1 Program Management Systems Committee Joint Industry/Government Meeting January 29, 2009 EVM for Service Contracts Working Group

2 Subcommittee Charter Problem Statement EVMS is being applied to a variety of services type work scenarios and there is no consistent guidance or policy on how EVMS should be implemented Charter for Subcommittee: To develop and recommend policy, process guidance, and/or training to support the implementation of EVMS on services type work Targeted Exit Criteria: White Paper - “Guidance for Implementing EVMS on Services Work

3 Earlier Conclusions EVM is useful for managing services work; however its application should be scaled to balance the benefits of EVM with program risks and the cost of EVM implementation EVM is compatible with performance based services acquisition, but there are some issues that require further discussion/resolution (we no longer agree entirely with this conclusion) It’s important to seek ways to define objective methods for measuring earned value of services Over-reliance on LOE for services can mask progress on other work Recommend separate analysis of performance data for development and service work It may be more appropriate and beneficial to implement EVM at the program level rather than at the individual contract level, e.g., staff augmentation (personal services) work More flexibility in EVM Systems may be required to enable optimal application of EVM to services contracts, e.g., Summary-level planning/shorter planning horizons Allowances in the process for more frequent re time-phasing of budgets Use WBS process to determine work to manage using EVM and PBSA.

4 Yesterday’s Participants Matt Morris Barbara Phillips Lucy Haines Mark Infanti* Mike O’Neill Buddy Everage* Bill Mendelson Steve Gahm Eric Christoph Jeff Christoph *Attended working group session last August

5 Conclusions EVMS or PBMS required for services EVMS useful for discrete projects Performance-based management is more appropriate for services that are difficult to scope and schedule, e.g., IT services, logistics, maintenance Management objectives vary among types of services, e.g., when a service is provided in accordance with a service level agreement (SLA), the goal may be to meet the required service level at a planned or lower cost Commonalities also exist, including WBS Resource plan Metrics, but not necessarily EV

6 Outline for Guidance Document Define, compare and contrast products vs. services Provide guidance for selecting appropriate management methods applicable to the contract scope of work Many contracts are hybrids – both EVM and PBM could be used on different WBS elements within a single contract Methods may also vary by contract type Collect and describe characteristics of various types of services Write guidance for each, e.g., IT, logistics, depot maintenance, etc. Provide guidance for contracting, i.e., to put management requirements on contract correctly