PPM-13: Leveraging DCMA EVMS Compliance Metrics To Support . - Microsoft
PPM-13:Leveraging DCMAEVMS ComplianceMetrics to SupportYour ContractLifecycleDave Scott, BDOJessica Coral, BDO
Agenda & Learning ObjectivesUnderstand theDCMA EVMScompliancemetrics andbusinessprocessesDCMA Data Driven Metrics & Contract LifecyclePage 2How to useEVMScompliancemetrics for yourcontractsLearn about thebenefits ofEVMS processimprovement
Before and AfterDCMA Data Driven Metrics & Contract LifecyclePage 3
Introduction to DCMA EVMS Compliance Metrics (DECM) andBusiness ProcessesPage 4
Besides Compliance - Why do EVM? EVM is a proven Project Management methodology which is accepted by the Project ManagementInstitute (PMI), GAO, OMB, and DoD EVM re-enforces project management best practices such as planning and scheduling EVM accurately measures project performance and enables an ‘early warning’ system to identifypotential project issues while there is still time to react Opens the door to new opportunities requiring the implementation of a compliant EVMS – i.e.multi-award contracts like the GSA Oasis ContractDCMA Data Driven Metrics & Contract LifecyclePage 5
Why is EV useful?We analyze the past performance to help us control the futurePastPresentAre we on Cost & Schedule?What are the significant variances?Why do we have variances? Whois responsible?What is the trend to date?FutureWhen will we finish?What will it cost atcomplete?How can we control thetrend?Answer 2 key questions1. Did we get what we wanted for what we spent?2. At the end of the project, is it likely that the cost will be less than or equal toour original estimate?DCMA Data Driven Metrics & Contract LifecyclePage 6
EIA–748 EVM Guidelines Overview16) Record Direct Costs1) Define Work Scope (WBS)17) Summarize into WBS2) Define Organization (OBS)18) Summarize into OBS3) Integrate Subsystems19) Record Indirect Costs4) Identify Overhead Control20) Identify Unit & Lot Costs5) Integrate WBS & OBS21) Track & Report Material Costs6) Schedule Work7) Set Measurement Indicators8) Set Time-Phased BudgetEIA-748CompliantEVMS22) Calculate SV & CV23) Identify Significant Variances24) Analyze Indirect CV9) Budget by Cost Elements25) Summarize Data & Variances10) Discrete Work Packages26) Implement Corrective Actions11) Summary Work/Planning Pkg27) Revise Estimate at Completion12) Identify LOE Activities13) Establish Overhead Budgets14) Identify MR and UB15) Reconcile to Target Cost- Organizing28) Incorporate Change- Planning & Scheduling29) Reconcile Budgets- Accounting- Analyzing- RevisingDCMA Data Driven Metrics & Contract LifecyclePage 7- DoD High Risk Guideline30) Control Retroactive Changes31) Prevent Unauthorized Change32) Document PMB Changes
Top DCMA Guidelines reporting the highest deficiencies or noncompliance Guideline 6: Schedule the authorized work in a manner which describes the sequence of work andidentifies significant task interdependencies required to meet the requirements of the program. Guideline 10: To the extent it is practical to identify the authorized work in discrete work packages,establish budgets for this work in terms of dollars, hours, or other measurable units. Where the entirecontrol account is not subdivided into work packages, identify the far term effort in larger planningpackages for budget and scheduling purposes. Guideline 16: Record direct costs in a manner consistent with the budgets in a formal systemcontrolled by the general books of account. Guideline 27: Develop revised estimates of cost at completion based on performance to date,commitment values for material, and estimates of future conditions. Compare this information with theperformance measurement baseline to identify variances at completion important to companymanagement and any applicable customer reporting requirements including statements of fundingrequirements.DCMA Data Driven Metrics & Contract LifecyclePage 8
Sample Automated MetricsGuideline10 To the extent it is practicable to identify the authorized work in discretework packages, establish budgets for this work in terms of dollars, hours,or other measurable units. Where the entire control account is not subdivided into work packages,identify the far term effort in larger planning packages for budget andscheduling purposes.Guideline11 Provide that the sum of all work package budgets plus planningpackage budgets within a control account equals the controlaccount budget.DCMA Data Driven Metrics & Contract LifecyclePage 9Full list of current metrics available at: http://www.dcma.mil/HQ/EVMS/
Test Metric SpecificationDetails of each test metric ispublished so that there is acommon understanding of thetest and associated thresholdsDCMA Data Driven Metrics & Contract LifecyclePage 10
Sample Manual MetricsGuideline 1 Define the authorized work elements for the program. A Work Breakdown Structure(WBS), tailored for effective internal management control, is commonly used in thisprocess.Guideline 2 Identify the program organizational structure, including the major subcontractors,responsible for accomplishing the authorized work, and define the organizational elementsin which work will be planned and controlled.Guideline 3 Provide for the integration of the planning, scheduling, budgeting, work authorization andcost accumulation processes with each other, and as appropriate, the program workbreakdown structure and the program organizational structure.DCMA Data Driven Metrics & Contract LifecyclePage 11
DCMA Business ProcessesDCMA EVMS business practices (BP): BP1 - Pre-Award EVM System Plan Review BP2 - Post Award Earned Value Management System Description - Initial andChanges BP3 - Contract Initiation Support BP4 - EVMS Surveillance BP5 - EVMS Review for Cause BP6 - Compliance Review ExecutionDCMA Data Driven Metrics & Contract LifecyclePage 12
New DOD Integrated Program Management Data Report (IPMDR) IPMDR – New Data Item Description (DID) which will start being applied to contracts in early CY 2020 –replaces IPMR DID #81861B Electronic data delivery except variance narratives Deliver no later than 16th working day after monthly close Discuss tailoring and incremental delivery with program office Previously on ACAT 1 programs reported electronically by uploading to the EVM-CR but not all ACATlevels will report via the EVM-CRObjectives Encourage dialog with the program office Relevant data faster Improved visibility into project controls – CA, WP, EOC, Time Phased Forecast Improved cost and schedule integration Data for more comprehensive analysis like DCMA metricsDCMA Data Driven Metrics & Contract LifecyclePage 13
IPMR and IPMDR ComparisonIPMR Format 1-4 Contract Performance WBS OBS Baseline Changes Staff Planning Format 5 Variance Analysis Format 6 Schedule (plus native) Format 7 Time Phased (by WBS)Format UN/CEFACT XML EDI 839 (legacy)DCMA Data Driven Metrics & Contract LifecyclePage 14IPMDRContract Performance Dataset Summary Data & Structures (WBS, OBS, ),Reporting Calendar Cumulative To-Date BCWS, BCWP, and ACWP byCA/WP Time-Phased EAC BCWS and ETC by CA/WPSchedule Dataset (plus native format)Performance Narrative Executive Summary Variance AnalysisFormat Zipped JSON files Encodes cost / schedule data as tables &relationships
Compliance Metrics Through the Contract LifecyclePage 15
Proposal & Contract Pre-AwardDOD DFARS Clause 252.234-7001 - Notice of Earned Value Management System Requires an EVMS certified by a cognizant federal agency, or Gap analysis of current EVMS capabilities vs. the EIA-748 - 32 guidelines, description of the EVMSto be implemented, and an EVMS implementation planHow to use DCMA Metrics during the proposal phase: Use EVMS data from an existing program Develop an EVM System Description document which describes the system, business processes,and responsibilities Utilize DCMA EVMS compliance metrics to demonstrate system compliance or to support a gapanalysis Develop EVMS implementation plan to close any gapsDCMA Data Driven Metrics & Contract LifecyclePage 16
Post Contract Award & IBRDCMA Business Practice 3 - Contract Initiation Support DCMA Initial evaluation of a contractor’s Earned Value Management System (EVMS) for all newand existing contracts and programs that have the DFARS requirement; May me completed during the Integrated Baseline Review (IBR) or an subsequent initial visit forvalidation Quantitative analysis techniques (64 Metrics) to identify risks and test the reliability of coremanagement processes utilized during the initial stages of a program. Emphasizes the contractor’s Organization and Planning, Scheduling, and Budgeting processes,and also looks at Accounting and Estimate At Complete (EAC) processes.How to use DCMA metrics post contract award: Utilize metrics on baseline data and initial reports to prepare for IBRDCMA Data Driven Metrics & Contract LifecyclePage 17
Program ExecutionDCMA Business Practice 4 - EVMS Surveillance Process to conduct ongoing assessments (surveillance) of contractor EVMS compliance to theElectronic Industries Alliance Standard-748 EVMS (EIA-748) guidelines. There are five (5) groups of metrics (104 Metrics) with different minimum suggested frequenciesof evaluation. Intended to minimize the data inputs required from the contractor. Group 1 metrics leverage automated data analysis using the Integrated Master Schedule (IMS)and the EV Cost Tool Data Groups 2-5 are mostly manual and broken out to minimize the number of data calls.How to use DCMA metrics during program execution: Use metrics to ‘test’ EVMS data prior to submissions to ensure compliance Use metrics to support internal EVMS surveillance and improvementsDCMA Data Driven Metrics & Contract LifecyclePage 18
Metric Analysis in Acumen – Summary ReportDCMA Data Driven Metrics & Contract LifecyclePage 19
Metric Analysis in Acumen – Detailed ReportDCMA Data Driven Metrics & Contract LifecyclePage 20
Detailed Metrics Analysis –WAD IntegrationControl Account BAC in EV Tool does notmatch CA BAC in WADs – 100% of CAs do notmatch for each period in the project!DCMA Data Driven Metrics & Contract LifecyclePage 21Review the Control Accounts by period andcompare each BAC:-Which system is correct?-What is causing the discrepancy?-Is it a user error or issue with the tool?-How can is be corrected going forward?
Detailed Metrics AnalysisIn each period, there are between 16 WPs/PPs that do not havecorresponding tasks in the scheduleDCMA Data Driven Metrics & Contract LifecyclePage 22Review each WP/PP, starting with the nearterm:-Are the WPs/PPs in the EV tool or schedulecorrect?-Are tasks coded correctly in the schedule?-How can is be corrected going forward?
Developing DECM CapabilitiesPage 23
Developing Contractor DECM CapabilitiesData Configuration Integrating data from multiple sources for analysisAutomating metrics when possible through coding of EVM dataToolset Implementation & Processes Reviewing the metrics in an automated manner requires the implementation of a new toolsetProcesses must be reviewed and updated to account for new tools and execution of internal surveillanceInternal Surveillance & Training DCMA’s intention is that contractors will perform internal surveillance and use the test metrics to review data qualityprior to monthly submissions Requires qualified resources readily available to address the new data requirements and assess any potential risksbefore you submit your data to the DCMADCMA Data Driven Metrics & Contract LifecyclePage 24
3 Steps to DECM SurveillanceTask 1Assessment Task 2Data and Process DesignProject plan review and assessment of currentEVMS capabilities tosupport DDMReview current scheduleand cost managementcapabilities to identifysources of data andrecommendenhancements as required to supportmetrics and toolimplementationAdditional data analysisand assessment of manualsources of data like WorkAuthorization Documents(WADs)DCMA Data Driven Metrics & Contract LifecyclePage 25Task 3Implementation & TrainingDesign coding changes, such as PlanningPackage/Work Packageflags, Control Account/Summary LevelPlanning Package flagsand identifying elementsof cost Design process changesto support the monthlyreporting timeline andsupport correctiveaction planning Installation and configurationof analysis toolProject test of metrics,reporting, and root causeanalysisData clean up and additionalchangesTraining on DDM, governmentprocesses, and selected tool
Surveillance by ExceptionSimilar approach to managing project analysis but for surveillanceSurveillance is more efficient because you don’t need to review every metric,every monthFocus on: Metrics associated with top GL deficiencies“At-a-glance” assessment of metric healthMetrics that have been red for several periodsMetrics that are trending negativelyDCMA Data Driven Metrics & Contract LifecyclePage 262
Supporting the Program with Metric Analysis1. Run metric report in Acumen and export to excel2. Review metrics that trip thresholds and prepare data analysis/briefing for programa. What metrics have issuesb. Refresher on what the metric is checking (what does the data mean?)c. Screenshots and examples that trace 1-2 findings per metricd. Suggestions and options on how the issues can be addressed in the future3. Create plan for resolving issues that can be corrected including timelines and responsibleparties4. Document metrics that won’t be “fixed” so you don’t have to rehash conversations everymonth5. Provide trend analysisDCMA Data Driven Metrics & Contract LifecyclePage 27
Metric TrendingTrack metrics by category, over timeto identify trends and highlight areasto focus on.Contract level chart to viewexceptions by contract.DCMA Data Driven Metrics & Contract LifecyclePage 282
Benefits of EVMS Compliance Metrics Encourages a commitment to automate your organization’s internalEVMS surveillance processesFocused approach to reviewing, trending and analyzing metrics for astreamlined processContinuously improve EVMS processes, enhancing projectperformance management by identifying project controlsweaknessesDCMA Data Driven Metrics & Contract LifecyclePage 29
AppendixPage 30
How is EVM Applied on Government Contracts?OMB Circular A11 Part7, Capital ProgrammingGuide Supplement All major acquisitions with development effortsrequire the use an EVMS compliant with EIA-748. TheAgency must use EVM for their work and consolidatethe contractors EVM reporting, Requires IBR) andsets 10% variance thresholdFederal AcquisitionRegulations (FAR),34.201 EVMS, 34.202IBR IAW OMB Circular A-11 Part 7 EiA-748 compliant EVMS required for majoracquisitions for development. EVMSapproved by CFA. if the contractor doesn’t have a compliantsystem they must provide a plan. Requires monthly reporting and primemust flowdown to subcontractors.Defense FederalAcquisition RegulationsSupplement, 252.2347001, 252.234-7002,CDRL’s/DID’s IPMRReportingDCMA Data Driven Metrics & Contract LifecyclePage 31 Notice of EVM, Contract 20M EIA-748compliant or plan to implement, 100Mmust certify Provide for generation of timely, reliable,and verifiable information. IBR 180 days
What is Surveillance?NDIA – Integrated Program Management Division (IPMD) Surveillance Guide defines the followinggoals of an Earned Value Management System (EVMS) surveillance process:1. Ensure that the organization’s EVMS has been effectively implemented in accordance with theorganization’s EVMS documentation2. Ensure the EVMS provides timely, accurate, and reliable integrated project managementinformation for internal and customer use3. Assess the project’s commitment and ability to maintain and use its EVMS as an integral part ofits project management processIt’s not a validation review or integrated baseline review – but uses the EIA-748 32 Guidelines andDOD EVMSIG as a roadmap to conduct surveillance https://www.acq.osd.mil/evm/#/homeDCMA Data Driven Metrics & Contract LifecyclePage 32
New Surveillance ProcessWhat projects are subject to Surveillance? Projects with EVM reporting requirement 100M Projects identified for surveillance by the government program office Projects deemed to be high risk by the DCMA or stakeholdersDCMA is looking to modernize contractor oversight methods and practices to maximizeeffectiveness and create a standard benchmark, while simultaneously reducing costs Designed to streamline compliance oversight by generating a set of data tests andthresholds by which to adjudicate acceptable risk Facilitates the identification of high-risk contracts through an objective,automated process that allows for joint resolution of issues as they occur Contracts identified as high-risk are subject to a DCMA surveillance reviewDCMA Data Driven Metrics & Contract LifecyclePage 33
DCMA Business Practice 4Tripped Metric Follow-Up & Close OutIf any metrics exceed the threshold the Team Member will evaluate the data anomalies causing the trip(s).Follow-up actions may include:1. Discussions with the contractor and other stakeholders2. Requests for data to support an expanded sample size or additional artifacts related to the dataanomalies3. Interviews with appropriate Control Account Managers and other contractor personnelTripped Metric Closeout – After metric follow-up actions are complete, the Team Member will determine ifthe metric trip represents a false indicator, in which case it should be closed out and annotated.If it is not a false indicator the team member will take one of the following steps to close out the action:1. Acceptance of the condition as the correct execution of the contractor system2. Notation of a risk for future surveillance activities3. Issuance of Corrective Action Request(s)DCMA Data Driven Metrics & Contract LifecyclePage 34
DCMA Data Driven Metrics & Contract Lifecycle Page 5 Besides Compliance - Why do EVM? EVM is a proven Project Management methodology which is accepted by the Project Management Institute (PMI), GAO, OMB, and DoD EVM re-enforces project management best practices such as planning and scheduling
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Overview DCMA at a glance DCMA interactions with certified auditing Mechanics of DCMA surveillance and where certified auditing fits DOD Budget/Better Buying Power and where certified auditing fits What Certification says about a product or contractor 2
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