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NEW: DOD Proposes to withhold payment to contractors for non-compliance with EVMS:
DoD is proposing to withhold payment of 10% to contractors that are noncompliant with the contractual EVMS requirements. On January 15, DoD issued a proposed amendment to the Defense Federal Acquisition Regulation Supplement (DFARS) to improve the effectiveness of DoD oversight of contractor Business Systems, including EVMS. Per the amendment, contractor business systems and internal controls, including EVMS, are the first line of defense against waste, fraud, and abuse. Weak control systems increase the risk of unallowable and unreasonable costs on Government contracts.
The proposed DFARS amendment was published Jan. 15 in the Federal Register Proposed EVMS withhold amendment . Interested parties should submit comments in writing to DoD on or before March 16, 2010. .
NEW: DOD EVM Report to Congress:
DOD submitted its Congressionally-required report on Earned Value Management, DoD EVM: Performance, Oversight, and Governance (Report).
Report concluded that "The utility of EVM has declined to a level where it does not serve its intended purpose." It includes findings and recommendations regarding:
1. Changes in culture necessary
2. Accuracy of EVM data
3. Technical Performance Measures (TPM).
4. Systems Engineering (SE)
The following information is available at the DoD EVM Implementation tab.
Link to Report
Abstract of the Report regarding the above issues
Assessment of the Report's merits and deficiencies
Recommendations to improve the effectiveness of EVM sent to the Senate and House Armed Services Committees and to the Office of Management and Budget
Assessment of Industry's input to DoD for the Report
The complete Report to Congress may be downloaded at link: DAU web site: DoD Report to Congress
For guidance on how to link EV to TPMs and how to augment EVM processes with a rigorous SE process, see my articles and presentations on the Advanced EV: PBEV tab, especially "Integrating SE with EVM" published in the PMI Measurable News (May 2008) or the original version, published in May 2004 in Defense AT&L.
June 15, 2009: New, Interim Defense Acquisition Guide (DAG) includes expanded guidance to integrate Technical Performance Measures (TPM) with EVM and enhanced Systems Engineering (SE) responsibilities for integrated planning.
DAG includes new guidance for integrating TPMs with EVM and the IMS, including contractual TPM reporting. A contractor must now have a TPM plan, defined in terms of expected performance at specific points in the program as defined in the WBS and IMS, the methods of measurement at those points, and the variation limits for corrective action.
DAG also includes expanded responsibility for SE to integrate the:
Technical scope of effort in the WBS
Corresponding event driven program implementation in the IMS and EVM
Technical baselines, TPMs, and EV.
The pertinent sections of the DAG are 4.5.1, 4.5.4.1, 4.5.4.2, and 4.5.6.1.
The DOD Guide Matrix and the Technical Performance tabs (top left corner) have been updated to include the DAG.
More specific guidance and examples for integrating technical performance, or Quality, with EVM are provided in my article, Integrating SE with EVM, in the “PMI Measurable News” and in the presentation to the DCMA.
The presentation made to the DCMA EVM Center Conference, that covered the DAG's new guidance for EVM, is available at the PBEV Live EV Training tab. Detailed guidance, practical examples, and templates are in my book, Performance-Based Earned Value®.
A link to DAG is provided below.
May 22, 2009: Pres. Obama signed Weapons System Acquisition Reform Act of 2009 (WSARA), S. 454. Includes EVM improvement and Systems Engineering (SE) best practices.
Section 302, Earned Value Management, directs DoD to provide recommendations for improving EVM and its implementation within DoD including:
· A discussion of the merits of possible alternatives
· A plan for implementing any improvements the Secretary determines to be appropriate
The Act also requires that DoD develop policies and guidance for the
· Use of SE principles and best practices
· Development of SE master plans
The Act can be downloaded at http://www.govtrack.us/congress/bill.xpd?bill=s111-454
Web Editor’s note: Performance-Based Earned Value® meets the intent of the Act. PBEV augments the EVMS Standard by overcoming the Standard’s failure to incorporate Quality into the measurement of EV. PBEV provides guidance for integrating SE with EVM. It is based on SE principles and best practices from SE and Project Management standards and CMMI®. It ensures that EV is based on objective technical performance measures and on meeting the technical baseline requirements. Acquisition managers and contractors are invited to consider PBEV as a framework for process improvement.
DAPS:
Recent DOD guidance has finally acknowledged that the EVMS Standard has a “quality gap.” The “DOD Systems and Software Engineering Defense Acquisition Program Support Methodology”(DAPS) states that “EVMS has no provision to measure quality.” To overcome the EVMS quality gap, DAPS provides excellent guidance to be used during Program Support Reviews. DAPS discusses the importance of using Technical Performance Measures (TPM), Critical Technical Parameters (CTP), and other metrics to cover other performance-related requirements/capabilities such as Developmental Test success criteria and Operational Test entrance criteria. DAPS also provides useful focus questions that should be answered to ensure that earned value is linked to technical performance (Section 3.3.4.3). Links to DAPS and other DOD Guides for more effective program management are available below.
May 6, 2009: Dep. Sec. Of Defense Lynn provided testimony on Acquisition Reform to the House Armed Services Committee.
Recommendations for Acquisition Reform include:
- Improve contractor data reporting of earned value
- Tie incentive fees to contractor performance
- Maintain disciplined systems engineering integrated with testing
The full testimony can be downloaded at http://armedservices.house.gov/pdfs/FC050609A/Lynn_Testimony050609.pdf
DODI 5000.02 Operation of the Defense Acquisition System, date Dec. 2, 2008:
This revision requires a Systems Engineering Plan (SEP). The SEP shall describe the program’s overall technical approach, including key technical risks, processes, resources, metrics, and applicable performance incentives. It shall also detail the timing, conduct, and success criteria of technical reviews.
https://akss.dau.mil/Documents/Policy/DoDI%205000-02%20(Official%20Signed%20Version)%202%20Dec%202008.pdf
Note: See DOD guides below, including guidance to
Dept. of the Navy memorandum:
DoD (POL) policy memoranda:
Various DoD guides summarize policy and guidelines for integrating systems engineering with EVM and for basing award fee and incentives on achieving integrated plans and meeting contractual performance requirements. The guides cover the following topics:
The key guides are:
Interim Defense Acquisition Guide (DAG)
Systems Engineering Plan (SEP) Preparation Guide
Work Breakdown Structure Handbook, MIL-HDBK-881A (WBS)
- Integrated Master Plan (IMP) and Integrated Master Schedule (IMS) Preparation and Use Guide (IMP/IMS)
- Guide for Integrating SE into DOD Acquisition Contracts (Integ SE)
- Systems and Software Engineering Defense Acquisition Program Support Methodology (DAPS)
- PDF file from DOD (AT&L), How to Prepare a SEP that Works, includes the following useful slides:
19: Key Performance Parameters (KPP) should include
- Actual KPPs from draft or approved Initial Capabilities Document (ICD), Capabilities Development Document (CDD), or Capabilities Production Document ( CPD)
- Progress made towards KPPs
23: Requirements Traceability
- Chart illustrates requirements traceability
- Capabilities (CDD/CPD)
- Technical Baseline
- Functional Baseline
- Allocated Baseline
- Product Baseline
35: Technical Reviews
· Shows schedule of all SE technical reviews and relationships to the technical baseline
All Guides and the PDF file, How to Prepare a SEP that Works, except WBS, may be downloaded at http://www.acq.osd.mil/sse/pg/guidance.html within "Systems Engineering."