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| Need to change Federal Acquisition Policy and Regulations: Any changes to DoD acquisition guidance that may result from DoD's response to the National Defense Authoirization Act (NDAA), Section 864, will not fix the problems because that guidance is not applicable to contractors. Revisions to OMB policy, Federal Acquisition Regulation (FAR), and Defense FAR Supplement (DFARS) are necessary to require contractors to measure and report earned value that is based on technical performance. Also, OMB and DoD should consider reducing acquisition costs by eliminating compliance with those EVMS guidelines that add no value to Government and Industry. Proposed revisions and benefits follow. A letter to Mr. Gary Bliss, Director, PARCA, describes the recommended Path to EVM Acquisition Reform. Link: Letter to PARCA Director Gary Bliss DFARS: Recommended revision to DFARS to close the Quality Gap: Revise DFARS 234.201 and 252.234-7002 to comply with ANSI/EIA-748 guidelines, ANSI/PMI Standard 99-001-2008 (PMI), and ANSI/EIA 632, as shown in the following table: Additional information regarding PMI and ANSI/EIA 632 are shown in the subsequent table, Revisions to OMB Circular.
| Table 1: Recommended DFARS Revisions | | Guideline | ANSI/EIA-748 is | DFARS modified (should be) | Rationale |
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| 2.1(a) | Define the authorized work elements for the program. A work breakdown structure (WBS), tailored for effective internal management control, is commonly used in this process. | Define the authorized product scope and work elements for the program. A work breakdown structure (WBS), tailored for effective internal management control, is commonly used in this process. | Add "product scope" to work scope. |
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| 2.2(b) | Identify physical products, milestones, technical performance goals, or other indicators that will be used to measure progress. | Identify technical performance goals and physical products, milestones, or other indicators that will be used to measure progress and technical performance. | Measuring "technical performance" should be required, not optional ("and" not "or"). |
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Note: Similar revisions are recommended for FAR 34.201(a), 52.234-2(a), and 52.234-4(a). OMB Circular: Recommended revision to OMB Circular No. A-11, Part 7, Planning, Budgeting, Acquisition, and Management of Capital Assets, to close the Quality Gap: | Table 2: Recommended Revisions to OMB Circular No. A-11, Part 7 | | Section | OMB Circular is | OMB Circular modified (should be) | Rationale |
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| 300.4 | Earned value management (EVM) is a project (investment) management tool effectively integrating the investment scope with work, schedule and cost elements for optimum investment planning and control. The qualities and operating characteristics of earned value management systems (EVMS) are described in American National Standards Institute (ANSI)/Electronic Industries Alliance (EIA) Standard –748–1998, Earned Value Management Systems, approved May 19, 1998. It was reaffirmed on August 28, 2002. | Earned value management (EVM) is a project (investment) management tool effectively integrating the product scope with work, schedule and cost elements for optimum investment planning and control. The qualities and operating characteristics of earned value management systems (EVMS) are described in American National Standards Institute (ANSI)/Electronic Industries Alliance (EIA) Standard –748–1998, Earned Value Management Systems, approved May 19, 1998. It was reaffirmed on August 28, 2002. The qualities and operating characteristics of the product scope and the metrics to evaluate actual progress compared to planned progress are described in the ANSI/Project Management Institute (PMI) Standard 99-001-2008, A Guide to the Project Management Body of Knowledge (PMBOK Guide®), Fourth Edition. The qualities and operating characteristics of the product metrics to evaluate actual progress compared to planned progress are described in the PMBOK Guide® and in ANSI/EIA 632, Processes for Engineering a System | 1. Add "product scope" and "PMBOK Guide" reference to differentiate product scope (technical or quality) from work scope. Section 5.2.3.1: Product scope description. Progressively elaborates the characteristics of the product, service or result described in the project charter and requirements documentation. Section 5.5: Control Scope Process of monitoring the status of the project and product scope and managing changes to the scope baseline. In the project context, the term scope can refer to: Product scope. The features and functions that characterize a product, service, or result; and/or Project scope. The work that needs to be accomplished to deliver a product, service, or result with the specified features and functions.
Completion of the product scope is measured against the product requirements (Section 5.1). 2. Include "technical performance" metrics from PMI. Section 10.5.1.3: Work performance information is used to generate project activity metrics to evaluate actual progress compared to planned progress. These metrics include, but are not limited to planned vs. actual: Schedule performance Cost performance and 3. Include "product metrics" and expected values from ANSI/EIA 632, Section 4.2.1, Requirement 10, Progress Against Requirements: Assess progress..compare system definition against requirements. a) Identify product metrics and expected values - Quality of product - Progress towards satisfying requirements d) Compare results against requirements |
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| 300.5 | Institute performance measures and management processes monitoring and comparing monitoring and comparing actual performance to planned results. Agencies must use a performance-based acquisition management or earned value management system, based on the ANSI/EIA Standard 748, to obtain timely information regarding the progress of capital investments. The system must also measure progress towards milestones in an independently verifiable basis, in terms of cost, capability of the investment to meet specified requirements, timeliness, and quality. | Institute performance measures and management processes monitoring and comparing monitoring and comparing actual performance to planned results. Agencies must use a performance-based acquisition management or earned value management system, based on the ANSI/EIA Standard 748, the PMBOK Guide®, and ANSI/EIA 632 to obtain timely information regarding the progress of capital investments. The system must also measure progress towards milestones in an independently verifiable basis, in terms of cost, capability of the investment to meet specified requirements, timeliness, and quality. | Add references to PMBOK Guide and ANSI/EIA 632 |
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Table 3: EVM Acquisition Reform Needed to Meet Legislation and DoD Policy | Legislation or
DoD Document | Requirements in Legislation or
DoD Document | EVM Acquisition Reform Needed to Meet
Requirements | DTM 09-027—
Implementation of
WSARA
(Amends DODI 5000.02)
Reference 1. | Evaluate the cost, schedule, and
performance of the program, relative to:
· Current metrics
· Performance requirements
· Baseline parameters.
| Current EVMS policy and regulations do not require contractors to maintain and report technical performance metrics.
See recommendations below. |
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NDAA Sec. 864
Reference 2. | Consider whether measures of quality and technical performance should be included in any earned value management system. | Changes to OMB policy, FAR, and DFARS are necessary to require contractors to link earned value to quality and technical performance |
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NDAA Sec. 805
Reference 2. | Establish a documented process for:
· Information technology acquisition planning
· Requirements development and management
· Project management and oversight
· Earned value management, and
· Risk management | Same as NDAA Sec. 864 |
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OUSD Memo: Better Buying Power –
Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending
Reference 3. | Reduce non-value-added overhead imposed on industry | Compliance with some EVMS guidelines is non-value-added. It adds to costs, but does not add to quality of product or timeliness of delivery.
Recommendation:
1. Identify and remove non-value-added EVMS guidelines. 2. Require contractors to link EV to quality and technical performance. 3. Then a. Focus management attention on progress towards meeting requirements of the technical baseline. b. Focus compliance reviews on requirements to link EV to quality and technical performance. |
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References: 1. DTM 09-027: 12/4/2009 http://www.dtic.mil/whs/directives/corres/pdf/DTM-09-027.pdf , Attachment 1, Amendment 8
2. NDAA: National Defense Authorization Act for 2011 http://pb-ev.com/new.aspx
3. OUSD Memo: 9/14/2010 http://www.defense.gov/news/d20100914acquisitionprocurement.pdf Revised EVMS Process Flow with Addition of Product Baseline and Technical Performance Measurement: 
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