Earned Value Method (EVM) for Construction Projects: Current Application and Future Projections

Mayra Proaño-Narváez,Pablo Vásquez Quiroz,Marco Avila-Calle,Carlos Flores-Vázquez

doi:10.3390/buildings12030301

Mayra Proaño-Narváez, Pablo Vásquez Quiroz + Show 2 more

Open Access

https://doi.org/10.3390/buildings12030301

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Journal: Buildings	Publication Date: Mar 4, 2022
Citations: 8	License type: CC BY 4.0

Affiliation: Universidad Católica de Cuenca, University of Cuenca

Abstract

The earned value method (EVM) is an internationally known technique for project management that emphasizes the control of project cost performance and duration, thus allowing trends to be identified during execution and warning the project manager of variances that may affect the project so that they can take the necessary corrective measures. In this research, the finished projects of a construction company in the city of Cuenca, Ecuador, were assessed. EVM was applied to projects from a database developed with information from each one to rebuild past events, existing problems, and critical points and evaluate the performance over time. The results of this analysis are meant to determine the project’s success, calculating the cost variance at the end. EVM motivates project stakeholders to pay attention to costs and progress so that timely actions can be taken to optimize resources, resulting in the completion of a project within budget and on time. In conclusion, EVM plays an essential role in the integral management of the project in terms of scope, time, and cost. Moreover, there are now guidelines for applying this method as a control tool in future construction projects.

Highlights

In recent years, the construction business has become competitive in a market saturated with contractors trying to stand out and succeed in completing their projects [1]
In Cuadros López et al [24], earned value method (EVM) was applied to a building project in Colombia, and evaluations were carried out in four stages; the results show that during the project, despite the alerts given by the performance indicators, the success of the method depended mainly on the decisions of project directors or managers to implement timely measures and maintain the cost and schedule of the project
From the analysis of projects executed by a construction company in Cuenca in the private and public sectors, it is concluded that the application of the EVM method as a tool for project control and evaluation is practical in terms of costs (CPI indicator) throughout the project since, in the end, it allows determining the variance of the price relative to the planned value

Summary

Introduction

The construction business has become competitive in a market saturated with contractors trying to stand out and succeed in completing their projects [1]. About 40% of the projects reported deficiencies in their performance. In Nigeria, 55% of 137 projects had cost overruns ranging from 5% to 808% over the original cost estimate. In Colombia, more than 50% of projects ended up with cost overruns, and more than 80% ended up with delays of between 30 and 80 days [2]. In developed countries such as the United Kingdom, which have multiple techniques and advanced software for project control, it has been noted that many projects, despite having these tools, still do not meet expectations in terms of time and cost [5]

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Results

Conclusion