Dave Burgess

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Integrated Project Management (IPM) Earned Value
Management (EVM)
Dave Burgess Director, Cost Department (AIR
4.2) E-mail david.e.burgess_at_navy.mil Phone
[phone]
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C/SCSC TO EVM TO IPM
C/SCSC Pre-96
EVM 96 to Today
IPM (Integrated Project Management) Forward
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WHAT IS EARNED VALUE MANAGEMENT?
EVM IS NOT A COST REPORT

• Widely accepted industry best practice for
  project management
• An integrated approach to manage the technical
  work scope, schedule, and cost objectives of a
  program

EVM Cost, Schedule and Technical Integration
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INTEGRATED PROJECT MANAGEMENT (IPM)
IPM
IPM Cost, Schedule, and Technical Issues
Management from Pre-Award through Execution
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ROLES OF A PROGRAM MANAGER
TWO ROLES
Acquisition Program Management
Integrated Project Management

• Acquisition Planning
• APB
• Source Selection Plan
• Award Fee
• SAR/DAES

• Project Status/CPI, SPI
• Staffing
• Estimate at Completion
• Tasks Completed
• Management Processes

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COST GROWTH ANALYSIS

• SAR ANALYSIS
• RDTE Avg All Programs 64
• Rotary-Wing Programs 173
• Fixed-Wing Programs 53
• Missile Programs 52

• EVM CONTRACT ANALYSIS
• All Programs reported in 48Performadex
  (Mar07)
• Scope Growth 12
• Cost Growth 36

SAR 64 Growth in Planning Phase Based on 2003
SAR Study
NAVAIR 48 Growth Execution Phase
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Contractor Performance Trends
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Cost and Schedule Variances
HISTORY TENDS TO REPEAT ITSELF. Programs often
demonstrate same performance trends before and
after multiple program restructures/OTBs.
--- Cost Variance --- Schedule Variance
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What makes NAVAIR different?
ORGANIZATION Portfolio Approach Tools Techniques
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WHERE DOES IPM FIT IN AT NAVAIR?
NAVAIR
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EVM/IPM ORGANIZATION
Division Head
Deputy Division Head/ Training/External
Customer Focus
Process Focus
Management Systems
4.2.3.1 ASW and Special Missions
Analysis
4.2.3.2 Tactical Air and JSF
Time-Based Scheduling
4.2.3.3 Mission Support and Weapons
Process-Oriented, Customer-Focused Organization
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What makes NAVAIR different?
Organization PORTFOLIO APPROACH Tools Techniques
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NAVAIR STOPLIGHT HISTORY

• Initially the ASN(RDA) Early Warning System
• Includes all efforts where EVM data is received
• Provided on a monthly basis to NAVAIR Leadership
  (Commander (AIR-00), PEOs, Level 1 Competency
  Leads)
• NAVAIR Leadership
• Metrics (Potential Overruns/Underruns, Percent
  Green)
• Significant Issues
• Management System and Integrated Baseline Review
  Schedule
• Excel Spreadsheet/Performadex (Web Application)
• Monthly Briefings and Charts
• Includes comments from the Cost Department, the
  Program Office and Contracting organizations

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NAVAIR STOPLIGHT CHART EXAMPLE
EXAMPLE
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EXAMPLE
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Staffing / Schedule Leading Indicators of
Program Stress
Format 4 Staffing
Format 3 PMB
Projected Workforce Required
Projected Burn Rate
Cumulative Workforce Ahead or Behind
Baseline Execution Index
Integrated Master Schedule
CPI / SPI
Cumulative Work Not Accomplished On Time
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Data Driven Collaborative Improvement Activities
in Development Programs
(CONTRACTOR SENSITIVE DATA)
CONTRACTOR COST GROWTH
ALL ACTIVE CONTRACTS (61) WITH EVM REPORTING
COST OVERRUN
NAVAIR / CONTRACTOR ROOT CAUSE ANALYSIS
IMPROVEMENT ACTIVITY
ROOT CAUSE ANALYSIS
64 IMPROVEMENT OPPORTUNITIES
28 ONGOING SUPPLIER EFFORTS
14 JOINT EFFORTS
22 REQUIRE FURTHER ANALYSIS
1 HIGH IMPACT BILL OF MATERIAL COST GROWTH
COLLABORATIVE IMPACT TO PROGRAM SUCCESS
MILLIONS
UPDATED 17 APRIL 2007 DATA SOURCE DAVE
BURGESS,AIR-4.2, [phone]
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Contractor A Common Reporting Elements Cost and
Schedule Performance
Cost Variance
Schedule Variance
UNFAVORABLE
FAVORABLE
Avionics
Overhead
ECP / LLP
Flight Test
Air Vehicle
Technology
Survivability
Cost of Money
Field Services
Product Assurance
Configuration Mgmt
Testing Evaluation
Crew Station / Systems
General Administrative
Program / Project Management
Systems Engineering / Integration
Contractor reports 15 of 47 common elements are
under-performing
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What makes NAVAIR different?
Organization Portfolio Approach TOOLS TECHNIQUES
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Estimate at Completion Development
Formula -based Approach
NAVAIR Approach
NAVAIR Risk based Approach
Actuals ETC / CPI x SPI EAC
Example Prm XYZ
Statistical Range 195-262M
BC 189M WC 390M ML 271M
10 251M 50 285M 95 337M
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Integrated Project Management THE
FUTURE Enculturation An Educated Workforce
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ENCULTURATION

• Planning
• Pre-award Workshops
• Procurement Initiation Document (PID)
• Source Selections
• Management System Assessment (MSA)
• Integrated Baseline Reviews (IBRs)
• Training
• Classroom
• IPT
• Competency
• Mentoring
• Award Fee Criteria

Metrics Are we making progress?
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ENCULTURATION

• Execution
• Post Award workshops
• IBRs/MSAs Contact Implementation Reviews
• Schedule Risk Assessments (SRAs)
• Mentoring
• Technical Reviews (PDR, CDR)
• Program Management Reviews (PMRs)
• Award Fee determination

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INTEGRATED PROJECT MANAGEMENT INTIATIVE
ENCULTURATION
PROGRAM PERFORMANCE TEAM (PPT)

• Improve project management during execution phase
  (all stakeholders)
• Evaluate, improve, and share lessons learned

• Identification of program performance issues
• Data analysis driven

IPM
IPM
ANALYSIS REVITALIZATION

• Implement project management improvement ideas
• New toolkit, Performadex, Cockpit Chart, etc.

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PILLARS OF A GOOD PROGRAM
A well understood requirement with flow down to
performance spec and temp A genuine integrated
schedule with associated Earned Value
Management An independent cost estimate (one that
isnt a part of the missionary movement where
folks are trying to sell a program and to force
fit it within available funds) Full and stable
funding A culture of drawing in outside
competency (from the contractor, from the syscom,
from academia) A willingness to ask the hard
questions, and the courage and energy to not quit
until you gain understanding A recognition that
it takes requirements, resources, and
acquisition, all working together, to get the dog
to hunt

Program success is made difficult by missing any
one of these, missing two does not lead to a good
place Vice Admiral Dyer, September 29, 2002
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BACKUP
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Contractor Performance (CPI before and after OTB)
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Schedule Risk Assessment Process
Schedule
1. Develop a complete critical path network.
The final process steps involve the schedule
analyst preparing a report and presenting an SRA
position.
6. Document results.
2. Identify reporting tasks and risk candidates.
7. Present position to program office. IPTs
develop risk mitigating actions.
3. Enter risk parameters. (Contractor CAMs
responsibility)
Most Likely
Min.
Max.
4. Run schedule simulation quantify impact of
risk on schedule.
5. Analyze schedule results integrate into cost
estimate.

Time
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SRA REPORT TREND CHART Example (SRA Output)
The goal is to see confidence dates trend toward
the baseline date with each SRA
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Sensitivity Analysis(SRA Output)
This analysis determines each tasks impact (via
forward/ backward pass calculations) on the end
date if the minimum (optimistic) thru the maximum
(pessimistic) durations come true. The green
represents the amount of time available to
mitigate between the earliest completion date and
the expected completion date red represents the
amount of time available to mitigate between the
expected completion date and the latest
completion date.
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Estimating Discrete Risks
Software
Environ. Qual
Range is result of engineering assessment of
vendor quotes Best Case 7,916K Most Likely
9,680K Worst Case 10,545K Trigen
Distribution 90/10