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1 Click to edit Master title style 0

2 Click Surviving to edit Today s Master title style Earned Value Management System (EVMS) Environment Breakout Session #G12 Dale Gillam, MBA, CPCM, PMI-SP, CSSGB, CSM, EVP, CMA, CMQ/OE, CCE/A, CFM, SCPM, CMSC, PMP Program Manager;» Fifth Corporate level EVM and Scheduling Focal Point, SAIC Crystal Glenn, MBA, CPCM, PMP, Fellow Program Control Consultant, CenturyLink Past President, NCMA Tysons Chapter Date: Wednesday, July 29, 2015 Time: 9:45am-11:00am 1 1

3 Click Objectives to edit Master title style To aid the contracting community through: Current environment related to EVM Key contractual considerations Distinguishing between EVM System and EVM reporting requirements Defining the typical EVM System solution Sharing lessons learned 22

4 Click to edit Master title style Earned Value Management Environment 33

5 Leaner Fiscal Environment Click to edit Master title style Increased scrutiny on government and contractor performance Shorter time frame to generate positive results for customers Increased use of EVM for integration and accountability Use of payment withholds for non-compliance Emphasis on objective evidence to support award and incentive fees Increased comparison of one contract to another by same contractor Increased comparison of contractor to contractor Delayed awards Contractors not replenishing the backlog of awards Increased use of protesting awards Contractors redefining markets Diversifying to hot markets (e.g., cyber), commercial, and international work Redefining their business base by eliminating OCIs Companies are spinning off non-core competency work and some are merging 44

6 Click Federal to Customer edit Master EVM title Trends style (1 of 2) On-going trend that the primary method of Integrated Program Management (IPM) is through effective EVM solutions Growing recognition that EVM is not one size fits all More discussion on how suppliers manage when EVM is not required OMB engaging on best practices in addition to government audits Circular A-11 required the use of EVM on DM&E work Established guides on technology readiness, scheduling, EVM PARCA is leading the way for IPM practices within DOD through leveraging EVM CPR and IMS DIDs were evolved and rebranded the Integrated Program Management Report (IPMR) DID Increasing use of the Integrated Master Plan (IMP) when EVM is used Increasing discussion on using a subset of the IPMR for management reporting even when EVM is not used Published DoD EVMS Interpretive Guide (EVMSIG) for standardized DoD view 55

7 Click Federal to Customer edit Master EVM title Trends style (2 of 2) DCMA updating practices to tighten oversight and Click compliance to edit Master text styles Updating and integrating review practices and instructions Second level Data based and automated data reviews - Analytics and Information Management System (AIMS) Tool Civilian Agencies raising the IPM capabilities Often adopting and then modifying the DoD practices Working Group is tackling standards and best practice definition Emphasis on: IPM across Agencies using EVM techniques Scaling practices Reciprocity Sharing of best practices and information 66

8 EVM Community Trends (1 of 2) Click to edit Master title style Adjudication of requirement and acceptable practice interpretations Scaling Click IPM/EVM to edit solutions defining Master text a styles system to be scaled to the need Meeting robust / mature practice requirements Defining Third how level to manage programs when mature reqts don t exist Implementing good PM practices on non-traditional contracts Non-schedule based; Services; Agile Establishing and Aligning Best Practices in Guides Various Government (e.g., GAO, PARCA, DCMA) vs. Industry guides Improving program start-up best practices Improving integrated change management To baseline and forecast; and to schedule as well as scope & budget Utilization of predictive measures Examining why programs fail and why they succeed 77

9 EVM Community Trends (2 of 2) Click to edit Master title style Project scheduling Increasing emphasis on schedule health metrics Increasing scrutiny of risk solution and relationship to the IMS Use of schedule risk analysis (SRA) Improved risk management solutions & integration with other practices Third level Clear emphasis Fourth on level IPM practices in addition to the tools that support IPM Need for integrated tools to support IPM practices Supporting XML and DID requirements; Bid & proposal through execution WBS definition and pricing/boe solution; Schedule development and maintenance; EVM cost engine; Work authorization and timekeeping Analytics; Risk and analysis; Work flow and baseline logs, Corrective action tracking 88

10 Click to edit Master title style Key Contractual Considerations 99

11 Contract Challenges Click to edit Master title style IDIQ vs Delivery Order requirements and management Conflict between mature management / EVM vs. LPTA LPTA Click environment to edit and Master managing text ECPs styles and scope creep Shift Second to FPIF contracts level Few COs/CORs qualified to use schedules/ EVM for better IPM Clear definition Fourth of what level is or isn t authorized Misuse of Budget» Fifth vs. level Funding Use of payment withholds through Business Systems DFARS Subcontractor requirements, management, and oversight tied to Prime Partnering with subcontractors and vendors Managing and reporting on hybrid contracts 10

12 Click Why We to edit Should Master Care: title style Contracts Controls the Environment Program Team - Worst Case Scope, Third level Schedule, & Budget Program Team - Best Case Scope, Schedule, & Budget Stakeholders Pulling in Different Directions Stakeholders Working to Same Direction Contracts controls the levers to align Government, Prime, and Subcontractor interests and efforts EVM is a key lever through using it for effective integrated program management across the entire program environment 11

13 Click DFARS to edit Master title style Business Systems Defines business systems as: Accounting systems ( ) EVM systems ( ) Estimating systems ( ) Material management and accounting systems ( ) Property management systems ( ) Purchasing systems ( ) Both the system clause and business system clause need to be on a contract for the business system controls to be in effect 12

14 Click EVM Related to edit Master Requirements: title style Clauses or Standard References DFARS Notice of EVMS DFARS EVMS DFARS Third level Notice of CSDR DFARS CSDR DFARS Business Systems FAR Notice of a Pre-Award IBR FAR Notice of a Post-Award IBR FAR EVMS EIA EVMS Standard EVM or EVMS: General Reference Cited 13

15 Click EVM Related to edit Master Requirements: title style Reporting/Deliverable References CWBS: DI-MGMT or MIL-HDBK-881 IMP (Integrated Master Plan) IMS: DI-MGMT Third level CPR: DI-MGMT IPMR: DI-MGMT CFSR: DI-MGMT CDSR - DD Form 1921: DI-FNCL FC-HR - DD Form : DI-FNCL PCR DD Form : DI-FNCL CBDR DD Form : DI-FNCL Other EVMS Reporting 14

16 Click EVMS to Business edit Master System title style Key Points EVMS compliance had been at DCMA EVM Center determination, Click to edit now Master with ACO text styles Elevated EVM Systems in companies Prior Third to clause, level EVMS was often a program-level consideration (i.e. often not considered by contractors» Fifth as a level company-wide system) Allows ACOs to withhold a percentage of payments when a business system contains deficiencies A contractor deficiency has to be significant in nature There are so many chances to correct the deficiency before a withhold is implemented that when done, it means there were documented issues for a long time 15

17 Click Key Contractual to edit Master Considerations: title style Government Need to clarify requirements in IDIQ/MA vs. individual Task Orders Work with contractors to clarify requirements in RFPs and postaward Include Section L/M requirements for EVM related requirements Look for how and where these are addressed in proposal Should be Fourth consistent level and integrated throughout volumes Seek ways to align use of EVM and SLAs/KPPs, etc., to correlate data Validate core elements of contractor s EVMS solution Engage with Government COR/Program Office on use of EVM Consider engaging DCMA and/or Agency EVM resources to lend depth and consistent focus on EVM requirements Engage with the contractor organizational level EVM Focal Points - communicates importance and adds leverage outside the program Use early (<90 day) IBRs and Surveillance Review to get the right start and keep consistent emphasis on the practices 16

18 Click Key Contractual to edit Master Considerations: title style Prime Contractor Determine who the organizational EVM experts are and engage Click them to edit early and Master throughout text the styles contracting process Engage with counterparts and get the EVM experts to talk Clarify any ambiguity in requirements during the RFP phase Tell a consistent story of the solution within each deliverable and» Fifth volume, level and across all of them Define the role of subcontractors within EVMS solution (e.g., part of the prime s EVMS or a separate flowdown?) If integrated, the tracking/costing of subcontractor timekeeping and the reconciliation with subsequent invoices is key Clearly define how subcontractor data and practices will be integrated and/or aligned with the prime 17

19 Click Key Contractual to edit Master Considerations: title style Subcontractor Establish formal requirements with prime Understand effort involved if requirements are formally flowed down vs. integration into prime s EVMS Seek opportunities for mentor/protégé relationships Define role in IBRs and Surveillance Reviews Engage with Fourth prime level contractor s and possibly end customer s EVM» Fifth resources level Leverage the relationship to define/evolve own EVMS Position yourself for potential small business set-asides as you will have to provide the leadership in these solutions 18

20 Click to edit Master title style Distinguishing between EVM System Fourth and level EVM reporting requirements 19

21 Click EVM Reporting to edit Master vs. System title style You cannot effectively do one without the other two. Earned Value (EV) = The value of the work completed.» Earned Fifth level Value Management (EVM) = The use of EV data to determine program status, issues and corrective actions, and in forecasting. Earned Value Management System (EVMS) = A system of integrated processes and procedures developed in compliance with the standard* and used to manage a program and enable reliable EVM and statusing of EV. *Standard = EIA-748, EVMS Standard 20

22 Click Core EVM to edit Acronyms Master title and style Metrics EVM data is based on budgets not funding Click Funding to is the edit F word Master of EVM text styles BCWS (aka PV) = Budgeted Second Cost level for Work Scheduled (aka Planned Value) BCWP Third (aka EV) level = Budgeted Cost for Work Performed (aka Earned Value) ACWP (aka AC) = Actual Cost of Work Performed (aka Actual Costs) SV = Schedule Variance = BCWP BCWS SPI = Schedule Performance Index = BCWP / BCWS CV = Cost Variance = BCWP ACWP CPI = Cost Performance Index = BCWP / ACWP BAC = Budget at Complete = Cumulative BCWS Value ETC = Estimate to Complete EAC = Estimate at Complete = ACWP + ETC VAC = Variance at Complete = BAC EAC 21 Many other terms, metrics, and indices exist

23 Click EVM System to edit Master Defined title by style a Single Core Document Electronic Industries Alliance-748 (EIA-748), EVMS Click Standard to edit Master text styles Defines The primary goal for an EVMS The seven principles of an EVMS The 32 Fourth basic guidelines level grouped by five major categories: Organization Planning, scheduling, and budgeting Accounting considerations Analysis and management reports Revisions and data maintenance A process elaboration on the application of the guidelines The system documentation expectations The system evaluation process, acceptance and surveillance expectations 22

24 Click EVM System to edit Master - Primary title Goal style An EVMS will effectively integrate the work scope with the schedule and cost elements for optimum Third program level planning and control. The primary purpose of the system is to support program management. The system is owned by the company and is governed by company policies and procedures. Source: EIA-748 EVMS Standard 23

25 Click What to Is Project edit Master Management? title style Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements. Meeting Third stakeholder level needs and expectations involves balancing competing demands: Scope, schedule, and budget Stakeholders with different needs and expectations Identified requirements (needs) and unidentified requirements (expectations) * Source: A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Fifth Edition, Project Management Institute, Inc., 2013 PMBOK is a registered mark of the Project Management Institute, Inc. 24

26 Click EVM System to edit Master - Seven title Principles style 1. Plan all work scope for the program to completion 2. Break down the program work scope into finite pieces that can be assigned to a responsible person or organization for control of technical, schedule and cost objectives 3. Integrate program work scope, schedule, and cost objectives into a performance measurement baseline plan against Fourth which level accomplishments may be measured. Control changes» Fifth to the level baseline 4. Use actual cost incurred and recorded in accomplishing the work performed 5. Objectively assess accomplishments at the work performance level 6. Analyze significant variances from the plan, forecast impacts, and prepare an estimate at completion based on performance to date and work to be performed 7. Use EVMS information in the company s management processes 25 Source: EIA-748 EVMS Standard 25

27 Click EVM System to edit Master - 32 Guidelines title style by Five Categories 1. Organization Guidelines Planning, Third scheduling, level and budgeting Guidelines Fourth 6-15 level 3. Accounting considerations Guidelines Analysis and management reports Guidelines Revisions and data maintenance Guidelines

28 Click Integrate to Schedule, edit Master Cost and title Performance style to Complete the Technical Requirements 27

29 The Key Takeaway EVMS is about the Click to edit Master title style Integration of Technical with Cost and Schedule Integration of details in management practices Fully integrated interface between management and technical Empowerment for technical leads to be effective CAMs Integration of real-time program data for complete visibility and control 28

30 Click to edit Master title style Defining the typical EVM System solution 29

31 Click Core Elements to edit Master of the title Typical style EVMS Solution Organizational Policy: Establishes organizational approach to EVM Click to edit Master text styles EVM System Description: Defines the organization s EVM practices and how they comply with EIA-748 and best practices EVM Procedures: Aid in implementing the EVMSD on programs Training: Educates» Fifth stakeholders level on practices and roles and responsibilities Surveillance: Approach and status of regular internal reviews Tools: Integrated solution to support the practices Community: Avenues to communicate with EVM stakeholders Proposal and Program Support: Gives insight into ability to propose efforts appropriately, and start them off right and maintain them Credentials: Organizational through Gov t Recognition (DoD: now ACO through DFARS ; Others: Vary); Individual Practitioners (e.g., PMP, EVP). 30

32 Key Click Players to edit in Master the Implementation title style and Maintenance of an EVMS Program team - Program Manager, Deputy PM, Click to edit Master text styles Business Manager, CAMs, and Project Controllers Second are level the foundation of a successful EVMS CAMs are Fourth the cornerstone level of EVM implementation EVMS Project» Fifth Controllers level require additional skills Beyond the traditional financial Project Controller EVMS practices, tools and analysis Critical functional and matrixed EVMS support Contracts and Subcontracts Material/Procurement Line Managers Corporate EVMS SMEs 31

33 Click Control to Account edit Master Manager title style (CAM) Responsibilities CAMs are critical players in an EVMS Responsibilities include: Oversight Third of level technical scope under assigned control accounts Ownership of control account budgets and schedules Statusing of work package tasks under assigned control accounts This generates the amount of earned value Validation of actual costs charged to assigned control accounts As required variance analysis As required development and implementation of corrective actions Generation of timely Estimates at Completes (EACs) 32

34 EVMS Click to Requires edit Master Program title style Focus Resources and Time Implementing the approach Documenting the EVM Plan Conducting Training Baseline Development Breaking down the work Creating the IMS Developing BOEs Work Authorization Issuing CAAs from PM to CAM CAMs providing WADs to team Validating charges by person Rolling Wave Planning Used to fine tune planning during execution on a case-bycase basis Baseline Change Management Documenting Baseline Change Requests and capturing changes in the Program Log Weekly/Accounting Period status and analysis Creating, analyzing, and reconciling reports EVM discussions EAC effort Developing BOEs Reconciling/reworking estimates Customer and oversight (e.g., DCMA) reviews Implementing corrective actions 33

35 Click Need to for edit Consistent Master title Customer style Engagement Formal reviews Integrated Baseline Review (IBR) Occurs periodically. Emphasis is on the quality of the performance measurement baseline, Second with level focus on: Technical content, Schedule attainability, Budget adequacy, Resource adequacy, EVMS used as a management tool Surveillance Reviews The periodic review of specific process areas» Fifth (and level underlying guidelines) with focus on specific areas of work to ensure maintenance of the EVMS Validation / Implementation Review Complete review of all process areas typically conducted ~6 months into a program to ensure an adequate system / implementation Regular program interactions EVMS reports - Accounting period based deliverables Alignment of regular meetings with use of EVM (e.g., data, IMS) Consistent direction from customer PM / COTR 34

36 Click Additional to edit Information Master title style EIA-748 EVMS Standard: NDIA IPMD: Primary PM standards working group for DoD, Civilian Agencies, and industry Summary of Agency requirements: licysummaryrev a.pdf College of Performance Management (CPM) Primary educational and practitioner forum, with emphasis on EVM Hosts webinars, a Fall IPM Workshop, and a Spring EVM Workshop Linkedin EVM Group: Cobra Group: winsight Group: Government PARCA EVM: DoD policy holder, and interpretation and issue resolution facilitator CAIWG: see NDIA IPMD site for POC Primary Civilian Agency working group for PM/ EVM topics GAO: Conducts audits and creates best practices guides (PM, EVM, scheduling) 35

37 Click Request to edit for Engagement Master title style Contracting Track at the Integrated Program Management Click to edit (IPM) Master Workshop text styles 11/16-18, 2015, in Bethesda, MD Second level NDIA IPM Division Contracts Working Group Next in-person meeting: 8/25-26, 2015, in Arlington, VA ult.aspx NCMA Tysons Chapter spearheading consistent engagement with these other communities Others are encouraged to participate too 36

38 Click Contact to edit Information Master title style Dale Gillam SAIC Second level Crystal Glenn CenturyLink 37

39 Click to edit Master title style Back-up Slides for Fourth Subsequent level Review General and Systemic Lessons Learned 38

40 Should Click to EVM edit be Master Included? title style Determine Independent of Contract Type Selection of contract type may include criteria such as: How much is known about requirement Likelihood of accuracy of proposed contractors estimate Availability of capability in the market Level of confidence in the agency s independent estimate Determination Fourth to include level EVM requirement in a contract may include criteria» Fifth such level as: Is it development or construction type work? Are risks associated with the scope of work significant? Is there a need for performance-based tracking? Is the work scope substantially discrete/measurable? Are there concerns or unknowns in the quality of the management practices that can be overcome by requiring EVM? The takeaway is that contract selection and EVM determinations are two separate and distinct decision processes Source: Glenn Counts, 39

41 Click General to edit and Master Systemic title Lessons style Learned (1 of 12) It is necessary to keep an open mind about EVMS and learn what the current environment is about EVMS is not about reporting, nor is it just applicable to large product-oriented DoD systems EVMS is Fourth about level institutionalizing good, integrated project management practices The implementation of these practices will result in reliable data to assist project management EVMS implementation necessitates the engagement of line managers and functional leads Most senior leaders have been in oversight roles for a while, so they need to be educated on the new environment of EVMS and how it can be used to meet their operational goals while supporting the needs of the customer and the project 40

42 Click General to edit and Master Systemic title Lessons style Learned (2 of 12) EVMS shines the light on existing broken management Click to edit processes Master text styles The level of project management experience and maturity Second is inconsistent level across many of our organizations. As a result, we have pockets of good project management discipline; but since EVMS spans functional and often organizational boundaries, it amplifies problems where they exist. It is important to validate and focus on contract requirements It is common for the project team to focus on executing the tasks at hand and to lose focus on specific contract requirements It is important to have knowledgeable, trusted project outsiders provide a fresh review of the contract requirements and project performance to ensure actual compliance with the contract requirements 41

43 Click General to edit and Master Systemic title Lessons style Learned (3 of 12) It is important to engage customers and partners early and throughout Click to the edit process Master text styles The approach to engaging customers, subcontractors, and partners Second is important level for the success of any EVMS implementation. By educating team members upfront, at or before project start up, and by actually walking the team members Fourth through level the process steps together can save a great deal of work, re-work and/or explanation later. Assess your customer s understanding of EVMS Is there an opportunity for joint training? Is there an opportunity for training or educating your customer prior to contract award? Understand your customer s EVMS requirement to OMB Opportunity to influence how are program is represented Business opportunity to assist government with implementing EVMS 42

44 Click General to edit and Master Systemic title Lessons style Learned (4 of 12) EVMS is often used as a program management communication Click to edit tool Master text styles Don t forget to analyze the data in the same way the customer will Do not assume that the customer will be lenient; this leads to complacency Project managers who bid EVMS and do not implement it or attempt to have it removed from the contract risk non-compliance with the contract and jeopardize EVMS credentials In time, customers will become more EVMS savvy, customers may hire EVMS experts, or new customers may have different agendas; therefore, be sure to rigorously pursue compliance with EVMS requirements on contracts 43

45 Click General to edit and Master Systemic title Lessons style Learned (5 of 12) It is important to engage functional experts early The right help at the right time can make things a lot better Staff in these support functions are reasonable and critical Third to finding level a defendable balance between the project s reality and the EVMS requirements EVMS, by design, has built in flexibility for addressing the intent of the requirements while scaling and focusing the implementation on what is required by the customer and what benefits the project Engage experts early and throughout the lifecycle Identify and develop relationships with customer EVMS focal points and advocates Often you can help establish, define, and reinforce their role They can help you as well 44

46 Click General to edit and Master Systemic title Lessons style Learned (6 of 12) Having solid project controls support in place, on the Click first to day edit of the Master project, text is essential styles The project controllers provide the consistency needed to support the project management functions Find an EVMS resource with practical experience to augment Fourth your team level It is important that there are no single points of failure Make sure to cross-train team members and backup data files; Projects have had some unfortunate experiences caused by projects that were relying on a single person who was not able to follow through 45

47 Click General to edit and Master Systemic title Lessons style Learned (7 of 12) Establish and maintain a solid technical, cost, and Click schedule to edit baseline Master text styles It takes more effort to generate a quality baseline; however, Second it is level better to put effort into the baseline than into Third trying to level justify bad performance that occurs later as the result of bad planning EVMS process compliance becomes meaningless if the data is not reliable Develop a detailed schedule with linked dependencies and resources It is recommended that an IBR be mandated to occur early in the project and throughout project execution so as to ensure appropriate ownership, clarification, and consistent understanding of the details Involve key technical and management members in PMB development Work in the PMB must map back to SOW 46

48 Click General to edit and Master Systemic title Lessons style Learned (8 of 12) Do not allow the degree of technical change to be used Click as to an excuse edit Master for the lack text of styles baseline development, change management, and process compliance Change management is an important part of and reason for using EVMS. The argument that there is too much change to perform EVMS is not» logical Fifth level since EVMS is designed to support the management and control of change Document EVMS related direction to CAMs Usage of different EV methods Change control authorities Scheduling or BOE assumptions or ground-rules Do not overcommit We continue to commit to monthly vice period based reporting Leverage our existing systems and business rules to meet the intent 47

49 Click General to edit and Master Systemic title Lessons style Learned (9 of 12) It is critical that there be adequate tool support and training Click to edit Master text styles No tool is compliant with the EVMS standard; by definition, tools Second cannot level be. Any vendor who claims its tools are compliant Third with level the EVMS standard is, at best, unknowledgeable about which he or she is talking Tools are important in automating aspects of the processes The project needs to use capable tools and there must be knowledgeable tool users dedicated to the project The standup, support, and use of tools continues to be a significant challenge with every implementation Unfortunately, tool issues tend to support the misperception that, in general, EVMS is way too difficult Computer systems are not perfect we catch errors all the time Have a clear approach to backing up and archiving files 48

50 Click General to edit and Master Systemic title Lessons style Learned (10 of 12) Establish subcontractor flow-down requirements during Click the to proposal edit Master phase text and institutionalize styles them The role of subcontractors is important in programs The approach in which we management subcontractors greatly impacts our success of an EVMS implementation Important to address subcontractor time reporting requirements. Typical want to have them use an automated system daily, with weekly and bi-weekly reporting available Require the subcontractors to reconcile the automated reporting with their invoices with the understanding we will not pay them if they are not consistent 49

51 Click General to edit and Master Systemic title Lessons style Learned (11 of 12) Do not put too much emphasis on generating the data Click and to not edit enough Master on the text analysis styles and use of the analysis results to manage the project The result of EVMS is not data and reports, but good project management There is Fourth a need to level balance data generation with the understanding» Fifth and level use of the data Important to do horizontal and vertical traceability through the entire program and all the artifacts Contract Value to ACB to CPR to RAM to Revenue Recognition #s Trace both dollars and hours through the artifacts Ensure data traceability through to other reports (e.g., E300) Review deliverables from the customer s perspective Use of analytics tools for XML/X12 deliverables 50

52 Click General to edit and Master Systemic title Lessons style Learned (12 of 12) Keep everyone in the same camp Reoccurring issues when we are the incumbent and EVMS is added to the new contract People Second sitting level on customer sites or at remote locations often align more with the customer than with the company. This can Third create challenges level following through on requirements. Some times we discover EVMS requirements by accident Always fun to be informed of a requirement by the customer CAMs are critical to success of an EVMS A key tenet of EVMS is the formal delegation of traditional project management responsibility and authority to CAMs Requires ownership of the management processes, and the cost/schedule responsibilities in addition to the technical skills CAMs interviews tell the real story of how the program is managed 51

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