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Background EVM is a widely accepted practice used throughout NATO countries’ defense departments, their governments, and the commercial sector. The U.S. Department of Defense Earned Value Management Implementation Guide (DoD, 2019) defines EVM as a program management technique for assessing program performance and progress. The fundamental theory of this technique is built upon three key data elements: the Budgeted Cost of Work Performed (BCWP; i.e., earned value), Budgeted Cost of Work Scheduled (BCWS; i.e., planned value), and Actual Cost of Work Performed (ACWP; Defense Acquisition University, 2020). EVM metrics are derived using these elements to assess current program cost and schedule performance, forecast future performance, and construct corrective action plans as necessary (DoD, 2019). Estimates at Completion (EACs) are forecasts made to estimate the final cost of a program using EVM data elements. EACs from government analysts and private sector contractors have often manifested in lower projections than final actual costs (Christensen, 1996). Christensen noted that pressure to prevent programs from being cancelled contributed to these optimistic estimates. The end result is programs unable to satisfy all the requirements while costing more than initially planned (Government Accountability Office, 2020). Accurately forecasting the EAC is therefore crucial to a successful project. The various works of Christensen and co-authors (Christensen & Heise, 1993; Christensen & Payne, 1992; Christensen, 1996; Christensen & Templin, 2002) examined EAC projections for U.S. military acquisition programs. Since that time, the application of EVM has greatly expanded into different project types (private and public) and across numerous countries. For example, Kim et al. (2003) demonstrated the increased acceptance and utility of EVM in a variety of project types, while De Marco and Narbaev (2014) discuss EVM techniques in nondefense fields such as construction. EVM’s international reach is seen in the large literature from the Operations Research and Scheduling group based in Belgium (Vanhoucke, 2017) to Spanish construction analyses (Sutrisna et al., 2020) and infrastructure projects in Australia (Ibrahim et al., 2019), among others. Understanding the mechanics of EAC is crucial to interpreting the literature findings. EACs can be calculated in various ways simply by
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Defense ARJ , Spring 2025, Vol. 32 No. 1
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