EVM World 2019

EVM World 2019 Coming May 22-24

Mark your calendar for EVM World 2019. College of Performance Management (CPM) is hosting the 35th Annual EVM World at the Westin Ft. Lauderdale Beach Resort, Fort Lauderdale, Florida on May 22-24.

The title of the conference is “Maximizing Program & Performance Management Through Collaboration.” For more conference information go to the College of Performance Management website.

How to Write a Variance Analysis Report for DoD contracts with an Earned Value Management System Reporting Requirement – Part 1

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.


Understanding FAR Earned Value Management System (EVMS) Reporting Requirements

Understanding FAR Earned Value Management System (EVMS) Reporting Requirements

In today’s federal market, responding to government solicitations in a timely and complaint manner is ever-more challenging.  Understanding FAR earned value management system reporting requirements is not easy.

Many small or medium size federal contractors who are responding to federal solicitations may have another obstacle: how to comply with Earned Value Management System RFP (Request for Proposal) requirements.

Simply said, Earned Value Management (EVM) is an integrated project management methodology that utilizes a set of integrated core project management principles (e.g., scope, schedule and budget) to assess and measure project performance.

For those companies that have not implemented EVMS as part of their project management process framework , FAR 52.234-3, Post-award Integrated Baseline Review allows a company that has not been determined to be in compliance (e.g., by a cognizant federal Agency or DCMA) with the Electronic Industries Alliance Standard 748 (EIA-748) to submit a comprehensive EVMS plan with the 32 EVMS guidelines as part of their RFP submission.

For example, FAR 52.234-3, states the following:

“Offerors shall not be eliminated from consideration for contract award because they do not have an EVMS that complies with these standards.”

The plan shall:

(i) Describe the EVMS the offeror intends to use in performance of the contracts;

(ii) Distinguish between the offeror’s existing management system and modifications proposed to meet the guidelines;

(iii) Describe the management system and its application in terms of the EVMS guidelines;

(iv) Describe the proposed procedure for administration of the guidelines, as applied to subcontractors; and

(v) Provide documentation describing the process and results of any third-party or self-evaluation of the system’s compliance with the EVMS guidelines.

To learn more about how to write a compliant RFP EVMS Plan, call Basil Soutos, CEO of Samos Advisors LLC, at 703-409-5941 or email  bsoutos@samosadvisors.com. 

Basil Soutos is the founder of Samos Advisors, LLC, a proven leader in EVMS & Project Management.

Basil Soutos to Present at 8th Annual EVM Practitioners’ Forum

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

Samos Advisors Can Meet your EVMS Training Needs

Interested in learning about implementing a compliant EIA-748 Earned Value Management System (EVMS) for your programs or projects? Basil Soutos has over 30+ years of design, development and implementing EVMS on small to large DoD and civilian agency programs.

Whether you are new to EVMS, want to refresh your EVMS skills or learn about new EVMS industry best practices, Samos Advisors can tailor your EVMS training needs to meet your corporate or contractual reporting requirements.

Samos Advisors offers a 1 day EVMS overview training course exploring all 32 EIA-748 guidelines. We also teach a comprehensive control account management (CAM) training course reviewing relevant EVMS responsibilities and learning how to properly analyze EVMS schedule (IMS) and cost data (IPMR Reporting).  Our other popular training venues offers in depth knowledge how to prepare for government mandatory EVMS reviews such as: Integrated Baseline Reviews (IBR), Government EVMS Surveillances and/or EVMS Certification.

For more information about how Samos Advisors can meet your EVMS training needs, contact Basil Soutos at 703-409-5941 or bsoutos@samosadvisors.com

Samos Advisors Launches New Website

Samos Advisors recently teamed with Jill Kurtz of Kurtz Digital Strategy to re-design Samos Advisors website.  Samos Advisors re-designed website enhances services offerings in the areas of Proposal Management Project Management and Earned Value Management.

To learn more about Samos Advisors expanded service offerings click on the link samosadvisors.com.

If your company is thinking about website design, contact Jill Kurtz, Kurtz Digital Strategy, at jill@kurtzdigitalstrategy.com to setup a free consultation.