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U.S. Department of Energy DOE G 413.3-10
Washington, D.C. 20585
5-6-08
EARNED VALUE MANAGEMENT SYSTEM (EVMS)
[This Guide describes suggested nonmandatory approaches for
meeting requirements. Guides are not requirements documents and
are not to be construed as requirements in any audit or appraisal
for compliance with the parent Policy, Order, Notice, or Manual.]
FOREWORD
This Department of Energy (DOE) Guide is for use by all DOE
elements. This Guide intends to provide approaches for
implementing the Earned Value Management System (EVMS)
requirements of DOE O 413.3A, Program and Project Management for
the Acquisition of Capital Assets in compliance with the American
National Standards Institute/Electronic Industries Alliance
(ANSI/EIA)-748, Earned Value Management Systems. DOE Guides,
which are part of the DOE Directives System, provide supplemental
information for fulfilling requirements contained in rules,
regulatory standards, and DOE directives. Guides do not establish
or invoke new requirements or are they substitutes for
requirements.
SECTION I-INTRODUCTION
1. GOAL
To support DOE's initiatives to improve program, project,
and contract management through the implementation and
surveillance of a contractor's EVMS that is in conformance
with DOE O 413.3A and the American National Standards
Institute/Electronic Industries Alliance (ANSI/EIA)-748,
Earned Value Management System.
The primary audience of this Guide is the FPD. It is
critical that the federal project director (FPD) understands
the EVMS process and procedures and utilizes the EVMS
information as an effective project management system to
ensure successful project execution and to fulfill their
roles and responsibilities as outlined in DOE O 413.3A.
2. OBJECTIVE
To provide an overview of the DOE EVMS that:
a. Describes the EVMS and associated critical information
available to the FPD, federal program manager, other
senior leaders, and contractors, and suggests how to
use them. To these ends, this guide:
(1) Suggests a common reporting format to communicate
EVMS consistently across DOE.
(2) Promotes implementation of EVMS as early in a
project life cycle as practical.
b. Describes the certification process for a contractor's
EVMS. See SECTION III.
c. Describes the EVMS surveillance process to ensure
ongoing EVMS compliance. See SECTION IV.
d. Describes EVMS-related lessons learned. See SECTION V.
This guide is not intended to be a comprehensive training
document, a detailed system requirement, or a contractual
implementation requirement. Those issues are beyond the
scope of this guide; however, FPDs and other DOE elements
are encouraged to contact the Office of Engineering and
Construction Management (OECM) for consultation. Additional
references are listed in APPENDIX A.
3. APPLICABILITY
To FPDs and other DOE elements, including contractors, for
which EVMS is required by DOE O 413.3A and contractual
requirements. Federal Acquisition Regulation (FAR) 52.234-4
requires compliance with the current version of ANSI/EIA-748
at the time of contract award.
SECTION II-EVMS
1. DESCRIPTION
a. What is an EVMS-
EVMS is an integrated set of policies, procedures, and
practices to support program and project management as
a decision enhancing tool and a critical component of
risk management. An EVMS:
(1) Effectively integrates a project's work scope,
cost, and schedule into a single performance
measurement baseline (PMB).
(2) Reliably tracks:
(a) planned value (PV) of work to be performed or
the budgeted cost for work scheduled (BCWS),
(b) earned value (EV) of actual work performed or
the budgeted cost for work performed (BCWP),
and
(c) actual cost (AC) of work performed (ACWP).
(3) Provides performance measures against the PMB.
(4) Provides means of identifying, reviewing,
approving, and incorporating changes to the PMB.
(5) Provides trend analysis and evaluation of
estimated cost at completion.
(6) Provides a sound basis for problem identification,
corrective actions, and management re-planning.
b. What is the purpose-
EVMS measures actual performance of work scope and the
associated cost and schedule versus an agreed to
baseline plan, while using disciplined means of
baseline change control for documenting any changes to
the agreed to baseline plan.
c. Why use it-
EVMS is a best practice and standard adopted by the
Federal Government and the project management industry.
DOE O 413.3A, the Office of Management and Budget
(OMB), and the Federal Acquisition Regulation (FAR)
require EVMS.
Projects requesting funds are required to provide EVMS
data as part of the business case per OMB Circular
A-11.
d. When is it used-
(1) EVMS should be implemented as early as possible in
a project's life cycle.
(2) By no later than CD-2, the performance baseline
(PB that includes the contractor's PMB) must cover
the entire project life cycle, i.e., through CD-4
or through the near-term baseline for EM cleanup
projects.
(3) DOE O 413.3A requires its use for projects with a
total project cost (TPC) greater than or equal to
$20M, and its EVMS data be entered into the DOE
Project Assessment and Reporting System (PARS)
after CD-2.
(4) For projects that do not utilize an EVMS, e.g.,
firm fixed price contracts, an alternative
performance management system must be described in
the project execution plan (PEP) that is approved
by the acquisition executive.
e. When is certification of an EVMS required-
(1) DOE O 413.3A requires for projects greater than or
equal to $20M that the contractor employ an
ANSI/EIA-748 compliant EVMS by CD-2. The
contractor's EVMS should be certified as soon as
possible, but no later than CD-3. In most cases,
EVMS certification will be a condition for CD-3
approval. Therefore, efforts need to be made to
plan and execute the certification process on a
schedule that can meet this requirement.
(2) Certification applies to the following:
(a) projects with a TPC between $20M and $50M
(DOE O 413.3A requires self-certification by
the contractor);
(b) projects with a TPC greater than or equal to
$50M (DOE O 413.3A requires certification by
OECM; this does not to preclude contractors
from obtaining certification by OECM for
projects with a TPC less than $50M); and
(c) new contractors who have replaced contractors
with certified EVMS or who require
certification.
(3) The certification process should be scheduled in
advance in anticipation of referenced CDs and new
contractors.
f. What are the criteria-
(1) EVMS needs to comply with DOE O 413.3A,
ANSI/EIA-748, and contractual requirements.
(2) Additional clarification on ANSI/EIA-748 is
provided by the National Defense Industrial
Association (NDIA), Program Management Systems
Committee (PMSC), Earned Value Management Systems
Intent Guide.
(3) Additional references are listed in APPENDIX A.
g. When should certification be scheduled-
(1) Contractors and their programs/Program Secretarial
Officers (PSOs) should determine the level of
certification required, i.e., not applicable,
self-certification, or OECM certification; review
the contractual requirements; and conduct a self-
evaluation.
(2) If OECM certification is required, OECM should be
contacted to coordinate the review schedule.
2. CRITICAL INFORMATION AND SUGGESTED USES
Following are some critical items that FPDs and other DOE
elements should closely monitor to ensure successful EVMS
implementation and continued compliance. Refer to APPENDIX B
for EVMS calculations.
a. Variances
(1) Identifies cost, schedule, and estimate at
completion (EAC) deviations from the PMB and
should be reviewed to ensure that their causes,
corrective action plans (CAPs), and impacts to the
project are clear, meaningful, and attempt to
recover negative deviations from the plan and
address reasons for significant positive
deviations from the plan.
(2) FPDs should ensure that variances are accurately
reported for the current month,
cumulative-to-date, and against the budget at
completion (BAC) and should monitor the variance
analysis reports and the effectiveness of
corrective actions.
(3) In addressing variances, historical performance
against the plan must not be erased, unless to
correct errors, routine accounting adjustments,
effects of customer or management directed
changes, or to improve the baseline integrity and
accuracy of performance measurement data. Together
with the remaining management reserve (MR) and DOE
contingency, updated EACs, and other factors, it
is critical to understand whether a project is in
danger of exceeding the contract budget base (CBB)
or the PB.
(4) Possible cost variance (CV) causes include the
following
(a) rate changes (i.e., labor, overhead),
(b) vendor discounts or price increases,
(c) quantity discounts,
(d) material cost changes, and
(e) requirement changes.
(5) Possible schedule variance (SV) causes include
(a) poor baseline schedule (does it reflect
reality-),
(b) subcontractor/vendor cannot deliver when
needed,
(c) more/less effort than planned,
(d) insufficient resources (staffing),
(e) labor disputes/work stoppage,
(f) resource availability (is it there when I
need it-), and
(g) requirement changes.
b. Indices
(1) Indices measure how efficiently a project has
executed the PMB to the present time. They should
be closely monitored. They are good indicators
that could predict future performance but they do
not stand alone (e.g., by themselves they do not
monitor whether the critical path work is being
performed as planned).
(2) Schedule performance index (SPI) indicates how
much work you have accomplished against the
planned work. "How am I doing against my plan-"
Current or cumulative month data should be
assessed and trended.
(3) Cost performance index (CPI) indicates how much
effort you are getting for every dollar spent. "Am
I getting the best bang for the buck-" Current or
cumulative month data should be assessed and
trended.
(4) Work remaining (WR), budget remaining (BR), and
estimate to complete (ETC) should be checked to
assess if adequate resources are available to
complete the project.
(5) To complete performance index (TCPI) indicates the
budget for work remaining versus the estimate for
work remaining. TCPIBAC indicates the level of
efficiency that must be achieved for the cost at
completion to equal the BAC. TCPIEAC indicates the
level of efficiency that must be achieved for the
cost at completion to equal the EAC.
c. Baseline Management
Baseline management is crucial for properly
documenting, approving, and implementing changes to the
PMB and for understanding if the project is in danger
of exceeding the CBB or the PB.
3. TOOLS
Additional tools to better understand the terms and concepts
are clarified below.
a. DOE Gold Card
APPENDIX B provides a comprehensive summary of key EVMS
terms, their interrelationships, and measurement of
project progress versus the plan. These terms are the
foundations for reports including contract performance
reports (CPRs) in APPENDIX C.
b. Contract Performance Reports
CPRs provide critical information from the contractor
to their management and DOE about their performance in
an organized, easy to understand format. CPRs are
management reports that provide timely, reliable data
that is used to assess the contractor's current and
projected performance, to quantify and track known or
emerging problems, to determine the contractor's
ability to achieve the PMB, and to assist in decision
making. It is important that the CPR be as accurate as
possible so it may be used for its intended purpose,
which is to facilitate informed, timely decisions.
CPRs are provided monthly and pertain to all authorized
work including priced and unpriced efforts.
FAR 34.201(c) requires the contracting officer to
require contractors to submit EVMS monthly reports for
those contracts for which EVMS applies. The contract
requirements should be consulted.
APPENDIX C provides five CPR formats. These formats are
not required by DOE. If used, they should be tailored
to meet the needs of the project. When viewed in total
and over a period of time, these formats can provide
significant insight regarding project performance. The
following are the five CPR formats:
(1) Format 1: WBS
(2) Format 2: Organizational Categories
(3) Format 3: Baseline
(4) Format 4: Staffing
(5) Format 5: Explanation and Problem Analyses
c. CPR Checklist
APPENDIX D provides a checklist of items for the FPD to
review to ensure that CPR formats 1 to 5 are properly
prepared.
d. PARS
The following information should be entered into PARS,
as applicable.
(1) Complete PV or BCWS profile.
(2) Monthly EV or BCWP and AC or ACWP. PARS
automatically calculates the monthly and
cumulative indices.
(3) Variance analysis and monthly status reports.
(4) Latest revised estimate(LRE).
(5) Contingency remaining.
(6) Updates of other data fields, i.e., FPD,
contractor project manager, project description,
etc.
SECTION III-CERTIFICATION OF A CONTRACTOR'S EVMS
1. WHAT CERTIFICATION MEANS
Certification is a process that involves reviewing and
certifying that the design and implementation of a
contractor's EVMS is in conformance with ANSI/EIA-748
primarily for DOE O 413.3A projects. The certification is
not to verify how well projects or the programs are doing,
but to assess the capability of the system to provide an
objective measure of progress and the effective use of the
system by the contractor and for the Department. Project
data are simply means of demonstrating EVMS compliance.
Elements of the EVMS (i.e., the design as reflected by
policies, procedures, and processes; and the
implementation as reflected by reports and other
documents) are evaluated individually and as a whole to
ensure that they meet the intent of ANSI/EIA-748.
2. CERTIFICATION REVIEW SCOPE
Certification review scope encompasses a project's
statement of work as reflected by a project specific
contract and/or PEP.
a. When a contractor has multiple projects,
certification may be accomplished on a single or
multiple project basis, with this decision being
dependent primarily on the types of projects being
managed and where each project is in its life cycle.
b. An overriding objective in making this decision is to
ensure that the review is conducted using data from
projects that are sufficiently mature and provide a
representative sampling of the contractor's total
efforts to implement an ANSI/EIA-748 compliant EVMS.
3. SELF-CERTIFICATION
a. DOE line management oversight of the self-
certification is preferred as the means to gain
confidence in the contractor's EVMS implementation.
b. In addition to providing the standard and basis by
which an EVMS is to be certified, ANSI/EIA-748
section 5.1 provides the following methods of self-
evaluation that may be used as basis for
self-certification. It is recommended that all
methods be utilized;
(1) contractor's internal resources,
(2) a peer group from the contractor's internal
resources and/or other organizations,
(3) an outside organization to assist with
evaluation, and
(4) associated DOE program representatives to assist
with evaluation.
c. Once self-certified, the primary program/PSO should
formally notify OECM of the self-certification.
4. OECM CERTIFICATION PROCESS
a. Points of Contact
The following points of contact (POCs) should be
involved with the certification process.
(1) OECM EVMS Lead should -
(a) Serve as primary certification POC.
(b) Develop the EVMS certification review
schedule milestones by working with the
contractor and program/PSO.
(c) Lead the OECM on-site review team and
coordinates the review team.
(2) Contractor POC should -
(a) Typically be the head of the project
controls department.
(b) Assess contract to determine if contractor
requires OECM certification. If so,
consults with the program/POC and the
FPD/site office, to schedule certification.
(c) Ensure that contractor has a mature EVMS
supported by its project controls
department.
(3) Program/PSO POC should -
(a) Assess project CD status to determine if
contractor requires OECM certification. If
so, contact OECM, in consultation with the
contractor and FPD/site office, to schedule
certification with those projects planned
to be provided as certification review
documentation.
(b) Assist in the scheduling the contractor and
FPD/site office resources to support the
review efforts.
(c) Assess contract status to determine if new
contractor is anticipated. If so, contacts
OECM, in consultation with the contractor
and the FPD/site office, to determine if
certification should be scheduled.
(4) FPD/Site Office should -
(a) Assess project CD status to determine if
contractor requires OECM certification. If
so, contacts appropriate program/PSO, in
consultation with the contractor, to
schedule certification with those projects
planned to be provided as certification
review documentation.
(b) Assess contract status to determine if new
contractor is anticipated. If so, contacts
appropriate program/PSO, in consultation
with the contractor and other site office
personnel, to determine if certification
should be scheduled.
b. Milestones
This section provides a high-level overview of the
following major milestones of the OECM administered
EVMS certification process.
(1) M01-Readiness Assessment (RA)
(2) M02-On-Site Review
(3) M03-CAP Analysis & Acceptance
(4) M04-CAP Implementation and Follow-Up Review
(5) M05-Certification
c. M01-Readiness Assessment
(1) The RA is an on-site meeting with the contractor
to ensure that the contractor is ready for an
EVMS certification review. It should be
approximately one day or longer and scheduled
two or more months prior to the on-site review.
The contractor should have conducted some form
of self-certification prior to the RA. The
on-site review may be postponed based on the RA
or failure to address critical issues identified
in OECM's RA report.
(2) The RA primarily consists of discussion of the
general scope of the projects for which a review
of the EVMS is conducted; the purpose, scope,
and requirements of the certification review
including DOE expectations; the on-site review
process including required documents, interview
schedule, timeframe for the on-site review, and
all administrative support needed to conduct a
quality review; and comments to certification
review documentation provided by the contractor.
(3) Deliverables
(a) Certification Review Documentation-The
contractor should provide OECM
certification review documentation
(APPENDIX E) approximately 30 working days
prior to the RA.
(b) RA Report-OECM should provide the contractor,
program/PSO, and FPD/site office with a
report of the RA approximately 5 working days
after the RA.
d. M02-On-Site Review
(1) The on-site review with the contractor is to
assess compliance with ANSI/EIA-748. It should be
approximately 5 working days.
(2) The on-site review primarily consists of
interviews by the OECM on-site certification
review team (APPENDIX F) of the contractor's
control account managers (CAM), functional
managers, and senior managers and of data traces
to determine if they support the certification
review documentation.
(3) At the end of the on-site review, the review
team should provide an out-brief. The goal is to
identify all findings. A finding is documented
in the form of a corrective action request
(CAR). Other issues may be documented in the
form of a continuous improvement opportunity
(CIO).
(a) A CAR is a systemic or limited occurrence of
an ANSI/EIA-748 non-compliance or a
significant impact to reporting, and requires
a CAP.
(b) A CIO is a recommended improvement or
expansion of good practices for wider
application and does not require a CAP.
(4) It is critical for the contractor to inform OECM
of any changes to the EVMS after the on-site
in-brief.
(5) Deliverables
(a) Certification Review Documentation-The
contractor should provide OECM certification
review documentation (APPENDIX E)
approximately 40 working days prior to the
on-site review.
(b) On-Site Review Report-OECM should provide the
contractor, program/PSO, and FPD/site office
a report of the on-site review with the CARs
and CIOs approximately 5 working days after
the on-site out-brief.
e. M03-CAP Analysis and Acceptance
(1) Based on the CARs, the contractor should prepare
and submit a CAP for each CAR. A CAP represents
the proposed action to address the CAR. A CAP
clearly documents assumptions and constraints.
Failure to provide a CAP for each CAR within 60
working days of the on-site review out-brief may
result in a new certification review.
(2) If OECM's CAP analysis concludes that the CAP
logically outlines in sufficient detail the
proposal to remedy the ANSI/EIA-748 non-compliance
or a significant impact to reporting, OECM may
accept the CAP.
(3) It may take more than one CAP submission before
OECM accepts the CAP.
(4) The contractor is cautioned about implementing
CAPs prior to OECM's acceptance for it may result
in the need for even further changes and thereby
be non-productive.
(5) Deliverables
(a) CAP-The contractor should provide OECM CAP
for each CAR approximately 20 working days
after the on-site review out-brief.
(b) CAP Acceptance-OECM should respond to the
contractor regarding the acceptability of the
CAP approximately 10 working days after the
receipt of the CAP.
f. M04-CAP Implementation and Followup Review
(1) Based on OECM acceptance of the CAP, the
contractor should implement the CAP immediately.
At a minimum, the EVMS description should be
updated accordingly.
(2) Concurrently, evidence files (depending on the
nature of the CARs, a minimum of 3 months of
supporting documentation including CPRs) of the
implementation that remedy the CAR should be sent
to OECM and the follow-up review should be
coordinated with OECM. Failure to provide
sufficient evidence files within 5 months of CAP
acceptance may result in a new certification
review.
(3) Upon receipt of all the evidence files, OECM
should conduct an implementation analysis and
document the results in the implementation report.
(4) The implementation report may conclude that the
CAR
(a) has not been adequately addressed (resulting
in another submission of evidence files) or
(b) has been adequately addressed which
necessitates coordination of a follow-up
review.
(5) Followup Review
(a) The follow-up review with the contractor is
to assess compliance with ANSI/EIA-748. It
should be approximately a one or two day
on-site review, or OECM may substitute with a
video conference depending on the complexity
and the number of CARs, but may involve
further discussions with the contractor CAMS
and senior management and on-site review.
(b) The follow-up review primarily consists of
interviews of the contractor's CAMs,
functional managers, and senior managers to
determine if they support the evidence files
and close the CARs.
(c) The follow-up review should result in another
implementation report which may conclude that
another submission of evidence files is
required for EVMS certification. Failure to
obtain EVMS certification within 6 months of
on-site review out-brief will result in a new
certification review assuming OECM promptly
responds to the contractor's submissions as
noted.
(6) Deliverables
(a) Evidence Files-The contractor should provide
OECM evidence files approximately 85 working
days after the on-site review out-brief.
There should be a set of evidence files for
each CAP.
(b) Implementation Report-OECM should provide
contractor, program/PSO, and FRP/site office
a report of the implementation analysis
approximately 20 working days after receipt
of the evidence files.
g. M05-Certification
(1) Based on a successful follow-up review, OECM
should provide the contractor a letter of
certification, a significant achievement, with the
expectation that the contractor maintains its
EVMS, e.g., conducts surveillance as part of their
integrated management system and with continuous
improvement.
(2) It is expected that an EVMS should be ready for
certification within six months of the on-site
review. If the time between the on-site review and
certification is longer than six months, then
another on-site review may be necessary. In no
case, should it extend beyond one year without
restarting the certification process.
(3) Deliverables
(a) Letter of EVMS Certification-OECM should
provide contractor letter certifying that the
contractor's EVMS is in compliance with
ANSI/EIA-748 approximately 10 working days
after the successful follow-up review.
SECTION IV-EVMS SURVEILLANCE
Surveillance is the recurring process of reviewing a contractor's
EVMS to ensure continued compliance with ANSI/EIA-748. DOE uses,
as a guide, the NDIA PMSC, Surveillance Guide. An effective
surveillance process ensures that the key elements and the use of
an EVMS are maintained over time and on subsequent applications
(e.g., on new projects). The purpose of surveillance is to ensure
that the contractor is continuing to use their EVMS effectively
to monitor and manage cost, schedule, and technical performance.
Through the process of surveillance, successful practices may be
shared as part of the lessons learned process.
1. CONTRACTOR SURVEILLANCE
The contractor has the primary responsibility for
implementing and maintaining a surveillance program to
ensure continued compliance of the system with ANSI/EIA-748.
An acceptable approach to surveillance planning could begin
with the establishment of a comprehensive surveillance plan
prepared by the contractor and provided for information and
comment to the program/PSO and FPD/site office. The
surveillance plan includes a clear definition of the scope
of surveillance, the responsibilities, methods for
conducting, and the schedule. The plan typically spans
multiple years, is supplemented by an annual schedule with
additional detail regarding the planned surveillances, and
the projects selected for review. Responsibility for EVMS
surveillance should be within an organization separate from
the project manager's line management.
2. DOE LINE MANAGEMENT OVERSIGHT
While the contractor has the primary responsibility for EVMS
surveillance, DOE line management (i.e., the FPD/site office
up through the program/PSO) also shares in the
responsibility. DOE line management should assess the
results of the contractor surveillance program to determine
if additional DOE-led surveillances are necessary. To this
end, in reviewing the results of the surveillances, DOE line
management may decide to initiate program office directed
surveillances or it may request (through its program office)
that OECM lead a surveillance review.
3. DOE OECM OVERSIGHT
As part of DOE's continuous effort to institutionalize EVMS
across the Department and export best business practices
across programs, OECM will conduct periodic surveillance
reviews similar to the certification review. Many events,
such as a request from the field or program office, negative
performance indicators, and OECM schedules can trigger
reviews. This does not abrogate the responsibility of the
contractor and DOE line management to establish their EVMS
surveillance program. The DOE headquarters surveillance
program is one of oversight.
SECTION V-LESSONS LEARNED
The EVMS lessons learned contained within this section originate
from CARs and CIOs identified during certification and
surveillance reviews. They may also arise from external
independent reviews (EIRs), independent project reviews (IPRs),
day-to-day execution, and other industry sources. The following
are ten common lessons learned issues that merit discussion.
1. ACQUISITION PROCESS
The request for proposal should specify what is required
of the contractor as it relates to EVMS, and should make
specific reference to ANSI/EIA-748, FAR, and DOE O 413.3A
contractor requirements.
2. BUDGET VERSUS FUNDS AND PERFORMANCE MEASUREMENT BASELINE
The following basic concepts are often confused and can
result in non-compliance.
a. Funds are a monetary resource provided to execute the
plan.
b. Budget equates to the plan. The PMB represents the
performance plan against which the contractor is
measured as the contractor executes the total, not
just the annual project scope of work. It is the
summation of the time-phased budgets for all control
accounts (CAs), summary level planning packages
(SLPPs), applicable indirect budgets, and any
undistributed budget (UB). For traditional projects,
the PMB at CD-2 is required to encompass the entire
project scope of work. For environmental management
cleanup projects (especially long term projects), the
PMB at CD-2 may be for the contract period, a near-
term baseline, or the life cycle period. Contractors
must not zero out past variances within the PMB to
manage funds. Historical performance against the plan
must not be erased, unless to correct errors, routine
accounting adjustments, effects of customer or
management directed changes, or to improve the
baseline integrity and accuracy of performance
measurement data. In other words-
(1) historical performance against the plan must not
be erased,
(2) integrity of the PMB must be maintained, and
(3) separate means must be employed for funds control.
A fully implemented EVMS is concerned with the total
project scope, the associated planned budget and
schedule, and the resultant PMB that is used for
purposes of measuring progress for the total project
and is not focused on the management and control of an
annual funding plan.
3. MANAGEMENT RESERVE
Contractors should be encouraged to establish a challenging
PMB. However, it must be understood that there will be risk
events within the contractor's defined scope of work. A
proper balance of challenge versus risks and managing risks
can be the key to project success. Many of these risk events
may happen and the contractor should be allowed to have a
budget reserve that they can use to better plan future work.
This budget reserve or MR should not be used to budget newly
directed work scope.
4. DOE CONTINGENCY
In establishing the TPC, DOE should account for technical
and programmatic risks. It is important to account for these
technical and programmatic risks by establishing a DOE
contingency which would be used for providing additional
budget should the need arise.
5. CHANGE CONTROL
a. Many CARs are related to change control - primarily PMB
maintenance and how MR and DOE contingency are used. It
is important for the change control process to provide
visibility to the type of change (e.g., scope change,
versus a contractor initiated re-plan of future work)
and that budget has been taken from the appropriate
account (i.e., MR or DOE contingency). This is
essential to ensure that the total project scope, cost,
and schedule are managed by DOE and the contractor.
b. ANSI/EIA-748 requires that work be performed against a
planned budget. Therefore, if there is a large proposed
scope change for which a significant amount of time is
required prior to DOE approval, mechanisms should exist
to provide "a not to exceed budget" while contract
negotiations continue to resolve the final outcome.
c. Although the issue of budget control (which is a part
of baseline change control) and funds control are often
inter-related, the contractor EVMS description and
implementing procedures oftentimes use the terms
interchangeably, when in fact they are two separate
processes.
d. When describing a baseline change, the total project
cost and schedule impacts need to be addressed up
through CD-4 and not just the cost and schedule impacts
to the annual work plan, or the current project phase
(e.g., design phase).
6. ESTIMATE AT COMPLETION
Whereas the PMB is important to measure a contractor's
performance against a plan, an EAC is necessary to
understand what the anticipated total funding requirements
are to complete the project. Although most contractors have
a process for identifying the development of trends and
revising specific CA EACs to address individual issues,
oftentimes there is no defined frequency for the development
of a revised bottoms-up EAC. Real-time updates of EAC at
individual CA is important, and individual changes are often
non-linear (i.e., their algebraic sum may not reflect the
total impact). To better understand the EAC, a bottoms-up
EAC should be required on some defined frequency. An annual
update is usually adequate.
7. WORK AUTHORIZATION PROCESS
Usually the contract or PEP captures the total scope of
work, cost, and schedule. The contractor's work
authorization process for individual CAs should be recorded
in an authorizing document from the contractor's line
management (e.g., project manager) to each CAM. Oftentimes,
what is documented is an annual work plan and not the total
project plan.
8. ACCRUALS
Methods for planning, taking credit for actual work
performed, and accounting for actual costs (pending receipt
of an invoice) should be synchronized. Disciplined methods
for reversing accruals (upon receipt of the invoice) should
be implemented. If they are not, the reported variances may
not represent actual variances. Additionally, it can lead to
a significant waste of personnel resources to explain the
variances.
9. EARNED VALUE TECHNIQUES
Wherever practicable, objective measures (rather than
management judgment) should be used to take credit for work
performed. Caution should be exercised when there is a high
proportion of "level of effort" work in that, for this
method, the work performed always equals what was planned
and by itself it never generates a schedule variance.
Further guidance regarding acceptable earned value
measurement techniques can be found in the ANSI/EIA-748.
10. OVER-RELIANCE ON CUMULATIVE SPI
In addition to the potential masking of schedule problems
encountered for projects with a high proportion of "level of
effort" work, cumulative SPI is not a good indication of
what is happening on the project critical path and does not
reflect whether the critical path work is or is not being
accomplished. In analyzing data, therefore, it is important
for both the FPD and contractor to analyze more than just
the cumulative indices. For example, understanding exactly
what work is on the critical path, and then assessing the
SPI for each of these work elements would be more
meaningful.
APPENDIX A-REFERENCES
ANSI/EIA-748-A-1998, Earned Value Management Systems, 1998,
http://ansi.org/.
ANSI/EIA-748-B-2007, Earned Value Management Systems, 2007,
http://ansi.org/.
DoD EVMS website, http://www.acq.osd.mil/pm.
DoD DI-MGMT-81466A, Contract Performance Report,
http://www.assistdocs.com/search/document_details.cfm-ident_num
ber=206421&StartRow=1&PaginatorPageNumber=1&doc%5Fid=DI%
2DMGMT%2D81466A&status%5Fall=ON&search%5Fmethod=BASIC.
DOE O 413.3A, Program and Project Management for the
Acquisition of Capital Assets, dated 7-28-06,
http://management.energy.gov/policy_guidance/project_managment.
htm.
DOE 413.3 series guides.
FAR Subparts 34.2 and 52.234, Earned Value Management System,
2008, http://www.acqnet.gov/far/index.html - Provides EVMS and
certification requirements and solicitation provisions and
contract clauses for acquisitions.
GAO-07-1134SP, Cost Assessment Guide - Best Practices for
Estimating and Managing Program Costs, exposure draft, 2007,
http://www.gao.gov/new.items/d071134sp.pdf.
NDIA PMSC, Earned Value Management Systems Intent Guide, 2006,
http://www.ndia.org/Template.cfm-Section=Procurement&Template=/
ContentManagement/ContentDisplay.cfm&ContentID=2310.
NDIA PMSC, Surveillance Guide, 2004,
http://www.ndia.org/Template.cfm-Section=Procurement&Template=/
ContentManagement/ContentDisplay.cfm&ContentID=2310.
OMB Circular A-11, Part 7, Planning, Budgeting, Acquisition,
and Management of Capital Assets, includes supplement, Capital
Planning Guide, 2007, http://www.whitehouse.gov/omb/circulars/
a11/current_year/a11_toc.html.
Project Assessment and Reporting System (PARS),
https://pars.energy.gov.
APPENDIX B-DOE EVMS GOLD CARD
SEE THE GRAPHIC IN THE PDF
APPENDIX C-CPR FORMATS 1 TO 5 OVERVIEW
1. The following CPR formats are available from the DoD website
(APPENDIX A). Blank forms are attached on the following
pages.
a. Format 1: WBS
Provides data to measure cost and schedule performance by
product-oriented work breakdown structure (WBS) elements, the
hardware, software, and services the Government is buying.
Identifyes any reprogramming adjustment, BAC, EAC, MR, UB,
and variance at completion by element. It can also show the
indirect costs by element.
b. Format 2: Organizational Categories
Provides format 1 data by the contractor's organization
(functional or integrated product team structure). Refers to
the organizational categories that reflect the contractor's
internal management. A certified EVMS requires reporting by
WBS and organizational breakdown structure (OBS).
c. Format 3: Baseline
Provides the budget baseline plan against which performance
is measured.
d. Format 4: Staffing
Provides staffing forecasts for correlation with the budget
plan and cost estimates.
e. Format 5: Explanation and Problem Analyses
A narrative report used to explain significant cost and
schedule variances and other identified contract problems and
topics to the CA level.
2. Regarding completion of the data blocks in CPR formats 1 to
5, many of the blocks are self-explanatory. Sample
descriptions of some that many not be so clear are provided
below, and detailed instructions for completing the CPR data
blocks can be obtained from the DoD website (APPENDIX A).
a. Phase: Refers to current segment of a project (e.g.,
design, construction, commissioning).
b. Share Ratio: Refers to contracts wherein there is a
sharing of costs, or cost savings, for completion of the
project above, or below, a contractually established
target cost. For example, if for every dollar that the
project is completed less than the target cost the DOE
retains 80 cents and the contractor's fee is increased
by 20 cents, then the share ratio would be 80/20.
c. Cost of Money: Refers to interest costs incurred by the
contractor when he is financing facility capital assets
(e.g., the building, equipment procurements, etc). This
usually is not done for DOE projects (and is usually not
applicable).
3. CPR FORMATS 1 TO 5
SEE GRAPHICS IN THE PDF
APPENDIX D—CPR FORMATS 1 TO 5 CHECKLIST
The following are some checks for CPR formats 1 to 5 noted in APPENDIX C.
1. FORMAT 1: WBS
a. Check Summary information for correctness (i.e., contract
number/type, program name, report period, and signature).
b. Verify negotiated cost tracks to the latest definitized
contractual actions. REMEMBER: Cost does not include fee.
Ensure that the estimated cost of authorized unpriced work
(AUW) reflects contractual actions in-progress and not
definitized (e.g., change orders, not-to-exceeds,
supplemental agreements, and letter contracts).
c. Check and verify the following :
(1) Fixed Fee should reconcile to the fixed fee
definitized on contract.
(2) Award Fee Pool should reconcile to the
total definitized award fee negotiated on contract.
(3) Award Fee earned should reflect the fee the
contractor earned to date. Crosscheck with
the contract.
(4) Award Fee available should reflect the award
fee pool less award fee earned less unearned
award fee.
d. Check and verify that the:
(1) Negotiated Price = Negotiated cost + Fixed fee +
Award fee earned + Award fee available
(2) Estimated Price = Negotiated price + Estimated
cost of authorized unpriced work
e. Assess changes to the UB that should be explained in
Format 3, and efforts should be made to distribute all UBs
well ahead of the planned execution of the work. Look for
significant changes in the MR budget. Significant changes
in budget should be identified in format 3 and explained
in format 5. Any entry in the MR EAC represents MR usage.
2. FORMAT 2: ORGANIZATIONAL CATEGORIES
Verify information against organizational categories.
3. FORMAT 3: BASELINE
a. Check and verify header information. Cross-check
with format 1.
b. Note changes to PMB since the last report. Reconcile
the end of month PMB BCWS to the BCWS “total”
line of format 1.
4. FORMAT 4: STAFFING
Check accuracy of headcount data with control account
managers (CAM)/integrated project team (IPT) leads. Note
changes in headcount since the last report. Look for major
changes, i.e., significant shifts in time-phasing of planned
staffing in projected headcount (rule of thumb, >10%).
Reconcile the headcount with format 3 data. Check for
explanation in the format 5.
5. FORMAT 5: EXPLANATION AND PROBLEM ANALYSES
a. Refer to SECTION II for a discussion of what the
variances and indices may be indicating regarding over-all
performance, the reasons for the variances, the adequacy
of corrective action plans, and forecasts of future
performance.
b. Also check whether the indicated reasons for
variances are within (or outside) the listing of identified
risks, and whether proper re-planning of future work has
` been done to better plan future work, and whether contractor
MR is being properly utilized.
APPENDIX E—TYPICAL CERTIFICATION REVIEW DOCUMENTATION
1. READINESS ASSESSMENT
Typical certification review documentation to be provided
to OECM approximately 30 working days prior to the RA:
a. primary POCs,
b. contract with changes/modifications,
c. list of subcontractors with associated scopes of work,
d. EVMS description, surveillance plan, and change
control procedure and other implementing procedures
(i.e., referenced documentation),
e. cross reference of the EVMS description to ANSI/EIA-748
guidelines (compliance map),
f. WBS and WBS dictionary,
g. organizational chart and OBS, and
h. dollarized responsibility assignment matrix (RAM).
2. ON-SITE REVIEW
Typical certification review documentation to be provided to OECM
approximately 40 working days prior to the on-site review:
a. updated documentation including those listed above and
already provided,
b. contract performance reports (CPR) for the last 3 consecutive
months,
c. CAM notebooks (representative sample),
d. CA plans (representative sample of contractor’s and
subcontractor’s),
e. program schedules (contractor’s and subcontractor’s),
f. variance analysis reports (representative sample),
g. variance analysis corrective action log,
h. change control log including executed and pending,
i. management reserve and contingency log,
j. UB log,
k. accounting policies and procedures,
l. rationale for projected rates,
m. disclosure statement, and
n. Defense Contract Audit Agency (DCAA), Inspector
General (IG), or other audit reports.
APPENDIX F—OECM ON-SITE CERTIFICATION REVIEW TEAM
1. TYPICAL REVIEW TEAM
A typical EVMS on-site certification review team led by OECM is shown in Table 1.
Table 1 – Typical OECM On-Site Certification Review and Interview Team Matrix
____________________________________________________________________________________
4 Functional Teams 4 Interview Teams
_________________________________________________________________________
No. 5 Functional Areas Member 1 2 3 4
(Accounting)
_________________________________________________________________________
A Organization Member A1 x
Member A2 x
Analysis and
Management
Reports Member A3 x
B Planning and
Budgeting Member B1 x
Member B2 x
Member B3 x
C Accounting Member C1 x
Member C2 x
Member C3 x
D Revisions Member D1 x
Member D2 x
Member D3 x
The 5 functional areas shown represent the 5 process groupings into which the
32 ANSI/EIA-748 guidelines are categorized. A functional area lead is
designated for each functional area. Each functional team member is
assigned to an interview team, wherein the interview teams are
constructed to have representation from all but team 4, the accounting
team. The accounting team also conducts interviews, and although it is
assigned to a few of the interviews conducted by the other three interview
teams, in large part it conducts its interviews of accounting personnel. In
addition to the interviews of the contractor personnel conducted by the
4 interview teams, the OECM EVMS lead with other team members conduct
interviews of the contractor’s senior management.
2. FUNCTIONING OF THE REVIEW TEAM
a. In general, the review team plans and executes its work
prior to, during, and following the on-site review, as follows:
(1) Prior to the on-site review, team members
review the certification review documentation
that is supplied by the OECM EVMS lead to
assess compliance of the EVMS processes and
procedures with ANSI/EIA-748.
(2) During the on-site review, team members
conduct interviews and data traces to determine
if contractor personnel are doing business
consistent with their EVMS procedures. Also, at
the end of each day the entire team assembles to
discuss potential problem issues. Further, the OECM
EVMS lead with other team members meet at the end
of each day of interviews with the contractor in order
to ensure that there are no misunderstandings in what
the review team believes it is observing and to ensure
there are no surprises at the on-site review out-brief.
(3) Following the on-site review and acceptance of the
contractor’s CAP, the OECM EVMS lead and necessary
functional team leads assess the acceptability of the
contractor CAP and support further reviews to ensure
successful CAP implementation.
b. Technical accountability (e.g., determining which issues represent
non-compliances with ANSI/EIA-748) rests with OECM;
however, in most cases a consensus position is usually
reached by the entire review team.
c. Staffing of the Review Team
(1) In general, the accounting team is comprised
primarily of personnel from the program that has
accounting over-sight responsibility for the contractor
being reviewed. This is usually a DOE field services
office or DCAA.
(2) The remaining review team members should be
qualified personnel who have no conflict of interest
with the contractor or that contractor’s projects and
may include DOE personnel. If requested by the OECM
EVMS lead, the program may need to identify some of
the review team members approximately 30 working
days prior to the start of the on-site review.
(3) Staffing of the review team should be identified by
approximately 20 working days prior to the start of
the on-site review.
APPENDIX G—ACRONYMS
AC actual cost
ACWP actual cost of work performed
ANSI American National Standards Institute
AUW authorized unpriced work
BAC budget at completion
BCWP budgeted cost for work performed
BCWS budgeted cost for work scheduled
BR budget remaining
CA control account
CAM control account manager
CAP corrective action plan
CAR corrective action request
CBB contract budget base
CD critical decision
CIO continuous improvement opportunity
CPI cost performance index
CPR contract performance report
cum cumulative
CV cost variance
CPR contract performance report
DCAA Defense Contract Audit Agency
DoD Department of Defense
DOE Department of Energy
EAC estimate at completion
ETC estimate to complete
EIA Electronic Industries Alliance
EIR external independent review
EV earned value
EVMS earned value management system
FAR Federal Acquisition Regulation
FPD federal project director
G guide
GAO Government Accountability Office
IG Inspector General
IPR independent project review
IPT integrated project team
LRE latest revised estimate (at completion)
M million or milestone
MR management reserve
NDIA National Defense Industrial Association
O order
OBS organizational breakdown structure
OECM Office of Engineering and Construction Management
OMB Office of Management and Budget
PARS Project Assessment and Reporting System
PB performance baseline
PEP project execution plan
PMB performance measurement baseline
PMSC Program Management Systems Committee
POC point of contact
PP planning package
PSO Program Secretarial Officer
PV planned value
RA readiness assessment
RAM responsibility assignment matrix
SLPP summary level planning package
SPI schedule performance index
SV schedule variance
TCPI to complete performance index
TPC total project cost
UB undistributed budget
VAC variance at completion
WBS work breakdown structure
WP work package
WR work remaining