1. Introduction to the Management Control System (MCS) Process Presented by: Enrique (Rick) Contreras Program Management Specialist SAIC & Dan Crain Process Owner Program Management SME AIR-1.1.4

2. Return to Topics Page 2 Topics What is the MCS? Origin of MCS MCS Relationship to Government/Industry Standards Benefits of the MCS Barriers to Success Status of the Process

3. Return to Topics Page 3 What is the MCS?

4. Return to Topics Page 4 Contract Management Baseline Maintenance Project or Technical Management Information Management Finance & Accounting Management Performance Measurement SIGMA is a collection of business processes defining functions within NAVAIR. These processes are not fully integrated nor do they address project management. In past systems, this data was held in separate and non-integrated tools. SIGMA now provides NAVAIR with an integrated tool. WBS Dictionary (Technical SOW) Organization Breakdown Structure Work Breakdown Structure Integrated Master Schedules Funding Sources & Appropriation Types Baseline Management SIGMA and MCS Functions The MCS integrates the business functions into the project management process. Establishing criteria and the basis for sound project management and controls is the development of the cost, schedule & technical baseline data.

5. Return to Topics Page 5 An Integrated Process The MCS is the primary process within NAVAIR for in-house project management. The MCS is an integrated project management process consisting of inter-related subsystems used to manage projects with these objectives: Application of integrated project management practices Management of total project work scope Manage by Exception Use Earned Value to measure performance against a stable cost, schedule, & technical baseline The MCS establishes a “backbone” for integration of the SIGMA Business Function Processes into the project management process.

6. Return to Topics Page 6 Origin of MCS

7. Return to Topics Page 7 Origin Began as a “System Description” Process addressed application of EVMS for in-house work SD&I written for SIGMA-based business rules Required SAP specific descriptions, definitions, and instructions Evolved into an IMP document, EVMS became a secondary goal for MCS Training had to address “cultural” barriers of Project Management vs. Funds Management philosophy

8. Return to Topics Page 8 MCS Relationship to Government/Industry Standards

9. Return to Topics Page 9 The MCS Process Flow Organize: 1. Define the Work 2. Assign the Work Authorize: 3. Authorize the Work Plan: 4.Schedule the Work 5.Budget the Work & Negotiate the Baseline Monitor: 6.Perform the Work 7.Measure the Work 8.Forecast Remaining Work Control: 9.Analyze Variances & Take Corrective Actions 10.Revise the Baseline (as Necessary & Permitted) The MCS process flow follows the EVMS process flow This consists of five major phases, containing 10 steps Implementation, Training and Execution also follow this flow

10. Return to Topics Page 10 DoDD 5000.1 & DoDI 5000.2 Basis for the NAVAIR MCS Process Government & Industry Requirements NAVAIR Management Control System (MCS) Project-Specific Requirements *Project Management Institute Earned Value Management Systems (EVMS) Guide EVMS ANSI Standard ANSI/EIA-748-1998 PMI* Project Management Body of Knowledge (PMBOK) Process Document Process Instructions SIGMA Training & Scripts MCS Training & Implementation Program Office Directive (POD) Statement of Work IMP/IMS

11. Return to Topics Page 11 MCS & EVM: Relationships & Applicability Authorize: 3. Authorize the Work Plan: 4. Schedule the Work 5. Budget Work & Negotiate Baseline Monitor: 6. Perform the Work 7. Measure the Work 8. Forecast Remaining Work Control: 9. Analyze Variances & Corrective Actions 10. Revise the Baseline Section 1 Project Definition & Organization Section 2 Project Planning, Budgeting, & Authorization Sections 3 - 7 Project Execution, Sustainment, and Surveillance Organize: 1. Define the Work 2. Assign the Work Major DoD Contracts Definition: Cost & Incentives contracts >$20M (CPR & IMS Tailored) Cost & Incentives contracts >$50M (Certified EVMS, CPR & IMS) Not mandatory for FFP, T&M contracts Less than Major Contracts Threshold: >$20M Optional, Risk based PM Decision >12 mo., & >$6.3M, but < threshold for major contract Formal Acceptance of Contractor’s EVM System Contract Performance Report (CPR) Integrated Master Schedule (IMS) MCS EVM Milestone Decision Authority (MDA) / Program Executive Offices (PEO) will be the decision maker for application of EVM principles and practices for in-house projects using the following criteria: 1 st Consideration: Duration (12 months or greater) and Cost ($6.3M or greater) 2 nd Consideration: Risk (Cost, Schedule, Technical) >= 12 Months & >= $6M? Sufficient Risk? Decision to Apply EVM Yes EVM Not Required No MDA/PEO Assesses New Project 1 DoD NAVAIR DoDD 5000.1 & DoDI 5000.2 12 May 2003 OMB Circular A-11, Preparing, Submitting, and Executing the Budget 27 June 2002 Earned Value Management Implementation Guide (EVMIG) 3 Oct 1997 ANSI/EIA-748- 1998

12. Return to Topics Page 12 Benefits of the MCS

13. Return to Topics Page 13 Why MCS? To meet Sponsor & Organization objectives and requirements (cost, schedule, & technical) To stay on schedule & budget To stay (be) competitive To practice “Project Management”, not “Funds Management” The underlying concepts are sound & make good business sense To comply to Industry-accepted processes and practices Because the Government, Sponsor, or Boss says so!

14. Return to Topics Page 14 The Value of the MCS to Project Managers Providing essential insight into questions such as: What are the major deliverables & how are we performing against them? What are the major pieces of the work scope & who is responsible? What are the major issues & risks to watch out for? What resources do we need to complete this project? How far along are we? How much work has been accomplished? What are we doing about problems? What are the major changes since the project started? To date, are we over or under-run? Ahead or behind schedule? At completion, will the project be over or under-run? Ahead or behind schedule? Historically, what have similar projects cost? How long have they taken?

15. Return to Topics Page 15 Benefits of the MCS Combined with the use of SIGMA, NAVAIR establishes the use of a standard process and tool throughout the Command Perform analysis on all Projects within a Program, Organization, and within NAVAIR Allows for the management of ALL project works scope (Organic and Contracted) in one system Establishes one set of criteria for project management, regardless of complexity, value, or duration of the project work scope Drill down to see detail of Projects, WBS elements, & Control Accounts Summarize Projects for HQ, Field Activities, etc. Quickly see cost & schedule variances that provide “early warning signals” for projects Ensure accurate Estimate-at-Completion (EAC) Develop standard reports to assess common project management criteria across all projects within NAVAIR

16. Return to Topics Page 16 Live / Dynamic Data Access “Real time” data Weekly NAVAIR Labor Hours/Costs Monthly Contractor Support Services (CSS)—as invoiced External costs—as invoiced Need to drill down to find answers to issues (Variances) Takes more than one page to get a picture of the Project’s status Good data depends on objective status (garbage in, garbage out) Technical explanations or analysis require people’s inputs Administrative effort still required

17. Return to Topics Page 17 Barriers to Success

18. Return to Topics Page 18 Obstacles to Overcome Management Commitment Process Discipline Practice vs. Policy Change Cultural Government vs. Industry Practice

19. Return to Topics Page 19 Status of the Process

20. Return to Topics Page 20 Ongoing Efforts P-8A MMA PMA-213, JPALS AIR-1.0 Workload Planning & Staffing SIGMA PS Business Rule Integration

21. Return to Topics Page 21 Future MCS-based Project Management Training using NAVY ERP Smaller, Controlled Audience Project-specific Implementation Training and Support Web-based MCS documents, training, templates and tools