Using Earned Value Methods to Substantiate Change-of-Scope Claims

Abstract Earned value is a project management tool that provides significant managerial benefits by identifying project deliverables, tying these outputs to specific group or individual responsibility, and tracking performance over time. A less obvious benefit of earned value is that it can provide the justification for claims related to cost adjustments and scope changes. Most important, if the claim cannot be resolved and legal remedies are pursued, earned value methods are consistent with key legal standards for substantiating cost claims. This article presents a case study of the cost system that was used by a contractor who eventually initiated legal claims against the government for alleged scope changes and related cost increases. It demonstrates the relationship between the legal requirements for cost claims and the capabilities of earned value methods. Finally, it contrasts the deficiencies of the methods used by the contractor with good practice in cost estimation and the earned value method.