文档介绍：FORETHOUGHT TOOL
Would the capital-project
forecasts you endorse
withstand public scrutiny? What’s Your
Here’s how to be sure. Project’s Real
Price Tag?
by Quentin W. Fleming and Joel M. Koppelman
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FORETHOUGHT TOOL
What’s Your Project’s Real Price Tag?
Would the capital-project forecasts you endorse withstand public scrutiny? Here’s
how to be sure.
by Quentin W. Fleming and Joel M. Koppelman
There are many ways executives can cook the ers. Since 1977, the Department of Defense
books, some legal, some not. The illegal ways (DOD) has used the technique to track the per-
are ing less attractive, thanks to recent formance of more than 800 projects. A recent
attention from Congress, the SEC, and other study by David Christensen and David Rees at
regulatory bodies. But there is a way some ex- Southern Utah University of 52 DOD contracts
ecutives put a spin pany performance validates EVM’s precision in tracking cost per-
that is no less dangerous for being legal: They formance as projects proceed. Perhaps more
endorse, even encourage, optimistic forecasts important, the work also confirms that EVM
on major long-term capital projects. We’re can be