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| Section 887 of the FY 2009 National Defense Authorization Act and the Weapon Systems Acquisition Reform Act (WSARA) required DoD to submit the following report to Congress on DoD implementation of EVM. DoD Report to Congress: DoD Earned Value Management: Performance, Oversight, and Governance (Report) Link: DAU web site: DoD Report to Congress Excerpts from the DoD Defense Support Team (DST) EVM Report to Congress, required by WSARA, follow: "Utility of EVM has declined to a level where it does not serve its intended purpose." "EVM practices are intended to: Apply methodical discipline and objective measurement and analysis to cost, schedule and technical processes. Early mitigation of cost, schedule, and technical problems improves the probability of achieving program budget and completion goals.
Other Excerpts from DST EVM Report to Congress, Sept. 1, 2009 | | Significant Deficiency: Use of management reserve to alter internal and subcontract performance levels and overruns | 1. Change in...culture is necessary · Encourage Program Managers to identify and quantify the impacts of schedule slips and cost overruns · Contractors often worry that poor performance may result in o Program cancellation o Reduced profits o Damaging performance evaluations
· Contractors may circumvent proper EVM practices to keep EVM metrics favorable and problems hidden · Engineering community should establish technical performance measures (TPM) that enable objective confirmation that tasks are complete
| 2. Accuracy of EVM data provided by vendors---in conveying the true status of the project · Various subsystems that make up many contractors' EVMS are not integrated, resulting in inconsistent portrayals of status · Schedules often cannot show downstream impacts of problems or cannot determine the critical path driving contract completion · When assessing cost and schedule variances, contractors cannot effectively identify the root cause, impact, and appropriate corrective actions · Contractors do not have a process for developing reliable estimates at completion · Contractor change control processes do not maintain the integrity of the PMB · Contractors treat EVM as a reporting requirement rather than the management process it is intended to be · Many instances of inappropriate changes o Arbitrarily changing past variances o Moving budgets to mask overruns o Making changes that were not properly authorized
"End result: Many Defense contractors cannot accurately predict outcomes that affect program costs or deliveries"
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3. Technical Performance Measures (TPM) · EV process is reliable and accurate only if o TPMs are identified and associated with completion of appropriate work packages o Quality of work must be verified o Criteria must be defined clearly and unambiguously · If good TPMs are not used: o Programs could report 100 percent of earned value..even though behind schedule § Validating requirements § Completing the preliminary design § Meeting weight targets § Delivering software releases that meet the requirements · Program Manager should ensure that the EVM process measures the quality and technical maturity of technical work products instead of just the quantity of work performed. |
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4. Systems Engineering (SE) a. EV process is reliable and accurate only if Augmented with a rigorous SE process- SE products are costed and included in EVM tracking
- SE life-cycle management method is integrated with the planning of the PMB
b. Requirements definition findings Cost and schedule growth arise due to changes that are in the defined scope of the contract but not reflected in the EVM baseline Scope creep arises because of lack of communication between the government and the contractor through poor requirements definition or an inadequate IBR
"SE and EVM should be integrated, not stove-piped"
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Assessment of Report: The DoD EVM Report includes many valid assessments and recommendations for corrective actions. However, it also contains incorrect and insufficient information. Most importantly, the Report does not provide a needed recommendation for legislative action to link earned value with technical performance, or Quality. The seed of a remedy is in the "Ike Skelton National Defense Authorization Act for 2011," H.R. 6523. See New . Letters to Congress, OMB, and DoD: The foIlowing letters were sent to the House and Senate Armed Services Committees and to Mr. J. Zients, Dep. Director for Management and Chief Performance Officer, Office of Managesment and Budget (OMB), to Secretary of Defense Gates, and to Nr, G, Bliss, Director, Performance Assessments and Root Cause Analysis (PARCA) with recommendations for acquisition reform of EVM. - Letter to Senate Armed Services Committee on DoD Report to Congress
- Letter to Mr. Zients 12/13/2009 (OMB)
- Letter to Senate Armed Services Committee on F-35 Program Cost and Schedule Overruns and EVM , 3/5/2010
- Letter to House Armed Services Committee (HASC), 3/28/10 subject: Panel on Defense Acquisition Reform Recommendation Regarding Earned Value
- Letter to HASC, 4/11/2010 subject: Defense Acquisition Reform Recommendations Regarding Earned Value Management
- Letter to HASC, 4/16/2010 subject: Proposed Markup to H.R. 5013 regarding Contractor Earned Value Management
- Letter to Chairman Levin, 4/28/2010 subject: Request to Support Earned Value Management Reform in H.R. 5013, IMPROVE Acquisition Act
- Letter to Sen. Collins , 5/6/2010 subject: Flaw in S. 920 regarding Earned Value Management
- 2nd letter to Mr. Zients , 7/17/10 subject: EVM Acquisition Reform
- 3rd letter to Mr. Zients 10/29/10 subject: Acquisition Reform of Earned Value Management for Capital Assets and IT Investments
- Letter to Sec. Gates 10/31/10 subject: Acquisition Reform of Earned Value Management for Capital Assets and IT Investments
- Email to House and Senate Armed Services Committees 11/5/10 subject: Acquisition Reform provision in NDAA
- Letter to PARCA Director Gary Bliss , 1/7/11 subject: Path to Earned Value Management Acquisition Reform
- Letter to Sen. Carper and Sen. Collins , 4/14/11 subject: Inconsistency in S.801, Information Technology Investment Management Act of 2011 regarding EVM
- Letter to Chairman McKeon , 9/13/11 subject: Defense Acquisition Reform
- Letter to Sen. McCain , 10/25/11 subject: Cost Controls on the F-35 and Need for Acquisition Reform of Earned Value Management
17. Letter to Mr. Kranz , 11/1/11 subject: Comments on DI-MGMT-81466B, Integrated Program Management Report 18. Letter to Sen. McCain , 12/20/11 subject: Proposed Amendment to NDAA for 2012 (S. 1867) for Earned Value Management Acquisition Reform Industry input to DoD: DoD received industry views from the Council of Defense and Space Industry Associations (CODSIA). CODSIA’s responded to Mr. Shay Assad, DoD Director, Defense Procurement & Acquisition Policy CODSIA . Assessment of CODSIA report: The CODSIA response does not sufficiently address the deficiencies in the quality of EVMS reporting and the contributing factors. CODSIA also did not identify the correct root causes of deficient EVM implementation. Finally, the CODSIA letter has limited guidance regarding Integrated Baseline Reviews (IBR). Consequently, I sent two letters to Mr. Assad that covered two topics: Deficiency in FAR, Defense Federal Acquisition Regulation Supplement (DFARS) and the EVMS Standard: | Contractor has no requirement to: Link EV to technical performance or Quality Integrate the EV Performance Measurement Baseline with the technical baseline (Functional Baseline, Allocated Baseline, or Product Baseline)
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House Armed Services Committee Panel on Defense Acquisition Reform Panel Findings and Recommendations New: 5 May 2011, NAVAIR Contractor EVMS Compliance Letter to DCMA From: Commander, Naval Air Systems Command Issues: Of 63 contracts with EVMS reporting: 1. 24 are Red for cumulative cost, schedule, or EAC problems. 2. Nearly 1/2 are executed at sites with significant EVMS implementation issues that impact ability to use the data for effective program management. 3. Specific areas of concern include: a. Poorly developed and maintained IMS b. Lack of timely EAC updates c. Poor PMB control practices to include: Link to letter: NAVAIR Contractor EVMS Compliance New: Sept. 21, 2011: Navy Ship Builders Have Compliance Problems Like NAVAIR Inside the Pentagon reported that breaking at least half the rules has become the norm for shipbuilders that construct multibillion-dollar aircraft carriers, amphibious ships, submarines and surface combatants (Sept.21, 2011). "The defense industry as a whole has not met the department's expectations for [EVMS] compliance and we continue to work with DCMA and our suppliers to improve their management processes," said Navy spokeswoman Capt. Cate Mueller. LM EVMS has been deficient since 2007. See following Compliance Report. DCMA: Lockheed Martin EVMS Compliance Report The DCMA EVMS Compliance Report, Executive Summary, dated 11/19/2007, stated that Lockheed Martin Aeronautics Company (LM-Aero)
• Is not following, nor consistently applying, the EVMS guidelines during the execution of Department Programs
• Utility of the EVMS has declined • Large percentage of Control Account Managers (CAM) Are disconnected from basic LM-Aero EVMS functions Cannot satisfactorily demonstrate that they understand and use documented EVM processes, procedures and tools to manage their work
• LM-Aero was non-compliant in 19 0f 32 industry guidelines • Significant findings include: Using management reserve to alter internal and subcontractor performance levels and overruns Cost and schedule integration problems that undermine the validity of data Inappropriate EV techniques used for assessment of material, subcontracts, and rework Inability of CAMs to demonstrate working level understanding of key EVMS processes including Definition and use of critical path Situational awareness of cost and schedule variances for course correction Substantiation of completion cost estimates
The DCMA report is available at POGO, the Project on Government Oversight, in its report, "Pentagon: Lockheed Cannot Properly Manage Billion-Dollar Programs, Many Defense Contractors Have Not Adequately Tracked Costs" http://pogoarchives.org/m/ns/jsf/dcma-report-20071119.pdf
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