Improving Program
Performance at
FAA
Presented to: PMI-WDC Skyline Luncheon
By: Wayne Abba
Date: June 15, 2006
Federal Aviation
Administration
EVM Transformation Overview
• Objectives of the EVM Transformation Effort
– Meet commitments to OMB, GAO
– Improve FAA’s Business Cases
– Improve Program Management and Reduce
Variances
• Progress in FY 05
– Adopted EVM Policy and assessed programs
against ANSI Standard
– The “FAA Flag”
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EVM at FAA
• Background
– FAA has used DoD approach (EVM for contractors
only) on some programs and decided it’s not
sufficient
– Will manage entire program using EVMS in
accordance with ANSI/EIA 748
• Manage/measure all resources
• Requires changes in behavior by all parties
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Improving EVM at FAA
http://fast.faa.gov
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FAST Home Page: http://fast.faa.gov
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EVM Transformation at FAA
• Holistic Approach
• Goals
– Adopting FAA and industry Program Management
"Best Practices"
– Strengthening and integrating technical, schedule,
and cost performance management of programs by
implementing earned value management techniques
– Positioning programs to be better able to anticipate,
forecast, and communicate future performance
based on objective performance metrics and risk
assessments as well as proven engineering
judgments
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June 15, 2006
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EVM Transformation Overview “Flag”
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EVM Transformation Overview
• EVM Transformation Initiative August 05Present
– Accomplishments to-Date
• Agency wide EVM Working Group/Council
• Holistic approach – Policy & Guidance, Training, Program
Reviews
• Plans of Action with Milestones submitted to OMB
• Commitments made to OMB/GAO which are on track
• Executive Briefings used to maintained visibility & support
• EVM “Bubble Chart” used to report progress and status
• Met with Major Prime and Support Contractors – follow-up
meetings focus on sharing best practices
• FAA’s Acquisition Management Policy updated with EVM
policy and guidance and changes in acquisition processes
• Prepared a paper on the costs and benefits of EVM.
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Assessment Themes - Issues
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PM Commitment
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Cross Cutting Themes
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Multiple Baselines
Gov’t FTE’s & Effort
Program Support LOE
Choosing the Correct Contract Type
Including Sufficient EVM Language in Contracts
Comprehensive Program-Level WBS
FAA Best Practices
– Performance-based Payments
– Mature Estimating Techniques
– Alignment of Program WBS with Contract CLINS and OMB 300 Useful
Segments
– GCAMS & CCAMS
– Program Level EVM Tools Application
– Risk Adjusted Schedule & Cost Applications
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EVM Transformation Overview
FAA Major Programs - Cost & Schedule Variance
Schedule Variance %
10%
Over Spent
Ahead of Schedule
Under Spent
Ahead of Schedule
5%
AAA
BBB
III
JJJ
KKK
GGG
HHH
DDD
FFF
EEE
LLL
SSS
TTT
-5%
MMM
-10%
NNN
OOO
Program Name
Color Code - EVMS
Quality:
>-15%
PPP
QQQ
Over Spent
Behind Schedule
Under Spent
Behind Schedule
RRR
-10%
-5%
5%
10%
Green: Meets
Yellow: Partially
Meets
Red: Does Not Meet
>15%
Cost Variance %
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EVM Transformation Summary
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The FAA has committed to OMB and GAO that we will implement full EVM – prime
contracts, support contracts, and government FTE’s - by the end of FY 07 and is
on schedule to do so.
The FAA sees EVM as a major tool to help meet its goals to manage its
acquisitions against cost and schedule and performance targets.
EVM Transformation will be measurable and transparent – we expect to “get
worse” before we get better.
EVM Transformation is a major evolution of the Acquisition Management System,
in the areas of procurement, risk, cost estimation, work breakdown structure, and
system engineering, and affects program planning through execution
EVM data and analysis will be built into the reporting systems used to brief key
executives on the planning, progress, and evaluation of programs
FAA’s Contractors are essential to FAA’s success in implementing EVM on all its
programs – we want them to share their best practices and advice with us
Existing contracts will most likely not be modified but data from contractors will
be used to build EVM in at the program level.
EVM will be used for Screening Information Requests (SIRs) and New Contracts
EVM will be a discriminator in contract awards and past performance evaluations
The use – benefits and costs - of EVM will be tracked as evidence of excellent
good contract management and not as an add-on cost to the government
FAA has set the goal to be the government leader in implementing EVM
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EVM Council
• Formed as a continuation of the
management processes effort
• Co-Chaired by ATO-A and AIO
• Membership includes:
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ATO Service Unit representatives
Other Lines of Business implementing EVM
AIO representatives
CFO representatives
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EVM Transformation – Goals for 2006
• EVM Council tracking POA&M status – most targets
due in 2006 – if achieved, flag will turn to mostly
yellow and green.
• FAA to assess its financial processes against the
ANSI standard & update its flag
• FAA to issue a Layperson’s guide to EVM
• FAA to issue a manager’s guide to using EVM
• Technical Training to continue and be supplemented
by awareness training
• EVM toolkit to be selected.
• Our goal is that 50% of our “EVM” scores on our
exhibit 300s be “4” or “5” and the rest “3”.
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EVM Transformation – Goals for 2007
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Full EVM implementation by end of FY 07.
EVM part of Program Managers toolkit.
Full EVM reporting for all major investments.
EVM scores on Exhibit 300s are all “4” or “5”.
Use of EVM makes a major difference in ability
of FAA programs to stay on track and within
budget.
• Use of EVM contributes to FAA “NAS
Modernization Program” being removed from
the GAO High Risk List.
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EVM Transformation - Challenges
• Financial systems may need modification
• Budgets are tight and this affects new initiatives.
• The Acquisition Management System will need to
be updated several more times.
• We must reduce the burden on program managers.
• We must show the impact on bottom line results.
• We must meet our aggressive targets.
• Awareness and Acceptance of EVM is lumpy.
• We must continue to keep all senior executives
involved and engaged especially in the areas of
contracts, budget, and program management.
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EVM Transformation Progress
"It takes focus on performance and efficiency measures,
dedication, candor, accountability, and these are all
things I see exhibited at the FAA. You basically are
there. You are where I would like the Federal
Government to be on all 1,200 of its programs, and you
run an operation that is more measurable than others."
Clay Johnson III
Deputy Director for Management, OMB
At the FAA-wide meeting that unveiled
the FAA’s FY 06 Strategic Plan
11/15/2005
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FAA Contractor Meeting Feb 6, 2006
Participants
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Lockheed Martin
Raytheon
Harris
Parsons Infrastructure and Technology Group
Northrop Grumman
Mitre
Computer Sciences Corporation
Advanced Management Technology Inc.
BAE Systems
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FAA Procurement Comments
• Top contractors – suppliers, support
contractors, FFRDC
– Purpose – cooperation with industry to achieve
mutual success in performing FAA mission
– FAA EVM differs from legacy approach
• Program level, not just contractors
• Will not change existing contracts
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Expectations from Contractors
• Manage using ANSI/EIA 748
– Existing contracts will not be modified to require EVM
– For new contracts, contractors are responsible for
• Contract performance (scope, schedule, delivery)
• Excellent management
– Contractors may leverage existing EVM acceptance from other
agencies or work with FAA to develop new plan
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Follow-up Meeting Guidelines
• Attendees requested to return for individual
meetings over next three months with EVM
team and selected Program Managers and
Contracting Officers
– Present Management Overview
• Company response to FAA initiative
• EVM System acceptance applicability to FAA or Plan to
achieve acceptance (ref. NDIA Systems Acceptance Guide)
• How EVM is used on current FAA contracts
• Best practices (e.g., subcontract management)
• Improvement opportunities
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FAA Contractor Meeting Follow-up
Participants
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Lockheed Martin*
Raytheon*
Harris
Parsons Infrastructure and Technology Group*
Northrop Grumman*
Mitre
Computer Sciences Corporation*
Advanced Management Technology Inc.
BAE Systems
* Follow-up meeting already held
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Summary-FAA EVM Approach Overview
FAA programs are implementing EVM at the program level and requiring
contractor EVM reporting in an effective and efficient manner
Prime Contractors
Program
Effort
Cost Reimbursable
Measurable
• EVM reporting and
certification
LOE (1)
• Status reporting and
invoices
1)
2)
Fixed Price
Support Contractors
Cost
Reimbursable
Fixed Price
• Performance
based payments,
or
• Status reporting
and invoices
• EVM reporting
and certification, or
• Status reporting
and invoices(1) (2)
• Performance
based
payments(1), or
• Status reporting
and invoices(1) (2)
• Status reporting
and invoices
• Status reporting
and invoices
• Status reporting
and invoices
EVM implemented by the FAA PO
Includes production and sustaining support, such as, engineering and program management
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Management Transformation in
Civilian Agencies
• FAA Transformation more than “just EVM”
– Setting an example for public administration
• A project-managed agency
• Measuring objectively and reporting honestly
• Accountable for results
– Improving the practice of EVM
• Managing all program resources
• Effective and efficient implementation
• Consistent among business units and programs
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Management Transformation in
Civilian Agencies
• Considerations for civilian agencies
– Signs of ad hoc EVM implementation
• Wide variance in application thresholds
• Lack of coordination among agencies
– Does the DoD legacy approach fit?
• Contract-based $ thresholds are high
• Inconsistent/ineffective application
• Disinterest in civilian agency management
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Recommendations
• Form interagency working group
– Coordinate with DoD, Intel Community and
National Defense Industrial Association
• Compare implementation policy and
guidance
– Reconcile any glaring differences
– Discuss possible areas for common policy
– Deal with program and contractor validation issue
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