Simplified Earned Value Analysis Method for Highway Construction Projects

Abstract

Earned value (EV) methodology has been widely studied and implemented in academia and industry. Nonetheless, state departments of transportation (DOTs) are lagging in their acceptance and utilization of EV techniques to measure progress and assess performance for highway construction projects. Difficulty securing cost progress data and other information, such as a cost and resource-loaded schedule, necessary to generate EV metrics, is one of several reasons. This paper suggests DOTs adopt the simplified earned value analysis (SEVA) method, which uses project contract information and project progress payment data to calculate EV metrics. The SEVA method is proposed as an intermediate approach for DOTs to apply the EV concept without the burden of additional data collection. The study also addressed front-loading and auxiliary item costs and their impact on measuring project progress. By removing the costs of front-loading and auxiliary items, for example, mobilization and preparing right-of-way, from metrics calculations, the SEVA method provided a more accurate picture of project progress and performance. The SEVA method is also expected to help DOTs move toward wider earned value management implementation in highway construction. This study contributes to the academic body of knowledge by exploring little-studied challenges to EV application and their practical solutions in highway construction, and by introducing potential future research avenues in EV implementation in highway construction.

Keywords

infrastructure construction construction management

Get full access to this article

View all access options for this article.

References

Orgut

R. E.

Zhu

Batouli

Mostafavi

Jaselskis

E. J.

Metrics That Matter: Core Predictive and Diagnostic Metrics for Improved Project Controls and Analytics. Journal of Construction Engineering and Management, Vol. 144, No. 11, 2018, p. 04018100. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001538.

Grandage

Turning the Project Management Lights On: Earned Value Management in the States. Dissertation, University of Georgia, Athens, 2020.

Christensen-Day

C. J.

Earned Value on Fixed-Price Projects. Proc., AACE401 International Transactions, EVM.S02, 2010, pp. 1–13. American Association of Cost Engineering, Morgantown, WV, 2010.

Fleming

Q. W.

Koppelman

J. M.

Earned Value Management. Cost Engineering, Vol. 44, No. 9, 2002, pp. 32–36.

Christensen

D. S.

The Costs and Benefits of the Earned Value Management Process. Journal of Parametrics, Vol. 18, No. 2, 1998, pp. 1–16. https://doi.org/10.1080/10157891.1998.10462568.

Bowman

Sabouri

Effective Use of Earned Value for Controlling Construction Projects. Proc., AACE International Transactions, EVM. 1747. American Association of Cost Engineering, Morgantown, WV, 2014.

Aramali

Sanboskani

Gibson

G. E.

Jr. El Asmar

Cho

Forward-Looking State-of-the-Art Review on Earned Value Management Systems: The Disconnect between Academia and Industry. Journal of Management in Engineering, Vol. 38, No. 3, 2022, p. 03122001. https://doi.org/10.1061/(ASCE)ME.1943-5479.0001019.

Lukas

M. J. A.

Earned Value Analysis–Why it Doesn’t Work. Proc., AACE International Transactions, EVM. 01, 2008, pp. 1–10. American Association of Cost Engineering, Morgantown, WV, 2008.

PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 6th ed. Project Management Institute, Pennsylvania, 2017.

10.

Demachkieh

Abdul-Malak

M. A.

Decision-Aid Frameworks for Earned Value Measurement or Assessment by the Construction Contract Engineer. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, Vol. 13, No. 3, 2021, p. 04521014. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000481.

11.

Kim

Wells

W. G.

Jr. Duffey

M. R.

A Model for Effective Implementation of Earned Value Management methodology. International Journal of Project Management, Vol. 21, No. 5, 2003, pp. 375–382. https://doi.org/10.1016/S0263-7863(02)00049-2.

12.

Naizghi

M. S.

Factors Affecting Implementation of Earned Value Management (EVM) in Construction Projects. Dissertation, Wayne State University, Detroit, MI, 2021.

13.

Han

B. G.

Son

Khwaja

O’Brien

W. J.

Developing Assessment Criteria for State DOTs’ Standard Specifications on Contractor Schedules. Proc., Construction Research Congress 2022. Arlington, VA, 2022, American Society of Civil Engineers, Reston, VA, pp. 403–413. https://doi.org/10.1061/9780784483978.042.

14.

Federal Highway Administration. Standard Specifications for Construction of Roads and Bridges on Federal Highway Projects (FP-14). Federal Highway Administration, United States Department of Transportation, 2014. https://highways.dot.gov/sites/fhwa.dot.gov/files/docs/federal-lands/specs/12851/fp14.pdf. Accessed July 1, 2022.

15.

Maharjan

Shrestha

P. P.

Srirangam

Impact of Mobilization Costs on Schedule Performance of Highway Projects. Engineering, Construction and Architectural Management, 2022. https://doi.org/10.1108/ECAM-10-2021-0852.

16.

Texas Department of Transportation. Standard Specifications for Construction and Maintenance of Highways, Streets, and Bridges. Texas Department of Transportation, 2014. https://ftp.txdot.gov/pub/txdot-info/des/spec-book-1114.pdf. Accessed July 1, 2022.

17.

Edgerton

W. W.

MacDermott

J. T.

Managing Mobilization Costs. Civil Engineering, Vol. 67, No. 8, 1997, pp. 54–56.

18.

Caltrans. Standard Specifications, California State Transportation Agency, Department of Transportation, 2018. https://dot.ca.gov/-/media/dot-media/programs/design/documents/f00203402018stdspecs-a11y.pdf. Accessed July 1, 2022.

19.

Texas Department of Transportation. 2014 (English) Description Codes Bid Codes 9001 6001 to 9608 6043. Texas Department of Transportation, 2022. http://www.dot.state.tx.us/insdtdot/orgchart/cmd/cserve/usfe/2014/UsfE9001.htm. Accessed July 1, 2022.

20.

Jarrah

R. E.

Kulkarni

O’Connor

J. T.

Cash Flow Projections for Selected TxDOT Highway Projects. Journal of Construction Engineering and Management, Vol. 133, No. 3, 2007, pp. 235–241. https://doi.org/10.1061/(ASCE)0733-9364(2007)133:3(235).

21.

Mills

Tasaico

H. A.

Forecasting Payments Made under Construction Contracts: Payout Curves and Cash Management in the North Carolina Department of Transportation. Transportation Research Record: Journal of the Transportation Research Board, 2005. 1907: 25–33.

22.

Baek

Liang

Ashuri

A Pattern-Recognition Method for Highway Construction Project Expenditure Cash Flows Using Clustering-Based K-Means Approach. Proc., Construction Research Congress 2022. Arlington, VA, 2022, American Society of Civil Engineers, Reston, VA, pp. 302–310. https://doi.org/10.1061/9780784483978.032.

23.

U. S. General Services Administration. FAR 52.232-5 Payments under Fixed-Price Construction Contracts. Federal Acquisition Regulation. U. S. General Services Administration. https://www.acquisition.gov/far/52.232-5. Accessed July 1, 2022.