost, schedule, and technical information in a meaningful, coherent fashion is a challenge for most projects. Without such information, managers can have a distorted view of a project’s status and risks. EVM also allows individuals outside the project to see a standardized metric describing the cost and schedule performance of that particular project and compare it consistently with other projects. EVM 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. 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. For example, if a contractor completed $5 million worth of work and the work actually cost $6.7 million, there would be a $1.7 million negative cost variance. Schedule variances are also measured in dollars, but they compare the earned value of the work completed with the value of 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 $5 million negative schedule variance. Earned value provides information that is necessary for understanding the health of a project and an objective view of project status. Cost and schedule variances can also be used in estimating the cost and time needed to complete the project. While some data that an EVM system produces are retrospective and indicate performance to date, EVM data can also be used to predict future performance. For example, estimates at completion for a project can be calculated by using efficiency indices which are based on a project’s past cost and schedule performance. See appendix II for additional information on the importance of EVM. A project’s EVM data comes from multiple sources. For example, each contractor that supports a project will produce and deliver EVM reports to the project for the work they and their subcontractors perform, if the contract so requires. In addition, the project will collect EVM information for the work that it performs in-house at a NASA center. All of this lower level EVM data can then be consolidated at the project level to produce a project level EVM report. Pulling together EVM data from multiple levels into a project level report gives the project a comprehensive outlook of its cost and schedule, and provides the project manager with early warning of potential cost and schedule overruns. EVM has evolved from an industrial engineering tool to a government and industry best practice, providing improved information to conduct oversight of acquisition programs. As such, it is guided by industry best practices and standard, and is required by regulations and requirements at the federal government and the agency level at NASA. These requirements and standards are summarized in table 1 below. Almost two decades of NASA’s past efforts to improve its use of earned value management have had uneven success. An EVM Focal Point Council was created in 1996 and focal points were designated at each NASA center and the Office of Procurement and the Office of the Chief Financial Officer to provide an open forum to share experiences and develop a network of support within the NASA EVM community. In 1997, the agency issued NASA Policy Directive 9501.3 “Earned Value Management Performance” which established the basis for applying EVM to NASA contracts. Prior to this policy, centers used their own individual policies on performance measurement systems. However, in 1999, the NASA Inspector General reported that EVM policy was not consolidated as an overall program management responsibility and that the Agency Program Management Council did not receive comprehensive EVM information.policy from the Office of the Chief Financial Officer to the Office of the Chief Engineer to emphasize EVM as a project management tool, rather than a financial management tool. As a result, in 2003, NASA shifted responsibility for the EVM In 2004, GAO reported that only 2 of 10 NASA projects reviewed used EVM consistently and appropriately. Several barriers to EVM implementation were identified, such as lack of reliable financial data, trained EVM staff, data analysis tools, and incentives. Among other things, GAO recommended that NASA take action to ensure that a true EVM system is used as an organizational management tool to bring cost to the forefront in NASA’s decision-making process and that acquisition and EVM management policies and procedures be enforced. In response to our recommendations, NASA stated that it was updating NASA Procedural Requirements 7120.5, its program and project management processes and requirements policy, to improve its cost estimating and ensure that its cost estimate and earned value analyses were effectively used, and the updated policy was issued in 2005. Similar to other agencies in our 2009 report on governmentwide use of EVM, we reported on weaknesses in NASA’s EVM policies and practices and recommended that the agency modify its policies governing EVM to ensure that they are consistent with best practices. In particular, we found problems with the EVM training requirements for personnel responsible for investment oversight and management responsibilities. In addition, NASA’s policy for revising project cost and schedule baselines did not have adequately defined criteria on the acceptable reasons for permitting a rebaselining. We also found weaknesses in how the NASA projects we reviewed implemented EVM and managed their negative performance trends. NASA acknowledged the identified weaknesses and stated that it was revising its NASA procedural requirements for programs and projects to include expanded and strengthened policies governing EVM application and processes, and revised policies for rebaselining projects. In January 2010, the Agency Program Management Council approved the funding for the EVM capability project to develop an EVM system that complies with the guidelines in ANSI/EIA-748. Another goal of the project was to determine whether it was feasible to implement a single EVM system that would integrate the scope, schedule, and budget of EVM data for NASA’s in-house managed efforts and contractor data across the agency. According to agency officials, NASA invested about $2 million into the capability project to pilot the EVM system through two projects: the Ice, Cloud, and Land Elevation Satellite-2 (ICESat-2) and the Constellation Extra-Vehicular Activity project. Through the pilots, the capability project demonstrated that an agency-wide EVM system was feasible. As a result, a finalized set of processes, tools, guidance, and training products that compose NASA’s new EVM system was developed. This new system was peer reviewed and approved by a panel of EVM experts. Our assessment of 10 major spaceflight projects showed that NASA has not yet fully implemented EVM and thus is not taking full advantage of an important tool that could help reduce acquisition risk. GAO found that the projects had shortfalls in two of the three fundamental practices that we assessed. Specifically, we found that half of the projects did not use an EVM system that was certified as compliant with the ANSI/EIA-748 standard. Most of the projects conducted an integrated baseline review (IBR), a practice that ensures the performance measurement baseline reflects all requirements and that resources are adequate to complete the work. Specifically, 9 projects conducted an IBR for their overall efforts; however, the Stratospheric Observatory for Infrared Astronomy (SOFIA) project office only conducted an IBR of one of its major contractors. In addition, we found that only 4 of the 10 projects had established formal independent surveillance reviews to ensure that key elements of the EVM process were maintained over time so that the data produced by the system provided timely indications of actual or potential problems. For the 6 projects that did not have formal independent surveillance in place, each provided evidence that they instituted monthly EVM data reviews, which according to project officials, helps them to continually monitor cost and schedule performance. However, the rigor of both the formal and informal surveillance reviews is questionable given the numerous EVM data anomalies we found in the monthly EVM reports. Specifically, we found many unexplained anomalies, such as the presence of negative numbers or missing data, which caused us to question the reliability of the data. Out of the 10 projects we reviewed, we found that just 3 projects had reliable EVM data while the remaining 7 had only partially reliable data. Overall, the projects are using EVM, but NASA has not consistently implemented EVM across these projects. For example, we found that several projects were not implementing EVM at the project level, which is considered a best practice. Table 2 summarizes the performance of each of the 10 projects in meeting the three fundamental EVM practices and the reliability of the data. Of the 10 projects we reviewed, 4 projects had a certified EVM system, 3 did not, and 3 had a mixture in which some contractors and subcontractors had certified systems and some did not. When an EVM system is certified, the agency has assurance that the implemented system was validated for compliance with the ANSI/EIA-748 standard by independent and qualified staff and therefore can be considered to provide reliable and valid data from which to manage a project. The Global Precipitation Measurement (GPM), Tracking and Data Relay Satellite System (TDRS), Landsat Data Continuity Mission (LDCM), and James Webb Space Telescope (JWST) were the only projects that provided evidence that the contract performance reports provided came from EVM systems that were certified as compliant with the ANSI/EIA-748 standard. The Lunar Atmosphere and Dust Environment Explorer (LADEE), Magnetospheric Multiscale (MMS) and Radiation Belt Storm Probes (RBSP) projects did not have EVM systems that were certified to be compliant with the ASNI/EIA-748 standard.