Earned Value Management Center

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Earned Value Management Center Presented To
NDIA Presented By Mr. Gordon
Kranz Director Engineering and Analysis
Directorate February 4, 2010

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Organization Chart
Engineering Analysis Directorate
(EA) Executive Director (SES) Deputy EA (Field
Resource)
Hiring Budgeting IDPs - Training
Plans Performance Objectives Monthly Reports
Advanced Surveillance Techniques Advanced
Engineering Methods Six Sigma Improvement
Projects
Management Support Office
Process Improvement
Manufacturing Engineering / Supply Chain
Predictability Division
Earned Value Management Center
Industrial Analysis Center
Systems Engineering Division
Program Integration and Analysis Division
Software Engineering Division

• Policy, Training, and Tools to support
  Engineering Workforce
• SE Process and products
• Engineering Change Proposals
• Configuration Mgt
• Decision Analysis
• Root Cause Analysis
• etc

Policy, Training, and Tools to support SW
workforce -SW Requirements -SW Design -SW
Testing -SW Estimation etc

• Policy, Training and Tools to support Program
  Integrator Workforce
• Program Assessment
• Integrated Surveillance
• -Integrated Data analysis
• -Financial Assessment

Policy, Training and Tools to support EV and E
workforce Center Execution Mission EV
Compliance and Surveillance
Policy, Training and Tools to support IA
mission Industrial Capability Assessments
(ICAs) Analytical Products Homeland Defense
Economic Analysis
Policy, Training, and Tools to support Industrial
Engineering and supply chain workforce Supply
Chain Surveillance Manufacturing
Engineering Production Planning
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Topics

• Authority Guidance
• Vision Mission
• Guiding Principles
• Objectives
• Organization
• Agency EVM Policies and Products
• Partnering Opportunities with Industry
• State of EVMS
• DRAFT Review Schedule

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Authority and Guidance

• December 1995 OUSD(ATL) Paul G. Kaminski policy
  memorandum designates the DCMC (DCMA) as the
  Department of Defense Executive Agent for Earned
  Value Management System
• October 1996 OUSD(ATL) Paul G. Kaminski policy
  memorandum gives DCMA responsibility for EVMS
  compliance reviews
• 48 CFR Part 242.1106
• Designates DCMA as the DoD Executive Agent for
  EVMS compliance
• Reviews
• DFARS Subpart 242.302 (41)
• Assigns the Contract Administration Office (CAO)
  function for
• EVMS to the DCMA, including the responsibility
  for reviewing
• EVMS plans and verifying initial and continuing
  compliance with
• DoD EVMS criteria
• May 2007 OSD(ATL) Kenneth Krieg policy
  memorandum reaffirms the DCMA as the Department
  of Defense Executive Agent for Earned Value
  Management Systems

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Vision Mission Statements

• Vision
• Influence the implementation of industry-wide
  compliant EVMS
• Provide program managers, integrated product
  teams, and other acquisition enterprise customers
  EVMS that provide immediate access to reliable
  and accurate data and information on program
  costs, schedule, and technical performance
• Mission
• Advocate the Departments implementation of EVM
  by executing the role and responsibilities of the
  Executive Agent for Earned Value Management
  Systems (EVMS)
• Develop and deploy meaningful policies,
  processes, training, and toolsets that assist
  with objective assessment of supplier EVMS plans
  and the verification of initial and continuing
  compliance with EVMS requirements

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Guiding Principles

• Timely execution of the mission
• Keep a customer focus
• Treat others as valued colleagues
• Be humble and mindful in actions and words
• Be at the forefront of DoD EVM enculturation
• Teaching the acquisition enterprise the accepted
  norms and values of an EVM culture

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Objectives

• Execute the roles and responsibilities of DoD
  Executive Agent for EVMS in conformance with DoD
  EVMS policy
• Develop, control, and implement the DoD Earned
  Value Management Implementation Guide (EVMIG) as
  the central EVMS guidance for DoD personnel
• Interpret DoD EVMS criteria, including issues on
  guideline application and system review
  requirements
• Maintain the EVMS Knowledge Management Community
  of Practice
• Publish a comprehensive annual report on the
  state of supplier EVMS implementation activities
  for the Department and Congress

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Objectives (contd)

• Develop, institutionalize, and continuously
  improve Agency EVM policy, standard processes,
  training, and tools
• Coordinate with Chief Operations Officer
  functional proponents to assess compliance with,
  efficacy of, and workloads associated with Agency
  EVM policy, standard processes, training, and
  tools
• Train the EVMS workforce in the use of Agency
  standard EVMS processes
• Delegate resources to review and approve
  contractor EVMS plans and to lead EVMS compliance
  reviews in order to determine the adequacy and
  capability of contractor EVMS in meeting
  DFARS/contract requirements, including selection
  of the Review Director, Team Chief, and Team
  Members and the execution timeline

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Objectives (contd)

• Delegate resources to lead customer sponsored
  reviews of EVMS for potential compliance issues
  and/or process efficiency improvements
• Coordinate and control EVM analyses
• Participate in Federal acquisition rulemaking
  through leadership on DAR Council committees
• Appraise and authorize changes to validated
  contractor EVMS

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EVM Center Organization
EVM Center Director
Staff
Deputy Director
Training
ENCULTURATION
Compliance
Surveillance
Analysis
POLICY, PROCESS METHODOLOGIES
TOOLS, TEMPLATES INSTRUCTIONS
EXECUTION
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Agency EVM Policies

• Compliance Review Instruction (CRI)
• Internal review Apr-10, Agency review Jun-10,
  final Oct-10 (est)
• Standard Surveillance Instruction (SSI)
  (previously SSOM)
• Internal review completed Aug-09, Agency review
  Feb-10, final May-10 (est)
• Trip Wire Operating Instruction (TWI)
• Internal review complete Jan-10, Agency review
  Feb-10, final May-10 (est)
• EVMS Specialist Certification Program (ESCP)
• Internal review Feb-10, Agency review May-20,
  final Aug-10 (est)

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Product Listing

• EVMS Policy Documents (EVMIG) and Operational
  Instructions
• EVMS Manuals, Courseware and Training
• DoD EVMS Compliance Review Schedule
• Supplier EVMS Compliance Review Determination
  Reports
• EVMS Surveillance Plans and Reports (SSI SSP/SSR)
  
• Standard EVM contract language and contract
  requirements examples

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Product Listing (contd)

• Cost/Schedule Performance Measurement Data
  Analysis (EVM CPR)
• Tripwire Analysis and Charts
• Independent Budget/Estimates of Costs at
  Completion (EVM IEAC)
• Network/Critical Path Analysis (EVM IMS)
• Schedule Risk Assessments (EVM IMS)
• Topical Whitepapers and Presentations

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Partnering Opportunities with Industry

• System Surveillance Instruction
• EVMIG Revision
• Self Assessment Revision
• EVM Interpretive Instruction
• IMS Analysis Guide
• Compliance Review Instruction

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State of EVMS

• EVM implementation governance from government to
  industry has deteriorated since the 1995
  timeframe when
• C/SCSC replaced with EVM (following ANSI-748)
• Management utilized EVM as a tool for decision
  making
• Industry self-governance emphasis was part of
  acquisition reform
• Over 40 compliance reviews of industry over the
  past 2 years
• Reviews evaluate the adequacy of supplier
  implementation of the ANSI-748 (32 guidelines)
• Reviews follow the Earned Value Management
  Implementation Guide (EVMIG)
• Only one passed first time Augusta (Italy)
• Of the big four compliance reviews
• 3 of the 5 guideline areas were gt50
  Non-Compliant (NC)
• Highest NC Management Reporting Analysis (75)
• Lowest NC Accounting Considerations (29)
• Patterns reflect systemic, OSD/cross-services/cros
  s-industry issues

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Common Non-Compliant Findings

• PM CAM ownership, inattention to budgetary
  responsibilities
• Funds and budget distinction (GLs 8, 9, 10)
• Supplier processes and toolsets are too
  cumbersome (GL 3)
• Work authorization procedures not followed (GLs
  9, 10)
• Lack of integrated management systems (GL 3)
• Budget reconciliation issues
• Vertical integration of subcontractors (GL 7, 8)
• Lack of IBR rigor, front loaded baselines, etc.
  (GL 8)
• Baseline fluctuations and frequent replanning (GL
  8)
• Current period and retroactive changes (GL 30)
• Improper use of Management Reserve (GL 14)
• Reserves harvested to improperly cover cost
  overrun
• EV techniques not reflecting actual
  accomplishment (GLs 7, 10, 23)
• Progress not tied to technical accomplishment
• Untimely, unrealistic Latest Revised Estimates
  (GL 27)
• Failure to monitor progress on a regular basis
  and in an integrated way (GL 23)

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EVMS Assessment Scorecard(Nov 2008)
Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Contractor A                                                                
Contractor B                                                                
Contractor C                                                                
Contractor D                                                                
Contractor E                                                                
Contractor F                                                                
Contractor G                                                                
Contractor H                                                                
Contractor I                                                                
Contractor J                                                                
Contractor K                                                                
Contractor L                                                                
Contractor M                                                                
Contractor N                                                                
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EVMS Assessment Scorecard(Dec 2009)
Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline Guideline
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Contractor A                                                                
Contractor B                                                                
Contractor C                                                                
Contractor D                                                                
Contractor E                                                                
Contractor F                                                                
Contractor G                                                                
Contractor H                                                                
Contractor I                                                                
Contractor J                                                                
Contractor K                                                                
Contractor L                                                                
Contractor M                                                                
Contractor N                                                                
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EVM Implementation Concerns

• Industry Concerns
• Erosion of avenues of communication and problem
  resolution
• Conflicting contractual requirements
• Proliferation of independent approaches to
  implementation
• Duplicative EVM System reviews (Department Policy
  Needed)
• Declining experience
• Reciprocity
• Department Concerns
• Maturity of industry infrastructure to support
  ownership of EVM
• Lack of institutionalizing EVM as an integral
  management tool
• Varying levels of confidence in reported
  performance and financial data
• Internal oversight lacks sufficient rigor
• Consistency of message (Duplicative efforts
  within the Department)

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DRAFT Review Schedule
Review Type PAV Validation Initital Visit RFC / NM Implementation Follow-On
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In Closing

• EV is not the problem
• Understanding EV is not the problem
• Not using EV to manage is the problem
• EV is integral to program management
• It is not a secondary assignment
• Plan Execute Measure Fix

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Questions?