Learning legacy

Lessons learned from the London

2012 Games construction project

Using Earned Value/stable baselines with

NEC Contract projects
Earned Value (EV) was chosen by the Olympic Delivery Authority (ODA) Olympic Delivery Authority

to objectively and consistently measure project performance across the

Programme Baseline Report
Summary
November 2007

London 2012 construction programme. Combining scope, schedule and cost

measurement into an integrated system allowed programme-wide progress
to be established efficiently, and gave early warning of potential performance
issues. Early warning allowed rapid deployment of mitigation actions or
amended delivery strategies and this became one of the key enabling factors
for the programme’s ultimate success.
Strategic decisions
ODA mandated the use of EV for
monitoring performance on the
London 2012 Olympic and Paralympic
Games programme. The strategy
combined programme-level
Performance Management Baseline
(PMB) with project-level contract
management to provide a cohesive
EV reporting framework.
All EV reports use money to compare
the three fields measured:
–– Budget Cost of Work Scheduled
(BCWS): Baseline or Planned Value
–– Budget Cost of Work Performed
(BCWP): Earned Value
–– Actual Cost of Work Performed
(ACWP): Actual Cost
As many London 2012 programme
stakeholders were unfamiliar with
EV, standard terminology was
simplified (as above) to make
reports easier to understand.
The controls methodology – and EV
implementation in particular – was
also moulded by the use of NEC3
contracts. This gives contractors
the right to amend their ‘Accepted
Programme’ each month, negating
their use as a stable low-level
baseline. How this was overcome
is explained below.
Project and programme controls
report
framework
With the strategy set, the building
blocks of the project/programme
control regime were established in
Q2 2007 and matured through
2008. During this time:
–– a delivery driven Work Breakdown
Structure (WBS) was established;
–– a robust change control process
was implemented to control the Programme Baseline report published in
baseline; November 2007 (Yellow Book)
–– the Original Baseline Budget
(OBB) or ‘Yellow Book’, including
PMB, was published based on
novated contracts and cost plans
for proposed scopes;
–– the PMB modelled in controls
systems was precisely reconciled
with the OBB and ODA Finance
Business Plan;
–– links between management
subsystems for baseline, costs and
schedule were established via the
WBS and procurement codes;
–– a ‘control culture’ and trust in the
accuracy of reporting were built
Earned Value graph
up through training, coaching,
support and, when appropriate,
intervention;
–– two forecast datasets were
created in P6: contractors’ version
to capture monthly progress and
logic updates (the NEC3 Accepted
 Programme); and PM’s independent
assessment, including known
mitigations, which was compared
to the stable PMB to give current
status; and
–– all works contracts stipulated
Project Controls requirements
in Works Information schedules
covering systems, data content, file
format and transmission protocols.
Refining performance measurement
and the link to quantities
Physical progress measurement was
varied according to the work-type,
complexity and delivery phase of
each project. Techniques of varying
accuracy were used, ranging from
tracking key quantities – such as
number of piles, tonnes of steel,
metres of cable – through assigning
value to milestones, down to Level
of Effort (LOE).
All progress was expressed as
percent complete, applied to budget-
loaded summary activities then
aggregated to an EV figure and
percent complete for the project.
As the team’s fluency with EV
reporting grew, demand-led services
like logistics were separated out
to give a clearer picture of capital
delivery. Capital projects derived EV
from measured progress and services
exclusively used LOE where EV =
Planned Value. This suppresses any
variances from services, allowing
programme status to be reported
consistently but without obscuring
real performance issues.
Systems integration
The programme used standard ‘off
the shelf’ products:
–– Primavera P6 for budget-loaded
scheduling;
© 2011 Olympic Delivery Authority. The official Emblems of the London 2012 Games are © London Organising Committee of the Olympic Games and
Paralympic Games Limited (LOCOG) 2007. All rights reserved.
The construction of the venues and infrastructure of the London 2012 Games is funded by the National Lottery through the Olympic Lottery Distributor, the
Department for Culture, Media and Sport, the Mayor of London and the London Development Agency.
For more information visit: london2012.com/learninglegacy
–– Deltek Cobra for Cost and EV –– Criteria 8: Maintain PMB at
management. Control Account level
–– Criteria 15: CBB = approved
The OBB was captured in P6 to
project budgets + contingencies
produce a budget-loaded Level 2
–– Criteria 17: Prohibit multiple
integrated programme. This was then
accounting as direct costs are
imported into Cobra which became
summarised through the WBS
the repository for the baseline. As
–– Criteria 22: Produce monthly
baseline changes were approved
performance measurement data at
within the monthly cycle, they were
Control Account level
implemented by updating P6 and
–– Criteria 28: Incorporate all
re-imported into Cobra to create
authorised changes in a timely
the Current Baseline Budget (CBB)
manner
each period.
Baselines were modified via change
Progress was updated in P6 each
control to mirror current delivery
month and imported into Cobra where
strategies. This made performance
it was applied to the CBB to produce:
highly visible, but did lose the more
–– an EV figure: also used for
theoretical forecasting aspects of a
programme progress calculations
purist EV implementation.
–– a percent complete
Contractors’ staff new to EV
Actual costs were imported from
required much training to ensure
ODA’s ORACLE finance system
implementation gave meaningful
and reconciled to ensure that figures
measurement. This issue later drove
were agreed before P6 and Cobra
simplification of the PMB with
were locked-down and archived
high-level milestones to trace the
for reporting.
critical path and key interfaces, and
Cobra was the programme’s summary budget-loaded activities
‘single source of truth’ for reporting mapped onto contractor and PM
Baseline, EV and Actual Costs. The forecast datasets via the WBS.
most important of the various reports
produced were the monthly CBB
Report and the Cost Performance Project
Report (CPR). Programme Controls
Lessons learned Supplier
EV was pivotal in the successful CLM – Delivery Partner
programme controls used for London
2012. All 32 criteria specified in Authors
ANSI/EIA 748 were applied, the David Birch – Head of Programme
most influential being: Controls, CLM
–– Criteria 1: Define authorised work Gavin McGuire – Head of Cost
and resources via WBS Management, CLM
–– Criteria 3: Ensure management
subsystems support each other,
the WBS and the Organisational
Breakdown Structure (OBS)
Published October 2011
ODA 2010/374