The project baseline represents both the schedule and budget for all project tasks. As such, it is the benchmark against which all actual schedules and costs are measured, and it shows the relationship between the three primary project constraints – cost, performance and schedule. Schedule variance or cost variance can be determined by comparing earned value (EV) to planned value (PV) and actual cost (AC), respectively.
The term SPA refers to an event when schedule variance (SV) and cost variance (CV) are both zeroed in a single reporting period, and the remaining portion of the work is rebudgeted to establish a new Performance Management Baseline (PMB). This new PMB completes all remaining work using only the remaining budget from the original PMB.
But are Single Point Adjustments (SPA’s) appropriate for use in most projects? I think not. SPA’s seem only to distort earned value (EV) trend information while limiting the Estimate at Completion (EAC) range. After reading a few case studies, I believe an SPA has become primarily a tool used to suppress unfavorable EAC’s, and to address contract-reporting issues, rather than addressing program management or cost overrun concerns.
Using an SPA usually works only as a temporary administrative fix to create the illusion of a project being on-track. A well-maintained PMB shows the true variance of a project and lends itself to the creation of accurate estimates at completion (EAC), whereas the SPA falsely produces EAC estimates that conform to initial expectations.
Additionally, I’ve come to believe that SPA’s, if absolutely required, should only be used in conjunction with more traditional rebaselining techniques. These classic techniques essentially redefine the project baseline, rather than simply zeroing existing variance and attempting to finish the project with the previously allocated budget and in the time allotted.
A critical look at the use of an SPA presents a compelling case not to use the concept, and to be wary of any contractor who may recommend doing so. After reviewing the problems associated with SPAs, I think we can all understand the requirement for disciplined maintenance of the PMB. In order to have accurate estimates and true variances, which provide an opportunity to make adjustments to cost, time or scope, we have to know our PV and use that as a benchmark for our AC and EV.
