Office of Management and Budget EVMS Compliance Requirements

Office of Management and Budget EVMS Compliance Requirements • David Muzio NDIA Program Management Systems Committee May 3, 2005

OMB Circular A-11, Part 7 • Planning Budgeting, Acquisition and Management of Capital Assets – Agency-wide Capital Programming Process – Executive Review Committee must annually prioritize all new and old projects for funding – Funding for Major Acquisitions are based on a Business Case submitted to OMB with the annual budget submission 2

FY 2005/6 Business Case Scoring • All BCs were scored against 10 criteria: Maximum of 5 points per criteria • Results provided to agency via budget passback process • Ensure agency planning and management of assets is consistent with OMB policy and guidance • Ineffective programs, even those with a strong business case, were not recommended for funding Key Criteria • Supports the President’s Management Agenda Items. (Multiple Sections) • Acquisition Strategy (Section I. G). • Program Management (I. D, I. H, +) • Alternatives Analysis (I. E) • Risk Management (I. F) • Performance Goals (I. C) • Performance-Based Management System (I. H); Must be ANSI/EIA Standard 748 Compliant • Life-Cycle Costs Formulation (I. E. +) • IT ONLY – Enterprise Architecture (II. A) – Security and Privacy (II. B) 3

Evaluation of IT Business Cases • FY 2005 Budget – 1200 major projects worth $60 Billion – 621 projects worth $22 B placed on management watch list. – Correct project weaknesses by end of year or face additional oversight or budget reduction • FY 2006 Budget – 1, 087 major projects worth $65 B – 342 projects worth $15 B on watch list. – Same actions. 4

Budget and Performance Integration Program Assessment Rating Tool (PART) • Capital Assets and Service Acquisition – Agriculture - National Forest Improvement and Maintenance – Adequate – DOD – Communications Infrastructure – Results Not Demonstrated. – Bonneville Power Administration – Moderately Effective – HHS – Health Care Facilities Construction Effective 5

PART Alignment with A-11, Part 7 Capital Assets and Service Acquisitions • Purpose and Design – Clarity of purpose and soundness of design – Appropriate program design includes implemented processes consistent with Capital Programming Guide principles • Strategic Planning – Program planning, priority setting, and resource allocation – There is a strategy and plan for feasible, coherent, effective, efficient implementation, use and disposal of capital assets 6

PART Alignment with A-11, Part 7 • Program Management – Program is effectively managed to meet goals – Includes, the use of sound, performance-based acquisition and program/project management practices, e. g. , earned value management • Results and Accountability – Program is meeting it long-term and annual goals – Program/acquisition goals achieved within budgeted cost and established schedule. 7

Part Results 2004 • Number of Programs – 607 = 60% of Effective – 15% • Moderately Effective – 26% • Adequate – 26% • Ineffective – 4% • Results Not Demonstrated -29% • 71% have defined and are tracking outcome goals • 59% have measures to manage costs. 8

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EVMS FAR Case • Proposed Rule Published in Federal Register. – Asking for specific comments on use of IBR’s before award – under what circumstances, dollar limits, etc. – Nothing is off limits. – Comments due 60 Days after publication in Federal Register – Expected Final Rule – July/August 10

Part 7 -Acquisition Planning • [ If an EVMS is to be used, discuss the methodology the Government will employ to analyze and use the EV data to assess and monitor contract performance. In addition, discuss how the offeror’s/contractor’s EVMS will be verified for compliance with ANSI/EIA Standard - 748, and the timing and conduct of integrated baseline reviews (whether prior to or post award). See 34. 202 11

52. 243 -YYY Notice of Earned Value Management System – Pre-Award IBR • New solicitations provision - optional • Same as XXX provision with (d) added • (d) The Government will conduct an IBR, as designated by the agency, prior to contract award. The objective of the IBR is for the Government and the Contractor to jointly assess technical areas, such as the contractor’s planning to ensure complete coverage of the contract requirements, logical scheduling of the work activities, adequate resources, methodologies for earned value (BCWP), and identification of inherent risks. 12

52. 234 -ZZZ Earned Value Management System • As prescribed in 34. 203 (c) insert the following clause: • (a) In the performance of this contract the contractor shall use an EVMS to manage the contract that at the time of contract award has been recognized by the Cognizant ACO or a Federal Department or Agency as compliant with the guidelines in ANSI/EIA Standard 748 (current version at time of award and the contractor will submit reports in accordance with the requirements of this contract. 13

52. 234 -ZZZ Earned Value Management System • (c) Agencies may conduct IBRs. If a preaward IBR has not been conducted, such a review shall be scheduled as early as practicable after contract award, but not later than 180 days after award. The CO may also require an IBR at (1) exercise of significant options or (2) incorporation of major modifications. Such reviews will normally be scheduled before award of the contract action. 14

CAO/CIO/SPE Memorandum • Must conduct a compliance review if contractor does not have a current AA • Must conduct an IBR on all contracts, before or after award as appropriate, to ensure establishment of PMB. • As interim procedure use DOD EVMIG as guidance to implement agency EVMS system. • PMSC is working on EVMS Acceptance process guide that could be applicable to both Government and industry. • PMSC has started new project to develop a full EVMS implementation guide. Recommends Civilian agency participation on PMSC. • Recommends NDIA guides as “best practices” – PMs Guide to IBR Process – Suveillance Guide – Intent Guide 15

OFPP Policy Letter 05 -01 • Developing and Managing the Acquisition Workforce. – Applies to all agencies except those subject to DAWIA – In Agency review • Core Competencies – All agencies shall use the DOD set of core competencies to fulfill the training, experience and continuous learning requirements – Includes all contracting positions and Program Managers. 16

Continued Emphasis on Good Project Management • Business cases still need improvement • The PART includes specific program management evaluations • Implementation of EVM required while FAR Guidance in process. • NDIA will be focal point for EVM practices • All agencies will be required to perform EVM compliance and surveillance reviews and conduct IBRs. • Common Program Manager Qualification Standards in place by 2007 • Increased civilian agency contracting and program management training and funding 17