Office of Management and Budget Program Management Systems Committee February 8, 2005 EVMS Actions in Process David Muzio

2 EVMS FAR Case Proposed FAR Rule –Draft at OMB for Approval –Publication in Federal Register by end of February asking for comments –Asking for specific comments on use of IBR’s before award – under what circumstances, dollar limits, etc. –Nothing is off limits. Suggestions welcome. –Comments due 60 Days after publication in Federal Register –Expected Final Rule – July

3 EVMS Added to FAR Parts Part 2, Definitions Part 7, Acquisition Planning Part 34, Major Systems Acquisition Part 42, Contract Administration and Audit Services Part 52, Solicitation Provisions and Contract Clauses.

4 Part 2, Definitions “Earned value management system” means a project management tool that effectively integrates the project scope of work with cost, schedule and performance elements for optimum project planning and control. The qualities and operating characteristics of earned value management systems are described in ANSI/EIA Standard -748, Earned Value Management Systems. (See OMB Circular A-11, Part 7)

5 Part 7-Acquisition Planning 7.1 Acquisition Plans, (b) Plan of Action (10) Management information requirements. Discuss, as appropriate, what management system will be used by the Government to monitor the contractor’s effort. [ If an EVMS is to be used, discuss the methodology the Government will employ to analyze and use the EV data to assess and monitor contract performance. In addition, discuss how the offeror’s/contractor’s EVMS will be verified for compliance with the ANSI/EIA standard, and the timing and conduct of integrated baseline reviews (whether prior to or post award). See

6 Part 34-Major System Acquisition Scope of part This part describes acquisition policies and procedures for use in acquiring major systems consistent with OMB Circular No. A-109; [and the use of Earned Value Management Systems in acquisitions designated as major acquisitions consistent with OMB Circular A-11]

7 Subpart Mission-oriented solicitation (b) The solicitation Shall-- add a new (6): [Require the use of an Earned Value Management System that meets the guidelines of ANSI/EIA Standard – 748 (current version at time of solicitation). (See ) for earned value management systems reporting requirements)

8 Added New Subpart 34.2 Earned Value Management Systems Policy (a) EVMS is required in acquisitions designated, IAW agency procedures, as major acquisitions subject to OMB Circular A-11. (b) When EVMS is required, the agency shall consider the use of an Integrated Baseline Review (IBR).

Integrated Baseline Reviews (a) The IBR is meant to verify the technical content and the realism of the related performance budgets, resources, and schedules. It should provide a mutual understanding of the inherent risks in offeror’s/contractor’s performance plans and the underlying management control systems, and it should formulate a plan to handle these risks.

IBRs (b) The IBR is a joint assessment by the offeror or contractor, and the Government, of the- –(1) ability of the projects technical plan to achieve the objectives of the scope of work; –(2) Adequacy of the time allocated for performing the defined tasks to successfully achieve the project schedule objectives –Plus 3 more (c) Conduct the IBR IAW agency procedures.

Solicitation Provisions and Contract Clause (a) The CO shall insert a provision that is substantially the same as the provision at XXX, Notice of Earned Value Management System, in solicitations for contracts that require the contractor to use an EVMS and for which the Government may require an IBR after award. When an offeror is required to provide an EVMS plan as part of its proposal, the CO shall forward a copy of the plan to the cognizant ACO or responsible Federal Department or agency and obtain their assistance in determining the adequacy of the proposed EVMS plan.

Solicitation Provisions and Contract Clause (b) Essentially the same provision except titled -- Notice of Earned Value Management System – Pre-Award IBR, – and for which the Government will require and IBR prior to contract award. (c) The CO shall insert a clause that is substantially the same as the clause at ZZZ, Earned Value Management System, where EVMS required. Two provisions, only one clause.

13 Part 42 – Contract Administration and Audit Services Reporting Requirements –(d) For major acquisition contracting officers shall require contractors to submit EMVS monthly reports. (See subpart 34.2 and OMB Circular A-11, Part 7, Section I.H.4 of the Exhibit 300.

14 Part 52- Solicitation Provisions and Contract Clauses XXX Notice of Earned Value Management System As prescribed in (a) use the following (a) The offeror shall provide documentation that the cognizant ACO or a Federal Department or Agency has recognized that the proposed EVMS complies with the EVMS guidelines in ANSI/EIA Standard (current version at time of solicitation).

XXX Notice of Earned Value Management System (b) If the offeror proposes to use a system that does not meet the requirements of paragraph (a) of this provision, the offeror shall submit a comprehensive plan for compliance with the EVMS guidelines. (1) The plan shall –Same 5 actions as in current DOD clause (2) The offeror shall provide information and assistance as required by the CO (3) The Govt will review the plan before award.

XXX Notice of Earned Value Management System (c) Offerors shall identify the major subcontractors, or major subcontracted effort if major subcontractors have not been selected, planned for application of the guidelines. The prime contractor and the Government shall agree to subcontractors selected for application of the EVMS guidelines.

YYY Notice of Earned Value Management System – Pre-Award IBR Same as XXX provision with (d) added (d) The Government will conduct and IBR, as designated by the agency, prior to contract award. The objective of the IBR is for the Government and the Contractor to jointly assess technical areas, such as the contractor’s planning to ensure complete coverage of the contract requirements, logical scheduling of the work activities, adequate resources, methodologies for earned value (BCWP), and identification of inherent risks.

ZZZ Earned Value Management System As prescribed in (c) insert the following clause: (a) In the performance of this contract the contractor shall use an EVMS to manage the contract that at the time of contract award has been recognized by the Cognizant ACO or a Federal Department or Agency as compliant with the guidelines in ANSI/EIA Standard 748 (current version at time of award and the contractor will submit reports in accordance with the requirements of this contract.

ZZZ Earned Value Management System (b) If, at the time of award, the Contractor’s EVMS has not been recognized by the cognizant ACO or a Federal Department or Agency as complying with EVMS guidelines (or the Contractor does not have an existing cost/schedule control system that is compliant with the guidelines in ANSI/EIA Standard -748 (current version at time of award). The Contractor shall apply the system to the contract and shall be prepared to demonstrate to the ACO that the EVMS complies with the EVMS guidelines referenced in paragraph (a) of this clause

ZZZ Earned Value Management System (c) Agencies may conduct IBRs. If a pre- award IBR has not been conducted, such a review shall be scheduled as early as practicable after contract award, but not later than 180 days after award. The CO may also require an IBR at (1) exercise of significant options or (2) incorporation of major modifications. Such reviews will nornally be scheduled before award of the contract action.

ZZZ Earned Value Management System (d) Unless a waiver is granted by the ACO or Federal Department or Agency, contractor proposed EVMS changes require approval of the ACO or Federal Department or Agency, prior to implementation. The ACO or Federal Department or Agency, shall advise the contractor of the acceptability of such changes within 30 calendar days after receipt of the notice of proposed changes from the contractor. If the advance approval requirements are waived by the ACO or Federal Department or Agency, the contractor shall disclose EVMS changes to the ACO or Federal Department or Agency at least 14 calendar days prior to the effective date of implementation.

ZZZ Earned Value Management System (e) The contractor agrees to provide access to all pertinent records and data requesed by the Contracting Officer or a duly authorized representative. Access is to permit Government surveillance to ensure that the EVMS conforms, and continues to conform, with the performance criteria referenced in paragraph (a) of this clause (f) The contractor shall require the subcontractors specified below to comply with the requirements of this clause: (Insert list of subcontractors).

23 Other Actions Planned OMB letter to NDIA President requesting inclusion of civilian agency representatives participation with Program Management Systems Committee expected not later than week of February 14. OMB memorandum to Chief Acquisition Officers/Chief Information Officers and Senior Procurement Executives providing additional guidance to all agencies on EVMS expected week of February 14.

24 CAO/CIO/SPE Memorandum Recommends Civilian agency participation on PMSC. Recommends NDIA guides as “best practices” –PMs Guide to IBR Process –Suveillance Guide –Intent Guide

25 CAO/CIO/SPE Memorandum Must conduct a compliance review if contractor does not have a current AA Must conduct an IBR on all contracts, before or after award as appropriate, to ensure establishment of PMB. As interim procedure use DOD EVMIG as guidance to implement agency EVMS system. PMSC is working on EVMS Acceptance process guide that could be applicable to both Government and industry. OMB will ask PMSC to start new project to develop a full EVMS implementation guide.

26 Rewrite of FAR Part 34 Major Systems Acquisition OFPP will draft a rewrite of Part 34 to change title to Major Acquisitions and align it more closely to Circular A-11, Part 7 –Will conduct process to rescind Circular A-109. –Research laws where A-109 mentioned, submit request for changes to insert A-11, Part 7. Expected completion NLT December 2005

27 Draft OFPP Policy Letter Developing and Managing the Acquisition Workforce. –Applies to all agencies except those subject to DAWIA –In Agency review Core Competencies –All agencies shall use the DOD set of core competencies to fulfill the training, experience and continuous learning requirements –Includes all contracting positions and Program Managers.

28 Draft OFPP Policy Letter OFPP envisions a common certification program that generally reflects a government-wide standard. GSA shall establish an Acquisition Workforce Training Fund to support training for other than DOD agencies. Tax of 5% on fees collected on interagency ID/IQ contracts will assist civilian agencies with training needs.

29 Federal Acquisition Institute Responsible for the overall management of the civilian agency acquisition workforce –FAI takes direction from OFPP –FAI has recently co-located with DAU In partnership with DAU, FAI shall support the identification and maintenance of core acquisition workforce competencies and a core curriculum DAU will work with FAI to provide additional EVM training to PMs and COs on major acquisitions.

30 QUESTIONS? “We are not here to mark time, but to make progress to achieve results, and to leave a record of excellence.” –President George W. Bush –October 15, 2001