Earned Value Manager Burdening

Burdening is a critical component of earned value management systems. Use burdening matrices to calculate and measure the indirect costs of contracts -- costs that you cannot specifically attribute to an individual contract. You can define burdened costs that are added to the direct cost. Burdening costs are aggregated and reported into one of the burdening types.
ccppmop1551
Burdening is a critical component of earned value management systems. Use burdening matrices to calculate and measure the indirect costs of contracts -- costs that you cannot specifically attribute to an individual contract. You can define burdened costs that are added to the direct cost. Burdening costs are aggregated and reported into one of the burdening types.
2
Set Up Burdening Matrices
Follow these steps:
  1. Create the burdening classes.
  2. Create the burdening matrices.
  3. Create the roles that are used in burdening matrix levels.
  4. Create and define the burdening matrix levels.
  5. Associate the burdening matrix to the project.
  6. Apply burdening in earned value calculations.
Burdening Types
You can associate multiple burdening classes to the same burdening type. The burdening type controls the reporting of burdening costs on the contract performance reports (CPR). You cannot create additional burdening types.
The following burdening types are provided:
  • G&A
    . Defines the type for General and Administration burdened costs.
  • COM
    . Defines the type for Cost of Money (COM) burdened costs.
  • Fee
    . Defines the type for profit/fee burdened costs.
  • Overhead
    . Defines the type for overhead burdened costs.
Create Burdening Classes
Burdening classes categorize burden costs for reporting purposes. Burdening classes are used in burdening matrix levels and are referenced in burdening matrices for transaction processing. After creating the burdening classes and the burdening matrix, associate the burdening classes to the burdening matrix levels.
Burdening classes are one of the types of the financial classes available in
Clarity PPM
. The following static burdening classes, or burdening types, are provided with the Earned Value Manager:
  • G&A
    . Defines the class for General and Administration (G&A) burdened costs.
  • COM
    . Defines the class for Cost of Money (COM) burdened costs.
  • Fee
    . Defines the class for profit/fee (FEE) burdened costs.
  • Overhead
    . Defines the class for overhead (OVERHEAD) burdened costs.
Follow these steps:
  1. Open Administration, and from Finance, click Setup.
  2. In the Classifications section, click Burdening Classes.
  3. Click New.
  4. Complete the following fields:
    • Burdening Class
      Defines a unique burdening class ID.
      Limits:
      18 characters
      Required:
      Yes
    • Description
      Defines the detailed description for the burdening class.
      Limits:
      32 characters
      Required:
      Yes
    • Burdening Type
      Defines the type for the burdening class. The burdening type controls the reporting of burdening costs on contract performance reports (CPR).
      Values:
      COM, Fee, G&A, or Overhead
      Required:
      Yes
    • Active
      Indicates if this burdening class is activated.
      Default:
      Selected
  5. Save the changes.
    The burdening classes
    page appears, displaying the new burdening class.
 You can modify inactive and user-defined burdening classes. Inactive burdening classes are classes that are not used in earned value calculations. You cannot modify the static burdening classes, such as G&A, COM, Fee, and Overhead. In addition, if the burdening class is associated with a burdening matrix level,
do not
modify the burdening class. Modifying assigned burdening classes causes validation errors.
Delete Burdening Classes
You can delete burdening classes using the burdening classes
page. You cannot delete burdening classes that are:
  • Active
  • Not defined by you
  • Static (G&A, COM, Fee, or Overhead)
  • Associated with an active burdening matrix
Attempting to delete assigned burdening classes causes errors.
Inactive Burdening Classes
Inactive burdening classes are the ones that are not used in earned value calculations.
Follow these steps:
  1. Open Administration, and from Finance, click Setup.
  2. In the Classifications section, click the Burdening Classes link.
  3. Select the check box next to the burdening class, and click Delete.
  4. Click Yes to confirm the deletion.
Create Burdening Matrices
Burdening matrices are made up of multiple rows of burdening levels. With the EVM add-in, you can create any number of burdening matrices for each project transaction type. When you create a burdening matrix, it is inactive until it is used in an earned value calculation. You cannot set matrices to active or inactive.
Follow these steps:
  1. Open Administration, and from Finance, click Burdening Matrix.
    : The Burdening Matrix menu is only visible if your administrator installed the EVM add-in and if you have the required access rights.
  2. Click New.
  3. Complete the following fields:
    • Burdening Matrix Name
      Defines the unique name for the burdening matrix.
      Limits:
      32 characters
    • Burdening Matrix ID
      Defines the unique identifier for the burdening matrix.
    • Currency
      Defines the default currency that is used when defining this matrix flat rate burdening amount. The field appears only if multi-currency is enabled. This field displays only if the burdening matrix is associated with a project for burdening calculations.
      Default:
      System Currency
    • Description
      Defines the description for the burdening matrix.
      Limits:
      32 characters
  4. Save your changes.
Delete Burdening Matrices
You can delete inactive burdening matrices. You can also delete the matrices that are not associated with a project.
Inactive Burdening Matrices
Inactive burdening matrices are the ones that are not used in earned value calculations.
Follow these steps:
  1. Open Administration, and from Finance, click Burdening Matrix.
  2. Click the check box next to the burdening matrix you want to delete, and click Delete.
  3. Click Yes to confirm the deletion.
Create Burdening Levels
Burdening levels are the individual rates and rules that you define for a burdening matrix used when applying rates to transactions. Burdening matrices are made up of one or more levels of burdening. The contract direct costs are burdened based on the associated burdening class. The burdening level-associated burdening classes act as filters for identifying the matching transactions. When a transaction contains attributes matching the criteria defined in the burdening matrix, the burdened costs are applied with the specified rates at each burdening level from the top down.
You can create levels of burdening for a burdening matrix using the create burdening level page. Burdening levels are auto numbered starting at level zero (0). Level 0 is the highest level in the matrix, and is equal to the direct cost. Level one (1) is the starting level you can create. The additional burdening levels, when created, get incremented.
You can select the level at which the rate is applied. By default, the burdening level burdening rate is applied to the matrix base rate. The base rate is the direct cost that is passed from the project by multiplying the resource units with the rate specified in the rate matrix. If you do not create and define additional burdening levels, the direct cost is applied to level zero (0). As you create additional levels, you can define at which level the rate is applied.
You can only add levels sequentially after the lowest level (most recently added level), and not between levels. You cannot sort the list of burdening levels.
To apply different burdening rates or rules to a role or group of roles, create burdening levels for each burdening class and rule combination. First specify the role or group, and then define the rates and rules to apply to the role or group.
Follow these steps:
  1. Open the burdening matrix.
  2. Click Levels.
  3. Click New.
  4. Complete the following fields:
    • Level
      Defines the level number for the burdening level.
      Default:
      The next level in the series.
    • Burdening Class
      Defines the burdening class that is associated with the level. Required when a burdening class is created. Display-only after the level is created.
    • Role(s)
      Required. Defines the resource role to which the burdening cost is applied. You can apply this burdening rate and rule to one or more resource roles.
    • Rate Type
      Required. Defines the rate is applied for the burdening level.
      Values:
      • Percentage. Defines the burdening as a percentage, which is calculated using the rate matrix defined currency based on the following formula:
      Burden Value = Burden value of referenced level * rate (%) Burden Value = Accumulated burdened value of referenced level + flat amount
      • Flat Amount. Defines the burdening as an absolute amount, which is calculated using the rate matrix defined currency based on the following compound formula:
      Default:
      Percentage
    • Flat Amount
      Defines the flat amount from which to calculate and apply to the burdening rate for this level. Complete this field if you select flat amount as the rate type.
    • Percentage
      Defines the percentage from which to calculate and apply to the burdening rate for this level. Complete this field if you select percentage as the rate type.
    • Applied At Level
      Required. Defines the lower-level rate to which the burdening rate is applied. When you set the level to zero (0), the direct cost is applied. The applied at level number must be less than the burdening level number.
    • Burdening Formula
      Required. Defines the burdening formula for the level. The burdening amount at each level is calculated based on the burdening formula. A running total amount is calculated that accumulates the burdening from the matrix burdening levels.
      Values:
      • Simple. The burdening is applied to the value of the level defined in the Applied At Level field.
      • Compound. The burdening is applied to the running total amount of the level defined in the Applied At Level field.
      Default:
      Simple
  5. Save the changes.
    The new burdening level is created and displays on the burdening matrix levels page.
Delete Burdening Levels
You can only delete the maximum burdening level in a matrix. For example, the matrix is associated with a project and the level with a burdening matrix used in burdened cost calculations. The burdening level cannot be deleted.
Follow these steps:
  1. Open the burdening matrix.
  2. Click Levels.
  3. Click the check box next to the level, and click Delete.
  4. Click Yes to confirm the deletion.
Add Rows to the Burdening Level Escalation Table
Use the burdening level escalation table on the burdening level properties page to create the escalation matrix using:
  • Time varying burdening levels.
  • Adding rows to the burdening escalation table.
By default, an empty row displays in the table on the burdening level properties page. Complete the row and add additional rows.
Follow these steps:
  1. Open the burdening matrix.
  2. Click Levels.
  3. Click the Properties icon next to the number of the level to add an escalation table row.
  4. Complete the empty escalation row, click New Row to add, and define another row to the burdening escalation table.
    A new row is added to the table.
  5. Save the changes.
Time Vary Burdening Levels
Burdening can change over time. Therefore, you can define the time varying burdening, or the escalation rate for a particular burdening class, at each burdening level. Use the rows in the escalation table on the burdening level properties page to time vary the burdening.
The burdening level rate type determines the type that is used for the escalation table. If you do not define an escalation row for a date, the associated burdening level rate is applied to the date. Escalation matrices cannot have date gaps, or zero values.
Example
If your burdening rate escalated each month, add a new row for each month and define the rate for the month.
Follow these steps:
  1. Open the burdening matrix.
  2. Click Levels.
  3. Click the Properties icon next to the number of the level to vary the time.
  4. Complete the following fields:
    • Start
      Defines the date of starting to apply the escalation rate.
    • Finish
      Defines the last date until which the escalation rate is applied.
    • Percentage
      Displayed if the burdening level rate type is percentage. Defines the percentage to calculate and apply to the burdening rate for the level.
    • Amount
      Displayed if the burdening level rate type is flat amount. Defines the flat amount to calculate and apply to the burdening rate for the level.
  5. Save the changes.
Associate Burdening Matrices with Projects
Associate a burdening matrix with a project to calculate its indirect cost. The project is required to associate directly with a control account work package, or associated through selected tasks. A work package actual and remaining costs are burdened based on the matrix that is associated with the project.
You can associate:
  • The same burdening matrix to one or more projects.
  • The same burdening matrix to all four resource types.
  • Individual matrices to each resource type.
Before you can associate a burdening matrix with a project resource type, first create the burdening matrices.
Follow these steps:
  1. Open Home, and from Portfolio Management, click Projects.
  2. Click the name of the project to associate with a burdening matrix.
  3. Open the Properties menu and click EVM Burdening.
  4. Edit the information for the fields.
  5. For the Labor, Material, Equipment, and Expenses resource types, enter the following burdening information:
    • Burdening Matrix
      Defines the burdening matrix used to calculate the indirect cost amount of the transaction entry. Search for and add the burdening matrix to calculate project rates.
    • Exchange Rate Type
      Displayed only when multiple currencies are available. Defines the exchange rate type that is used for transactions entered against the project. When the project is approved, you cannot modify the exchange rate type.
      Values:
      • Average. The blended derived rate over time, typically weekly or monthly.
      • Fixed. The fixed rate that does not change over a defined period.
      • Spot. The variable rate that changes over the course of a day.
  6. Save the changes.
Disassociate Burdening Matrices from Projects
If a matrix is unused in burdened cost calculations, you can disassociate burdening matrices from a project resource type.
Follow these steps:
  1. Open Home, and from Portfolio Management, click Projects.
  2. Click the name of the project to disassociate from a burdening matrix.
  3. Open the Properties menu, and click EVM Burdening.
  4. Select the check box next the resource type, and click Disassociate.
    The matrix is disassociated from the resource type.
Apply Burdening in Earned Value Calculations
Indirect costs are calculated by burdening rates to the project cost base (direct cost). The burdening matrix values are converted into the contract defined currency and the burdened costs are returned in that currency. The burdening is applied to the total cost (cost rate * unit) and not the per unit cost rate.
Matrix levels are used in burdened cost calculations. Burdened costs are stored based on the role and rate type that you define for the burden matrix levels.
Follow these steps:
  1. Create and define one or more cost/rate matrices.
  2. Create the burdening classes.
  3. Create the burdening matrices.
  4. Create the project.
  5. Financially enable the project.
  6. Set the project EV calculation method.
  7. Associate the cost/rate matrices to the project resource types.
  8. Associate burdening matrices to the project.
  9. Assign staff to project tasks.
  10. Create a cost plan using the team allocations.
  11. Schedule the Rate Matrix Extraction job.
  12. Baseline the project.
  13. Calculate and record earned value data.