Common Findings from EVMS Reviews

1
Common Findingsfrom EVMS Reviews

• Don Grace
• OECM Designated Representative
• on DCMA Led EVMS Reviews
• November 15, 2006

2006 Project Management Workshop
2
Agenda

• Definitions
• Common Findings (5)
• Additional Observations (2)

3
Definitions

• Findings (Per DCMAs EVMS Review Protocols)
• Contractors EVMS is either
• Documented (via its Project Controls System
  Description, and implementing procedures) in a
  manner that is non-compliant with ANSI 748, or
• Implemented in a manner that is inconsistent with
  its PCSD/ Implementing Procedures, plus
• The issue is sufficient to require a documented
  Corrective Action from the Contractor
• Findings documented (at the end of the on-site
  review) in the form of Corrective Action
  Requests

4
Common Issues

• 1. Annual, vs Project, Baseline
• Root Cause driven by focus on annual funding,
  and utilizing EVMS to limit/ control expenditures
  to the annual funding
• Although Funds Control is essential in the DOE
  environment, ANSI 748 does not address annual
  baselines, but rather the Project baseline.
• PCSDs, and implementing procedures, oftentimes
  use terms Funds Change Control, and Budget
  Change Control interchangeably
• Need to clearly distinguish between the two

5
Common Issues

• 2. Fragmented Work Authorization Processes
• Needs to be a documented flow down process
• Starts with the Contract, and
• Often breaks down at the final flow down to the
  Control Account Managers (CAMs)
• In support of above
• The Contract captures the total project scope of
  work/ cost/ and schedule, and
• Contractor Managements authorizing of Control
  Account Managers needs to reflect their total
  scope/ cost and schedule
• Within above context
• The need to limit authorized work execution to
  the funding year is also recognized as needing
  control however,
• Work Authorization process needs to clearly
  document each CAMs total ( not just annual)
  scope, and associated costs and schedules

6
Common Issues

• 3. Performance Measurement Baseline (PMB) Does
  not reflect a meaningful/ useful Plan
• Various root causes can include
• Unduly linking change of PMB to Change of
  Contract
• Developing PMBs based on overly optimistic
  funding profiles (thus re-doing the PMB)
• Contract being structured such that it does not
  allow for a risk based creation (and contractor
  managed use) of Contractor Management Reserve
• Overly cumbersome change control processes
  leading to excessively long periods of time for
  incorporation of changes

7
Common Issues

• 4. Zeroing of Past Variances
• Loose ability to learn from errors in prior
  planning, and/ or past work execution
  inefficiencies
• Root cause may be inter-related with others
  e.g., may be
• Using EVMS Budget Control for purposes of annual
  Funds Control (without keeping issues separated)

8
Common Issues

• 5. Being Too Loose as to when Bottoms up EAC
  is Required
• Although change control impacts EAC (in
  addition to BAC) and can be an indicator of
  changed conditions,
• Collectively changes are often non-linear, plus
• Basis of Estimates need to be revisited (e.g.,
  commodity rates, etc)
• DCMA pushes for at a minimum of annually
• On case by case basis, may want to allow
  modifying to consider balancing of effort
  required, versus when next Critical Decision
  would require, versus how long it has been since
  last bottoms up estimate, versus what current
  monthly EAC update indicates, etc

9
Additional Observations

• 1. Regarding where, and how, EVMS is implemented
• It can either be
• An invaluable tool, or
• A tool where the value added may not exceed the
  effort required to implement and maintain
• Where Implemented
• No question should be invaluable for both typical
  capital projects, and in many areas of operations
  funded efforts (e.g., many aspects of EM work).
• May question if (and if so, how) it should be
  applied to more production operations oriented
  environments.

10
Additional Observations

• 1. Regarding where, and how, EVMS is implemented
  (continued)
• How Implemented for Production Operations
• Many of these type activities are budgeted as
  LOE, and with BCWP set equal to BCWS, you may
  look much better than you actually are
• Although task performance in a Production
  Operations Environment (e.g., Corrective and
  Preventive Maintenance) is important, other
  suites of tools should perhaps be considered for
  purposes of management control

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Additional Observations

• 2. Definition of the EVMS Baseline
• Should/ Must EVMS Baseline Contract Baseline?
• DCMA has not required to be equal e.g.,
• Some project contracts limited to design phase,
  and EVMS Baseline also limited to this same SOW
• These, however, include bad examples wherein
  construction phase estimate has increased by
  several factors (while communication of this
  reality was significantly delayed)
• For other projects, judgments made to set equal
  to a more clearly definable project scope (and
  not limiting to a contract defined end date).
• Suggest
• Not requiring the two to be , and assessing on
  a case by case basis, plus
• Ensuring (for those cases where EVMS baseline
  does not include construction) that there are
  means (even if they are separate from EVMS, and
  the CD process) to require more timely updates of
  the entire project estimate