Material, part 1 of 3. In this tidbit we'll review what ANSI 748 says about material and what it means.

There are all kinds of material associated with completing projects. Big, one of a kind special order items (one test cell, please); commodities (computers, pipe fittings, etc.) and stuff from the general stores warehouse ("Can I have 200' of RG-58 cable please?") So ANSI 748(B) is necessarily vague on how to incorporate material in EVM planning and accounting. Here is some of what it says (abridged).

2.2d Establish budgets for ... significant cost

elements (.., material, etc.).

2.3f ... the material accounting system will provide for:

• 1) Accurate cost accumulation and assignment of costs to control accounts...

• 2) Cost recorded ...in the same period that earned value is measured and at the point in time most suitable for the category of
• material...
• 3) Full accountability of all material purchased

Why all this fuss over material? If we're building as ship there is lots of it. But if we're building an IT system there may be little, if any. Of course we should be interested in what we budgeted, what we spent, and what we used. We also care about the process to purchase the material, receive it, and test it if necessary. That's basic project and cost management. In EVM there is one other item. When and how much material is used is an indicator of progress! Yes, material usage can generate schedule variance.

Here's a conversation I had with a potential client who wanted an independent look at their internal ANSI 748 gap analysis. "Ray, we didn't look at any of the material guidelines since we don't sell any tangible items to the Government." "Do you buy any material

such as computers to do the work, using cost reimbursable contract funds?" "Yes." "Then you do." {see 2.3f 3) above}. "We'll get back to you." They never did. Maybe they did not like my answer.

Material accounting does not include labor efforts to get it. That's in the category of labor intensive efforts such as writing the specs, going out for bid, reviewing  bids, placing the PO, receiving the material, inspecting it, storing it. How these tasks are included in your schedule and EVM PMB has a lot to do with how you pay for these efforts. Are they direct or indirect (do you have a purchasing department on indirect costs). Direct cost efforts probably become a scheduled task within the WBS/OBS. Indirect tasks become milestones such as "PO Placed".

EVM material planning and accounting is all about material, not the labor to get. We know we need to buy 26 tires for our five demonstration vehicles (including six spares). Labor efforts will buy it and we know we have to budget to buy them, but how do we make tires part of our PMB? That's where we pick this up in the March EVM Newsletter.

Next month part two - planning material into your EVM performance measurement baseline.

AUGUSTINE'S LAW, Norman R. Augustine, ISBN: 0-915928-81-7, 1988, Amazon and others, new and used prices vary

What's the point of reviewing a book that was first printed in 1983? When the book is timeless in its accurate depiction of problems and challenges of bringing a new system from conception through development. Sadly, what he wrote in 1980 is just as true today and applies to most high technology development projects. So if you are new to systems development you will find useful knowledge about the environment you have become part of. If you lived through the defense programs of the 80's you will find that he's accurately described the crazy world you worked in. I read it in 1985 and I just read it again. Regardless, any reader will find laugh out loud humor in his 45 laws and quotes sprinkled throughout the book.

Norman Augustine is certainly qualified to create such laws. He served as Assistant Director of Defense Research and Engineering; Vice President at LTV Missiles and Space; Assistant Secretary of the Army; a CEO at Martin Marietta; President, CEO, and Chairman of Lockheed Martin; and chaired the Defense Science Board.

The book is 45 chapters, each with a Law. Each Law is a conclusion of 3-5 pages of backup material and graphs, often leading you to think you know where he's going, only to find the Law is orthogonal to your thoughts. The Laws are worth the price of the book, but his continued use of quotes by others adds even more to the book.

Each chapter begins with a continuation of the tale of an aircraft development program from its award, through all its challenges, to its cancellation, to promotions for all involved, to those who get more responsibility for the next program. (The idea of a parallel tale appeared again in my Earned Value Maturity Model book, but I'd lost where in my subconscious I had stored the idea.)

On pushing technology he states "designing a system near the 'edge of the state of the art' is risky when 'it's not clear which edge one is on'". He follows this with Mario Andretti's Indianapolis 500 experience. In 19 races he finished only 3 times and won only once. Otherwise he crashed or his car just quit. This leads us to Law # VII. "The last 10 percent of the performance sought generates one third of the cost and two-thirds of the problems." Of course he has a chart to back this up.

Law # XXIII "Any task can be completed in only one-third more time than is currently estimated" True in 1983, and too often true today.

Could the following still happen today as he described in 1983?

 "{The} contractor acquiesced to the ...demands that daily status meetings be held wherein the workforce would be afforded the opportunity to stand before an assembled throng and report at length the reasons behind the lack of progress the previous day. In addition, separate meetings would be scheduled to review budgets, planning, and personnel assignments...also on a daily basis. Finally a Master Meeting was established for each morning during which the scheduling of the all other meetings would be coordinated, and a cost-control meeting was schedule for each evening to discuss how overtime could be reduced. Thus would be solved the problems which had become uncomfortable evident: everyone was working so hard that no one had time to do any work.". 

This is not the last time you'll see some gems from this book in The EVM Newsletter.

I spent over 30 years in the Navy, exiting as a Captain. I worked for Admirals and had a two star speak at my retirement. So I've been through all the junior ranks, and been in the company of the most senior ranks.  In Augustine's Law's he quotes someone else's law: "Rank times IQ is a Constant". He said it, I didn't. But as I moved up the Navy ranks I felt I knew less and less about more and more stuff.

Here is the formula.

R * IQ = C (constant)

But I've been through the fire drill many times that starts with "the Admiral is visiting next week". For you it might be the CEO, or PEO, or Agency Head. So here are my Rules of Rank to add to the one above.

Preparation Time = R * k (Time preparing for their visit is proportional to their rank)

Visit Time = 1/R (The higher the rank the less time they will actually spend visiting)

Understanding = 1/R² (Their understanding of what they see and hear is an an inverse SQUARED relationship)

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