Archive for category: EVMS

Earned Value Management requirements in the federal space are typically imposed on contractors via either FAR 52.234-4 Earned Value Management System or, for defense contracts, DFARS 252.234-7002 Earned Value Management System (EVMS).

The two clauses are slightly different. The FAR directs contractors to use an EVM system compliant with the guidelines in the EIA-748 standard. The DFARS clause mandates the use of an EVMS compliant with ANSI/EIA-748. Why the difference, and does this mean that there are two different standards?

A Little History

• May 1998: The first American National Standards Institute (ANSI) Standard for Earned Value Management Systems approved through the Electronic Industries Alliance (EIA), an ANSI partner focused on standards for electronic components. The standard was drafted by the National Defense Industrial Association (NDIA) Program Management Systems Committee (PMSC) and released as ANSI/EIA-748-1998.
• 2007: EIA announced that it would be devolved into its constituent sectors, one of which was the Government Electronics and Information Technology Association (GEIA). With the dissolution of EIA the standards were to be managed by their respective sectors.
• 2008: GEIA merged with the Information Technology Association of America (ITAA), and the new organization changed its name to TechAmerica in 2009.
• 2013: TechAmerica sold their standards program to the Society of Automotive Engineers (SAE) International. It was at this time that ANSI dropped the EIA-748 standard.

Throughout this history, NDIA has continued to be the author and steward of the 748 standard.

Today the EIA-748 standard is maintained by the SAE G-47 Systems Engineering Committee and was most recently revised on January 8, 2019 to EIA748D. The rationale for the change includes the following note:
“NDIA Integrated Program Management Division (IPMD) is the author of and the steward for the EIA 748 Standard for Earned Value Management Systems.

IPMD has a large active base of EVM system users and maintains ongoing contacts with the US Department of Defense and other federal agencies regarding the implementation and use of EVMS. More information can be found at https://www.ndia.org/divisions/ipmd.

Is There an ANSI Standard?

Currently, ANSI has no definitive standard for EVM. It does, however, have PMI FS-PMBOK-2017 A Guide to the Project Management Body of Knowledge (PMBOK Guide), which includes ANSI/PMI 99-001-2017 The Standard for Project Management.

The Project Management Institute (PM) has also published a PMI PSF-EVM-2011 Practice Standard for Earned Value Management – Second Edition. This practice standard is not an ANSI standard. As stated in the preface it is designed “…to expand upon the concept of EVM as presented in the PMBOK Guide in a way that allows for easy understanding and implementation.&rdquo

The Project Management Institute (PM) is an ANSI accredited Standards Developing Organization in the area of project management. PMI is currently in the process of developing a Standard for Earned Value Management, which when approved would become a new ANSI Standard.

What About ISO?

Funny you should ask! The International Organization for Standardization (ISO) recently published ISO 21508:2018 Earned value management in project and programme management.

The ISO standard describes 11 process steps required to implement EVM and is designed to complement ISO 21500: Guidance on project management and ISO 21503, Project, programme and portfolio management — Guidance on programme management.

Where Does That Leave Us?

There are two active EVMS standards today which could be relevant to practitioners in the United States: EIA748D, and ISO 21508:2018.

• EIA-748 is maintained by the NDIA IPMD on behalf of the Society of Automotive Engineers, and this standard is the one that is referred to by both the FAR and the DFARS.
• ISO 21508:2018 is maintained by ISO Technical Committee 258. Interestingly, the Secretariat of ISO/TC 258 is currently chaired by ANSI, representing the United States.

ANSI, through PMI, is in the process of developing a new Standard for Earned Value Management. The public comment period for this Standard should open during 2019.

Save the Date! The 2019 Spring Integrated Program Management Division Meeting will take place on April 30 – May 1, 2019 at the Hyatt Regency Dulles in Dulles Virginia.

The NDIA Integrated Program Management Division Meeting is a forum for exchanging views and information to promote and communicate integrated program management best practices.

Visit the event page for details. Registration and the agenda will be available soon.

Part 1 – Preparing for Variance Analysis Reporting

Variance analysis is a critical component of an Earned Value Management System (EVMS) project. It is important to understand the value of the analysis from the contractor’s perspective to properly conduct variance analysis.

First, we will tackle how to prepare for variance analysis reporting.

There is typically a requirement for variance analysis reporting via the EIA-748 EVM Guidelines and contract. The analysis provides the contractor with a wealth of information regarding the status of the project as well as valuable information regarding the contractor’s EVMS implementation.

As a result of the analysis, the contractor can make appropriate adjustments to improve the system’s implementation and/or corrections to improve the project’s performance.

Assessing Variances During Project Execution

During the execution of the project, the contractor will periodically, typically monthly, assess progress in achieving cost and schedule objectives agreed to by the customer.

• Cost variances occur when the actual costs of achieving an approved work plan are more, or less, than that agreed to in the original plan.
• Schedule variances occur as a result of the actual work accomplished being more, or less, than the approved plan.

Variances can be either positive, indicating that the project is under costs and/or ahead of schedule, or negative, indicating that the project is over costs and/or behind schedule.

If variances are significant, that is, they exceed the established thresholds (i.e., a fixed dollar amount and/or percentage of the control account value) than a formal variance analysis report (VAR) is required. This is typically accomplished by completing the CPR/IPMR Format 5 and submitting the report monthly. We’ll discuss the Format 5 in subsequent articles.

Conducting Variance Analysis

Variance analysis should be conducted for both the current period data and on a cumulative basis. Both provide useful information for management.

The cumulative data is particularly important in identifying trends in the data, either positive or negative. The data may also indicate on-going problems that have not been corrected, and thus need extra attention, or that the EVMS implementation is inadequate in producing accurate and timely performance results.

In addition to monthly data analysis, the contractor should review the data that generates the forecasted completion costs of the contract: the estimate at completion (EAC) and the variance at completion (VAC).  It is critical that the contractor know the current performance status and also what impact the current performance will have on future outcomes.

Preparing to Write the VAR

The submission of the CPR/IPMR, including Format 5, is driven by contractual requirements for end of month reporting. So, it is to the benefit of the contractor to prepare in advance to avoid the last-minute crunch to meet the submission deadline. Proper preparation for writing the VAR will enhance the contractor’s ability to write an effective, meaningful report as well meet the submission requirements.

Often, due to the limited time available between month end closeout and report submission requirements, the contractor is faced with the challenging dilemma of VAR quality versus contract submission requirements. Which is worse: getting written-up for the VAR’s poor quality or failure to meet the contractual requirements? Usually the contractual requirements, i.e., the submission date, wins that debate.

Creating a Quality Report, on Time

Perhaps there is a better mean for the contractor to meet both requirements. Let’s explore the possibilities.

The Control Account Manager (CAM) with assistance from the project controls team is responsible for writing the VAR. A central question associated with this process is when to start the writing process.

Contractors have well defined process timelines (a monthly business calendar), but these may not be adequate to meet the VAR submission requirements. All the pertinent data needs to be available, but that information becomes available at different times.

Typically, the schedule performance data is available (assuming the schedule is statused weekly) before the cost data which lags because of end of month close out. If the CAM is monitoring the control account performance information weekly, technical issues resulting in scheduling issues would be known.

At this point, the CAM can make significant headway in completing the Format 5 by writing to the known technical/schedule issues that are causing the variance. The cost data associated with these issues can be incorporated and written to later when they become available. By adopting this methodology, the CAM may gain additional time to devote to writing a more accurate VAR.

Preparation is a critical component to the VAR process. The writing of the VAR can be improved by giving some consideration to the following:

CAM/Project Control Actions

1. Prior to month-end close out
   1. Enter estimated actuals and validate accruals
   2. Ensure BCR packages are submitted for management approval
   3. Perform schedule realism; ensure schedule status is up to date
   4. Perform material and subcontracting analysis
2. After month-end close out; prior to VAR development
   1. Finalize schedule performance and “earned value” calculations
   2. Finalize forecast dates
   3. Review/Update ETCs as required
   4. Run cost and schedule health metrics
3. CAM reviews all pertinent EVM Reports generated by the Project Controls staff
   1. Applies to both current period and historical data (looking for trends)
   2. Understand the control account situation and potential impacts to the program

If the CAM role is performed properly there should be no surprises. The CAM should be completely aware of concerns and potential issues and may have already taken the appropriate corrective actions prior to the submission of the IPMR Format 5.

The key to understanding the program big picture so that VARs – and all reports – are accurate and as insightful as possible is to communicate with other CAMs to be aware of what they are involved with regardless of whether there is a direct impact.

Next month in part 2 of this series we will look at how to write an effective variance analysis report that will provide useful management information to both the contractor and the government customer.

 

Want to learn more about how a DOE contractor prepares for EVMS Certification? Sign-up today for the 8th Annual EVM Practitioners’ Forum.

Samos Advisors LLC CEO Basil Soutos is presenting “How to prepare for a DOE Contractor EVMS Certification” on Thursday, August 23, 12:45pm at the Washington Hilton, Washington, DC.  Basil Soutos will speak about the following EVMS certification readiness topics: contractor EVMS certification readiness techniques, certification readiness process road-map, best practices for achieving Program Management, Project Controls and CAM interview success and how to comply with DOE’s EVMS “Attribute” Data Driven Certification Model.

This year’s event is at the Washington Hilton, Washington, DC.  The dates of this event is August 22 and 23.  Contact Todd Hatherly at Federal Publics Seminars for registration information: todd@fedpubseminars.com.

For more information about Samos Advisors, contact Basil Soutos at 703-409-5941 or bsoutos@samosadvisors.com