1. EVM 202—Lesson 5 EVMS Surveillance
September 2016
EVM 202—Lesson 5 EVMS Surveillance

2. Lesson 5 Learning Objectives
Terminal Objective
Describe the Earned Value Management System (EVMS) surveillance purpose and process
Enabling Objectives
Describe Department of Defense (DoD) policy related to EVMS surveillance
Describe the Defense Contract Management Agency (DCMA) surveillance process
Describe the DCMA Corrective Action Request (CAR) process
Describe EVMS noncompliance remediation options
Describe the working relationships of the Program Management Office (PMO) and contractor in the surveillance process

3. EVMS Surveillance Purpose
Purpose of Surveillance—Surveillance is a recurring process conducted by DCMA, Supervisor of Shipbuilding, Conversion and Repair (SUPSHIP), or other cognizant Federal agency that assesses the continuing compliance of the contractor’s EVMS with Electronic Industries Alliance Standard-748 (EIA-748) and the contractor’s written system documentation
Policy—DCMA surveillance of management control systems is required for all contract efforts ≥ 100M that require Earned Value Management (EVM) compliance with the EIA-748
Defense Federal Acquisition Regulation Supplement (DFARS) clause establishes the contractual authority for EVMS surveillance; requirement cannot be eliminated by PMO

4. DoDI 5000.02 EVM Policy Guidance Enclosure 1 Table 8 EVM Application Requirements
Enabling Learning Objective
ELO 2.1: Demonstrate the EVM applicability to a contract
ELO 2.5: Apply appropriate Integrated Program Management Report (IPMR) tailoring
Instructor Guidance
Walk students through the DoDI EVM policy shown on this slide.
Briefly discuss EVM policy as it relates to other types of contracts (e.g., major modifications; LRIP, etc.)
Notes
This slide reflects the DoDI EVM requirements, including the Defense Procurement and Acquisition Policy (DPAP) Interim Deviation. This policy grew out of a March 2005 policy that requires an EVMS on cost or incentive contracts, subcontracts, and intra-government work agreements greater than or equal to $20 million then-year (TY). For efforts greater than or equal to $100 million TY, the EVMS must be formally approved by the contracting officer.
Implementing EVM on contracts less than $20 million is a risk-based decision at the discretion of the program manager and requires a cost-benefit analysis. EVM policy also requires use of a common Work Breakdown Structure (WBS) in accordance with the DoD MIL-STD-881 (current version), which is now incorporated into the Data Item Description (DID).
EVM is discouraged for DoD firm-fixed-price (FFP), level of effort (LOE), and time-and-materials (T&M) contracts, as well as contracts less than or equal to 12 months in duration.
Note that:
DFARS Clause , Earned Value Management System (DEVIATION) (SEP 2015) raised the compliance review threshold from $50 million to $100 million.
DI-MGMT (current version) supersedes the Contract Performance Report (CPR) and Integrated Master Schedule (IMS) DIDs for contracts awarded based on solicitations or RFPs issued on or after July 1, 2012 (See the next slide for details).
The IPMR DID is required for contracts where DFARS applies.

5. Surveillance Verifies the EVMS
A contractor’s processes and procedures continue to satisfy the EIA-748 EVMS guidelines
A contractor’s processes and procedures are being followed appropriately
The validity of the contractor’s performance data provided to the Government

6. EVMS Integrated Surveillance Team (IST)
DCMA CMO
EVM Specialist
Program Support Team (PST)
Program integrator/support program integrator
Administrative Contracting Office (ACO)
EVM Implementation Division (ID)
PMO
The contractor

7. DCMA EVM Surveillance Process
When surveillance is required, all 32 guidelines evaluated within a three-year period
Standard Surveillance Plan (SSP)—Developed by the EVM Specialist
Minimum of four surveillance events per year
Corrective Action Request (CAR)

8. EVMS Surveillance Plan
Surveillance Selection Risk Matrix
Formal DoD Program Office delegation is NOT required
An SSP is required
Begins at contract award and runs throughout the contract
Uses a risk-based approach
Requires quarterly surveillance covering all guidelines over a 36-month period
Requires surveillance results be documented and communicated to stakeholders in a timely manner
Annual EVMS Surveillance Schedule

9. DCMA Standard CAR Process
CAR Severity
Level I—Contractual non-compliance; no special management attention required to correct; directed at supplier working level
Level II—Systemic and could affect EVMS; directed to supplier management level and copy sent to ACO
Level III—Systemic and has affected EVMS and program performance; directed to supplier top management at site; contractual remedies possible
Level IV—System has affected EVMS and multiple programs; directed to supplier corporate management; issued as part of contractual remedy notice

10. Remediation Flow Chart
Financial Remediation Actions*
Reduce or suspend progress payments
Reduce contractor billings
Reduce overhead billing rates
Reduce award fee (must be factor)
Negotiate a reduction in contract price
Management System Remediation Actions*
Review for cause/compliance review
Withdraw management system approval
Other*
Issue Cure Notice
Issue Show Cause Notice
Create EVM Oversight Group
Implement EVMS Senior Executive Review Board
Submit Contractor Performance Assessment Report (CPAR)
*Actions may be taken concurrently Withdrawal applies only to efforts ≥ $100M TY

11. Remedies Focused Surveillance Review (FSR)
May result from routine surveillance or a PMO concern for IPMR data validity
Purpose: To determine magnitude and systematic nature of concerns
Review for Cause (RFC) Major Problem Identified
Evaluates the contractor’s progress against the CAP
Identifies remaining actions required to reaffirm system acceptability
Ensure accuracy of performance data generated for Government contracts
Determines if the system approval should be withdrawn

12. EVM Roles and Responsibilities Exercise
Review the EVM Roles and Responsibilities reference on Blackboard:
Team A—DCMA
Team B—DCMA Earned Value Management Implementation Division (EVM ID)
Team C—Program Management Office (PMO)
Team D—Contractor
Prepare a 5–10 minute briefing on your assigned role’s surveillance responsibilities (use easel paper)

13. Lesson 5 Summary Terminal Learning Objective (TLO)
Describe the EVMS surveillance purpose and process
Enabling Learning Objective (ELO)
Describe DoD policy related to EVMS surveillance
Describe the DCMA surveillance process
Describe the DCMA CAR process
Describe EVMS noncompliance remediation options
Describe the working relationships of the PMO and contractor in the surveillance process