Strength through Industry & Technology Program Management Systems Committee Procurement Division Educational Seminar 31 March 2008 Sarasota, Florida Current Initiatives in Earned Value Management

Strength through Industry & Technology 2 The State of EVM Needs improvement More training needed in the civilian agencies More aggressive DCMA has identified problems We acknowledge that we are a part of the problem It’s time to partner with our stakeholders and identify new solutions

Strength through Industry & Technology 3 PMSC Opportunities Increase commonality and consistency of EVM implementation across industry and government Proactive and timely resolution of contractual EVMS implementation and oversight issues –Incorrect/Conflicting EV Contract Requirements –FAR Clauses Cited –DFAR Clauses Omitted –H-Clauses and SOW That Direct System Violations Share industry and government best practices and lessons learned Review and discuss industry/government EVM policy and guidance Improve EVM skill set (people, processes and tools) Work with educational institutions to develop EVM course curricula

Strength through Industry & Technology 4 More Aggressive DCMA Executive Agent for Earned Value Management Systems –Responsible for Determining Initial and Ongoing EVMS Compliance for All DoD Suppliers (including Subs) DCMA Re-energizing EVM within Pentagon –Recent Review Results Have Heightened Interest Instituted Standard Review Methodology using new Standard Surveillance Operating Manual (SSOM) –Did not coordinate with industry before issuance –Issuing Contract Action Reports where they had not before

Strength through Industry & Technology 5 What DCMA Has Seen In Plant Systemic EVMS Weaknesses –Across Programs, Suppliers and Buying Commands CAM Knowledge Problems Span of Control Issues Inadequate Schedules Data Integration and Integrity Problems Undisciplined Work Authorization and Change Control Processes Poor Variance Analyses No Formal Corrective Action Processes Inadequate Estimate at Completion Procedures EVM Used to Report Data, Not as a Management Tool

Strength through Industry & Technology 6 PMSC Initiatives Encourage joint industry/government training: –Scheduling- Contracting for EVM –EVM - IBR –Surveillance- Acceptance Engage the Program Management community in pursuit of our objectives: –DoD - Intelligence agencies –OMB- Civilian agencies –GAO- DAU and FAI –Professional Associations

Strength through Industry & Technology Industrial Committee for Program Management PMSC set up meeting with Dr. Finley –Concern over lack of DoD participation in the PMSC by his direct staff relevant to EVM (i.e., System Engineering, Contracts, etc.) Other disciplines need to be at the table for more PM representation not just the EVM –Open up the communication lines to offer better integration of activities Result of meeting – establishment of ICPM to improve Program Management of DoD programs –Provide a continuing forum for government-industry discussions and exchange of views related to program and acquisition management activities. –Discuss OSD and DoD Component policies that affect relationships with suppliers. –Discuss emerging issues in government and industry that affect the readiness and capabilities of U.S. defense system producers.

Strength through Industry & Technology Mike Joyce (Chair) – Lockheed Martin Dr. Jim Finley (Principal Govt Participant) –Deputy Under Secretary of Defense (Acquisition & Technology) Dave Ahern – OUSD A&T Director, Portfolio Systems Acquisition Vice Adm David Architzel – Navy LGen Donald Hoffman – AF MGen Steve Reeves - Army Steve Goo – Boeing John Chino – Northrop Grumman Skip Burns – Raytheon Ron Hornish – Rockwell Collins Mike Blake – Textron Susan Dong – BAE Systems Bennett Croswell – Pratt & Whitney Bill Altman – Battelle (for Steve Kelly) Neil Albert – NDIA PMSC Pete Wynne – NDIA PMSC

Strength through Industry & Technology Contracts Subcommittee In addition to including FAR or DFARS EVMS clauses on contracts, contracting officers frequently include other provisions that often require suppliers to modify or depart from their standard, validated EVM Systems.  The use of a single EVMS by all program participants to manage large programs involving major subcontractors is viewed as non- compliant to the DFARS EVMS clause by DCMA. – This approach also referred to as badgeless, virtual, or gray badge. – Characterized by adoption of a single validated system to manage the effort (typically the prime’s EVMS), use of a common tool set, integrated schedules and performance reporting DCMA’s stated policy is to issue Corrective Action Request (s) against the contractor for following contract direction 9

Strength through Industry & Technology 10 Contracts Subcommittee  There is a widespread EVM knowledge gap among the contracting communities  Evidence that EVM and Contracting experts are not collaborating, via IPTs, on the contractual application and use of EVMS during acquisition planning  Evidence of this is as follows: Incorrect flow down and/or omission of EVM contractual requirements. Improper contract direction forcing the contractor or subcontractor to violate their approved system. Over application of EVM requirements Improper use of Management Reserve (MR) Integrated Baseline Review (IBR) timing  NDIA PMSC should establish an Industry / Government team to generate a briefing and communication/training package which can be delivered to all federal agencies and contractor organizations.

Strength through Industry & Technology 11 Service Contracts Subcommittee Charter for Subcommittee: Develop and recommend policy, process guidance, and/or training to support the implementation of EVMS on services type work. EVM and PBSA are compatible and should be used together. Both use a WBS to develop the requirements, cost and schedule and must have a defined method of measuring performance. Common Approach Control Account for PMO Work Package 1: Project Management Resources: Fixed, Project Manager - One charge number, LOE Work Package 2: Project Control Resources: Fixed; Scheduler, Financial Analyst, EV Specialist, Data Entry Clerk - One charge number, LOE

Strength through Industry & Technology Program Management Office Project Management Scheduling Finance Project Support Office Project Management “Common Approach”

Strength through Industry & Technology Admin Mgt Technical Direction / Mgt Planning/ Statusing/ Analyzing/ Reporting Monthly Processing Verification &Validation Training CAM /User Support Program Management Office Project Management Operations Support Baseline Support Project Support Office EVMS Improvements PMB Creation PMB Modification Tool & Utility Development Research & Informal Train Training Course Development Conferences & Seminars In-house Company Mandated “New Approach”

Strength through Industry & Technology PM Basis of Estimate (BOE) Administrative Management –Based on percentage times the number of FTEs (5-8%) or Technical Direction / Management –Based on percentage of technical work (7-12%) Planning, Statusing, Analyzing, Reporting –Based on Should Costs, Business Processes, # of CAPs, Risk, Scope Stability, EVM Maturity, etc

Strength through Industry & Technology Should Costs by Role per CAP Status input preparation: 60 min Performance metrics data entry: 10 min Status Review: 30 min Data entry adjustments: 5 min Preliminary report generation: 10 min VAR analysis investigation & doc: 30 min VAR Analysis Review & Validation: 15 min Report preparation & reconciliation: 10 min *

Strength through Industry & Technology Scheduling Subcommittee Recognition that issues with the IMS are broad and numerous Planning: –What are the essential building blocks needed and how are they acquired –How is an IMS built Execution: How is a schedule updated and status presented

Strength through Industry & Technology QUESTIONS? 17