Earned Value Management Center Presented To NDIA Presented

Earned Value Management Center Presented To: NDIA Presented By: Mr. Gordon Kranz Director Engineering and Analysis Directorate February 4, 2010

Organization Chart Engineering & Analysis Directorate (EA) Executive Director (SES) Deputy E&A (Field Resource) Hiring Budgeting IDPs - Training Plans Performance Objectives Monthly Reports Systems Engineering Division Policy, Training, and Tools to support Engineering Workforce: -SE Process and products -Engineering Change Proposals -Configuration Mgt -Decision Analysis -Root Cause Analysis -etc Management Support Office Process Improvement Software Engineering Division Program Integration and Analysis Division Policy, Training, and Tools to support SW workforce: -SW Requirements -SW Design -SW Testing -SW Estimation etc Policy, Training and Tools to support Program Integrator Workforce: -Program Assessment -Integrated Surveillance -Integrated Data analysis -Financial Assessment Manufacturing Engineering / Supply Chain Predictability Division Policy, Training, and Tools to support Industrial Engineering and supply chain workforce: Supply Chain Surveillance Manufacturing Engineering Production Planning Advanced Surveillance Techniques Advanced Engineering Methods Six Sigma Improvement Projects Earned Value Management Center Policy, Training and Tools to support EV and E workforce: Center Execution Mission: EV Compliance and Surveillance Industrial Analysis Center Policy, Training and Tools to support IA mission: Industrial Capability Assessments (ICAs); Analytical Products; Homeland Defense; Economic Analysis 2

Topics ▫ Authority & Guidance ▫ Vision & Mission ▫ Guiding Principles ▫ Objectives ▫ Organization ▫ Agency EVM Policies and Products ▫ Partnering Opportunities with Industry ▫ State of EVMS ▫ DRAFT Review Schedule 3

Authority and Guidance ▫ December 1995: OUSD(AT&L) Paul G. Kaminski policy memorandum designates the DCMC (DCMA) as the Department of Defense Executive Agent for Earned Value Management System ▫ October 1996: OUSD(AT&L) Paul G. Kaminski policy memorandum gives DCMA responsibility for EVMS compliance reviews ▫ 48 CFR Part 242. 1106 › Designates DCMA as the Do. D Executive Agent for EVMS compliance › Reviews ▫ DFARS Subpart 242. 302 (41) › Assigns the Contract Administration Office (CAO) function for EVMS to the DCMA, including the responsibility for reviewing EVMS plans and verifying initial and continuing compliance with Do. D EVMS criteria ▫ May 2007: OSD(AT&L) Kenneth Krieg policy memorandum reaffirms the DCMA as the Department of Defense Executive Agent for Earned Value Management Systems 4

Vision & Mission Statements Vision: ▫ Influence the implementation of industry-wide compliant EVMS ▫ Provide program managers, integrated product teams, and other acquisition enterprise customers EVMS that provide immediate access to reliable and accurate data and information on program costs, schedule, and technical performance Mission: ▫ Advocate the Department’s implementation of EVM by executing the role and responsibilities of the Executive Agent for Earned Value Management Systems (EVMS) ▫ Develop and deploy meaningful policies, processes, training, and toolsets that assist with objective assessment of supplier EVMS plans and the verification of initial and continuing compliance with EVMS requirements 5

Guiding Principles ▫ Timely execution of the mission ▫ Keep a customer focus ▫ Treat others as valued colleagues ▫ Be humble and mindful in actions and words ▫ Be at the forefront of Do. D EVM enculturation › Teaching the acquisition enterprise the accepted norms and values of an EVM culture 6

Objectives ▫ Execute the roles and responsibilities of Do. D Executive Agent for EVMS in conformance with Do. D EVMS policy ▫ Develop, control, and implement the Do. D Earned Value Management Implementation Guide (EVMIG) as the central EVMS guidance for Do. D personnel ▫ Interpret Do. D EVMS criteria, including issues on guideline application and system review requirements ▫ Maintain the EVMS Knowledge Management Community of Practice ▫ Publish a comprehensive annual report on the state of supplier EVMS implementation activities for the Department and Congress 7

Objectives (cont’d) ▫ Develop, institutionalize, and continuously improve Agency EVM policy, standard processes, training, and tools ▫ Coordinate with Chief Operations Officer functional proponents to assess compliance with, efficacy of, and workloads associated with Agency EVM policy, standard processes, training, and tools ▫ Train the EVMS workforce in the use of Agency standard EVMS processes ▫ Delegate resources to review and approve contractor EVMS plans and to lead EVMS compliance reviews in order to determine the adequacy and capability of contractor EVMS in meeting DFARS/contract requirements, including selection of the Review Director, Team Chief, and Team Members and the execution timeline 8

Objectives (cont’d) ▫ Delegate resources to lead customer sponsored reviews of EVMS for potential compliance issues and/or process efficiency improvements ▫ Coordinate and control EVM analyses ▫ Participate in Federal acquisition rulemaking through leadership on DAR Council committees ▫ Appraise and authorize changes to validated contractor EVMS 9

EVM Center Organization EVM Center Director Staff Deputy Director Training ENCULTURATION Compliance Surveillance Analysis POLICY, PROCESS & METHODOLOGIES TOOLS, TEMPLATES & INSTRUCTIONS EXECUTION 10

Agency EVM Policies ▫ Compliance Review Instruction (CRI) › Internal review Apr-10, Agency review Jun-10, final Oct-10 (est) ▫ Standard Surveillance Instruction (SSI) (previously SSOM) › Internal review completed Aug-09, Agency review Feb-10, final May-10 (est) ▫ Trip Wire Operating Instruction (TWI) › Internal review complete Jan-10, Agency review Feb-10, final May-10 (est) ▫ EVMS Specialist Certification Program (ESCP) › Internal review Feb-10, Agency review May-20, final Aug-10 (est) 11

Product Listing ▫ EVMS Policy Documents (EVMIG) and Operational Instructions ▫ EVMS Manuals, Courseware and Training ▫ Do. D EVMS Compliance Review Schedule ▫ Supplier EVMS Compliance Review Determination Reports ▫ EVMS Surveillance Plans and Reports (SSI SSP/SSR) ▫ Standard EVM contract language and contract requirements examples 12

Product Listing (cont’d) ▫ Cost/Schedule Performance Measurement Data Analysis (EVM CPR) › Tripwire Analysis and Charts ▫ Independent Budget/Estimates of Costs at Completion (EVM IEAC) ▫ Network/Critical Path Analysis (EVM IMS) › Schedule Risk Assessments (EVM IMS) ▫ Topical Whitepapers and Presentations 13

Partnering Opportunities with Industry ▫ System Surveillance Instruction ▫ EVMIG Revision ▫ Self Assessment Revision ▫ EVM Interpretive Instruction ▫ IMS Analysis Guide ▫ Compliance Review Instruction 14

State of EVMS ▫ EVM implementation governance from government to industry has deteriorated since the 1995 timeframe when: › C/SCSC replaced with EVM (following ANSI-748) › Management utilized EVM as a tool for decision making › Industry self-governance emphasis was part of acquisition reform ▫ Over 40 compliance reviews of industry over the past 2 years › Reviews evaluate the adequacy of supplier implementation of the ANSI-748 (32 › › guidelines) Reviews follow the Earned Value Management Implementation Guide (EVMIG) Only one passed first time – Augusta (Italy) ▫ Of the “big four” compliance reviews: › 3 of the 5 guideline areas were >50% Non-Compliant (NC) › Highest NC: Management Reporting & Analysis (75%) › Lowest NC: Accounting Considerations (29%) › Patterns reflect systemic, OSD/cross-services/cross-industry issues 15

Common Non-Compliant Findings 1. PM & CAM ownership, inattention to budgetary responsibilities □ Funds and budget distinction (GLs 8, 9, 10) □ Budget reconciliation issues 2. Supplier processes and toolsets are too cumbersome (GL 3) 3. Work authorization procedures not followed (GLs 9, 10) 4. Lack of integrated management systems (GL 3) 5. 6. 7. 8. 9. Vertical integration of subcontractors (GL 7, 8) Lack of IBR rigor, front loaded baselines, etc. (GL 8) Baseline fluctuations and frequent replanning (GL 8) Current period and retroactive changes (GL 30) Improper use of Management Reserve (GL 14) 1. Reserves harvested to improperly cover cost overrun 10. EV techniques not reflecting actual accomplishment (GLs 7, 10, 23) 1. Progress not tied to technical accomplishment • Untimely, unrealistic Latest Revised Estimates (GL 27) 1. Failure to monitor progress on a regular basis and in an integrated 16 way (GL 23)

EVMS Assessment Scorecard (Nov 2008) Guideline 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Contractor A Contractor B Contractor C Contractor D Contractor E Contractor F Contractor G Contractor H Contractor I Contractor J Contractor K Contractor L Contractor M Contractor N 17

EVMS Assessment Scorecard (Dec 2009) Guideline 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Contractor A Contractor B Contractor C Contractor D Contractor E Contractor F Contractor G Contractor H Contractor I Contractor J Contractor K Contractor L Contractor M Contractor N 18

EVM Implementation Concerns ▫ Industry Concerns: › Erosion of avenues of communication and problem resolution › Conflicting contractual requirements › Proliferation of independent approaches to implementation › Duplicative EVM System reviews (Department Policy Needed) › Declining experience › Reciprocity ▫ Department Concerns: › Maturity of industry infrastructure to support “ownership” of EVM › Lack of institutionalizing EVM as an integral management tool › Varying levels of confidence in reported performance and financial data › Internal oversight lacks sufficient rigor › Consistency of message (Duplicative efforts within the Department) 19

DRAFT Review Schedule Review Type PAV Validation Initital Visit RFC / NM Implement Follow-On ation 20

In Closing ▫ EV is not the problem ▫ Understanding EV is not the problem ▫ Not using EV to manage is the problem ▫ EV is integral to program management ▫ It is not a secondary assignment ▫ Plan – Execute – Measure – Fix 21

Questions?