The Rebaseline Request Mid-Execution
You are the EVM analyst on a fixed-price contract to build a water treatment control system. The performance measurement baseline (PMB) was approved nine months ago: BAC $4.2M, 24-month duration, with the software integration work package budgeted at $900K. That work package is now 60% complete but has consumed $780K, and the CAM reports the remaining integration effort will need roughly $500K more - driven by a vendor API that changed after baseline. The CAM submits a change request to re-plan the remaining work, which would raise the work package budget to $1.28M and push BAC to $4.58M. The customer's contracting officer has not been approached. The project manager wants the change board to approve it this week so the next monthly report 'looks realistic'.
1. As the EVM analyst, what is your recommendation on the CAM's re-plan request, and what must happen before any baseline change is approved?
Read the worked answer
The request is a legitimate scope/technical change (vendor API change), but the correct sequence matters:
- Do not silently absorb it. Re-planning remaining work to cover a cost overrun on completed work is not a baseline change - it is masking a variance. The $780K spent against 60% complete ($540K earned) is a $240K cost overrun that must stay visible in the variance record.
- Route through change control. The API change is a customer-visible technical change; it needs a formal change proposal, impact assessment (cost, schedule, EV techniques affected), and customer/contracting officer negotiation before the PMB is modified. On a fixed-price contract, unpriced changes cannot simply be added to the baseline.
- Only the remaining work is re-plannable. If the change is approved and funded, the PMB change applies forward from the data date - the historical performance (CPI ≈ 0.69 on this WP) is retained.
- Reject the 'looks realistic' rationale. A baseline is changed for authorized scope, not to improve reported metrics. Document the PM's request and the analyst's objection.
2. If the change is approved and the work package budget becomes $1.28M with BAC $4.58M, what happens to the reported CPI and how should the report present it?
Read the worked answer
CPI is cumulative ACWP-based: earned value to date stays at $540K; actual costs stay at $780K regardless of the new budget. So CPI remains 540/780 ≈ 0.69 after the change - the re-baseline does not erase past performance.
The report should:
- Show performance against the original baseline as well as the current baseline (management-by-exception requires comparability).
- Disclose the approved change, its authorization reference, and the effective data date.
- Explain that the remaining-work budget now reflects the known API rework, so the forecast (EAC) improves in credibility even though CPI is unchanged.
- Flag that a BAC increase without corresponding customer funding on a fixed-price contract creates a margin problem, not just an EVM problem.