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National Defense Industrial Association (NDIA)Program Management Systems Committee (PMSC)ANSI/EIA 748Earned Value ManagementSystem Acceptance GuideWorking Release For User CommentJanuary 23, 2006 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide 2004-2005 National Defense Industrial Association (NDIA) Program Management SystemsCommittee (PMSC).NDIA PMSC ANSI/EIA 748 Earned Value Management System Acceptance GuideJanuary 16, 2006 DRAFTPermission to copy and distribute this document is hereby granted provided that this notice isretained on all copies, that copies are not altered, and that the NDIA PMSC is credited when thematerial is used to form other copyrighted documents.National Defense Industrial Association2111 Wilson Blvd., Suite 400Arlington, VA 22201(703) 522-1820Fax: (703) 522-1885www.ndia.org

NDIA PMSCANSI/EIA EVM System Acceptance GuideCONTENTS1INTRODUCTION.11.1 SYSTEM ACCEPTANCE OVERVIEW .11.2 BACKGROUND .11.3 PURPOSE OF THE GUIDE. .11.4 DEFINITIONS .22THE SYSTEM ACCEPTANCE PROCESS .42.1 SYSTEM DESIGN AND IMPLEMENTATION.52.1.1 Additional Documents .52.1.2 Compliance with ANSI Guidelines .62.2 COMPLIANCE EVALUATION REVIEW .72.3 SYSTEM ACCEPTANCE .83SYSTEM DESIGN AND IMPLEMENTATION.93.1 POLICY PREPARATION AND APPROVAL .93.2 SYSTEM DOCUMENTATION AND PROCEDURES .103.3 IMPLEMENTATION AND REVIEW.113.4 EVM AND SYSTEM TRAINING.124EVM SYSTEM COMPLIANCE EVALUATION REVIEW .134.1 EVM SYSTEM COMPLIANCE EVALUATION REVIEW SCHEDULE.144.2 EVM SYSTEM OWNER SELF-ASSESSMENT .154.3 PROGRESS ASSESSMENT REVIEW .154.4 COMPLIANCE EVALUATION TEAM MEMBERSHIP SELECTION AND TRAINING .164.5 EVM SYSTEM COMPLIANCE EVALUATION REVIEW (CER) .174.6 COMPLIANCE EVALUATION REVIEW REPORT .195SYSTEM COMPLIANCE ACCEPTANCE .205.1 INITIAL SYSTEM COMPLIANCE CERTIFICATION .205.2 EVM SYSTEM OWNER RESPONSIBILITIES .215.3 EVM EXECUTIVE AGENT RESPONSIBILITIES .21APPENDIX A CERTIFICATION TEAM QUALIFICATION GUIDELINES.23APPENDIX B EXAMPLE CER REPORT .26APPENDIX C PAR AND CER EXECUTION CONSIDERATIONS .28iJanuary 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance GuideLIST OF FIGURESFigure 2.1. The System Acceptance Process involves the System Owner, the ComplianceEvaluation Team, and Executive Agent. 4Figure 2.2. An Example Guideline Matrix to Ensure all 32 Guidelines are addressed in the EVMSystem. 7Figure 3.1. Documentation and Implementation Feedback Process. 11Figure 4.1. EVMS Compliance Framework . 13Figure 4.2. Sample CER Schedule. 14Figure 4.3. Review Cycles . 15Figure 4.4. Overview of the CER Process . 17

NDIA PMSCANSI/EIA 748 EVM System Acceptance GuideLIST OF MSCWBSAdvance AgreementAmerican National Standards InstituteCorrective Action RequestCompliance Evaluation ReviewElectronics Industries AllianceEarned Value Management Implementation GuideEarned Value Management SystemFederal Acquisition RegulationGovernment Performance and Results ActNational Defense Industrial AssociationOffice of Management and BudgetProgress Assessment ReviewProgram Management Systems CommitteeWork Breakdown Structure

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide1INTRODUCTION1.1System Acceptance OverviewSystems Acceptance is a process that involves the reviewing, approving and certifying ofthe design and implementation of an Earned Value Management System (EVMS) thatmeets the requirements of the 32 EVMS Guidelines embodied in the American NationalStandards Institute/Electronic Industry Alliance’s (ANSI/EIA) EIA-748-A, Standard forEarned Value Management Systems.1.2BackgroundThe Government Performance and Results Act (GPRA) and the Office of Managementand Budget (OMB) Circular A-11, have increased the requirement on governmentagencies to establish, maintain, and use a certified EVMS on major, capital assetacquisitions. This, in turn, has greatly expanded the number of suppliers who need todesign, implement, and have approved EVM systems that provide timely performanceinformation for both the supplier and the customer during these acquisitions. This needhas challenged both the government and supplier communities to establish a frameworkwhere multiple government agencies can recognize a supplier’s certified EVMS withoutthe need for unnecessary supplemental reviews or impediments to contract start-up.There is a pressing need for an approach that assures multiple government andcommercial customers as well as the contractor community that they can have highconfidence that a supplier’s EVMS meets the EIA 748-A, Industry Guidelines for EarnedValue Management.To address this issue, the National Defense Industrial Association (NDIA) ProgramManagement Systems Committee (PMSC), with encouragement from OMB, hasdeveloped this standard EVM system acceptance process to provide a means of obtainingEVM system compliance recognition that is acceptable to all stakeholders, bothgovernment and commercial customers, and to the suppliers supporting them. Thetraditional supplier/customer relationship does not have to exist in order to initiate thesystem acceptance process established in this guide. For example, a government agencymay use this process to assess the appropriate use of EVM at the program level within theagency.1.3Purpose of the Guide.This guide is intended to define a process whereby an EVM System Owner (supplier) orgovernment program with a first-time requirement to comply with the EVMS Guidelinescan:(a) Understand the needs for and effectively design an EVMS;(b) Successfully implement the EVMS on the requiring acquisition;(c) Conduct an evaluation of system compliance and its implementation;(d) Prepare and provide substantiating documentation for evaluation andimplementation;1January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide(e) Receive approval and documentation that will satisfy the current and futurerequirements for an approved EVMS.In succeeding sections, appropriate guidance will be provided to assist both the EVMsystem owner and the customer in fulfilling this responsibility.1.4DefinitionsANSI/EIA 748Accepted EVMSSystemAn EVM system that has been accepted by an organization,customer or third party representing the customer as compliantwith the ANSI/EIA 748 Standard – EVMS, typically documentedby an EVMS Advance Agreement (AA) or similar document.Acceptance may be found at a single geographic location or inmultiple locations. Multiple accepted systems may also residewithin a single geographic location.ANSI/EIA 748Compliant EVMSSystemAn EVM System that has been validated to be compliant with theintent of the ANSI/EIA 748 Standard – EVMS and consistent withthe NDIA EVMS Intent Guide. Typically, ANSI/EIA 748compliance is determined by an independent qualified reviewteam.ComplianceEvaluation Review(CER)The process to assess and determine EVM System Ownercompliance with the ANSI/EIA 748 Standard – EVMS.ComplianceThe characteristic of an EVMS that ensures the intent of the 32EVMS Guidelines is embodied in the integrated processes andsub-processes of a contractor’s methods of operation thatgenerates accurate and useful program performance data.CustomerThe government or commercial organization or entity for whichone or more programs are being executed.EVM ExecutiveAgentAn organization or party responsible to verify and accept an EVMSystem Owner compliance with ANSI/EIA 748 Standard – EarnedValue Management Systems. Examples include a GovernmentAgency EVM Focal Point (responsible to accept contractor andGovernment organization EVM Systems), and contractor(responsible to accept subcontractors’ EVM System.Earned ValueManagementSystem (EVMS)The integrated set of policies, processes, procedures, systems, andpractices that meet the intent of the guidelines in AmericanNational Standard ANSI/EIA-748, Earned Value ManagementSystems.2January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance GuideEVMS GuidelinesThe 32 EVMS guidelines contained in American NationalStandards Institute/Electronics Industries Alliance (ANSI/EIA)748 - Current Version, Earned Value Management Systems.EVM System Owner The organization or party responsible for the implementation anduse of an Earned Value Management System compliant with theANSI/EIA 748 – EVMS Guidelines. Examples of EVM SystemOwners include contractors, subcontractors, Government programoffices, and Government functions.Program or ProjectA planned effort to achieve an outcome, the progress towardwhich is discretely measurable.Self-assessmentThe process of a contractor’s or government agency program’sinternal review of the design and implementation of an EVMSwith the intent to verify compliance with the 32 Guidelines.Supplier/ VendorA government or commercial organization or entity from whichgoods or services are required to complete a program or project.The NDIA PMSC will review and assess the need for revisions to this guide every two years.3January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide2THE SYSTEM ACCEPTANCE PROCESSThe steps involved in the process of getting from system design to system acceptance areshown in Figure 2.1 and described in this chapter in general terms. Subsequent chaptersdescribe each of these steps in sufficient detail to allow execution by the EVM systemowner. It should also be noted that these steps may overlap to the extent that resourcesand capability exist within the EVM System Owner, the customer, or both. All stepsexcept those in the Acceptance column are necessary for an EVM System Owner orgovernment agency program to implement an EVMS that meets the intent of theguidelines. The decision to seek system acceptance is based on internal managementdesires, contractual requirements, or both.Figure 2.1. The System Acceptance Process involves the System Owner,the Compliance Evaluation Team, and Executive Agent.The amount of time to execute each step is a function of several factors: EVM System Owner resource availability and capability; Size of the acquisition driving the need for certification; Maturity level of the organization implementing EVM; Commitment of the organization and senior management; Availability of independent parties (customer, consultants, in-house, etc.).4January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide2.1System Design and Implementation.Since ownership of the EVMS rests with the EVM System Owner (or a Governmentagency program when an EVM System Owner/customer relationship does not exist), theresponsibility for completing this phase will also rest with the EVM System Owner.Normally, the customer or EVM Executive Agent requiring compliance does notparticipate in the implementation phase in order to provide independence during theCompliance Evaluation Review.During this phase, the EVM System Owner must establish an EVM Policy that isendorsed and supported by management. This policy will describe in high level termshow EVM will be applied in the system owner organization. EVM policies usuallyinclude a reference to ANSI/EIA 748 compliance, the type of programs/projects requiredto use EVM, and the EVM Executive Agent responsible for EVM compliance andsurveillance. Establishment of the EVM Policy is then followed by the development andimplementation of an EVM System. This system is generally documented by a systemdescription and procedures that translate the EVM Policy into specific organizationalapproaches of how the 32 guidelines in ANSI/EIA 748 will be executed. During thisphase, the EVM System Owner will typically: Compare existing project management processes and procedures to the ANSI/EIA748 Guidelines. Identify areas where modification of current procedures or creation of new ones isrequired. This is sometimes referred to as a “gap analysis.” Select candidate projects, programs, or contracts for initial implementation anddemonstration of the EVMS via Compliance Evaluation Review (CER). Establish a plan and schedule with assigned resources to ensure proper andeffective design, documentation, implementation, and maintenance. Train the program / project team on EVM and the organization EVM systemdescription, procedures and systems.The period of performance for these activities typically ranges from 6 to 18 months.2.1.1 Additional DocumentsIn addition to the developing an EVM Policy and System Description and Procedures,two other documents are also developed that address post acceptance responsibilities: anEVMS Surveillance Plan and an EVM System Revision Procedure.Since the EVM System Owner is responsible for the maintenance of the system, theSurveillance Plan is developed to describe how the organization will periodically monitorthe compliance of its EVMS to ANSI/EIA-748 Standard. Guidance on developing andimplementing the EVMS Surveillance Plan is provided in the NDIA Surveillance Guide.Because modifications to the EVMS may be required from time to time, a SystemRevision Procedure is developed to document a formal approach to changing the EVMS.The DOD’s Earned Value Management Implementation Guide (EVMIG), while not5January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guidedirectly applicable for many EVM System Owner organizations, does provide exampleguidance for such a document.2.1.2Compliance with ANSI GuidelinesThere are various approaches to documenting the processes involved in the structure ofan EVMS. Many organizations choose to write a single document that describes howtheir program management processes and procedures meet the intent of the guidelines.Others choose to write a series of procedural documents that address specific elements ofthe guidelines; e.g. a work breakdown structure (WBS) procedure to cover the intent ofthe first Organization guideline or a procedure for establishing program or projectschedules as covered by the first two Planning, Scheduling, and Budgeting guidelines.Another approach is to integrate EVMS processes and procedures into existing functionalprocedures, such as engineering, production, and program management. Whicheverapproach is chosen, it is vital that, when completed, the EVM System Owner assuresitself that all 32 guidelines are addressed and that the aspects of the various processes arefully integrated in an approach to project management.There are also two philosophies regarding how to describe compliance of the internalprocesses with the guidelines. The first involves taking each of the five sections of theguidelines (Organization; Planning, Scheduling and Budgeting; etc.) and discussing howthe internal processes support the intent of each of the guidelines in that section. Thismeans that for each guideline, the EVM System Owner must ensure that each of theinternal processes that support or intersect with that guideline must be covered in thediscussion. For example, the material control process and the subcontract managementprocess cut across all five sections of the guidelines. As the guidelines in theOrganization section are described in terms of internal processes, these areas must becovered as to how their unique aspects relate to the intent of the guideline underdiscussion.The second approach orients the discussion around the multiple processes involved inproject management and how each of these processes meets the intent of each guidelinethat is affected. For example, in describing how the management of material items, fromidentification of requirements to inclusion in the end-product, is conducted in a projectmanagement environment, the description of this process must address guidelines in allfive sections. Other project management processes likewise intersect guidelines in allsections.In either case, the EVM System Owner should make use of a matrix similar to Figure 2.2to ensure that each of the 32 guidelines, their management intent, and related identifiableproducts are covered. This matrix becomes very useful during the self assessment andprogress assessment reviews and subsequent documentation of the evaluation processes.It verifies to both internal management and external customers or reviewers that the EVMSystem Owner has done a comprehensive job of describing an EVMS that meets theintent of the guidelines.The NDIA Earned Value Management Systems Intent Guide is an excellent documentthat will assist the EVM System Owner in ensuring a complete description of the EVMSis prepared.6January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance GuideREVISIONSANALYSISACCOUNTINGPLNG, SCHED;, & OCESSESPLNG. & BUDGT.ACCOUNTINGINDIRECTMGR. ANALYSISCHANGE CONTROLMATL PLNG & CNTRL.SUBCON .MGMT.Figure 2.2. An Example Guideline Matrix to Ensure all 32 Guidelinesare addressed in the EVM System.2.2Compliance Evaluation ReviewOnce the processes and procedures have been created, modified, and published, theCompliance Evaluation Review (CER) is conducted to verify: The system, as described, meets the intent of the 32 Guidelines as described bythe NDIA Earned Value Management Systems (EVMS) Intent Guide; The system, as described, is fully implemented on the selected programs; The implementation is successful and complies with the requirements of thesystem description/organization’s EVMS procedures and (if appropriate) programunique procedures; The system implemented provides timely, accurate, and auditable managementinformation for both the organization’s project management and the customer.The compliance review process and results are documented to allow those who did notparticipate in the review the ability to evaluate the propriety of the review and its results.This independent review must be conducted by a person(s) or organization(s) that:7January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide Has no vested interest in the EVM system owner; system; or program, project orcontract being reviewed; Is recognized as being knowledgeable and competent in the area of EVM systems andimplementation; Uses the NDIA EVMS Intent Guide for evaluating EVM systems for compliance.A CER report will be prepared by the Compliance Evaluation Team. This report is aniterative document resulting from a process that allows the Compliance Evaluation Teamto consider the EVM System Owner’s responses to any of the team’s findings prior tosubmitting the CER report to the EVM Executive Agent.2.3System AcceptanceThe final phase of the overall process is the acceptance of the EVM System Owner’ssystem by Government or commercial customers that may or may not have current orpending acquisitions with the EVM System Owner to whom the certification is to beissued. For Government customers, this acceptance, as defined by the OMB FederalAcquisition Regulation (FAR) clause, is effected by the contracting officer for thecustomer. For commercial customers, a designated representative will provide theappropriate acceptance document. If an AA is subsequently issued, it is normally signedby senior representatives of the EVM System Owner and the customer.In the case where the customer is a Government agency, it is possible that the EVMSystem Owner will want the acceptance to also be acknowledged by other agencies. Theresponsibility for coordinating cross-agency acceptance of the system rests primarily withthe agency issuing the initial acceptance. Cross-agency acceptance is best accomplishedthrough the establishment of reciprocal agreements between agencies and organizationsto mutually recognize EVM System Owner systems as ANSI EVM compliant. Eachparticipant in the reciprocal agreement would specify the level of supportingdocumentation or additional reviews required from the certification process to meet theirrequirements for acceptance.Commercial customers, at the request of the EVM System Owner, may providedocumentation supporting the system acceptance to new customers of the EVM SystemOwner. For a new commercial customer, the EVM System Owner, upon receiving a newrequirement for the implementation of an EVMS, may submit copies of the letter ofacceptance, the compliance assessment results, and/or the report of the complianceacceptance for the new customer.8January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide3SYSTEM DESIGN AND IMPLEMENTATIONThe primary purpose of Earned Value Management is to support program managementwith a system that provides a sound basis for program/project performance, problemidentification, corrective actions, and management decisions. Thus, Earned ValueManagement isn’t simply a metric or a report. It is comprised of a number ofmanagement processes that form an integrated program/project management capability.EVM Systems must, first and foremost, meet an organization’s needs and good businesspractices to be effective. Therefore, the establishment of an EVMS requires a structuredprocess.There is no single correct process for establishing an EVMS, but it typically involves thefollowing efforts: An organizational commitment to the use of EVM; An assessment of where changes/enhancements to processes to meet the EVMSGuidelines described by ANSI/EIA 748 are needed; Design of the EVMS processes; Documentation of the EVMS; Training; System evaluation.This section addresses these topics.3.1Policy Preparation and ApprovalThe EVM System belongs to and is governed by the EVMS owner corporation, company,Government Agency, or similar organization. Establishment of an EVM policy by seniormanagement is not required, but is an invaluable first step. It will facilitate thecommitment of resources necessary to design, implement, and maintain an EVMS withthe requirements of ANSI/EIA-748 EVMS guidelines. At a minimum, the policy shouldinclude: A statement of commitment to the operation and maintenance of the EVMS; A reference to policies and standards, i.e., ANSI/EIA748 and OMB A-11; A definition of the type of programs and projects that will use EVM; Assignment of responsibility for the operation and maintenance of the EVMS; A definition of program management responsibilities for implementing and usingEVM; Assignment of support organization responsibilities; Establishment of the requirement to conduct internal surveillance on the EVMS.9January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guide3.2System Documentation and ProceduresThe ANSI/EIA 748 EVMS guidelines are high level, goal oriented, and are intended tostate the qualities and operational considerations of an integrated management systemusing earned value analysis methods without mandating detail system characteristics.They also are structured to enable implementation on large and small programs, projects,or contracts. EVMS owners have the flexibility to implement EVM in a manner thatprovides the effective and efficient performance management methods and techniqueswithin the ANSI/EIA 748 Guidelines.An EVM System Owner may choose to either:a) Write a single document that describes how their program management processesand procedures meet the intent of the guidelines.b) Write a series of procedural documents that address specific elements of theguidelines; e.g. a work breakdown structure (WBS) procedure to cover the intent ofthe first Organization guideline or a procedure for establishing program or projectschedules as covered by the first two Planning, Scheduling and Budgetingguidelines.c) Revise existing functional procedures to incorporate processes and procedures tomeet the intent of the guidelines.Whichever approach is chosen, it is vital that, when completed, the EVM system owner isassured that all 32 guidelines are addressed and that the EVMS system owner’s variousprocesses are reflected in an integrated project management system.Developing these documents will only take place after specific system design solutionshave been identified to address any “gaps” that may exist between the EVMS owner’scurrent practices and the requirements of the EVMS Guidelines. One way that these gapsmight be identified is by conducting an assessment of current processes and practices asrelated to each of the 32 EVMS Guidelines.The NDIA Earned Value Management Systems Intent Guide may be used to assist theEVMS owner in ensuring an ANSI/EIA 748 conforming design of the EVMS isdeveloped and documented. An organization that needs to satisfy a proposal requirementthat its system meets this standard may prepare a compliance map documenting how itsbusiness processes conform to ANSI/EIA 748 EVMS guidelines using the NDIA IntentGuide Appendix A, Process Description Compliance Map Template.Preparing an Intent Guide compliance map provides several benefits that keep the systemdesign and implementation process moving forward. As described above, it can help inidentifying any process or procedure gaps that will require closure to achieveconformance with the EVMS Guidelines. The aligning of EVM System Owner(company or Agency) processes and procedures with the applicable guideline may alsoidentify duplicate documentation that, when removed, typically provides processstreamlining. When the design and subsequent documentation efforts that result fromactions taken based on the compliance mapping are completed, those involved withimplementing and maintaining the EVMS typically have a better understanding because10January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guidethe EVMS reflects how the organization intends to do business. This, in turn, can reducethe training requirements.Implementation and ReviewEarly in the system design and documentation activity, senior management needs toselect a program or project for the EVM System implementation. This program orproject will be the vehicle used for the conduct of the Compliance Evaluation Review.Some considerations for selecting the program or project for EVM Systemimplementation and review include: A program or project with a contractual or Government requirement to use anANSI/EIA 748 compliance EVM System; The diversity of the business-base upon which EVM will be implemented:- development, modernization, enhancement effort- hardware production projects- software design and delivery- support and services- multiple performing organizations (contractors, subcontractors, andGovernment organizations); The number of locations under which the EVMS will operate.Implementation of the EVMS on the program/project or projects occurs after the systemdesign and documentation discussed in paragraph 3.2 above has been completed.Additionally, as the processes are implemented, feedback on the effectiveness andaccuracy of the system documentation and procedures is important to ensure that neededimprovements are incorporated in a timely manner. Figure 3.2 graphically displays thisprocess.FeedbackFeedbackSystem DocumentationFeedback3.3System ImplementationFigure 3.1. Documentation and Implementation Feedback ProcessWhen the EVMS design is a product of using “as is” or modifying existing businessprocesses and procedures, implementation can move forward efficiently because the11January 23, 2007 DRAFT

NDIA PMSCANSI/EIA 748 EVM System Acceptance Guidepr

ANSI/EIA 748 Compliant EVMS System An EVM System that has been validated to be compliant with the intent of the ANSI/EIA 748 Standard – EVMS and consistent with the NDIA EVMS Intent Guide. Typically, ANSI/EIA 748 compliance is determined by an independent

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