Intermediate Earned Value Management (EVM 202) STUDENT GUIDE DEFENSE ACQUISITION UNIVERSITY November 2017 EVM 202—Intermediate Earned Value Management Course Schedule MONDAY TUESDAY 0800–1205 Lesson 1—Introduction to EVM 202 and the LAR Vehicle Program Presentations and Brief Out WEDNESDAY 0800–0900 Lesson 2 (cont.) Exercise Review THURSDAY 0800–1200 Lesson 4 (cont.) 1300–1700 Lesson 2—EVM in the Acquisition Strategy 1255–1700 Lesson 4 (cont.) 1115–1215 Lesson 5—EVMS Surveillance 1300–1530 Lesson 4 (cont.) Presentations and Brief Out 1530 –1700 Exam 1 Preparation and student study time MONDAY 0800–1205 Lesson 6 (cont.) TUESDAY 0800–1100 Lesson 6 (cont.) Exercise Review WEDNESDAY THURSDAY 0800–1000 Lesson 7 (cont.) Presentations and Brief out 0800–1200 Lesson 9—Integrated Program Management Case 1000–1200 Lesson 8—IPT Analysis and Performance Case 1305–1700 Lesson 6 (cont.) 1200–1700 Lesson 7—Tools Analysis Case 1300–1700 Lesson 8 (cont.) Presentations and Brief Out 0800–0945 Exam 1 & Debrief 0945–1115 Lesson 4 (cont.) 0900–1005 Lesson 3—EVMS Implementation 1005–1155 Lesson 4—Integrated Baseline Review Process Travel Day FRIDAY 1300–1435 Lesson 5 (cont.) 1435–1700 Lesson 6—Integrated Program Management Analysis Tools and Techniques FRIDAY 0800–0945 Exam 2 0945–1100 Course Survey, Clean-up, Exam 2 Debrief, Graduation 1300–1630 Lesson 9 (cont.) Presentations and Brief Out 1630–1700 Exam 2 Preparation EVM 202 November 2017 i This page is left blank intentionally. EVM 202 November 2017 ii TABLE OF CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. 9. Lesson 1: Introduction to EVM 202 and the LAR Vehicle Program Lesson 2: EVM in the Acquisition Strategy Lesson 3: EVMS Guidelines and Compliance Lesson 4: Integrated Baseline Review (IBR) Process Lesson 5: EVMS Surveillance Lesson 6: Integrated Program Management Analysis Tools and Techniques Lesson 7: Tool Analysis Case Study Lesson 8: Integrated Product Team (IPT) Analysis and Performance Case Lesson 9: Integrated Program Management Case Study EVM 202 November 2017 iii This page is left blank intentionally. EVM 202 November 2017 iv EVM 202 Lesson 1: Introduction to EVM 202 and the LAR Vehicle Program STUDENT GUIDE CONTENTS 1. 2. 3. 4. 5. Learning Objectives and Additional References LAR Vehicle Scenario Presentation Slides Introduction to Blackboard Materials Exercise Instructions EVM 202 November 2017 Lesson 1-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 1-2 Learning Objectives and Additional References Terminal Learning Objective Given a program scenario and accompanying documents, construct a brief that summarizes key program information. Enabling Learning Objective Given program documentation, describe program requirements, risks, and constraints in order to use EVM effectively. Additional References • • • Defense Acquisition Portal (DAP) Acquisition Community Connection (ACC) EVM Community of Practice (CoP) All other necessary references are available in the Lightweight, Assault and Reconnaissance (LAR) Vehicle simulation. EVM 202 November 2017 Lesson 1-3 LAR Vehicle Scenario Background In 2012, the Army leadership announced a vision of the future. This vision includes a Brigade structure and organization, which is crucial to the Army’s strategic responsiveness goals of deploying from a Continental United States (CONUS) base to a global theater of operation. These goals include deploying: one Brigade within 96 hours; one Division within 120 hours; and five Divisions within 30 days. To achieve this vision for the Army, the Tank-automotive and Armaments Command (TACOM) and United States Joint Forces Command (USJFC) initiated a Class II Joint Capability Technology Demonstration (JCTD) of a Lightweight, Assault and Reconnaissance (LAR) Vehicle. It is now July 2015 and you have just arrived at the LAR Vehicle Program Office headed by Colonel (COL) Paine. The JCTD LAR is currently undergoing operational testing and the vehicle shows great promise. However, early test results identified problems that must be resolved before production. To address these minor deficiencies, a JCTD transition plan has been developed and approved, establishing the LAR Vehicle program as new start. A request for proposals (RFP) for the Engineering & Manufacturing Development (EMD) contract is in the early stages of formulation. A Milestone B (MS) decision briefing is scheduled for early March 2016. A non-firm-fixed-price (FFP) contract is planned with estimated costs ranging between $600 and $800 million. Relevant Information The Senior Acquisition Executive (SAE), General (GEN) Moatars, wants COL Paine to strongly consider eliminating Earned Value Management and any type of schedule management or reporting requirements from the RFP. He feels that the contractor is being paid to manage the effort and how they choose to do, it is their business. If he cannot be convinced otherwise, he will direct COL Paine to process a waiver to eliminate Earned Value Management (EVM). COL Paine must convince GEN Moatars that earned value will help the Program Office effectively manage the contract. EVM 202 November 2017 Lesson 1-4 Introduction to Blackboard Course Materials Most EVM 202 lessons have a corresponding PowerPoint and a combination of briefings, tasks, and references/tools on Blackboard. A normal lesson typically begins with the LAR Vehicle program scenario in the Student Guide. Some lessons also have briefings about the topic area. You will use briefings and references to complete assigned tasks. You will complete your tasks either by using your team’s group File Exchange in Blackboard (which functions similar to a shared drive), or by using other materials such as a classroom whiteboard, easel paper, or worksheet. Your team’s group is available via the Team Groups tab on the Course Menu. EVM 202 November 2017 Lesson 1-5 Welcome! While you are waiting . . . • Review your Student Locator Card: – Verify supervisor email and phone number – Verify emergency contact name and phone number – Add your contact information • Include cell phone or hotel phone number if TDY or if different from emergency contact – Course Title: Intermediate Earned Value Management Course (IEVMC) – Course Number: EVM 202 – Signature: On bottom of sheet • Update ATLAS profile to make changes permanent 1 September 2016 Intermediate Earned Value Management Course (EVM 202) EVM 202 November 2017 Lesson 1-6 Administration • Turn off or silence your cell phones • Put your first name on your name card in LARGE PRINT • This is your duty station for the duration of the course • Dress code (business casual/professional): – No jeans, corduroy, shorts, t-shirts, tank tops, or athletic clothing – No sneakers, flip-flops, or slippers – No dress-down Fridays/travel days • Dress code violators will be sent home 3 Removable Memory Devices • Do NOT insert or connect removable memory device(s) into DAU computers – Poses security risk – Examples: • • • • • • Jump/flash/thumb drives/memory sticks Floppy disks SD/XD cards CD-R/W & DVD-R/W iPods Portable electronic devices, etc. • Computers for Unclassified use only 4 EVM 202 November 2017 Lesson 1-7 Non-Attribution Policy 5 DAU Briefing 6 EVM 202 November 2017 Lesson 1-8 EVM 202 Assessments • Total Assessment: 100 Points (Open Book, Blackboard, and Notes) – Exam 1: 40 Points (60 minutes, Friday Week 1) • Multiple choice, true/false, multiple answer, and fill in the blank – Lesson 9: 20 Points (Integrated Program Management Group Exercise) – Exam 2: 40 Points (90 minutes, Friday Week 2) • Multiple choice and multiple answer • Must achieve 80 total points to pass EVM 202 7 Course Materials—Blackboard Materials • • • • Schedule (digital copy) • LAR Vehicle Documentation – Acquisition Strategy Student Guide (digital copy) – Capability Development Lesson slides Document (CDD) Briefings, tasks, and references – Acquisition Program Baselines – Video briefings – Tasks and briefing templates – Lesson references and tools, including Empower (APBs) – Integrated Baseline Review (IBR) Documents – LAR Vehicle schedules – LAR Vehicle Program Control Books • Resources – EVM references – Job aids • Pre-Course Self-Assessment • Exams 1 and 2 8 EVM 202 November 2017 Lesson 1-9 Course Schedule EVM 202 Course Schedule Week Monday Tuesday Wednesday Thursday Friday Week 1 Travel Day Lesson 1 (Morning) Lesson 2 (Morning) Lesson 4: Part 3 (Morning and Exam 1 (Morning) Lesson 4: Part 4 Lesson 2 (Afternoon) Lesson 3 (Morning) Afternoon) Lesson 5 (Morning) Lesson 4: Parts 1 and 2 (Morning and Afternoon) Week 2 Lesson 6 (Morning and Afternoon) Lesson 6 (Morning) Lesson 7 (Morning) Lesson 7 (Afternoon) Lesson 8 (Morning and Afternoon) (Morning) Lesson 6 (Afternoon) Lesson 9 (Morning and Afternoon) Exam 2 9 Course Materials—Hardcopy Materials • Student Guide – – – – – – – – – – Name tent Schedule Gold Card EVM 202 course CD Learning objectives LAR Vehicle scenario Lesson slides Lesson exercises Comparison of Major Contract Types job aid LAR Vehicle Program Control Book—DEC 2016 • Other classroom handouts Bring your calculator or use your laptop’s calculator— 4 function is good enough. Cell phone use is strictly prohibited. EVM 202 November 2017 10 Lesson 1-10 Introductions • • • • • Name Organization—Job and Location How is Earned Value Management (EVM) used in youroffice? How many years of EVM experience do you have? What do you want to get out of this class? 11 EVM Review • EVM 202 Pre-Course Self-Assessment – Common challenges – Questions • Other EVM questions 12 EVM 202 November 2017 Lesson 1-11 Lesson 1—Introduction to EVM 202 and the LAR Vehicle Program Lesson 1 Learning Objectives Terminal Learning Objective (TLO) • Given a program scenario and accompanying documents, construct a brief that summarizes key program information Enabling Learning Objective (ELO) • Given program documentation, describe program requirements, risks, and constraints in order to use EVM effectively 14 EVM 202 November 2017 Lesson 1-12 Let’s Get Started • Unmute your volume. • Open Blackboard and go to Lesson 1: – – – – – • • Go to https://myclass.dau.mil. Select Click here to login and I Accept. Login using either your common access card (CAC) (select Login using Smart Card) or your Blackboard username and password (select Login using Username and Password). Select EVM 202 under Course List on the My Class Space page. Select Lesson 1 from the Course Menu. Review: – – – LAR Vehicle Scenario (Student Guide) COL Paine Briefing (LAR Vehicle Overview) Lesson 1 References – – – Download the Convince Briefing Template to your computer. Complete each section of the Convince Briefing as a team. Cite where you found your information for each section, e.g., Source: Capability Development Document (CDD). Upload your Final Convince Briefing to your team’s File Exchange. Complete the Convince Briefing task. – 15 Lesson 1 Summary • Terminal Learning Objective (TLO) – Given a program scenario and accompanying documents, construct a brief that summarizes key program information • Enabling Learning Objective (ELO) – Given program documentation, describe program requirements, risks, and constraints in order to use EVM effectively 16 EVM 202 November 2017 Lesson 1-13 How to Access Blackboard and Lesson 1 To access Blackboard and Lesson 1: 1. Go to https://myclass.dau.mil. 2. Select Click here to login on the Welcome to DAU Blackboard login screen. 3. Select I Accept in the DoD Warning Banner dialog box. 4. Login using either your common access card (CAC) (select Login using Smart Card) or your Blackboard username and password (select Login using Username and Password). The Blackboard homepage displays. 5. Select EVM 202 under Course List on the My Class Space page. The Blackboard EVM 202 course displays. 6. Select the Lesson 1 tab from the Course Menu on Blackboard. Lesson 1 displays. EVM 202 November 2017 Lesson 1-14 Exercise Instructions Group Task: Convince Briefing (Use the Convince Briefing Template on Blackboard for this exercise.) When directed by the instructor, review the LAR Vehicle Program Overview by COL Paine on Blackboard. Your task is to prepare and deliver a 10-minute briefing to COL Paine by creating, completing, and saving your team’s Convince Briefing on Blackboard. The Convince Briefing will include your team’s personal EVM experience and identify the LAR Vehicle key performance parameters (KPPs), critical milestones, budget requirements, and associated risks. Use your team’s File Exchange on Blackboard under Team Groups > Team [A/B/C/D] > File Exchange to complete this exercise. File Exchange Instructions To complete your team’s Convince Briefing: Select the Lesson 1 tab from the Course Menu on Blackboard. Download the Convince Briefing Template under Task: Convince Briefing. Save the file to your computer. Complete each section of the Convince Briefing as a team. Cite where you found your information for each section, e.g., Source: Capability Development Document (CDD). 6. To share draft files with your team members: a. Select the Team Groups tab on the Course Menu. b. Select your team’s link under Groups. c. Select File Exchange under Group Tools to upload and share files. d. Select Add File to upload a file. e. Select Browse My Computer to locate the file on your computer. f. Enter a Name for your file in the Name field. g. Select Submit to post the file to your team’s File Exchange. 7. Upload your Final Convince Briefing to your team’s File Exchange. 1. 2. 3. 4. 5. Note: Name your file “Final Convince Briefing” to distinguish it from any draft documents in your team’s File Exchange. EVM 202 November 2017 Lesson 1-15 EVM 202 Lesson 2: EVM in the Acquisition Strategy STUDENT GUIDE CONTENTS 1. 2. 3. 4. 5. 6. Learning Objectives and Additional References LAR Vehicle Scenario Presentation Slides Exercise Instructions Acquisition Strategy Practice Exercise Comparison of Major Contract Types EVM 202 November 2017 Lesson 2-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 2-2 Learning Objectives and Additional References Terminal Learning Objective Apply Department of Defense (DoD) Earned Value Management (EVM) policy to assemble the EVM elements of an acquisition strategy and pre-contract activities. Enabling Learning Objectives • • • • • Demonstrate the EVM applicability to a contract Identify Request for Proposals (RFP) sections affected by EVM application Given MIL-STD-881 and a risk assessment, choose the appropriate Contract Work Breakdown Structure (CWBS) level for EVM reporting Distinguish between the EVM-related Defense Federal Acquisition Regulation Supplement (DFARS) clauses Apply appropriate Integrated Program Management Report (IPMR) tailoring Additional References • • • • • Defense Acquisition Portal (DAP) Acquisition Community Connection (ACC) EVM Community of Practice (CoP) Defense Cost and Resource Center (DCARC) website Performance Assessments and Root Cause Analyses (PARCA) website Earned Value Management System Interpretation Guide (EVMSIG) EVM 202 November 2017 Lesson 2-3 LAR Vehicle Scenario Background It is early August 2015 and the Joint Capability Technology Demonstration (JCTD) for the Lightweight, Assault and Reconnaissance (LAR) Vehicle continues testing. Your convince briefing was well received last week by COL Paine and GEN Moatars. With their decision to include and use EVM to manage the LAR Vehicle program, we can now complete the LAR Engineering and Manufacturing Development (EMD) acquisition strategy. With continuing tensions in the Middle East as well as other parts of the world, the LAR Vehicle program has become a high priority for the Army. The Secretary of Defense has declared the LAR Vehicle program an Acquisition Category I (ACAT I) program of the utmost importance. Looking ahead, there are significant DoD budget pressures resulting from the war on terrorism. Across the board funding cuts are possible over the next few years as Congress tries to balance the Federal budget. The LAR Vehicle program is at risk of being canceled if cost, schedule, and technical problems are not identified early and managed effectively. Relevant Information 1. The EMD contract is estimated in the $600 to $800 million range. The target contract award date is March 2016. Because of the program risk level, a cost plus type contract with a combination of award and incentive fees is anticipated. 2. COL Paine is an EVM advocate. Although his background and experience are mostly technical, he recognizes the benefits of using the earned value approach in program management. He feels that even though the contractor is being paid to manage the effort, expending internal resources to preclude problems makes good business sense. 3. The level of detail in EVM reporting should be based on scope, complexity, and risk. This requirement is defined in the Integrated Program Management Report (IPMR) Data Item Description (DID) DI-MGMT-81861 (current version) and the OSD (PARCA) letter Level of Detail on Contract for Earned Value Reporting, dated June 18, 2015. The detail level for EVM reporting is placed on the contract using a Contract Data Requirements List (CDRL) and the Cost and Software Data Reporting/Earned Value Management (CSDR?EVM) CO-PLAN (if required) referencing the IPMR. Furthermore, the IPMR DID states that the reporting level is defined through tailoring the work breakdown structure (WBS) from the applicable MIL-STD-881 (current version) appendix and does not prescribe a required level of detail. To support a March 2016 contract award, the Request for Proposals (RFP) will need to be released in November 2015. The RFP will need to include an IPMR CDRL that provides the contractor with the proposed WBS to be used for IPMR data reporting in Format 1 EVM 202 November 2017 Lesson 2-4 September 2016 EVM 202—Lesson 2 EVM in the Acquisition Strategy Lesson 2 Learning Objectives Terminal Learning Objective • Apply DoD Earned Value Management (EVM) policy to assemble the EVM elements of an acquisition strategy and pre-contract activities Enabling Learning Objectives • Demonstrate the EVM applicability to a contract • Identify Request for Proposals (RFP) sections affected by EVM application • Given MIL-STD-881 and a risk assessment, choose the appropriate Contract Work Breakdown Structure (CWBS) level for EVM reporting • Distinguish between the EVM-related Defense Federal Acquisition Regulation Supplement (DFARS) clauses • Apply appropriate Integrated Program Management Report (IPMR) tailoring 2 EVM 202 November 2017 Lesson 2-5 What Is Earned Value Management (EVM)? • Program management tool that utilizes a contractor’s Earned Value Management System (EVMS) to integrate the work scope, schedule, and cost parameters of a program, providing objective performance measurement and management • As work is performed, the corresponding budget value is “earned” (EV) Acronym Term Definition EVM Earned Value Management An integrated program management toolthe program manager (PM) uses to track specific contract cost, schedule and performance objectives to support the Acquisition Program Baseline (APB) goals EVMS Earned Value Management System The contractor-specific internal control system(s) used to meet EVM requirements EV Earned Value The value of completed work expressed in terms of the work’s assigned budget, or budgeted cost for work performed (BCWP) 3 Earned Value Management System (EVMS) 4 EVM 202 November 2017 Lesson 2-6 Earned Value Management Gold Card 5 Powerful Quantitative Reports 6 EVM 202 November 2017 Lesson 2-7 EVM within the Contracting Process 7 Statutes Related to EVM Law Purpose Government Performance and Results Act of 1993 (GPRA) Requires strategic planning and performance standards for Federal Government Federal Acquisition Streamlining Act of 1994—Title V (FASA V) Requires programs to achieve 90% of cost, schedule, and performance goals Information Technology Management Reform Act of 1996 (ITMRA/Clinger-Cohen) Requires executive agencies to report performance of information system acquisitions Weapon System Acquisition Reform Act of 2009 (WSARA) Requires DoD to describe current EVM implementation and recommend policy changes 8 EVM 202 November 2017 Lesson 2-8 Office of Management and Budget (OMB) EVM Policy Policy Guidance • OMB Circular A-11 Supplement—Capital Programming Guide Purpose • Unified guidance to support OMB reporting to Congress Circular A-11 Policy • Agencies must establish cost, schedule, and performance goals for major acquisitions and achieve on average 90% of those goals • Provides guidance on integration of EVM, Integrated Baseline Reviews (IBRs), and risk management • As an OMB Circular, applies to DoD and all executive branch agencies 9 Integrated Program Management Report (IPMR) Format 1: Work Breakdown Structure The level of detail to be reported normally will be at level three of the Contract Work Breakdown Structure (CWBS), but lower levels may be specified for high-cost or high-risk items. CWBS elements and levels reported shall be those specified in the contract. Format 2: Organizational Categories This format shall be used to collect organizational cost information at the total contract level for organizational elements that reflect the contractor's internal management, rather than for individual CWBS elements structure. Format 2 shall also identify each major subcontractor as defined in the contract. Format 3: Baseline Format 3 lists all significant baseline changes that have occurred by CWBS during the reporting period, to include the contract changes and supplemental agreements, allocations from management reserve (MR) and undistributed budget (UB), and any significant re-phasing of budgets. Format 4: Staffing Format 4 includes staffing forecasts in months by the organizational categories. Format 4 categories may differ from those reported in Format 2 and shall be addressed during negotiations. Format 5: Explanations and Problem Analyses Format 5 is a narrative report prepared to amplify and explain data in the other IPMR formats. Format 6: Integrated Master Schedule Format 6 defines and contains the contractor’s IMS. It integrates with Format 1 WBS, Format 2 OBS, Format 3 Baseline, and Format 5 Analysis. Format 6 contains both the baseline and forecast schedules, and predicts the contract completion date and all interim milestones. Format 7: Electronic History and Forecast File Format 7 provides supplemental historical and time-phased information. Format 7 shall normally address the following: monthly historical time-phased budgeted cost for work scheduled (BCWS), BCWP, actual cost of work performed (ACWP), estimate to complete (ETC), by control account (CA) WBS; future forecast of BCWS and ETC. 10 EVM 202 November 2017 Lesson 2-9 DoDI 5000.02 EVM Application Requirements Enclosure 1 Table 8 Table 8 summarizes EVM application requirements. EVM is applied to cost reimbursable or incentive contracts, inclusive of options, with 18 months or greater period of performance and based on the nature of the work scope. Contract Value < $20M ≥ $20M & < $100M ≥ $100M Applicability Notes Source EVM not required; may be applied at PM discretion Requires business case analysis and MDA approval based on risk to the Government EVM Required; contractor is required to have an EVM The Government reserves the right to review a system (EVMS) that contractor’s EVMS when deemed necessary to complies with the guidelines verify compliance in EIA-748* Part 7 of OMB Circular A-11 (Reference (c)); DFARS 234.201 (Reference (al)); This The Contractor will provide access to all pertinent instruction EVM Required; contractor is records and data requested by the Contracting required to have an EVMS Officer or duly authorized representative as that has been determined to necessary to permit initial and ongoing be in compliance with the Government compliance reviews to ensure that guidelines in EIA-748* the EVMS complies, and continues to comply, with the guidelines in EIA-748*. Additional Information For ACAT ID and IAM programs, OSD USD(AT&L) Performance Assessments and Root Cause Analyses (PARCA), in coordination with the CAE or designee, will review proposed contract work scope for EVM applicability and provide a recommendation to the DAE/MDA for a determination of EVM applicability. For all other ACAT levels, the CAE, or designee, will review and determine EVM applicability. If EVM is determined to apply, then threshold application in this table is utilized or a waiver from the CAE is required. If, based on the nature of the work, EVM is determined not to apply, then EVM is not placed on contract. Applying EVM outside the thresholdsand criteria above, to include application on firm, fixed-price (FFP) contracts, FFP task orders, or FFPdelivery orders, a cost-benefit analysis will be conducted, MDAapproval is required, and the results provided to the contracting officer for documentation in the contract file. The term "contracts” includes contracts, subcontracts, intra-government work agreements, and other agreements. For indefinite delivery, indefinite quantity (IDIQ) contracts, inclusion of EVM requirements isbased on the estimated ceiling of the total IDIQ contract, and then is applied to the individual task/delivery orders, or group(s) of related task/delivery orders, that meet or are expected to meet the conditions of contract type, value, duration, and work scope. The EVM requirements should be placed on the base IDIQ contract and applied to the task/delivery orders, or group(s) of related task/delivery orders. “Related” refers to dependent efforts that can be measured and scheduled across task/delivery orders. The Integrated Baseline Review is required when EVM is determined to be applicable. The initiation of an over-target baseline or over-target schedule must be approved by the Government program manager. Application thresholds are in then-year dollars. * EIA-748 = Electronic Industries Alliance (EIA) 748-C (Reference (au)) 1 DoDI 5000.02 EVM Policy Guidance Enclosure 1 Table 9 EVM Reporting Requirements Contract Value Applicability < $20M Not required ≥ $20M & < $50M Required monthly when EVM requirement is on contract ≥ $50M Required monthly when EVM requirement is on contract Notes Source IPMR Should be used if cost and/or schedule reporting is requested by the PMO Formats 2, 3, and 4 may be excluded from the contract data requirements list (CDRL) IPMR DID DI-MGMT-81861A* at program manager discretion based on risk All Formats must be included in the CDRL Additional Information For ACAT I contracts, task orders, and delivery orders, IPMR data will be delivered to the EVM Central Repository. The IPMR can be tailored to collect cost and/or schedule data for any contract regardless of whether EVM is required. For information on tailoring the IPMR, refer to the DoD IPMR Implementation Guide (Reference (cj)). Formats and reporting requirements for the IPMR are determined and managed by USD(AT&L) through the office of PARCA. Reporting thresholds are in then-year dollars. DI-MGMT-81861A = Data Item Management-81861 (Reference (av)) 12 EVM 202 November 2017 Lesson 2-10 DoDI 5000.02 EVM Applicability - PMO 2 Step EVM Application Process Step 1. PMO Determination ‐ Contract Criteria Review 1. Contract is Cost Plus or Incentive 2. Contract > $20M (including known options) 3. Contract at least 18 months PoP 4. Work discreetly measurable & schedulable all Yes 1 or 2 or 3 is No EVM Not Applicable* only 4 is No Must move to Step 2 for work scope determination No EVM does not apply* EVM not on contract; no deviation/waiver required Step 2. Work Scope Determination • Does EVM apply based on review of SOW, PWS, WBS, & CDRLs (i.e., work discretely measurable & schedulable) ACAT ID & IAM – PARCA Determines Other ACATs ‐ SAE/CAE Determines • EVM placed on contract; PMO has option to seek waiver/deviation from CAE Yes EVM does apply EVM is placed on contract; PMO has option to seek waiver/deviation from CAE The PM has the option to make a business case to apply EVM outside the thresholds and application decision Key EVM Inputs in the RFP Development Process • Do you include EVM at all? • Where do you address EVM in the RFP? – – – – – Section C—Description/Specs/Work Statement Section I—General Provisions Section J—Exhibits/Attachments Section L—Instructions to Offerors Section M—Evaluation Factors for Award 14 EVM 202 November 2017 Lesson 2-11 Section C—Statement of Objectives (SOO) or Statement of Work (SOW) • The SOO or SOW should contain statements requiring: – Development of a CWBS at a level adequate for management and contract control – The contracted technical effort to use a guidelines-compliant EVMS that correlates cost and schedule performance with technical progress – Designation of critical subcontractors by name for EVM compliance and flow down of EVMS compliance to subcontractors – Integrated Baseline Reviews (IBRs) – Reference to EVMS data items as part of Integrated Program Management Reporting See the Application of EVM to Contracts job aid for sample SOW paragraphs 15 Section I—General Provisions • • Use the DFARS clauses, not the FAR clauses, for EVM. FAR Clauses – FAR 52.234-2 Notice of EVMS—Pre-Award IBR (July 2006) – FAR 52.234-3 Notice of EVMS—Post Award IBR (July 2006) – FAR 52.234-4 EVMS—The Government will conduct an IBR if a pre-award IBR has not been conducted. (May 2014) • DFARS Section 234.203—Solicitation provisions and contract clause (Dec 2011) – Use the provision at DFARS 252.234-7001, Notice of Earned Value Management System, in the solicitation instead of the provisions at FAR 52.234-2 and FAR 52.234-3. – Use the clause at DFARS 252.234-7002, Earned Value Management System, in the solicitation and contract instead of the clause at FAR 52.234-4. – Use DFARS 252.242-7005, Contractor Business Systems, in the solicitation and contract to allow for withholding payments due to a non-compliant EVMS issue. – Includes links to procedures on performing cost-benefit analyses and waivers DoD contracts will not use FAR clauses for EVM. EVM 202 November 2017 16 Lesson 2-12 Section J—Exhibits/Attachments • Contract Data Requirements List (CDRL) places data on contract – EVM-Related Data Item Descriptions (DID) • Integrated Program Management Report (IPMR)—DI-MGMT-81861 (current version) supersedes CPR and IMS DIDs, effective July 1, 2012 • EVM CDRLs can and should be tailored within bounds of policy – Tailoring options are limited for contracts ≥ $50M (frequency, level of detail) – Most aspects are tailorable for contracts < $50M (formats, frequency, level of detail, etc.) – FM and Cost-Related Data Item Descriptions (DIDs) • Contract Work Breakdown Structure—DI-MGMT-81334D • Contract Funds Status Report—DI-MGMT-81468A • Consider all risk factors when tailoring EVM DIDs – – – – – Type of contract (determined by cost risk) Technology Schedule Past contractor performance Scope, complexity, risk 17 EVM Central Repository • • • Provides centralized reporting, collection, and distribution of the Contract Performance Reports (CPRs), Contract Funds Status Report (CFSR), the Integrated Master Schedule (IMS), and the IPMR Mandatory for ACAT 1C, 1D (Major Defense Acquisition Program (MDAP)), and ACAT 1A (Major Automated Information System (MAIS)) programs Available at the EVM Central Repository (EVM-CR) at http://dcarc.cape.osd.mil/evm/evmoverview.aspx 18 EVM 202 November 2017 Lesson 2-13 Section J—EVM Report Details Required • Formats 1-5 Guidance • Format 6 Guidance – – – – – Formats 1 and 2 reporting levels Reporting frequency Submission dates Date of first and last reports Resources shown in dollars or hours – Format 5 variance reporting • thresholds • Fixed number of variances • Percentage or dollar thresholds • Specific variances – Human readable format – – – – Reporting frequency Submission dates Date of first and last reports Frequency of schedule risk analysis – Electronic data interchange format Format 7 Guidance – – – – – Reporting levels Subcontractor information Date elements Reporting frequency DoD-approved electronic XML format 19 Section L—Instructions to Offerors • Guidance to bidders for the assembly of their proposals • Each offeror’s proposal shall include a description of the EVMS to be used in accordance with the appropriate RFP DFARS clauses • Compliance with system approval requires: – Reference to a “Proof of System Approval” (e.g., Contracting Officer Final Determination (COFD) Letter and a copy of the approved EVMS description); or – A plan to obtain EVMS approval to include how the system will be approved • Compliance only requires a written summary of the proposed EVMS reference in sufficient detail to show how it addresses all 32 EIA-748 EVMS guidelines 20 EVM 202 November 2017 Lesson 2-14 Section M—Evaluation Factors for Award • Evaluation of the proposed EVMS is normally undertaken as part of the proposal evaluation process to determine the probability of the system meeting the guidelines – For Existing Systems—Evaluation may consist of a confirmation that the referenced system approval is accurate and current. The system should be in use currently, and surveillance should not have identified significant, uncorrected problems. – For EVMS (Without approval)—The EVMS description should be evaluated for completeness against the EIA-748 guidelines • An on-site examination of a proposed EVMS should not normally be required during proposal evaluation. But if deficiencies are identified, written communications or an onsite visit may be required when approved by the Source Selection Board and Procuring Activity • The Defense Contract Management Agency (DCMA) should be requested to provide insight regarding EVMS capability, quality, and past performance 21 DoDI 5000.02 EVM Policy for Cost and Incentive Contracts < $20M TY • EVM optional; based on risk assessment • Requires business case analysis and MDA approval • DFARS clauses—If you decide to use EVM, use these DFARS clauses: – DFARS 252.234-7001—Notice of EVMS – DFARS 252.234-7002—EVMS – DFARS 252.242-7005—Contractor Business Systems • EVM Data Requirements – DI-MGMT-81861 (current version)—IPMR (Formats 1 and 5 recommended; Format 6 may be recommended) • IBR conducted ASAP but not later than 180 calendar days after contract award 22 EVM 202 November 2017 Lesson 2-15 DoDI 5000.02 EVM Policy for Cost and Incentive Contracts ≥ $20M TY and < $50M TY • Comply with EIA-748 • No formal EVMS approval • DFARS clauses – DFARS 252.234-7001—Notice of EVMS – DFARS 252.234-7002—EVMS – DFARS 252.242-7005—Contractor Business Systems • EVM Data Requirements – DI-MGMT-81861 (current version)—IPMR (Formats 1, 5, 6, and 7 are mandatory) • IBR conducted ASAP but not later than 180 calendar days after contract award 23 DoDI 5000.02 EVM Policy for Cost and Incentive Contracts ≥ $50M TY and < $100M TY • Comply with EIA-748 • No formal EVMS approval • DFARS clauses – DFARS 252.234-7001—Notice of EVMS – DFARS 252.234-7002—EVMS – DFARS 252.242-7005—Contractor Business Systems • EVM Data Requirements – DI-MGMT-81861 (current version)—IPMR (All seven formats are mandatory) • IBR conducted ASAP but not later than 180 calendar days after contract award 24 EVM 202 November 2017 Lesson 2-16 DoDI 5000.02 EVM Policy for Cost and Incentive Contracts ≥ $100M TY • Comply with EIA-748 • EVMS formally approved by cognizant contracting officer • DFARS clauses – DFARS 252.234-7001—Notice of EVMS – DFARS 252.234-7002—EVMS – DFARS 252.242-7005—Contractor Business Systems • EVM Data Requirements – DI-MGMT-81861 (current version)—IPMR (All seven formats mandatory) • IBR conducted as soon as possible (ASAP) but not later than 180 calendar days after contract award 25 DoDI 5000.02 EVM Policy for Firm-FixedPrice (FFP) Contracts • EVM discouraged regardless of dollar value • Requires Milestone Decision Authority (MDA) approval and cost-benefit analysis • If MDA decides to implement EVM, need same EVM DFARS clauses • EVM Data Requirements – DI-MGMT-81861 (current version)—IPMR • Formats 1 and 2—Performance in hours (versus dollars) or reported at price rather than cost • Format 3—Optional • Format 4—Not recommended • Format 5—If concerned with schedule risk, focus on schedule variance; rely on IMS variance analysis • Format 6—IMS. Consider alternatives: Contractor internal reports, status meetings, or use line of balance schedule • Format 7—Not recommended • IBR conducted ASAP but not later than 180 calendar days after contract award 26 EVM 202 November 2017 Lesson 2-17 IPMR Co-Plan EXERCISE 27 Acquisition Strategy Practice Exercise • Is Earned Value Management (EVM) required? (Yes or No) • Is EVMS approval required? (Yes or No) • Which EVM DFARS contract clause(s) and number(s) should be used in the Request for Proposals (RFP)? • Which EVM Data Item Description (DID) number(s) should be used in the RFP? • What formats of the EVM DID (if any) would you tailor out with the Contract Data Requirements List (CDRL)? Independent Scenarios 28 EVM 202 November 2017 Lesson 2-18 ACQUISITION STRATEGY PRACTICE EXERCISE REVIEW Practice Exercise: Scenario 1 Your Integrated Product Team (IPT) is responsible for developing the encryption hardware and encryption software for a new satellite system. The acquisition strategy is based on a complex modification of an existing aircraft system. Risk Assessment • Technical risk—High • Schedule risk—High • Cost risk—Low Contract Details • Contract Type: Cost Plus Incentive Fee/Award Fee • Period of Performance: 36 months • Estimated RDT&E Cost: $80M (TY) 30 EVM 202 November 2017 Lesson 2-19 Practice Exercise: Scenario 2 You are preparing a Concept Exploration RFP. In source selection, you plan to award at least three eighteen month, cost plus award fee study contracts. Contract Details • Contract Type: Cost Plus Award Fee • Period of Performance: 18 months • Estimated RDT&E: $30M (for all three) (TY) 31 Practice Exercise: Scenario 3 Your IPT is responsible for the development of simulation software. The software will be used for System Qualification Testing, Developmental Test and Evaluation (DT&E), and Operational Test and Evaluation (OT&E) of a major weapon system. The software will be provided as Government furnished property (GFP) to the primary contractor as well as the DT and OT testers. Although this is new software to the Government, most of the modules are game simulations considered commercial-off-the-shelf (COTS). Contract Details • Contract Type: Firm-Fixed-Price (FFP) • Period of Performance: 18 months – Provides six-month schedule padding before GFP need date • Estimated RDT&E Cost: $20.5M (TY) 32 EVM 202 November 2017 Lesson 2-20 Practice Exercise: Scenario 4 Your IPT is responsible for developing an RFP for an ACAT-3 target rocket Low Rate Initial Production (LRIP) contract. The Cost Plus Award Fee (CPAF) Engineering and Manufacturing Development (EMD) contract is experiencing an 8 to 12 percent cost growth and is about six to eight months behind schedule, and a number of technical issues have been identified in DT&E. A two year LRIP has been approved while Initial OT&E (IOT&E) testing continues instead of full rate production. The LRIP contract will be a new contract with both Research Development Test and Evaluation (RDT&E) test items and Production line items. Contract Details • Contract Type: Fixed Price Incentive Firm Target • Period of Performance: 30 Months • Estimated RDT&E: $25M ($10M TY1 and $15M TY2) • Estimated Production: $80M (TY2) 33 Practice Exercise: Scenario 5 You are the leader of a proposal development team preparing an RFP to outsource the depot maintenance for a major weapon system. The depot work is dependent on the Government getting the system to the depot as scheduled. The contract will include a base year and five annual options. The Statement of Work (SOW) has two primary tasks: • Operate depot facilities—a level of effort (LOE) task • Repair, upgrade, and test hardware on a time-and-materials (T&M) task order basis. Contract Details • Contract Type: Cost Plus Award Fee • Period of Performance: 72 months • Estimated O&M Costs: $500M (TY) 34 EVM 202 November 2017 Lesson 2-21 Lesson 2 Summary • Terminal Learning Objective (TLO) – Apply DoD EVM policy to assemble the EVM elements of an acquisition strategy and pre-contract activities • Enabling Learning Objective (ELO) – Demonstrate the EVM applicability to a contract – Identify RFP sections affected by EVM application – Given MIL-STD-881 and a risk assessment, choose the appropriate CWBS level for EVM reporting – Distinguish between the EVM-related DFARS clauses – Apply appropriate IPMR tailoring 35 EVM 202 November 2017 Lesson 2-22 Lesson 2 Exercise Instructions Individual Tasks Before starting the group task listed below, each team member should: 1. Review the Acquisition Community Connection EVM Community of Practice at the following URL: https://www.dau.mil/cop/evm/Pages/Default.aspx 2. View the LAR Vehicle Request for Proposal (RFP) Task Briefing (Mr. Nuisance) and LAR Vehicle Risk Assessment Briefing (Ms. Goodwrench) videos available on Blackboard. Group Task: Cost and Software Data Reporting (CSDR)/Earned Value Management Co-Plan exercise. This exercise identifies the Contract Work Breakdown Structure (CWBS) used for EVM and CSDR reporting by way of a Co-Plan, which is required for all ACAT 1 programs. The Co-Plan will be included with the Contract Data Requirements List in the RFP and will identify the CWBS elements required for EVM reporting to the Government in Format 1 of the IPMR. As such, the CWBS must extend at least as far as you intend to get EVM reporting. 1. Open the draft of the Co-Plan, which is an Excel file. 2. You should be able to complete the exercise by reviewing the following: a. The risk assessment provided by Ms. Goodwrench b. MIL-STD-881, Appendix G c. The draft Statement of Work (SOW) in the RFP 3. Ensure the Co-Plan follows the level of detail in the SOW (i.e. – if the SOW has items listed at a lower level of indenture than on the Co-Plan, insert rows in the Co-Plan and WBS numbers as appropriate -- Hint: see CWBS # 1.1.2). 4. Also, add rows and CWBS numbers for items you would like additional insight into; these typically are highrisk items and may be at a lower level than provided in MIL-STD-881 (level 4 for purposes of this exercise). 5. Place an X in box 13h (IPMR Format 1) in all rows that correspond to a CWBS item that you want the contractor to furnish EVM data in Format 1. 6. Do not place an X for items not in SOW. EVM 202 November 2017 Lesson 2-23 Acquisition Strategy Practice Exercise Review the following five scenarios and answer the following questions using current EVM policy: 1. Is Earned Value Management (EVM) required? (Yes or No) 2. Is Earned Value Management System (EVMS) approval required? (Yes or No) 3. Which EVM DFARS contract clause(s) and number(s) should be used in the Request for Proposals (RFP)? 4. Which EVM Data Item Description (DID) number(s) should be used in the RFP? 5. What formats of the EVM DID (if any) would you tailor out with the Contract Data Requirements List (CDRL)? Scenario 1 Your Integrated Product Team (IPT) is responsible for developing the encryption hardware and encryption software for a new satellite system. The acquisition strategy is based on a complex modification of an existing aircraft system. Technical Risk: HIGH Schedule Risk: HIGH Cost Risk: LOW Contract Type: Cost Plus Incentive Fee/Award Fee Period of Performance: 36 months Estimated Research, Development, Test, and Evaluation (RDT&E) Cost: $80M (TY) EVM Required EVMS Approval Required EVM DFARS Clauses and Number(s) EVM DID Number(s) DID Format(s) to be tailored out in CDRL EVM 202 November 2017 Lesson 2-24 Scenario 2 You are preparing a Concept Exploration RFP. In source selection, you plan to award at least three eighteen month, cost plus award fee study contracts. Contract Type: Cost Plus Award Fee Period of Performance: 18 months Estimated RDT&E: $30M (for all three) (TY) EVM Required EVMS Approval Required EVM DFARS Clauses and Number(s) EVM DID Number(s) DID Format(s) to be tailored out in CDRL Scenario 3 Your IPT is responsible for the development of simulation software. The software will be used for System Qualification Testing, Developmental Test and Evaluation (DT&E) and Operational Test and Evaluation (OT&E) of a major weapon system. The software will be provided as Government-furnished property (GFP) to the primary contractor as well as the DT & OT testers. Although this is new software to the Government, most of the modules are game simulations considered commercial-off-the-shelf (COTS). Contract Type: Firm-Fixed-Price Period of Performance: 18 months (provides six-month schedule padding before GFP need date) Estimated RDT&E Cost: $20.5M (TY) EVM Required EVMS Approval Required EVM DFARS Clauses and Number(s) EVM DID Number(s) DID Format(s) to be tailored out in CDRL EVM 202 November 2017 Lesson 2-25 Scenario 4 Your IPT is responsible for developing an RFP for an ACAT-3 target rocket Low-Rate Initial Production (LRIP) contract. The CPAF EMD contract is experiencing an eight to twelve percent cost growth and is about six to eight months behind schedule, and a number of technical issues have been identified in DT&E. A two year LRIP has been approved while Initial Operational Test and Evaluation (IOT&E) testing continues instead of full rate production. The LRIP contract will be a new contract with both RDT&E test items and production line items. Contract Type: Fixed Price Incentive Firm Target Period of Performance: 30 Months Estimated RDT&E: $25M ($10M TY1, & $15M TY2) Estimated Production: $80M (TY2) EVM Required EVMS Approval Required EVM DFARS Clauses and Number(s) EVM Data Item Description Number(s) DID Format(s) to be tailored out in CDRL EVM 202 November 2017 Lesson 2-26 Scenario 5 You are the leader of a proposal development team preparing an RFP to outsource the depot maintenance for a major weapon system. The contract will include a base year and five annual options. The SOW has two primary tasks: 1) operate depot facilities, a level of effort (LOE) task; and 2) repair, upgrade, and test hardware on a time-and-materials (T&M) task order basis. Contract Type: Cost Plus Award Fee Period of Performance: 72 months Estimated O&M Costs: $500M (TY) EVM Required EVMS Approval Required EVM DFARS Clauses and Number(s) EVM Data Item Description Number(s) DID Format(s) to be tailored out in CDRL EVM 202 November 2017 Lesson 2-27 This page is left blank intentionally. EVM 202 November 2017 Lesson 2-28 Comparison of Major Contract Types Firm-Fixed-Price (FFP) 1 2 Fixed Price Economic Price Adjustment (FPEPA) Fixed Price Incentive Firm Target (FPIF) Fixed Price Award Fee (FPAF) Fixed Price Prospective Price Redetermination (FP3R) Principal Risk None. Thus, the contractor to be Mitigated assumes all cost risk. Unstable market prices for labor or material over the life of the contract. Moderately uncertain contract labor or material requirements. Risk that the user will not be fully satisfied because of judgmental acceptance criteria. Costs of performance after the first year because they cannot be estimated with confidence. Use When… The requirement is well-defined. Contractors are experienced in meeting it. Market conditions are stable. Financial risks are otherwise insignificant. The market prices at risk are severable and significant. The risk stems from industry-wide contingencies beyond the contractor's control. The dollars at risk outweigh the administrative burdens of an FPEPA. A ceiling price can be established that covers the most probable risks inherent in the nature of the work. The proposed profit sharing formula would motivate the contractor to control costs and to meet other objectives. Judgmental standards can be fairly applied by the fee determining official. The potential fee is large enough to both: • Provide a meaningful incentive.1 • Justify related administrative burdens. The Government needs a firm commitment from the contractor to deliver the supplies or services during subsequent years. The dollars at risk outweigh the administrative burdens of an FPRP. Elements A firm-fixed-price for each line item or one or more groupings of line items. A fixed-price, ceiling on upward adjustment, and a formula for adjusting the price up or down based on: • Established prices • Actual labor or material costs • Labor or material indices • Ceiling price • Target cost • Target profit • Delivery, quality, or other performance targets (optional) • Profit sharing formula • 120 % ceiling and 50/50 share are points of departure • Fixed-price. • Award amount • Award fee evaluation criteria and procedures for measuring performance against the criteria • Fixed-price for the first period. • Proposed subsequent periods (at least 12 months apart). • Timetable for pricing the next period(s). Contractor is Obliged to: Provide an acceptable deliverable at the time, place and price specified in the contract. Provide an acceptable deliverable at the time and place specified in the contract at the adjusted price. Provide an acceptable deliverable at the time and place specified in the contract at or below the ceiling price. Perform at the time, place, and the price fixed in the contract. Provide acceptable deliverables at the time and place specified in the contract at the price established for each period. Contractor Incentive (other than maximizing goodwill)1 Generally realizes an additional dollar of profit for every dollar that costs are reduced. Generally realizes an additional dollar of profit for every dollar that costs are reduced. Realizes profit on cost by completing work below the ceiling price. May earn higher profit by incurring costs below the target cost or by meeting objective performance targets. Generally realizes an additional dollar of profit for every dollar that costs are reduced; earns an additional fee for satisfying the performance standards. For the period of performance, realizes an additional dollar of profit for every dollar that costs are reduced. Typical Application Commercial supplies and services. Long-term contracts for commercial supplies during a period of high inflation. Production of a major system based on a prototype. Performance-based contracts. Long-term production of spare parts for a major system. Principal Limitations in FAR/DFARS Parts 16, 32, 35, and 522 Generally NOT appropriate for R&D. Must be justified. Must be justified. Must be negotiated. Contractor must have an adequate accounting system. Cost data must support targets. Must be negotiated. MUST be negotiated. Contractor must have an adequate accounting system that supports the pricing periods. Prompt redeterminations. Variants Firm-Fixed-Price Level-of-Effort. Successive Targets (FPIS) Goodwill is the value of the name, reputation, location, and intangible assets of the firm. Comply with any USD(A&S), DPAP or other memoranda that have not been incorporated into the DFARS or DoD Directives or Instructions. Retroactive Redetermination DSMC JANUARY 2014 Comparison of Major Contract Types Cost Plus Incentive Fee (CPIF) Cost Plus Award Fee (CPAF) Cost Plus Fixed Fee (CPFF) Cost or Cost-Sharing (C or CS) Time-and-Materials (T&M) Principal Risk to be Highly uncertain and speculative labor hours, labor mix, and/or material requirements (and other things) necessary to perform the contract. The Government Mitigated assumes the risks inherent in the contract, benefiting if the actual cost is lower than the expected cost, or losing if the work cannot be completed within the expected cost of performance. Use When… An objective relationship can be established between the fee and such measures of performance as actual costs, delivery dates, performance benchmarks, and the like. Objective incentive targets are not feasible for critical aspects of performance. Judgmental standards can be fairly applied. Potential fee would provide a meaningful incentive. Relating fee to performance (e.g., to actual costs) would be unworkable or of marginal utility. The contractor expects substantial compensating benefits for absorbing part of the costs and/or foregoing fee or the vendor is a non-profit entity. No other type of contract is suitable (e.g., because costs are too low to justify an audit of the contractor's indirect expenses). Elements • Target cost • A minimum, maximum, and target fee • A formula for adjusting fee based on actual costs and/or performance • Performance targets (optional) • Target cost • Base amount, if applicable, and an award amount • Award fee evaluation criteria and procedures for measuring performance against the criteria • Target cost • Fixed fee • Target cost • No fee • If CS, an agreement on the Government's share of the cost. • Ceiling price • A per-hour labor rate that also covers overhead and profit • Provisions for reimbursing direct material costs Contractor is Obliged to: Make a good faith effort to meet the Government's needs within the estimated cost in the Contract, Part I the Schedule, Section B Supplies or services and prices/costs. Contractor Incentive (other than maximizing goodwill)1 Realizes a higher fee by completing the work at a lower cost and/or by meeting other objective performance targets. Realizes a higher fee by meeting judgmental performance standards. Realizes a higher rate of return (i.e., fee divided by total cost) as total cost decreases. If CS, shares in the cost of providing a deliverable of mutual benefit. Typical Application Research and development of the prototype for a major system. Large scale research study. Research study. Joint research with educational institutions. Principal Limitations in FAR/DFARS Parts 16, 32, 35, and 522 The contractor must have an adequate accounting system. The Government must exercise surveillance during performance to ensure use of efficient methods and cost controls. Must be negotiated. Must be justified. Statutory and regulatory limits on the fees that may be negotiated. Must include the applicable Limitation of Cost clause at FAR 52.232-20 through 23. Variants 1 2 Completion or Term. Goodwill is the value of the name, reputation, location, and intangible assets of the firm. Comply with any USD(A&S), DPAP or other memoranda that have not been incorporated into the DFARS or DoD Directives or Instructions. Make a good faith effort to meet the Government's needs within the ceiling price. Emergency repairs to heating plants and aircraft engines. D&F required (w/ HCA if over 3 years). Government MUST exercise appropriate surveillance to ensure efficient performance. Document any ceiling increases. Labor Hour (LH) DSMC JANUARY 2014 EVM 202 Lesson 3: EVMS Guidelines and Compliance STUDENT GUIDE CONTENTS 1. Learning Objectives and Additional References 2. LAR Vehicle Scenario 3. Presentation Slides EVM 202 November 2017 Lesson 3-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 3-2 Learning Objectives and Additional References Terminal Learning Objective Explain the importance of the formal Earned Value Management System (EVMS) approval process. Enabling Learning Objectives • • Explain the intent of the 32 Electronic Industries Alliance-748 (EIA-748) EVMS guidelines Describe the DoD EVMS compliance review (CR) process Additional References • • • • • • Defense Acquisition Portal (DAP) Acquisition Community Connection (ACC) Earned Value Management (EVM) Community of Practice (CoP) Earned Value Management System Interpretation Guide (EVMSIG) EIA-748 Intent Guide DCMA-INST-208 Earned Value Management System Compliance Reviews, 9 Apr 2014 Department of Defense Earned Value Management Roles and Responsibilities, 03 Jul 2007 EVM 202 November 2017 Lesson 3-3 LAR Vehicle Scenario Background Ten months have passed, and it is now June 15, 2016. The Lightweight, Assault and Reconnaissance (LAR) Vehicle program Milestone B was completed as scheduled in March 2016. Support to the allied force in the Middle East is going well. The LAR Vehicle Engineering and Manufacturing Development (EMD) contract was awarded to Increda Corporation three months late on June 1, 2016. This three-month slip resulted from a contract protest from the ATPI Corporation. The June 1, 2016 award just met the LAR Acquisition Program Baseline (APB) threshold date for contract award. Increda was reluctant to provide the amount of Earned Value Management (EVM) reporting contractually required. But in a true Integrated Product Team (IPT) spirit, COL Paine and Increda were able to tailor the requirements to meet their mutual management needs. Before you begin working the Memorandum of Agreement (MOA) with the Defense Contract Management Agency (DCMA), COL Paine has asked you to review the Increda EVMS description and identify potential issues for DCMA reconciliation. Relevant Information Your team knows that an Integrated Baseline Review (IBR) needs to be done within the first six months of the contract and has started the planning process. The LAR Vehicle contract established August 18, 2016 as the date for the IBR. This date has not been updated despite the fact the Government awarded the contract three months late. However, before the IBR, you want to make sure that there are no significant management risks associated with Increda’s EVMS description that may cause a different review decision. Since this is the first major Government contract for Increda, a formal compliance review (CR) will be required. There is a potential that one of their subcontracts may exceed $20 million, requiring Increda to affirm that the subcontractor management processes are compliant with the 32 EIA-748 guidelines. Based on that possibility, our IPT needs to review the EIA-748 guidelines and the EVMS approval process to determine if EVM flow-down and approval to/for subcontractors will be required once all the subcontracts are awarded. EVM 202 November 2017 Lesson 3-4 September 2016 EVM 202—Lesson 3 EVMS Guidelines and Compliance Lesson 3 Learning Objectives Terminal Learning Objective (TLO) • Explain the importance of the formal Earned Value Management System (EVMS) approval process Enabling Learning Objectives (ELOs) • Describe the 32 Electronic Industries Alliance-748 (EIA-748) EVMS guidelines • Describe the DoD EVMS compliance review (CR) process 2 EVM 202 November 2017 Lesson 3-5 The Earned Value Management Process: A Circular Relationship F r o m Organization • Define the work • Assign responsibilities • Define indirect procedures • Establish proper management controls t o t a l Assignments made to responsible organizations Planning and Budgeting • Schedule all work • Authorize all work • Time-phase the work • Develop controlaccounts t o d e t a i l Maintenance of budget, work, and schedule relationships d e t a i l Do not modify past budget or actuals (w/o permission) Revisions and Data Maintenance F r o m Analysis and Management Reports • Understand contract status • Use data for decision-making t o t o t a l All documents properly maintained Accounting Considerations • Material costs • Unit/lot costs • Cost summarization 3 EVMS Standard Area 1: Organization—5 Guidelines • • • • • Define the Work Breakdown Structure (WBS) Define program Organizational Breakdown Structure (OBS) Integrate subsidiary management processes Identify overhead management Integrate WBS/OBS to create control accounts (CAs) 4 EVM 202 November 2017 Lesson 3-6 EVMS Standard Area 2: Planning and Budgeting—10 Guidelines • • • • • • • • • • Schedule work Identify products and milestones for progress assessment Establish the performance measurement baseline (PMB) Authorize and budget by cost elements Determine discrete work and objective measures Sum work package (WP) and planning package (PP) budgets to the CA budget Level of effort (LOE) planning and control Establish overhead budgets Identify management reserve (MR) and undistributed budget (UB) Reconcile to target costs 5 EVMS Standard Area 3: Accounting Considerations—6 Guidelines • • • • • • Record direct costs Summarize direct costs by WBS elements Summarize direct costs by OBS elements Record/allocate indirect costs Identify unit and lot costs Track and report material costs/quantities 6 EVM 202 November 2017 Lesson 3-7 EVMS Standard Area 4: Analysis and Management Reports—6 Guidelines • • • • Calculate schedule variance (SV) and cost variance (CV) Analyze significant variances Analyze indirect CVs Summarize performance data and variances for management reporting • Implement corrective actions • Maintain estimate at completion (EAC) 7 EVMS Standard Area 5: Revisions and Data Maintenance—5 Guidelines • • • • • Incorporate changes in a timely manner Maintain baseline and reconcile budgets Control retroactive changes Prevent unauthorized revisions Document PMB changes 8 EVM 202 November 2017 Lesson 3-8 Guideline Intent 9 Guideline Intent (Cont.) 10 EVM 202 November 2017 Lesson 3-9 DoDI 5000.02 EVM Application Requirements Enclosure 1 Table 8 Table 8 summarizes EVM application requirements. EVM is applied to cost reimbursable or incentive contracts, inclusive of options, with 18 months or greater period of performance and based on the nature of the work scope. Contract Value Applicability Notes < $20M EVM not required; may be applied at PM discretion based on risk to the Government Requires business case analysis and MDA approval ≥ $20M & < $100M EVM Required; contractor is required to have an EVM The Government reserves the right to review a system (EVMS) that contractor’s EVMS when deemed necessary to complies with the guidelines verify compliance in EIA-748* ≥ $100M Source Part 7 of OMB Circular A-11 (Reference (c)); DFARS 234.201 (Reference (al)); This The Contractor will provide access to all pertinent instruction EVM Required; contractor is records and data requested by the Contracting required to have an EVMS Officer or duly authorized representative as that has been determined to necessary to permit initial and ongoing be in compliance with the Government compliance reviews to ensure that the EVMS complies, and continues to comply, guidelines in EIA-748* with the guidelines in EIA-748*. Additional Information For ACAT ID and IAM programs, OSD USD(AT&L) Performance Assessments and Root Cause Analyses (PARCA), in coordination with the CAE or designee, will review proposed contract work scope for EVM applicability and provide a recommendation to the DAE/MDA for a determination of EVM applicability. For all other ACAT levels, the CAE, or designee, will review and determine EVM applicability. If EVM is determined to apply, then threshold application in this table is utilized or a waiver from the CAE is required. If, based on the nature of the work, EVM is determined not to apply, then EVM is not placed on contract. Applying EVM outside the thresholdsand criteria above, to include application on firm, fixed-price (FFP) contracts, FFP task orders, or FFPdelivery orders, a cost-benefit analysis will be conducted, MDAapproval is required, and the results provided to the contracting officer for documentation in the contract file. The term "contracts” includes contracts, subcontracts, intra-government work agreements, and other agreements. For indefinite delivery, indefinite quantity (IDIQ) contracts, inclusion of EVM requirements isbased on the estimated ceiling of the total IDIQ contract, and then is applied to the individual task/delivery orders, or group(s) of related task/delivery orders, that meet or are expected to meet the conditions of contract type, value, duration, and work scope. The EVM requirements should be placed on the base IDIQ contract and applied to the task/delivery orders, or group(s) of related task/delivery orders. “Related” refers to dependent efforts that can be measured and scheduled across task/delivery orders. The Integrated Baseline Review is required when EVM is determined to be applicable. The initiation of an over-target baseline or over-target schedule must be approved by the Government program manager. Application thresholds are in then-year dollars. * EIA-748 = Electronic Industries Alliance (EIA) 748-C (Reference (au)) 1 EVMS Compliance versus Approval • Compliance—The continuing operation of contractor’s EVMS in accordance with the 32 EIA-748 EVMS guidelines • Approval—A formal recognition of certification by an independent party that contractor’s EVMS meets the 32 EIA748 EVMS guidelines – DoD: Conducted by Defense Contract Management Agency (DCMA) – Intelligence and other agencies: Recognize DCMA EVMS approvals or may conduct own approvals – DoD Tri-Lateral Memorandum of Understanding (MOU): Recognizes EVMS approvals performed by Canada and Australia 12 EVM 202 November 2017 Lesson 3-10 Limited DoD Alternatives for EVMS Acceptance • DoD does not recognize: – EIA-748 third-party and self approval options – Other U.S. agency approvals (e.g., FAA, DOE, IRS, etc.) • Foreign government approvals—DoD has formally entered into a tri-lateral MOU with Canada and Australia regarding EVMS approvals • DoD-conducted approval 13 Compliance Review (CR) Process • Formal review conducted to evaluate EVMS processes and implementation compliance with the 32 guidelines • DCMA has overall compliance determination responsibility • Documented system implemented on the reviewed program(s) • Valid, timely, andauditable program information is consistently generated 14 EVM 202 November 2017 Lesson 3-11 CR Team • CR Director—Director, EVM Implementation Division (EVMID) • CR Chief—Assigned by CR Director • CR Team Members – Formally assigned to CR Team – Knowledge of both program and contract is desirable – Skills should include formal training and experience in implementing, maintaining, and operating EVMSs – PMO SMEs can be used on the teams 15 Activity before the CR • Initial Visit (IV) – Should be accomplished three to six months after contract award – Provides an opportunity for early dialogue between DCMA and the contractor on the CR process – Sets review expectations among the stakeholders – Identifies areas of noncompliance and potential problems with the EVMS processes and procedures – Establishes a notional CR schedule 16 EVM 202 November 2017 Lesson 3-12 Compliance Review (CR) • CR Activities – Overview briefing to familiarize review team with proposed EVMS – Review of EVMS-generated documents and reports not already provided to team – Interviews with CAMs, functional staff, and program managers to assure that EVM is being used (sample basis) – Exit briefing covering team findings and documenting open system discrepancies • Track Corrective Action Plans to completion • Provide functional expertise to the Administrative Contracting Officer (ACO) • ACO will issue a Contracting Officer Final Determination (COFD) Letter 17 Proof of EVMS Approval • COFD Letter – Formal acknowledgement that the contractor has successfully demonstrated EVMS compliance with applicable guidelines – Based on recommendation from Review Director to the ACO – Only valid for the sites included in the CR – Divisional ACO (DACO) sends COFD to Contractor 18 EVM 202 November 2017 Lesson 3-13 EVMS Approval of Subcontractors • Subcontracted Effort (≥ $100M TY) – Subcontractor EVMS approval should be specified in Government’s prime contract – Subcontractor approval options and processes are the same as the prime contractor’s – Subcontractor must request a Government-led CR through the prime contractor • Subcontractor Flow Down (< $100M TY) – Government approval is not required – Prime reviews subcontractor’s EVMS for compliance – Prime contractor is responsible for EVMS surveillance 19 Lesson 3 Summary • Terminal Learning Objective (TLO) – Explain the importance of the formal EVMS approval process • Enabling Learning Objective (ELO) – Explain the intent of the 32 EIA-748 EVMS guidelines – Describe the DoD EVMS CR process 20 EVM 202 November 2017 Lesson 3-14 EVM 202 Lesson 4: Integrated Baseline Review (IBR) Process STUDENT GUIDE CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. Learning Objectives and Additional References LAR Vehicle Scenario Exercise Instructions Earned Value (EV) Techniques Exercise Task Relationships Exercise Critical Path and Float Exercise Float and Duration Exercise Project X Exercise EVM 202 November 2017 Lesson 4-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 4-2 Learning Objectives and Additional References Terminal Learning Objective Examine the performance measurement baseline (PMB) validity. Enabling Learning Objectives • • • • • • Explain the PMB development process Apply the DoD Integrated Baseline Review (IBR) policy and process Given the Earned Value (EV) technique, analyze control account EVM variables to select EVM metrics Analyze a schedule using the Precedence Diagram Method (PDM) Analyze IBR documents to determine areas of concern within the five risk areas in preparation for control account manager (CAM) interviews Explain the importance of PMB maintenance Additional References • • • Defense Acquisition Portal Acquisition Community Connection (ACC) EVM Community of Practice (CoP) The Program Managers’ Guide to the Integrated Baseline Review Process EVM 202 November 2017 Lesson 4-3 LAR Vehicle Scenario Background The Increda Corporation was selected for our contract. However, there was a protest that delayed contract award by 3 months. The Lightweight, Assault and Reconnaissance (LAR) Vehicle Program is now 6 months into the new Engineering and Manufacturing Development (EMD) contract. Increda has been fully cooperating with efforts to plan the upcoming Integrated Baseline Review (IBR) scheduled for January 15, 2017. They have completed and delivered the LAR Responsibility Assignment Matrix (RAM). This document follows in this guide. Relevant Information COL Paine is looking forward to the upcoming IBR. An infantryman and Battalion Commander for most of his career, COL Paine realizes his limited review experience is not enough to ensure the best possible IBR will be carried out. Therefore, COL Paine is counting on you to review and evaluate baseline development, appropriate use of EV techniques, the Integrated Master Schedule (IMS) health, and identification of the critical path in preparation for the IBR prior to entering the contractor's facility. EVM 202 November 2017 Lesson 4-4 September 2016 EVM 202—Lesson 4 Integrated Baseline Review (IBR) Process (Part 1: IBR Process and Baseline Development) Lesson 4 Learning Objectives Terminal Learning Objective • Examine the performance measurement baseline (PMB) validity Enabling Learning Objective • Explain the PMB development process • Apply the DoD Integrated Baseline Review (IBR) policy and process • Given the Earned Value (EV) technique, analyze control account EVM variables to select EVM metrics • Analyze a schedule using the Precedence Diagram Method (PDM) • Analyze IBR documents to determine areas of concern within the five risk areas in preparation for control account manager (CAM) interviews • Analyze the current schedule to determine status • Explain the importance of PMB maintenance 2 EVM 202 November 2017 Lesson 4-5 EVM within the Contracting Process 3 DoDI 5000.02 EVM Policy Guidance Enclosure 1 Table 8 EVM Application Requirements Contract Value < $20M ≥ $20M & < $100M ≥ $100M Applicability EVM not required; may be applied at PM discretion based on risk to the Government EVM Required; contractor is required to have an EVM system (EVMS) that complies with the guidelines in EIA-748* Notes Source Requires business case analysis and MDA approval The Government reserves the right to review a contractor’s EVMS when deemed necessary to verify compliance Part 7 of OMB Circular A-11 (Reference (c)); DFARS 234.201 (Reference (al)); This The Contractor will provide access to all pertinent instruction EVM Required; contractor is records and data requested by the Contracting required to have an EVMS Officer or duly authorized representative as that has been determined to necessary to permit initial and ongoing be in compliance with the Government compliance reviews to ensure that guidelines in EIA-748* the EVMS complies, and continues to comply, with the guidelines in EIA-748*. Additional Information For ACAT ID and IAM programs, OSD USD(AT&L) Performance Assessments and Root Cause Analyses (PARCA), in coordination with the CAE or designee, will review proposed contract work scope for EVM applicability and provide a recommendation to the DAE/MDA for a determination of EVM applicability. For all other ACAT levels, the CAE, or designee, will review and determine EVM applicability. If EVM is determined to apply, then threshold application in this table is utilized or a waiver from the CAE is required. If, based on the nature of the work, EVM is determined not to apply, then EVM is not placed on contract. Applying EVM outside the thresholds and criteria above, to include application on firm, fixed-price (FFP) contracts, FFP task orders, or FFP delivery orders, a cost-benefit analysis will be conducted, MDA approval is required, and the results provided to the contracting officer for documentation in the contract file. The term "contracts” includes contracts, subcontracts, intra-government work agreements, and other agreements. For indefinite delivery, indefinite quantity (IDIQ) contracts, inclusion of EVM requirements is based on the estimated ceiling of the total IDIQ contract, and then is applied to the individual task/delivery orders, or group(s) of related task/delivery orders, that meet or are expected to meet the conditions of contract type, value, duration, and work scope. The EVM requirements should be placed on the base IDIQ contract and applied to the task/delivery orders, or group(s) of related task/delivery orders. “Related” refers to dependent efforts that can be measured and scheduled across task/delivery orders. The Integrated Baseline Review is required when EVM is determined to be applicable. The initiation of an over-target baseline or over-target schedule must be approved by the Government program manager. Application thresholds are in then-year dollars. * EIA-748 = Electronic Industries Alliance (EIA) 748-C (Reference (au)) EVM 202 November 2017 4 Lesson 4-6 BASELINE DEVELOPMENT 5 PMB Budget Allocation 6 EVM 202 November 2017 Lesson 4-7 PMB Budget Allocation (Cont.) • Management reserve (MR): Budget withheld by contractor program manager for unknowns/risk management – NOT part of the PMB • Undistributed budget (UB): Broadly defined activities not yet distributed to a control account (CA) or summary level planning package (SLPP) – – – – Is NOT time-phased Does not have a WBS number IS part of the PMB Is a short-term holding account; UB to be distributed into SLPPs or CA • Summary level planning package (SLPP): Far-term contract activities not yet defined into CAs – IS time-phased – Can be distributed to reporting level WBS elements at a higher level than the CA, which distinguishes it from UB – IS part of the PMB 7 Baseline Planning Approaches • Detailed planning of all contract tasks is not usually possible at the contract’s start • Detailed planning is done in “waves” or increments • Once the nearest-term work is completed, the next segment of work is detail planned, and then the next, etc. • Detailed planning concepts include: – Rolling wave—Always detail plan a certain number of months into the future; constant planning mode – Block planning—Plan a block of time or to the next major milestone; planning in increments, not in constant planning mode 8 EVM 202 November 2017 Lesson 4-8 PMB Development Steps Category Steps Scope 1. Identify the scope of work 2. Extend to control account (CA)/work package level Schedule 3. Arrange the work packages in order 4. Schedule work packages 5. Classify the work and select an earned value (EV) technique Budget 6. Budget the work packages 7. Spread the budget over time 8. Calculate cumulative budgeted cost for work scheduled (BCWScum) 9 The Control Account: A Key Management Control Point (Responsibility Assignment Matrix) 10 EVM 202 November 2017 Lesson 4-9 Scheduling Process Overview • The Integrated Master Plan (IMP) is an event-based plan, which serves as the starting point for the Integrated Master Schedule (IMS) • The IMS should reflect contract milestones and technical requirements • The IMS and lower level schedules must provide vertical and horizontal traceability • Integrated product team (IPT) members must be knowledgeable of commonly used schedule presentation techniques 11 Schedule Integration The IMS and lower level schedules must be traceable both vertically and horizontally. Summary Master Schedule • Contract program schedule • Shows horizontal integration Intermediate Schedule • Major event or functional organization milestone schedule • Shows vertical integration to summary master schedule and detailed level Detailed Schedule • Control account and work package schedules 12 EVM 202 November 2017 Lesson 4-10 Integrated Master Schedule (IMS) *LRE = Latest revised estimate; the contractor’s estimate at completion (EAC) 13 Intermediate Schedule 14 EVM 202 November 2017 Lesson 4-11 Detailed Schedule 15 Determine When Tasks Happen 16 EVM 202 November 2017 Lesson 4-12 Classifying the Work • Discrete or measurable – Specific end product or result – Most objective category of work because the work is objective • Apportioned effort – Work dependent on other discrete work • Level of effort (LOE) – Has no specific product or hard to measure – Does not have to be level loaded 17 EV Techniques • Discrete tasks – – – – – – 0/100 method 50/50 method Incremental milestone method Equivalent unit method % complete method Supervisor’s estimate method • Apportioned effort – Measured as a factor, e.g., 10% of discrete task • Level of effort (LOE) – Scheduled work earned based on passage of time Prefer or require most objective technique 18 EVM 202 November 2017 Lesson 4-13 EV Techniques Illustrated Method BAC Time Period 0/100 4 1 Period 50/50 8 2 Periods Incremental Milestone 20 2 or more periods Equivalent Units Complete 18 Varies % Complete 72 Varies Apportioned Varies Level of Effort (LOE) Varies BCWP Calculation Tied to the discrete task (e.g., QA is 5% of pipe welding work package budget) BCWP = BCWS 19 Budget the Work Packages Labor Work Package 1 7 Work Package 2 Work Package 3 Work Package 4 Material Other Total 7 11 28 11 28 9 9 20 EVM 202 November 2017 Lesson 4-14 Calculate Cumulative BCWS 21 Draw the PMB from the Cumulative BCWS 22 EVM 202 November 2017 Lesson 4-15 PMB Development Concepts • • • • • • • Represents all work Is a participative process Is time-phased to contract and program milestones Is budgeted appropriately Reflects risk assessment Is realistic/achievable Is objective/measurable 23 PMB Summary • • • • Identifies the supplier’s plan to do the work Integrates technical, schedule, and cost Helps identify problems and allows early correction Defines means of determining status 24 EVM 202 November 2017 Lesson 4-16 EV Techniques Exercise Key: Comp = Complete LOE = Level of effort MS = Milestone 25 BASIC SCHEDULING 26 EVM 202 November 2017 Lesson 4-17 Why Should You Care about Scheduling? • • • • • Provides basis for project communication – Identifies key milestones, activities, and interdependencies – Provides baseline for performance measurement – Provides current status and forecasts completion dates Allows management by exception – Focus on critical path and slipping tasks Supports Better Buying Power (BBP) – Basis to analyze resource leveling and facility/range availability – Exploration of alternatives in cost/time trade-off studies Schedule status reported to management – Through Central Repository (CR) and Defense Acquisition Executive Summary (DAES) to the Office of the Secretary of Defense (OSD) – Through Selected Acquisition Report (SAR) to Congress – Program schedule is a key consideration at milestone decisions Schedule slips may result in funding cuts and/or other major impacts To accomplish project objectives on time 27 Baseline Versus Current Schedule Current schedule—The plan reflecting actual accomplishments and projections for completing remaining objectives Baseline—The original approved plan for accomplishing project objectives 28 EVM 202 November 2017 Lesson 4-18 Network Scheduling Process • Tasks – Identify everything that needs to be done – Ensure tasks trace to the WBS • Duration – Identify the duration of each task – Determine the measure of duration (e.g., calendar days vs. business days) • Order – Identify what must happen before each task – Establish criteria for starting a task • Constraints – Limitations to what may be done (e.g., facilities, resources) 29 Precedence Diagram Method (PDM) Task Relationships • • • • Finish-to-start Finish-to-finish Start-to-start Start-to-finish 30 EVM 202 November 2017 Lesson 4-19 Task Relationships—Finish-to-Start B cannot start until A has finished e.g., You cannot plant the flower until you have dug the hole. 31 Task Relationships—Finish-to-Finish B cannot finish until A has finished e.g., You cannot finish the analysis until the testing is finished. 32 EVM 202 November 2017 Lesson 4-20 Task Relationships—Start-to-Start B cannot start until A has started e.g., You cannot analyze test data until you have started testing. 33 Task Relationships—Start-to-Finish B cannot finish until A has started e.g., You cannot shut down the old computer system until the new one has come on line. 34 EVM 202 November 2017 Lesson 4-21 Task Relationships—Finish-to-Start with a Lag B cannot start until 1 day after A has finished e.g., You cannot remove the forms until 1 day after the concrete is poured. Lag should always be positive. A negative lag is called a lead and should not occur in a schedule. 35 Task Relationships—Start-to-Start with a Lag B cannot start until 1 day after A has started e.g ., You cannot start painting until 1 day after the primer has set. ID 1 3 4 Task Name Duration TASK A TASK B 2 days 2 days % Complete Week 1 Sun Mon Tue Wed Thu Fri Sat Week 2 Sun Mon 50% 0% 36 EVM 202 November 2017 Lesson 4-22 Task Relationships Exercise 37 Work Accomplished Out of Sequence? • Possible scenarios: – – – – EVM 202 Task more complex than planned Relationship not required for subsequent tasks (redundant logic) Work completed, schedule not updated—incorrect status Purposefully decided to work out of sequence November 2017 38 Lesson 4-23 Changing the Model Relationships • Team changed relationships to reflect reality • Legitimate planning techniques can be abused after a project starts—can add unnecessary risk if used incorrectly Things to look for: • – – Sequential relationships changing to overlapping Task relationships changing from finish-to-start to start-to-start or finish-to-finish—Ask why? 39 Poor Scheduling Practices EVM 202 • Poor scheduling practices can make it more difficult to use the schedule. • The finish-to-start relationship between Task A and Task E is an example of redundant logic. The logic is already addressed through the finish-to-start relationship between Tasks A and B and the finish-to-start relationship between Tasks B and E. November 2017 40 Lesson 4-24 Constraints • A constraint is a field that imposes a restriction on the start date (start constraint) of a task or milestone or on the finish date (finish constraint) of a task and/ormilestone • Hard constraints anchor a schedule or task in time to a specific date regardless of predecessor logic • Soft constraints anchor a task’s start or finish date but they respect predecessor logic and allow the schedule end date to move to the right (or slip) • Use of constraints within a schedule should be minimized • Constraints should never be used in the place of proper logic ties in the executable IMS • For network calculation purposes, it is essential to limit and control the use of constraints 41 Schedule Analysis • Forward pass—Determines earliest time (dates) for each activity (earliest finish time, EFT) EFT = EST + Duration - 1 • Backward pass—Determines latest time (dates) for each activity (latest finish time, LFT) LST = LFT – Duration + 1 • Float—Amount of time an activity can be delayed or expanded before it impacts the project finish time (Float = the lesser value of either LST - EST or LFT - EFT) • Critical path—A sequence of discrete tasks/activities and milestones through the network that has the longest duration through the project with the least amount of float 42 EVM 202 November 2017 Lesson 4-25 Critical Path and Float Exercise Determine the critical path and note any poor scheduling practices. 43 Gantt Chart Schedule View • Software is typically used to develop a contract or project schedule. • A Gantt chart displays the activities and milestones in a project against time. • This Gantt chart of the Critical Path and Float Exercise project was developed in MS Project. 44 EVM 202 November 2017 Lesson 4-26 Gantt Chart Critical Path To determine the critical path, start with the first task in the project and work through the network following these steps: 1. Identify the first task on the critical path: a. b. Eliminate summary tasks (an aggregation of subordinate tasks, no predecessors or successors). Eliminate completed tasks (check the Actual Finish date). Note: An incomplete task with the earliest start date is usually the first task on the critical path. If two or more tasks have the same start date, select the one with the latest finish date. 2. If a task is on the critical path, evaluate its successor tasks to determine next task on critical path: a. b. c. 3. Apply steps 1a and 1b. Find the successor with the latest finish date and least amount of float (usually 0 days). Always check relationship logic between tasks. Repeat step 2 for each task on the critical path until you have mapped out the complete critical path to the end of the project. 45 Determine Critical Path in Scheduling Tool Gantt Chart 1. Identify the first task on the critical path. – ID 0 (Project Summary): This is a summary task, so it is not on the critical path. – Task A: • Is not a summary task and is not complete (i.e., Actual Finish = NA) • Is the first incomplete task in this project, with the earliest start date and the least amount of float (0 days), so is the first task on the critical path Note that Task A is represented by a red bar on the Gantt chart, which is a typical Gantt chart format for critical tasks. Tasks on critical path so far: Task A EVM 202 November 2017 46 Lesson 4-27 2. Determine Critical Path in Scheduling Tool Gantt Chart (Cont. 1) Evaluate the successors for tasks on the critical path. – Using successor column: Task A has three successors: 2SS+3, 4, and 6. • • • • – Successors are identified by their ID number. SS+3 refers to start-to-start plus a lag of 3 days. IDs 4 and 6 are finish-to-start relationships, the most common type. None of the successors are summary tasks or are complete. Evaluate each successor to see if it has the latest finish date and least amount of float. • Task B has 3 days of float with a finish date of 1/4/07. It is not represented by a red bar on the chart. • Task D has 0 days of float with a finish date of 1/15/07. It is represented by a red bar on the chart. • Task F has 6 days of float. Its finish date is 1/21/07. It is not represented by a red bar on the chart. • Is Task D (0 float) or Task F (latest finish date) on the critical path? Check the relationship logic to see what it tells you. 47 Determine Critical Path in Scheduling Tool Gantt Chart (Cont. 2) 2. Evaluate the successors for tasks on the critical path(continued). – Task A has a finish-to start-relationship with Task D and Task F. Task D also has a finish-to-start relationship with Task F. This is the redundant logic illustrated earlier in the PDM example. – The redundant logic can be removed between Tasks A and F, leaving just Tasks D and B as Task A’s successors. – Of the two remaining successor tasks, Task D has the latest finish date and least amount of float, so it is on the critical path. Task D is represented by a red bar on the chart. Tasks on critical path so far: Tasks A and D EVM 202 November 2017 48 Lesson 4-28 Determine Critical Path in Scheduling Tool Gantt Chart (Cont. 3) 3. Repeat step 2 for each task on the critical path. – Task D, the next task on the critical path has two successors, Tasks F and G. • • – – – Neither Task F nor G is a summary task or completed. Task G has the latest finish date and least amount of float (0 days), so it is next on the critical path. Task G is also represented by a red bar on the chart. Now the tasks on the critical path are A – D – G. Next, evaluate the Task G’s successors. Task G has only one successor, Task H, which has 0 float days and is the last task in the network. Task H is represented by a red bar on the chart. The critical path is A – D – G – H, just as was determined using the PDM schedule. Tasks on critical path: Tasks A – D – G – H 49 RESOURCE LOADING ANALYSIS 50 EVM 202 November 2017 Lesson 4-29 Early Start 51 Late Start 52 EVM 202 November 2017 Lesson 4-30 Level Loaded 53 EVM 202 November 2017 Lesson 4-31 September 2016 EVM 202—Lesson 4 Integrated Baseline Review Process (Part 2: ) EVM 202 November 2017 Lesson 4-32 Open MS Project 1. 2. 3. 4. 5. Open MS Project from the Start button. Select File > Open > LAR 2016-12 (DEC16)FY16. (The instructor will provide the file location.) View the baseline and current schedules by going to Task > View > Analysis Gantt. Find the Status Date on the Project tab by selecting Project Information or checking Status Date on the toolbar. Ensure the Status Date Line is showing. If not, go to Format and select Gridlines > Status Date > Type - - - > Color Red. (You can also right-click in the white space and select Gridlines.) 2 EVM 202 November 2017 Lesson 4-33 Open MS Project (Cont.) 6. 7. To show the task relationship arrows, select Format > Layout > Link Type 2 and select OK. You can also change the bar height in this box. If quarters are not displayed, right-click on the Timescale Bar and select Timescale > Middle Tier > Label and change the label to Q1 ‘09, Q2 ‘09, .... 3 EVM 202 November 2017 Lesson 4-34 MS Project Symbols 1. 2. 3. In the graphic display area, double-click in the white space to display a legend box. In the graphic display area, place your cursor over any item and a pop-up legend box will appear for ten seconds. Double-click on any task name. A dialog box will appear with more data. 4 EVM 202 November 2017 Lesson 4-35 Schedule Health Metrics 1. 2. 3. 4. 5. Open Steelray Project Analyzer from the Start button. Select, LAR 2016-12 (DEC16) FY16 from Projects in the left navigation pane. If the file is not visible in the navigation pane, select Project from the top menu bar, then Add Project (the instructor will provide the file location), and select the file. Select DCMA 14 Point Assessment from Reports in the left navigation pane. If the file is not visible in the navigation pane, select Report from the top menu bar, then select DCMA 14 Point Assessment, and select Add to add the file to the navigation pane. Check the boxes by the LAR 2016-12 (DEC16) FY16 under Projects and DCMA 14 Point Assessment under Reports Press the Analyze button at the bottom. 5 EVM 202 November 2017 Lesson 4-36 Schedule Health Metrics (Cont.) LAR Schedule Value Potential Impact Missing Logic 3% Hard Constraints (Tasks w/ Constrained Dates) < 1% Tasks should rarely be artificially tied to dates. Durations combined with schedule logic should determine schedule dates. Use of constraints may result in incorrect calculation of the critical path and near critical paths. High Float 71% Large positive or negative slack values may indicate a poorly constructed schedule. Large positive slack may indicate poor or missing logic. Tasks w/ Total Slack > 44 days High Duration 38% Industry consensus is that near term tasks should be a week to a month in length. When more than a month, you will not be able to get an accurate estimate of progress and forecasted completion dates. Tasks w/ Duration > 44 days Baseline Execution Index (BEI) 0.87 This measure the tasks that were completed as a percentage of the tasks that should have been completed per the original (baseline) plan. The goal is to have a BEI of .95 or greater. EVM 202 Almost every task should have a predecessor and successor 6 November 2017 Lesson 4-37 Network Schedule Analysis • Why: To answer the question: Will the program be delivered on time to meet the APB schedule requirements, the contractual delivery requirements, and the needs of the warfighter? • What: Schedule is a key element of integrated program management. Analyze the network schedule (i.e., the Integrated Master Schedule, or IMS) to forecast completion dates for APB schedule parameters, contract deliverables, and technical risk drivers. • How: – Compute schedule metrics – Review the critical path and determine the project’s schedule drivers • Do the schedule drivers correlate with the technical risk drivers? • If not, why not? • Filter MS Project for critical tasks – Assess slipping tasks • Filter MS Project for slipping tasks – Determine the amount of float and duration change for the technical risk drivers – Analyze the network schedule for milestones and correlate with APB schedule parameters and contract delivery requirements • Filter MS Project for milestones 7 EVM 202 November 2017 Lesson 4-38 Schedule Task Metrics Baseline Execution Index (BEI) Source: IMS 8.31.06 1.20 2500 2000 0.80 1500 0.67 0.60 0.64 0.61 0.61 0.61 0.55 1000 0.46 0.40 0.22 0.20 500 0.28 0.20 0.12 0.11 0.00 0.14 0 0.00 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Task Hit/Miss NUMBER OF TASKS TASK HIT/MISS PERCENTAGE 1.00 BEI 0.00 0.22 0.28 0.12 0.11 0.20 0.67 0.14 0.61 0.61 0.55 0.46 0.64 0.61 Planned cumulative 986 1004 1033 1066 1102 1122 1125 Actual cumulative 804 825 839 859 882 900 910 1209 999 1356 1427 1077 1134 1512 1200 1581 1271 1756 1955 1376 1516 27 Hit Task Percentage: Graphically displays the percentage of current month baseline tasks/activities actually completed (or hit) on or ahead of their baseline schedule Number of tasks finished on or ahead of their baseline schedule that were baselined to be finished in THIS month Hit Task Percentage = Number of tasks baselined to be finished in THIS month Baseline Execution Index (BEI): Indicates the efficiency with which actual work has been accomplished when measured against the baseline; tasks missing baseline finish dates are included in the denominator BEI = Total number of tasks finished Total number of tasks baselined to be finished + Tasks without baseline finish dates 8 EVM 202 November 2017 Lesson 4-39 Schedule Metrics—Hit Task Percentage 1. 2. 3. Insert columns for Milestone, Baseline Finish, and Actual Finish. Go to the Format tab and uncheck the Summary Task and Project Summary Task boxes to remove the summary tasks. Filter out the milestone tasks. Use the down arrow on the Milestone column and select No under Filters. 9 EVM 202 November 2017 Lesson 4-40 Schedule Metrics—Hit Task Percentage (Cont.) 4. 5. Custom filter for baseline finishes occurring during the current month. Use the down arrow on the Baseline Finish column and select Filters and Custom. The number of tasks equals the denominator (10). Filter again for the actual finishes on or before the baseline finish date. The number of tasks equals the numerator (6). Number of Dec 16 tasks finished on 6 or ahead of baseline schedule Hit Task Percentage = Number of tasks baselined to be = 10= 60% finished in Dec 16 EVM 202 November 2017 10 Lesson 4-41 Schedule Metrics—BEI 1. 33 Total number of tasks finished = = 0.87 BEI = Total number of tasks baselined to 38 befinished+ Taskswithoutbaseline finish dates 2. 3. 4. EVM 202 Remove filters for the Baseline Finish and Actual Finish columns. Use the down arrow on the column and select Clear Filter…. Keep the filter for milestones. Create a dual filter for baseline finishes occurring before the beginning of the next month or baseline finishes equal to “NA”. The number of tasks equals the denominator (38). Remove the baseline finish filter. Filter again for all actual finishes that do not equal “NA”. The number of tasks equals the numerator (33). 11 November 2017 Lesson 4-42 Identify Critical Path 1. 2. 3. 4. 5. Add the Predecessor and Successor columns. Hide Summary Tasks by selecting the corresponding checkbox onthe Format tab. Select Critical from the View tab’s Filter drop-down menu (this filters for tasks with a float value of 0 or less). Insert Start column and then sort by Start Date (earliest to latest) to find the first task on the critical path. Any schedule item colored red is critical and has a float value of 0 or less. 12 EVM 202 November 2017 Lesson 4-43 Identify Critical Path (Cont.) 6. Review the LAR Vehicle program critical path WBS elements. What tasks are on the critical path to the next two milestones? – Exhaust to Subsystem CDR – Engine to System CDR 13 EVM 202 November 2017 Lesson 4-44 Slipping Task Filter 1. 2. 3. From the View drop-down menu, select Filter for > More Filters > Slipping Tasks from the pop-up window. Identify tasks with projected end dates later than their baseline finish, particularly if they are on the critical path. If they are not on critical path, how much float do they have? Are they close to the critical path? Review other filters: Completed Tasks, In Progress Tasks, and Incomplete Tasks. 14 EVM 202 November 2017 Lesson 4-45 Float and Duration Exercise • Filter for Slipping Tasks - Compare float, duration, slip, and work progress to identify near critical path tasks and tasks with questionable status. • Float and slip time are work days (five-day weeks). • MS Project selects the longest float of sub-elements for the summary float. 15 EVM 202 November 2017 Lesson 4-46 Milestone Assessment 1. 2. 3. From the View drop-down menu, select Filter for > Milestones and find the dates for the remaining milestones. Compare the milestone dates in the IMS with the information from your network schedule analysis to see if you think these dates might be off. Compare the project milestone dates with the contract delivery requirement dates. Are there potential contract delivery issues? 16 EVM 202 November 2017 Lesson 4-47 Project X Exercise • Refer to the Determine the Critical Path Using a Gantt Chart job aid 17 EVM 202 November 2017 Lesson 4-48 September 2016 EVM 202—Lesson 4 Integrated Baseline Review Process (Part 3: IBR Process) The Program Managers’ (PMs’) Guide to the Integrated Baseline Review (IBR) Process While most IBRs generally conform to DoD policy, inconsistent policy interpretations resulted in the development of individual Service/Agency IBR guidebooks, differing perceptions of purpose and value, and inconsistent IBR execution. To improve the consistency of the overall IBR Process, The Program Managers’ Guide to the Integrated Baseline Review Process was developed (TAB A). This Guide clearly defines the purpose, goals, and objectives of an IBR. It also describes attributes of an effective IBR and discusses a baseline review process that will lead to a better understanding of program risks. This Guide is the principal IBR reference and should be used to implement an integrated baseline discipline on an acquisition program. PMs are strongly encouraged to use this Guide during IBR training, when preparing for an IBR, and then again during the actual execution and conduct of the IBR. 2 EVM 202 November 2017 Lesson 4-49 IBR Process PMB Assessment IBR Preparation • Identify expectations/ assumptions • Identify teamcomposition • Determine responsibilities • Conduct training • Establish PMB Program Managers’ Mutual Understanding Management Processes • Baseline maintenance • Risk management • Business processes IBR Execution • Evaluate PMB • Identify risks and update Risk Management Plan • Assign responsibility for risk mitigation 3 Performance Measurement Baseline (PMB) Assessment • Examines Government and contractor PMs’ mutual understanding of the PMB and risks • Results in IBR execution or PMs’ continued utilization of their management processes • May be required by policy or contract – DoDI 5000.02—Operation of the Defense Acquisition System • IBRs are required whenever EVM is required (compliance with EIA-748) – DFARS Clause 252.234-7002 • The Government will schedule IBRs as early as practicable, and the review process will be conducted not later than 180 calendar days after contract award, the exercise of significant contract options, and the incorporation of major modifications. 4 EVM 202 November 2017 Lesson 4-50 IBR Preparation • IBR Plan • Risk areas – – – – – Technical risk Schedule risk Cost risk Resource risk Management process risk • Team composition • Responsibilities • Training Preparation for the IBR should begin as soon as practical. 5 IBR Preparation—Expectations • Integrated Product Team (IPT) members should develop a plan for conducting the review: – Define the objectives for the IBR – Plan and schedule review dates – Identify required technical expertise – Identify key responsibilities – Identify documentation needs – Review IBR documents – Plan and conduct IBR training – Identify procedures for risk identification, documentation, and incorporation into project risk management planning – Establish risk evaluation criteria – Establish how IBR findings will be documented and resolved 6 EVM 202 November 2017 Lesson 4-51 Notional IBR Planning Schedule 7 IBR Preparation—Risk Areas • Technical risk—Ability of project’s technical plan to achieve the scope of work objectives • Schedule risk—Adequacy of time allocated for performing the defined tasks to achieve project schedule objectives successfully • Cost risk—Ability of the PMB to execute the project and attain cost objectives successfully, recognizing the relationship between budget, resources, funding, schedule, and scope of work • Resource risk—Availability of personnel, facilities (manufacturing/test), and equipment, when required, to perform the defined tasks needed to execute program successfully • Management processes risk—Degree to which management processes provide effective and integrated technical, schedule, and cost planning and baseline change control 8 EVM 202 November 2017 Lesson 4-52 IBR Preparation—Expectations (Cont.) • Identify documentation needs – – – – Contract Work Breakdown Structure (CWBS) CWBS Dictionary Contractor’s Organizational Breakdown Structure (OBS) Responsibility assignment matrix (RAM) – Work AuthorizationDocuments (WADs) – Integrated Master Schedule (IMS) – Risk Management Plan and risk register – Control Account Plans (CAPs) – Current Integrated Performance Management Report (IPMR)/ Contract Performance Report (CPR) – Contract Funds Status Report (CFSR) – Detailed control account (CA) schedules – Earned Value Management System (EVMS) Description – Subcontractor data – Basic contract – P000 modifications – EVMS Surveillance Reports – DCMA/DCAA findings (Corrective Action Request (CAR)) – Schedule Risk Assessment (SRA) 9 IBR Preparation—Team Composition • Participants should be identified based on their programmatic or technical expertise, as required for the review • The size and composition of the team should reflect the PMs’ objectives, expectations, and risk assumptions • Disciplines include: – – – – Program management Business management Subcontract management Subcontractor personnel (when appropriate) – Technical management • • • • • • System engineering Software engineering Manufacturing Integration and test engineering Integrated logistics support Training 10 EVM 202 November 2017 Lesson 4-53 IBR Preparation—Responsibilities • PMs are jointly responsible for the IBR Process and for completing the following tasks: – Plan and perform the IBR – Provide an adequate number of qualified personnel to serve as IBR team members – Specify evaluation criteria for risk areas – Document risk issues identified during an IBR – Manage progress on required actions until issues are resolved 11 IBR Preparation—Training • PMs’ expectations • Project management aspects – IBR objectives – IBR approach and expectations – Risk identification and documentation • Management processes* – Baseline maintenance* – Risk management* – Business processes (including EVM)* – Statement of Work (SOW)/Statement of Objectives (SOO) – Work Breakdown Structure (WBS) Dictionary/Matrix – Funding – WorkAuthorization Documents (WADs)* – Control Account Plans (CAPs)* – Terms and acronyms* – Budget and schedule baselines* – Subcontractor management* – Management reserve (MR)* *Note: The contractor should brief this content during the training. 12 EVM 202 November 2017 Lesson 4-54 Responsibility Assignment Matrix (RAM) Exercise • Review the RAM to identify three control account managers (CAMs) to interview – Items to consider • Risks • Dollar value • Differences from Government estimates 13 LAR Vehicle RAM 14 EVM 202 November 2017 Lesson 4-55 IBR Preparation Summary • IBR Preparation identifies: – – – – – – – – – Key responsibilities Required technical expertise Training Review dates Review scope Risk evaluation criteria Documentation needs Disposition of findings Procedures for risk identification, documentation, and incorporation into project risk management planning • Before executing the IBR, ensure the PMB reflects the entire scope of work, documented at the appropriate level of detail 15 IBR Execution Requirements • The IBR is intended to provide the PMs with a mutual understanding of the project PMB and mitigate program risks. – Technical scope of work is fully included and consistent with authorizing documents – Key schedule milestones are identified – Supporting schedules reflect a logical flow to accomplish the technical work scope – Resources (budgets, facilities, personnel, skills, etc.) are adequate and available for the assigned tasks – Tasks are planned and can be measured objectively – Underlying PMB rationales are reasonable – Managers have implemented required management processes – MR is sufficient with respect to project risk 16 EVM 202 November 2017 Lesson 4-56 IBR Execution—Document Review • Trace – Statement of Work (SOW) to Work Authorization Documents (WADs) – WADs to control accounts – Control accounts to work packages/planning packages – Work packages/planning packages to schedule – Schedule dates to contract dates • Document – – – – Assess MR with respect to project risk not in the PMB Issues Risks Inconsistencies 17 IBR Execution—Typical IBR Agenda • • • • • • • Kick-off meeting Review IBR objectives Supplemental document review CAM discussions Daily out-brief Document results Follow up as necessary 18 EVM 202 November 2017 Lesson 4-57 IBR Execution—CAM Discussion • Be thoroughly prepared for the discussion; think through your “strategy” • Review questions and know what answer you should receive • Approach: – – – – Conduct discussions in the CAM’s workplace Have one person ask questions and one person take notes Explain basic objectives and purpose Open with simple questions on CAM’s area of responsibility; then proceed to more complex matters – Ask open-ended questions to determine familiarity with the budget and schedule aspects of the control account (CA); employ the “Show Me” technique 19 IBR Execution—CAM Discussion (Cont.) • Technical assessment • Schedule assessment – What are the high risk areas? – What are the conditions of measurement? – What are the technical requirements? • Work authorization – – – – PMB changes Schedules Budget authorization CAPs – – – – Underdeveloped logic Illogical/forced sequencing Lack of experience Consideration of technical risks • Budget assessment – Budget validity/risk – Distribution logic – Resources available • Work assessment – Which tasks may be overstated? – Which tasks may be understated? – What has been left out? 20 EVM 202 November 2017 Lesson 4-58 IBR Execution—After the CAM Discussion • Take time to reflect and compile your observations immediately after the discussion • Maintain your own file—keep notes for subsequent write-ups and reference • If problems are found during discussion: – Note discrepancies – Communicate to the team leader—clear and concise with supporting documentation – If EVMS issues are identified, provide to DCMA to work separately, not as part of the IBR – Let the team leader handle problems with the supplier • Consider contractor information as proprietary 21 IBR Execution—Daily Out-Briefs • Technical—Review Integrated Master Plan (IMP) significant accomplishments and document technical risks • Schedule—Review the critical path and float and document schedule risks • Cost—Review the realism of cost estimates and document cost risks • Resource—Review the sufficiency of personnel, facilities, and equipment and document resource risks • Management Processes—Review the management processes and document management risks 22 EVM 202 November 2017 Lesson 4-59 IBR Execution—Closeout • IBR team responsibilities—To document identified risk areas and provide the PMs with an overall project risk summary after completing the IBR • PMs’ responsibilities—To assess whether the IBR has achieved its purpose – Is there a mutual understanding of the project PMB? – Do you understand the contractor’s plan of action to handle the identified risks? – Is there agreement on a closure plan of action? – Have action officers been assigned for all identified risks? – Have risks been incorporated into the Risk Management Plan? 23 LAR VEHICLE IBR DOCUMENTATION REVIEW EXERCISE 24 EVM 202 November 2017 Lesson 4-60 LAR Vehicle IBR Documentation Review Package Documentation Review Package • Transmittal Letter • LAR Vehicle Statement of Work (SOW) • LAR Vehicle Technical Performance Metrics (TPMs) • LAR Vehicle Responsibility Assignment Matrix (RAM) • LAR Vehicle Integrated Master Schedule (IMS) • Work Authorization Documents for WBS 1.1.1 (Integration, Assembly, Test, & Checkout) • Work Authorization Documents for WBS 1.1.7.1 (Engine) • Work Authorization Documents for WBS 1.1.7.2 (Cooling) • Work Authorization Documents for WBS 1.1.7.3 (Exhaust) • CAM Documents for WBS 1.1.1 (Integration, Assembly, Test, & Checkout) • CAM Documents for WBS 1.1.7.1 (Engine) • CAM Documents for WBS 1.1.7.2 (Cooling) • CAM Documents for WBS 1.1.7.3 (Exhaust) 25 LAR Vehicle IBR Group Exercise Prepare a brief to the Government PM on your assigned WBS element taking the following into consideration: Technical Scope (Statement of Work) Risks • Is there adequate identification, definition, and flow down? • Is scope consistent with contract requirements? • Is there adequate assignment of responsibility, authority, and accountability? Schedules Risks • What is the period of performance? • Are planned durations realistic? • Are detailed (lower level) schedules consistent with the master schedule? • Are interdependencies defined and constraints appropriate? • Are there any tasks on the IMS critical path? • Do schedules support contract milestones? • What is the schedule “health” based on DCMA metrics? 26 EVM 202 November 2017 Lesson 4-61 LAR Vehicle IBR Group Exercise (Cont.) Prepare a brief to the Government PM on your assigned control account (CA) taking the following into consideration: Cost and Resource Risks • Is there a sound basis for estimate? • Is budget adequate and does it have correct time phasing? • Are there any issues with resource availability? • Are there provisions for scrap, rework, retest, or repair? Management Process Risk • Is cost, schedule, and technical planning integrated? • Do they have baseline change control? • Is accurate and timely management and performance data available? • Is there adequate subcontract management? • Do they use appropriate EVM methods? • Do the methods correlate with technical achievement? 27 EVM 202 November 2017 Lesson 4-62 September 2016 EVM 202—Lesson 4 Integrated Baseline Review Process (Part 4: Baseline Maintenance) Management Processes Process Description Baseline Maintenance Process • Maintains the PMB as a current depiction of the plan for accomplishing remaining work and accommodates changes to PMB caused by program dynamics Risk Management Process • • Documents and classifies risks associated with the PMB PMs should document action risks from IBR in risk management planning Each action risk addressed in risk management planning should be classified as to its probability of occurrence, consequences, handling, and identification of the individuals responsible for mitigation actions Business Processes • • • • Include scheduling, estimate to complete, earned value methodology, and managerial analysis Each process supports the project management Inappropriate or inadequate use of these processes may fail to identify project risks and may add risk to the project After an IBR, the emphasis shifts to management processes, which provide PMs with a continuous source of project information that enables a mutual understanding and reduces or eliminates the need for future IBRs. 2 EVM 202 November 2017 Lesson 4-63 Baseline Maintenance Ongoing Baseline Validity and Realism • Validity – – – – – PMB still represents goals and objectives PMB points to valid variances Variances result in management action Timely incorporation of contract changes Proper use of management reserve (MR) and undistributed budget (UB) • Realism – PMB changes made for management reasons, not for reporting reasons – Use of over target baselines (OTBs) – Use of single point adjustments (SPAs) 3 Baseline Maintenance Process • PMB Chart—The program at a glance • Troublesome baselines – Front loaded – Rubber baseline – SPAs • PMB changes – Contract changes – Internal replanning – Formal reprogramming 4 EVM 202 November 2017 Lesson 4-64 The Program at a Glance 5 TROUBLESOME BASELINES 6 EVM 202 November 2017 Lesson 4-65 Hypothetical PMB • Contract structure – Period of performance: 38 months – 1000 uniform control accounts (CAs) scheduled to approximate a Rayleigh distribution – CA budgets: $10/each (BCWS) – Actual CA costs: $11/each (ACWP) • Assume that there are no schedule issues: BCWP = BCWS (budgeted cost for work performed = budgeted cost for work scheduled) • Contractor has purposely underestimated costs to win contract – This is a buy-in contract 7 Front-Loaded Baseline PMB Plot 8 EVM 202 November 2017 Lesson 4-66 Front-Loaded Cost Variance (CV) Chart 9 Rubber Baseline PMB Plot 10 EVM 202 November 2017 Lesson 4-67 Rubber Baseline CV Chart 11 Single Point Adjustment (SPA) • An arbitrary baseline adjustment at any level of the Work Breakdown Structure (WBS) where BCWS is set equal to BCWP, or BCWP is set equal to actual cost of work performed (ACWP), or both BCWS and BCWP are set equal to ACWP and incomplete work is replanned to be completed on schedule and within the original PMB budget SPAs distort earned value cost and schedule metrics and make index-based earned value estimate at completion (EAC) computations unreliable. 12 EVM 202 November 2017 Lesson 4-68 SPA PMB Plot 13 SPA CV Chart 14 EVM 202 November 2017 Lesson 4-69 PMB CHANGES 15 Use of Management Reserve (MR) PMB Plot 16 EVM 202 November 2017 Lesson 4-70 Use of MR CV Chart 17 Effect of Contract Changes on PMB 18 EVM 202 November 2017 Lesson 4-71 Effect of Contract Changes on CV 19 Over Target Baseline/Over Target Schedule (OTB/OTS) • Replanning actions involving establishing cost or schedule objectives that exceed the desired or contractual objectives on the program • An OTB is a recovery plan, a new baseline for management when the original objectives cannot be met and new goals are needed for management purposes. The contractor must get permission from the Government before executing an OTB/OTS. 20 EVM 202 November 2017 Lesson 4-72 Over Target Baseline (OTB) PMB Plot 21 Effect of OTB on CV 22 EVM 202 November 2017 Lesson 4-73 IBR Risk Management Processes and PMB • Do PMB revisions support program goals, objectives, and milestones? • Changes must be incorporated in a timely manner • Changed budgets must be reconcilable with prior budgets • Retroactive changes must be controlled – Changes must be made in the period the issue is identified • The change-trail must be clearly documented • An over-arching question: Is the new PMB valid? 23 Lesson 4 Summary Terminal Learning Objective • Examine the performance measurement baseline (PMB) validity Enabling Learning Objective • Explain the PMB development process • Apply the DoD Integrated Baseline Review (IBR) policy and process • Given the Earned Value (EV) technique, analyze control account EVM variables to select EVM metrics • Analyze a schedule using the Precedence Diagram Method (PDM) • Analyze IBR documents to determine areas of concern within the five risk areas in preparation for control account manager (CAM) interviews • Analyze the current schedule to determine status • Explain the importance of PMB maintenance 24 EVM 202 November 2017 Lesson 4-74 Exercise Instructions Individual Task: Identify Top Three Control Accounts The task at hand is to identify the control accounts to be reviewed at the IBR. Use the recently delivered RAM and the information you already know about the risks on the LAR Vehicle program to identify the top three control accounts that need to be reviewed during the IBR. We will submit these control accounts to Increda for the delivery of detailed control account documents. EVM 202 November 2017 Lesson 4-75 Responsibility Assignment Matrix (RAM) WBS NUMBER WBS DESCRIPTION BAC $(000) TYPE CONTROL ACCOUNT NUMBER CONTROL ACCOUNT MANAGER JPO ESTIMATE $(000) 1 LAR 647,115 Roll-up 10000000S 655,794 1.1 Prime Vehicle 363,174 Roll-up 10100000S 392,610 1.1.1 Integration, Assembly, Test & Checkout 35,743 CA 10101000S M Cohe 42,530 1.1.2 Hull/Frame/Body/Cab 65,969 CA 10102000S J Little 63,190 1.1.2.1 Frame 27,097 CA 10102100S D Melton 30,350 1.1.2.2 Body/Cab 38,872 CA 10102200S W Weedman 32,840 1.1.5 Suspension/Steering 81,140 CA 10105000S M Board 85,200 1.1.6 Electronics 567 CA 10106000S E Walter 1.1.7 Power Package/Drive Train 116,615 Roll-up 10107000S 1.1.7.1 Engine 40,815 CA 10107101P H James 49,250 1.1.7.2 Cooling System 23,323 CA 10107201P F Valore 30,010 1.1.7.3 Exhaust System 17,492 CA 10107301P J Martin 19,250 1.1.7.4 Other Power Package Components 34,985 CA 10107401P F Manzer 36,460 1.1.8 Auxiliary Automotive 2,268 CA 10108000S B Carlson 2,750 1.1.10 Armament 41,595 CA 10110000S R Goodman 41,760 1.1.14 Communications 19,277 CA 10114000P B Bohls 22,210 1.4 Systems Engineering 130,925 CA 10400000G G Troop 102,346 1.5 Program Management 41,512 CA 10500000G P I Smith 20,308 1.6 System Test & Evaluation 10,920 Roll-up 10600000S 1.6.1 Development Test & Evaluation 1,665 CA 10601000P P Schwarz 1,933 1.6.2 Operational Test & Evaluation 1,665 CA 10602000P P Schwarz 2,785 1.6.3 Mock-ups 4,101 CA 10603000P P Hornick 7,350 1.6.4 Test & Evaluation Support 3,489 CA 10604000P J Rego 6,562 1.7 Training J Forman 8,150 1.8 Data EVM 202 CA 8,463 November 2017 Roll-up 134,970 18,630 10800000S 11,160 Lesson 4-76 WBS NUMBER WBS DESCRIPTION BAC $(000) TYPE CONTROL ACCOUNT NUMBER CONTROL ACCOUNT MANAGER JPO ESTIMATE $(000) 1.8.1 Technical Publications 2,885 CA 10801000G V Kinney 3,160 1.8.2 Engineering Data 2,885 CA 10802000G V Kinney 4,360 1.8.3 Management Data 2,693 CA 10803000G T Finefield 3,640 1.9 Peculiar Support Equipment 14,107 Roll-up 10900000S 1.9.1 Test & Measurement Equipment 7,852 CA 10901000G T Shannon 13,870 1.9.2 Support & Handling Equipment 6,255 CA 10902000G S Tack 7,140 1.13 Initial Spares & Repair (S&R) Parts 57,073 Roll-up 11300000S 1.13.1 Brakes S&R Parts 12,932 CA 11301000P R Freeman 15,020 1.13.2 Wheels S&R Parts 24,397 CA 11302000P J Hanby 35,130 1.13.3 Skid Plates S&R Parts 1,043 CA 11303000P W Thurman 2,150 1.13.4 Engine S&R Parts 1,173 CA 11304000P B Pellegrini 2,020 1.13.5 Drive Train S&R Parts 5,220 CA 11305000P T Forburger 4,350 1.13.6 Misc. S&R Parts 12,308 CA 11306000P R Johnson 22,910 [OH] OVERHEAD [COM] COST OF MONEY 8,218 R White [G&A] GEN & ADMIN 84,627 G Crystal [UB] UNDIST BUDGET [PMB] PERF MEASURE BL [MR] MGT RESERVE EVM 202 21,010 81,580 P I Smith 634,392 L Stone 12,723 P I Smith November 2017 Lesson 4-77 Group Task: IBR Documentation Review Situation It is Monday, January 3, 2017, and you’ve received a complete IBR documentation review package. The formal IBR is scheduled to begin on January 15, 2017. Increda has been busy completing detailed control account plans and summary level planning packages (SLPPs) for the LAR Vehicle development effort. Based on our request, they have compiled review books that include control account manager (CAM) planning documents for the Integration, Assembly, Test & Checkout (WBS 1.1.1), Engine (WBS 1.1.7.1), Cooling System (WBS 1.1.7.2) and the Exhaust System (WBS 1.1.7.3). Objective Evaluate the contractor’s implemented baseline to determine its acceptability for program execution. Instructions (Use the IBR Documentation Review Briefing Template on Blackboard for this exercise.) 1. Review the IBR Documents for your assigned CAM to assess the risk areas. 2. Prepare a brief to the program manager with your preliminary assessment of the risk areas. This should also include specific questions you would like to ask your assigned CAM during the discussion to complete the assessment. 3. Use your team’s File Exchange on Blackboard under Team Groups > Team [A/B/C/D] > File Exchange to complete this exercise. Questions to be considered in the Assessment Technical Scope (Statement of Work) Risks Is there adequate identification, definition, and flow down? Is scope consistent with contract requirements? Is there adequate assignment of responsibility, authority, and accountability? Schedules Risks What is the period of performance? Are planned durations realistic? Are detailed (lower level) schedules consistent with the master schedule? Are interdependencies defined and constraints appropriate? Are there any tasks on the Integrated Master Schedule (IMS) critical path? Do schedules support contract milestones? EVM 202 November 2017 Lesson 4-78 Cost and Resource Risks Is there a sound basis for the estimate? Is the budget adequate and does it have correct time phasing? Are there any issues with resource availability? Are there provisions for scrap, rework, retest, or repair? Management Process Risks Is cost, schedule, and technical planning integrated? Does the contractor have baseline change control? Is accurate and timely management and performance data available? Is there adequate subcontract management? Does the contractor use appropriate Earned Value Management (EVM) methods? Do the EVM methods correlate with technical achievement? File Exchange Instructions To complete your team’s IBR Documentation Review Briefing: 1. Select the Lesson 4 tab from the Course Menu on Blackboard. 2. Download the IBR Documentation Review Briefing Template under Task: IBR Documentation Review Briefing. 3. Save the file to your computer. 4. Complete each section of the IBR Documentation Review Briefing as a team. 5. To share draft files with your team members: a. Select the Team Groups tab on the Course Menu. b. Select your team’s link under Groups. c. Select File Exchange under Group Tools to upload and share files. d. Select Add File to upload a file. e. Select Browse My Computer to locate the file on your computer. f. Enter a Name for your file in the Name field. g. Select Submit to post the file to your team’s File Exchange. 6. Upload your Final IBR Documentation Review Briefing to your team’s File Exchange. Note: Name your file “Final IBR Documentation Review Briefing” to distinguish it from any draft documents in your team’s File Exchange. EVM 202 November 2017 Lesson 4-79 Earned Value (EV) Techniques Exercise Period 0 is the baseline control account plan. This control account baseline is based on a six period schedule and includes eight work packages (WPs). Each work package uses a specific EV technique consistent with the Earned Value Management System (EVMS) description. Given the cumulative actual cost of work performed (ACWPcum) and the updated milestone charts, for each period calculate the: Cumulative budgeted cost for work scheduled (BCWScum) Cumulative budgeted cost for work performed (BCWPcum) Cumulative cost variance (CVcum) Cumulative schedule variance (SVcum) Key: Comp = Complete LOE = Level of effort MS = Milestone EVM 202 November 2017 Lesson 4-80 EVM 202 November 2017 Lesson 4-81 EVM 202 November 2017 Lesson 4-82 EVM 202 November 2017 Lesson 4-83 Task Relationships Exercise Identify the relationships between the tasks illustrated on the following network schedule. EVM 202 November 2017 Lesson 4-84 Critical Path and Float Exercise For the following network schedule, determine the critical path and note any poor scheduling practices. EVM 202 November 2017 Lesson 4-85 Float and Duration Exercise Using the following schedule, answer questions 1–5 for Task ID 523. 1. How much float is still available for this task? 2. Has this task improved, remained the same, or slipped? By how much? 3. Has the duration on this task decreased, remained the same, or increased? 4. Based on work progress, is this task ahead of, on, or behind schedule? 5. While none of these tasks are currently identified as critical, which task requires the most immediate attention, and why? EVM 202 November 2017 Lesson 4-86 Project X Exercise Use the Project X Master Schedule to answer these questions. 1. Which tasks are summary level tasks (ID numbers)? 2. List the milestones (ID numbers). 3. Identify the critical path (ID numbers). 4. How does the current schedule of task ID 4 compare to its baseline? a. It has improved from baseline. b. It has remained the same. c. It has slipped from baseline. 5. What has happened to the duration of task ID 4 in the current schedule when compared to its baseline schedule? a. Task duration has decreased. b. Task duration is the same. c. Task duration has increased. 6. What does the schedule indicate about the work progress of task ID 4? a. Task is ahead of schedule in the current schedule. b. Task is on schedule in the current schedule. c. Task is behind schedule in the current schedule. 7. How does the current schedule of task ID 13 compare to its baseline? a. It has improved from baseline. b. It has remained the same. c. It has slipped from baseline. 8. What has happened to the duration of task ID 13 in the current schedule when compared to its baseline schedule? a. Task duration has decreased. b. Task duration is the same. c. Task duration has increased. 9. As of the status date, what does the schedule indicate about the work progress of task ID 13? a. Task is ahead of schedule in the current schedule. b. Task is on schedule in the current schedule. c. Task is behind schedule in the current schedule. 10. Compute the following DoD schedule metrics. Hit Task % Baseline Execution Index (BEI) As of: Jul 15 EVM 202 November 2017 Lesson 4-87 EVM 202 Lesson 5: EVMS Surveillance STUDENT GUIDE CONTENTS 1. 2. 3. 4. Learning Objectives and Additional References LAR Vehicle Scenario Presentation Slides Exercise Instructions EVM 202 November 2017 Lesson 5-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 5-2 Learning Objectives and Additional References Terminal Learning Objective Describe the Earned Value Management System (EVMS) surveillance purpose and process. Enabling Learning Objectives • • • • • Describe Department of Defense (DoD) policy related to EVMS surveillance Describe the Defense Contract Management Agency (DCMA) surveillance process Describe the DCMA Corrective Action Request (CAR) process Describe EVMS noncompliance remediation options Describe the working relationships of the Program Management Office (PMO) and contractor in the surveillance process Additional References • • • • Defense Acquisition Portal (DAP) Acquisition Community Connection (ACC) Earned Value Management (EVM) Community of Practice (CoP) DoD Memorandum “Use of Earned Value Management (EVM) in the Department of Defense” DCMA Standard Surveillance Instruction (SSI) EVM 202 November 2017 Lesson 5-3 LAR Vehicle Scenario Background General Pratt, the new commandant for DCMA, needs to be updated on some of the agency’s core competencies and processes. He read the Department of Defense (DoD) Earned Value Management (EVM) Performance, Oversight, and Governance report to Congress regarding EVM implementation across DoD program offices—and he is not pleased. The General is yelling about the right item, right price, and right time stuff, and he wants some answers. General Pratt has extensive contracting and program management experience, but he needs your help bringing him up-to-speed on organizational roles and responsibilities for conducting surveillance on Increda’s EVMS. EVM 202 November 2017 Lesson 5-4 September 2016 EVM 202—Lesson 5 EVMS Surveillance Lesson 5 Learning Objectives Terminal Objective • Describe the Earned Value Management System (EVMS) surveillance purpose and process Enabling Objectives • Describe Department of Defense (DoD) policy related to EVMS surveillance • Describe the Defense Contract Management Agency (DCMA) surveillance process • Describe the DCMA Corrective Action Request (CAR) process • Describe EVMS noncompliance remediation options • Describe the working relationships of the Program Management Office (PMO) and contractor in the surveillance process 2 EVM 202 November 2017 Lesson 5-5 EVMS Surveillance Purpose • Purpose of Surveillance—Surveillance is a recurring process conducted by DCMA, Supervisor of Shipbuilding, Conversion and Repair (SUPSHIP), or other cognizant Federal agency that assesses the continuing compliance of the contractor’s EVMS with Electronic Industries Alliance Standard-748 (EIA-748) and the contractor’s written system documentation • Policy—DCMA surveillance of management control systems is required for all contract efforts ≥ 100M that require Earned Value Management (EVM) compliance with the EIA-748 • Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.234-7002 establishes the contractual authority for EVMS surveillance; requirement cannot be eliminated by PMO 3 DoDI 5000.02 EVM Policy Guidance Enclosure 1 Table 8 EVM Application Requirements Contract Value < $20M ≥ $20M & < $100M ≥ $100M Applicability EVM not required; may be applied at PM discretion based on risk to the Government EVM Required; contractor is required to have an EVM system (EVMS) that complies with the guidelines in EIA-748* Notes Source Requires business case analysis and MDA approval The Government reserves the right to review a contractor’s EVMS when deemed necessary to verify compliance Part 7 of OMB Circular A-11 (Reference (c)); DFARS 234.201 (Reference (al)); This The Contractor will provide access to all pertinent instruction EVM Required; contractor is records and data requested by the Contracting required to have an EVMS Officer or duly authorized representative as that has been determined to necessary to permit initial and ongoing be in compliance with the Government compliance reviews to ensure that guidelines in EIA-748* the EVMS complies, and continues to comply, with the guidelines in EIA-748*. Additional Information For ACAT ID and IAM programs, OSD USD(AT&L) Performance Assessments and Root Cause Analyses (PARCA), in coordination with the CAE or designee, will review proposed contract work scope for EVM applicability and provide a recommendation to the DAE/MDA for a determination of EVM applicability. For all other ACAT levels, the CAE, or designee, will review and determine EVM applicability. If EVM is determined to apply, then threshold application in this table is utilized or a waiver from the CAE is required. If, based on the nature of the work, EVM is determined not to apply, then EVM is not placed on contract. Applying EVM outside the thresholds and criteria above, to include application on firm, fixed-price (FFP) contracts, FFP task orders, or FFP delivery orders, a cost-benefit analysis will be conducted, MDA approval is required, and the results provided to the contracting officer for documentation in the contract file. The term "contracts” includes contracts, subcontracts, intra-government work agreements, and other agreements. For indefinite delivery, indefinite quantity (IDIQ) contracts, inclusion of EVM requirements is based on the estimated ceiling of the total IDIQ contract, and then is applied to the individual task/delivery orders, or group(s) of related task/delivery orders, that meet or are expected to meet the conditions of contract type, value, duration, and work scope. The EVM requirements should be placed on the base IDIQ contract and applied to the task/delivery orders, or group(s) of related task/delivery orders. “Related” refers to dependent efforts that can be measured and scheduled across task/delivery orders. The Integrated Baseline Review is required when EVM is determined to be applicable. The initiation of an over-target baseline or over-target schedule must be approved by the Government program manager. Application thresholds are in then-year dollars. * EIA-748 = Electronic Industries Alliance (EIA) 748-C (Reference (au)) EVM 202 November 2017 4 Lesson 5-6 Surveillance Verifies the EVMS • Surveillance verifies: – A contractor’s processes and procedures continue to satisfy the EIA748 EVMS guidelines – A contractor’s processes and procedures are being followed appropriately – The validity of the contractor’s performance data provided to the Government 5 EVMS Integrated Surveillance Team (IST) • DCMA CMO – – – – EVM Specialist Program Support Team (PST) Program integrator/support program integrator Administrative Contracting Office (ACO) • EVM Implementation Division (ID) • PMO • The contractor 6 EVM 202 November 2017 Lesson 5-7 DCMA EVM Surveillance Process When surveillance is required, all 32 guidelines evaluated within a three-year period – Standard Surveillance Plan (SSP)—Developed by the EVM Specialist • Minimum of four surveillance events per year – Corrective Action Request (CAR) 7 EVMS Surveillance Plan Surveillance Selection Risk Matrix Annual EVMS Surveillance Schedule • Formal DoD Program Office delegation is NOT required • An SSP is required – Begins at contract award and runs throughout the contract – Uses a risk-based approach – Requires quarterly surveillance covering all guidelines over a 36-month period – Requires surveillance results be documented and communicated to stakeholders in a timely manner 8 EVM 202 November 2017 Lesson 5-8 DCMA Standard CAR Process CAR Severity • Level I—Contractual non-compliance; no special management attention required to correct; directed at supplier working level • Level II—Systemic and could affect EVMS; directed to supplier management level and copy sent to ACO • Level III—Systemic and has affected EVMS and program performance; directed to supplier top management at site; contractual remedies possible • Level IV—System has affected EVMS and multiple programs; directed to supplier corporate management; issued as part of contractual remedy notice 9 Remediation Flow Chart Financial Remediation Actions* • Reduce or suspend progress payments • • • • Reduce contractor billings Reduce overhead billing rates Reduce award fee (must be factor) Negotiate a reduction in contract price Management System Remediation Actions* • Review for cause/compliance review • Withdraw management system approval Other* • • • • • Issue Cure Notice Issue Show Cause Notice Create EVM Oversight Group Implement EVMS Senior Executive Review Board Submit Contractor Performance Assessment Report (CPAR) *Actions may be taken concurrently Withdrawal applies only to efforts ≥ $100M TY EVM 202 November 2017 10 Lesson 5-9 Remedies • Focused Surveillance Review (FSR) – May result from routine surveillance or a PMO concern for IPMR data validity – Purpose: To determine magnitude and systematic nature of concerns • Review for Cause (RFC) Major Problem Identified – Evaluates the contractor’s progress against the CAP – Identifies remaining actions required to reaffirm system acceptability – Ensure accuracy of performance data generated for Government contracts – Determines if the system approval should be withdrawn 11 EVM Roles and Responsibilities Exercise • Review the EVM Roles and Responsibilities reference on Blackboard: – – – – Team A—DCMA Team B—DCMA Earned Value Management Implementation Division (EVM ID) Team C—Program Management Office (PMO) Team D—Contractor • Prepare a 5–10 minute briefing on your assigned role’s surveillance responsibilities (use easel paper) 12 EVM 202 November 2017 Lesson 5-10 Lesson 5 Summary • Terminal Learning Objective (TLO) – Describe the EVMS surveillance purpose and process • Enabling Learning Objective (ELO) – – – – – Describe DoD policy related to EVMS surveillance Describe the DCMA surveillance process Describe the DCMA CAR process Describe EVMS noncompliance remediation options Describe the working relationships of the PMO and contractor in the surveillance process 13 EVM 202 November 2017 Lesson 5-11 Exercise Instructions Group Task: EVM Roles and Responsibilities Exercise (Use your whiteboard or easel paper for this exercise.) Your team has 30 minutes to review all available references and come up with an organization responsibility briefing. The General wants a table top brief. Review the “EVM Roles and Responsibilities” reference on Blackboard. All teams should be prepared to respond and brief the roles and responsibilities of their assigned organization. Each table should plan for no more than 10 minutes; the General has a full schedule today and time is an invaluable resource. Team Assignments • • • • Team A—DCMA Team B—DCMA Earned Value Management Implementation Division (EVM ID) Team C—Program Management Office (PMO) Team D—Contractor EVM 202 November 2017 Lesson 5-12 EVM 202 Lesson 6: Integrated Program Management Analysis Tools and Techniques STUDENT GUIDE CONTENTS 1. Learning Objectives and Additional References 2. LAR Vehicle Scenario 3. Presentation Slides 4. LAR Vehicle Program Control Book—DECEMBER 2016 5. Program Requirements Analysis Exercise 6. Notional Data Validity Check Exercise 7. EVM Chart Analysis Exercise 8. Price at Completion (PAC) Exercise 9. EVM Metrics Review Exercise 10. IPMR/CFSR Comparative Analysis Exercise EVM 202 November 2017 Lesson 6-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 6-2 Learning Objectives and Additional References Terminal Learning Objective Given an Integrated Analysis Model, assess integrated program management data to make informed recommendations to support program management decisions. Enabling Learning Objectives • • • • • • • • • Explain key elements of an Integrated Analysis Model Identify current program technical, cost, and schedule requirements Assess Integrated Program Management Report (IPMR) data validity Analyze data to determine technical, schedule, and cost drivers Construct a realistic estimate at completion (EAC) and appropriate time-phased price at completion (PAC) Analyze the Integrated Master Schedule (IMS) to determine the ability to meet schedule requirements Explain the influence of Earned Value Management (EVM) analysis on budget and program documents Demonstrate if program funding/budget is consistent with the Contract Funds Status Report (CFSR) and the time-phased Government PAC Justify recommendations for program management decisions Additional References • • Defense Acquisition Portal (DAP) Acquisition Community Connection (ACC) EVM Community of Practice (CoP) EVM 202 November 2017 Lesson 6-3 LAR Vehicle Scenario Background It is February 5, 2017. Issues identified at the Integrated Baseline Review (IBR) have been resolved. COL Paine and GEN Moatars are very pleased with the Earned Value Management (EVM) implementation progress made to date. They are especially excited about the Integrated Product Team (IPT) concept taking hold in the Program Management Office (PMO). The software tools, Empower and MS Project, are being greeted with great interest. However, many of your IPT members are having difficulty reconciling all of the different inputs received from Increda (e.g., schedules, technical assessments, IPMR data). The initial Program Management Review (PMR) is scheduled at the end of the week. COL Paine wants you to help the IPT make sense of all this information using the Integrated Program Management Model, which will help you analyze past performance, forecast future performance, and formulate a plan of action. Relevant Information As part of DAWIA (Defense Acquisition Workforce Improvement Act) continuing education, COL Paine has arranged for the Defense Acquisition University to provide a two-day refresher course on the Integrated Program Management Model. DAU has incorporated Lightweight, Assault and Reconnaissance (LAR) Vehicle Integrated Program Management Report (IPMR) data, already submitted by Increda, into many of the training exercises to add a sense of reality to the process. EVM 202 November 2017 Lesson 6-4 September 2016 EVM 202—Lesson 6 Integrated Program Management Analysis Tools and Techniques (Part 1) EVM 202 November 2017 Lesson 6-5 Integrated Program Management Model 2 EVM 202 November 2017 Lesson 6-6 Lesson 6 Learning Objectives Terminal Learning Objective (TLO) • Given an Integrated Analysis Model, assess integrated program management data to make informed recommendations to support program management decisions Enabling Learning Objectives (ELOs) • Explain key elements of an Integrated Analysis Model • Identify current program technical, cost, and schedule requirements • Assess Integrated Program Management Report (IPMR) data validity • Analyze data to determine technical, schedule, and cost drivers • Construct a realistic estimate at completion (EAC) and appropriate time-phased price at completion (PAC) • Analyze the Integrated Master Schedule (IMS) to determine the ability to meet schedule requirements • Explain the influence of EVM analysis on budget and program documents • Demonstrate if program funding/budget is consistent with the Contract Funds Status Report (CFSR) and the time-phased Government PAC • Justify recommendations for program management decisions 3 EVM 202 November 2017 Lesson 6-7 Acquisition Contracts and Oversight Reports 4 EVM 202 November 2017 Lesson 6-8 Integrated Program Management RISK • System Engineering • Simulation and Test • Design Reviews • TPMs • EVM BCWP (Earned Value) • Critical Path Schedules • Monte Carlo Schedule Simulations • Program Reviews • EVM BCWS (Time-Phased Budget) • • CFSR, CSDR, WBS, Cost Estimates EVM BAC, ACWP, and EAC (Actuals and Forecast Cost) 5 EVM 202 November 2017 Lesson 6-9 LAR Vehicle Data Package • Why: – You must have the proper data before you can do analysis. • What You Need: – Initial Capability Document (ICD), Capability Development Document (CDD), and Capability Production Document(CPD) – Acquisition Program Baseline (APB) – Contract – Integrated Program Management Report (IPMR) Earned Value (EV) and Critical Path – Contract Funds Status Reports (CFSR) – R&P Budget Forms – Defense Finance and Accounting Services (DFAS) Obligation and Expenditure Report – Defense Contract Management Agency (DCMA) Surveillance Reports • Where Can You Get It? – – – – – – – – ICD/CDD/CPD Program Office APB Program Office Contract Program Office IPMR EVM Central Repository CFSR EVM Central Repository R&P Forms http://comptroller.defense.gov/ DFAS Obligation and Expenditure Report DFAS DCMA Surveillance Reports Program Integrator and EVMS Monitor 6 EVM 202 November 2017 Lesson 6-10 Program Requirements Analysis • Why: – To identify and understand the Key Performance Parameters (KPPs) needed to demonstrate the technical maturity, affordability, and programmatics required to progress to the next acquisition milestone – To identify and ensure that the contract requirements fully support the warfighter’s requirements—the APB parameters • What: – Review the KPPs for technical, cost, and schedule requirements; the Capability Development Document (CDD) and Capability Production Document (CPD) define the KPPs, which are included verbatim in the Acquisition Program Baseline (APB) – Evaluate contract specification and delivery requirements • How: – Review the APB to identify and understand the threshold and objective goals for each performance, cost, and schedule KPP – Identify contract technical requirements – Identify contract delivery requirements 7 EVM 202 November 2017 Lesson 6-11 Program Requirements Analysis Exercise Instructions 1. Using the LAR March 2016 APB, review and identify the LAR Vehicle threshold and objective KPP values required for a production and deployment decision. (See the LAR Data Package.) 2. Identify any discrepancies of these values with the LAR Vehicle contract requirements. Team Whiteboard Assignments • Team A—APB Performance KPPs (Survivability and Grade) • Team B—APB Performance KPPs (Turning Radius and Range) • Team C—APB Schedule Parameters • Team D—APB Cost Parameters 8 EVM 202 November 2017 Lesson 6-12 Integrated Program Analysis Model Contract Level 1. Analyze Past Performance 1.1 Validate Data 1.2 Analyze PMB 1.3 Analyze Technical Risk Drivers 1.4 Analyze Schedule Drivers 1.5 Analyze Cost Drivers 2. 3. Predict Future Performance Formulate a Plan of Action 9 EVM 202 November 2017 Lesson 6-13 STEP 1 ANALYZE PAST PERFORMANCE • By analyzing past performance, the EVM analyst and the Integrated Product Teams (IPTs) lay the groundwork to help predict future performance. Both of these activities are essential inputs to formulating a plan of action. • Thus, the model can be thought of as an integrated whole, with the three activities occurring in on overlapping manner. 10 EVM 202 November 2017 Lesson 6-14 STEP 1.1 VALIDATE DATA 11 EVM 202 November 2017 Lesson 6-15 Step 1.1 Validate Data (Cont.) • Why: To determine if the actual data represents the real program status • What and How: – Earned Value Management System (EVMS) check – IPMR data validity analysis – Schedule validity analysis, i.e., schedule healthmetrics 12 EVM 202 November 2017 Lesson 6-16 Step 1.1—EVMS Check EVMS Indicator • Determines if the contractor’s EVMS has been approved and continues to generate reliable information – Contractor’s EVMS approved? – Obtain all open corrective action requests (CARs)? – Impact of outstanding CARs? • System indicator issues: System not approved, no surveillance, and/or Level 3 and 4 CARs Baseline Indicator • Assesses the risk of the baseline plan and risks identified during the Integrated Baseline Review (IBR) process – IBR conducted within 180 days? – IBR assessed all five IBR risk categories: cost, schedule, technical, resource, and management processes? – Any risk rated high/red at IBR? – High/red risks mitigated or EAC increased to reflect risk as appropriate? • Baseline indicator issues: IBR not conducted, all five risk categories not evaluated, and/or high/red risks not mitigated or accounted for in EAC 13 EVM 202 November 2017 Lesson 6-17 STEP 1.1—IPMR DATA VALIDITY ANALYSIS 14 EVM 202 November 2017 Lesson 6-18 Open Empower Dataset 1. 2. 3. 4. 5. 6. 7. Open your browser and enter the URL https://encore.dau.mil. Select Empower under Data Source. Enter the user name and the password provided. Select Dataset. Select LAR EMD 2016, DEC 16, WBS, and Dollars. Select OK. Close the Open Dataset dialog box. 15 EVM 202 November 2017 Lesson 6-19 Screen Layout 1. 2. 3. 4. 5. Empower opens in the Standard View in the tri-pane layout based upon the Dataset selections. The Status Bar indicates the selected contract, month, structure, unit, element, and the sort/filter status. The Menu Bar provides access to charts, reports, and other features. The Toolbar provides shortcuts to commonly used features. Select a row in the Sort Window to update a report/chart to the desired element. 16 EVM 202 November 2017 Lesson 6-20 Screen Layout—Text Only View 1. 2. 3. 4. 5. Empower opens in the Standard View in the tri-pane layout based upon the Dataset selections. The Status Bar indicates the selected contract, month, structure, unit, element, and the sort/filter status. The Menu Bar provides access to charts, reports, and other features. The Toolbar provides shortcuts to commonly used features. Select a row in the Sort Window to update a report/chart to the desired element. 17 EVM 202 November 2017 Lesson 6-21 WBS Format • The WBS View displays Format 1 (WBS) elements. 18 EVM 202 November 2017 Lesson 6-22 OBS Format • The OBS View displays Format 2 (OBS) elements. 19 EVM 202 November 2017 Lesson 6-23 IPT Format • The IPT View displays IPT elements. 20 EVM 202 November 2017 Lesson 6-24 Lowest Level • Toggle the Lowest button to display alternates between all of the WBS elements and the lowest level WBS elements. • The Layout button is used to return Empower to the tri-pane layout, with the three windows appropriately resized to fill the browser window. In Internet Explorer, you may also press the Refresh button. 21 EVM 202 November 2017 Lesson 6-25 Sort Column • Select a column to sort: – Select a column header to sort descending. – Select the same column again to sort ascending. Note in the sample below it is sorted by CV ascending. • The Status Bar indicates if the sort is ascending or descending. Important: Return to the original sort by selecting the top of the HIER column (hierarchical sort). After navigating Empower, you may be a little lost and want to return to the original parent-child sort. In this example, the lowest toggle is turned off; it is sorted by WBS hierarchy. The hierarchy values are calculated by Empower. 22 EVM 202 November 2017 Lesson 6-26 Interactive Filter/Go To Element • Interactive Filter—Enter parameters into the filter boxes of each column. • Use the Clear button to remove all filter parameters. Note: Filter parameters are executed with an ‘and’ clause. The above sort window shows lowest level elements between 5% and 95% complete with a CV of less than -100, with a CV sort. Text fields are executed as ‘begins with’ and number fields support the following parameters: • Numbers: Equal to: = N, Greater than: > N, Less than: < N, Less or equal: <= N. Greater or equal: >= N, Range of values: N1 .. N2 • Text fields: Execute as a “begins with” • Go to Element—Enter the complete element number in the interactive filter. 23 EVM 202 November 2017 Lesson 6-27 Empower Standard View • The following shows the contract WBS with SV, CV, and VAC stoplight colors and trends. The cell colors are based upon SV%, CV%, VAC%, and the thresholds shown in item 3 below. Up Arrow = Improving Down Arrow = Declining Sideways Arrow = No Significant Change • Open Options > Show Thresholds for a key to the colors and arrows. The arrows change for an element if there has been a 10% change in the variance for the previous month. 24 EVM 202 November 2017 Lesson 6-28 Contractual Thresholds • The VAR (Variance Analysis Reporting Threshold) column indicates what categories have exceeded the reporting thresholds. For the LAR, we have set + or - 10% thresholds. Exceeding triggers normally requires an narrative explanation in Format 5 of the IPMR. • Small letters indicate a current month breach; capital letters indicate a cumulative breach. C/c is for cost, S/s is for schedule, and V is for VAC. 25 EVM 202 November 2017 Lesson 6-29 Validity Report LAR EMD December 2016 WBS Dollars [1 : LAR] Validity Report • The Validity Report is an artificial intelligence report that reconciles the different IPMR formats as submitted by the contractor. • This is a good place to begin any analysis; basic checks are already done for you automatically. You must have confidence in the data to draw conclusions about the health of the contract. ▲ WARNING Formula EAC is optimistic CVCUM < VAC TCPIEAC - CPICUM > 0.10 EAC < CPI Forecast Format 3 PM EOP does not equal Format 1 BAC subtotal (PMB) BAC - MR BAC - F3 PM EOP > 0 Format 3 BOP PMB does not equal previous period's F3 EOP PMB F3 BOP (cp) - F3 EOP (cp-1) > 0 Format 3 BCWSCUM does not equal Format 1 BCWSCUM F3 BCWSCUM - F1 BCWSCUM > 0 Format 3 BOP (total), plus changes, does not equal F3 EOP (total) F3 BOP (total) + SUM(BL Changes) F3 total EOP (total) > 0 26 EVM 202 November 2017 Lesson 6-30 AI Narrative • To obtain a quick summary, select Reports > AI Narrative. • The AI Narrative is a computer-generated report where numerical data is translated into sentences; rule-based logic is used to generate the words. The report provides analyses in four areas: Summary; Performance to Date, EAC Analysis, and OSD Metrics. Note: Only a subset of the OSD Metrics are checked in the AI Narrative Report. 27 EVM 202 November 2017 Lesson 6-31 Notional Data Validity Check Exercise Complete the last two columns of this chart. Put 1 in the third column if the data needs to be corrected. Provide a brief explanation of your answer in the Notes/Actions column. Validity Check Checks for 1 100% Complete ACWP ≠ EAC Elements 100% complete, but EAC not equal to cumulative actual cost ACWP > LRE Elements with cumulative actual cost greater than LRE ACWP > BAC Elements where cumulative actual cost exceeds BAC ACWP increase without BCWP increase For the current period, there is ACWP with no BCWP BCWP increase without ACWP increase For the current period, there is BCWP with no ACWP BCWP > BAC Elements where BCWP exceeds BAC BCWS > BAC Elements where BCWS exceeds BAC CV < VAC (EAC realism) Elements where CVCUM is negative, VAC is greater than CVCUM TCPI-LRE – CPICUM = ±0.10 (EAC realism) Elements where TCPI-LRE differs from CPICUM by more than ±.10 1. Need Correction EVM 202 Notes/Actions 2. Need Investigation November 2017 28 Lesson 6-32 Step 1.1—Schedule Health Metrics LAR Schedule Value Potential Impact Missing Logic 3% Hard Constraints (Tasks w/ Constrained Dates) < 1% Tasks should rarely be artificially tied to dates. Durations combined with schedule logic should determine schedule dates. Use of constraints may result in incorrect calculation of the critical path and near critical paths. High Float 71% High Duration 38% Industry consensus is that near term tasks should be a week to a month in length. When more than a month, you will not be able to get an accurate estimate of progress and forecasted completion dates. Tasks w/ Duration > 44 days Baseline Execution Index (BEI) 0.87 EVM 202 Almost every task should have a predecessor and successor Large positive or negative slack values may indicate a poorly constructed schedule. Large positive slack may indicate poor or missing logic. Tasks w/ Total Slack > 44 days This measure the tasks that were completed as a percentage of the tasks that should have been completed per the original (baseline) plan. The goal is to have a BEI of .95 or greater. 29 November 2017 Lesson 6-33 STEP 1.2 ANALYZE PMB 30 EVM 202 November 2017 Lesson 6-34 Step 1.2—PMB Analysis • Why: To determine that the PMB is current and that the contractor is “using EVM to manage” and not “managing the earned value (EV) data” • What: Assess the IPMR baseline data to ensure that contract modifications are incorporated, that the PMB is updated to address cost and schedule variances, and that PMB adjustments have not invalidated EVM metrics • How: – IPMR analysis and contract modification and baseline revision metrics • Format 3 Review—Identify PMB Changes • Format 5 Review—Contractor explains PMB changes – Empower Contract Level 1: EAC Chart and Six Period Summary – Empower Undistributed Budget (UB): EAC Chart and Six Period Summary – Empower PMB: EAC Chart and Six Period Summary – Empower Management Reserve (MR): EAC Chart and Six Period Summary – Single Point Adjustments (SPAs) and Over Target Baselines (OTBs) – Has the PMB been maintained and does it accurately reflect program and contract status? 31 EVM 202 November 2017 Lesson 6-35 Contract Modification and Baseline Revisions Contract Modification Metric • Highlights changes made to the contract dollar value from the time of award to the present • Identifies when new requirements have been added to the contract or when existing requirements have been modified • Highlights whether or not requirements are clearly understood • A delta ≥ 10% used as an early warning indication that the program’s technical requirements are possibly not entirely understood Baseline Revisions Metric • Highlights changes made to the time-phased PMB over the past 13-month period using the IPMR Format 3 • Adelta ≥ 5% used as an early warning indication for volatility in the near-term plan 32 EVM 202 November 2017 Lesson 6-36 Format 3 Review 1. Format 3 Box 5 Contract Data—IMPORTANT • • • • 2. Lists all negotiated and authorized contractmodifications Lists the value of OTBs Lists contractor’s estimated completion date Should correlate contract P0000 status Format 3 Box 6 Performance Data • Block 15—UB; should be zero • Block 16—Shifts in total budget; can only come from OTB, MR, or new work 3. Format 3 Box 7—MR 33 EVM 202 November 2017 Lesson 6-37 Format 5 Explanations and Problem Analyses Review • • • • • • Contract summary Formal reprogramming analysis EAC analysis UB analysis MR analysis IMS discussion: – – – – Critical/driving paths Baseline schedule variance Schedule margin changes Schedule health analysis, if applicable • Format 3 discussion/changes • Format 4 discussion/changes • Cost and schedule variance analysis: – – – – – • Root cause Effects on immediate tasks Impacts on the total contract Corrective actions Base labor rate, material price, and overhead rate changes Supplemental discussion 34 EVM 202 November 2017 Lesson 6-38 Contract Modification Metric (Format 3) Contract Mod = IPMR3 5e - IPMR3 5a IPMR3 5a x 100 = 647,115 -647,115 x 100 = 0% 647,115 Contract Modification Metric = 0.0 Percent Warning indicator: Change ≥ 10% EVM 202 November 2017 35 Lesson 6-39 Baseline Revisions Metric (Format 3) Baseline Revisions Metric = 31.80 Percent Warning indicator: Change ≥ 5% EVM 202 November 2017 36 Lesson 6-40 Has the Contract Budget Base (CBB) Changed? 1. 2. 3. 4. 5. 6. How can you tell if the CBB has changed? The Empower Level 1 EAC Chart will tell you. Go to WBS Level 1 and select LAR > Charts > EAC. Make sure that you are at the LAR Vehicle program level; the status bar must read LAR. Unique to Empower, the BAC at level 1 is the CBB because it includes MR. Empower assumes MR will be consumed in level 1 charts and reports; the EAC calculations (e.g., CPICUM forecast) use CBB instead of PMB. Small value changes in the charts are not obvious at the contract level. Example: In MAY 2017, there was a $65.4K contract modification, but it is too small to see on this JUL 2017 EAC chart. 37 EVM 202 November 2017 Lesson 6-41 LAR Vehicle Level 1 Six Period Summary LAR EMD July 2017 WBS Dollars [1 : LAR] Six Period Summary (Millions) 38 EVM 202 November 2017 Lesson 6-42 LAR Vehicle UB EAC Chart 1. 2. 3. 4. Small contract changes can be very obvious in UB account. From Sort Window, scroll to the bottom of the Sort Window until you see UNDIST BUDGET. Select UNDIST BUDGET (Undistributed Budget - UB). Make sure the status bar changes to UB. Now all charts and reports will be for UB. Select Charts > EAC. Remember that the CBB includesAuthorized Unpriced Work (AUW). AUW normally first enters the PMB as UB. As the work is definitized, the UB BAC is allocated to the control accounts (CAs), is lowered as a result of contract negotiations, and/or is added to MR. 39 EVM 202 November 2017 Lesson 6-43 LAR Vehicle UB Six Period Summary LAR EMD July 2017 Dollars [UB]: UNDIST BUDGET Six Period Summary (Millions) 40 EVM 202 November 2017 Lesson 6-44 LAR Vehicle PMB EAC Chart 1. 2. 3. 4. 5. Continuing to track the May 2017 modification, review the PMB. From Sort Window, scroll to the bottom of the Sort Window and select PERF MEASURE BL. (Check the status bar.) Now all charts and reports will be for PMB. Select Charts > EAC. In this chart, BAC represents the PMB for July 2017. If a contractor is using EVM to manage, we expect the PMB line to change month to month (e.g., rolling wave planning, contract modifications, MR). The May contract modification does not appear to be reflected in the PMB. Where’s the money? 41 EVM 202 November 2017 Lesson 6-45 LAR Vehicle MR EAC Chart 1. 2. 3. 4. 5. The Empower MR EAC Chart shows the movement of budget in and out of MR. From Sort Window, scroll to the bottom of the Sort Window until you see MGT RESERVE. Select MGT RESERVE (Management Reserve - MR). (Check the status bar.) Select Chart > EAC. In this chart, the BAC represents the remaining MR. If a contractor is using EVM to manage, we expect the MR line to change month to month, e.g., subcontracts, negotiations, rolling wave planning, and unknown unknowns. Is the May contract modification in MR? 42 EVM 202 November 2017 Lesson 6-46 LAR Vehicle PMB SPA and OTB Chart 1. 2. 3. 4. 5. Review the PMB for possible SPA and OTB. From Sort Window, scroll to the bottom of the Sort Window and select PERF MEASURE BL. (Check Status Bar.) Now all charts and reports will be for the PMB. Select Charts > EAC. In this chart, the BAC represents the current PMB. In June 2018, an OTB is established. BCWP and BCWS are set equal to ACWP. $44.4M is added to the PMB to complete the work. Zeroing the variances results in LRE, BAC, and CPICUM convergence. If an OTB exists, EVM metrics must be evaluated in the context of the OTB. 43 EVM 202 November 2017 Lesson 6-47 STEP 1.3 ANALYZE TECHNICAL RISK DRIVERS 44 EVM 202 November 2017 Lesson 6-48 Step 1.3—Technical Risk Drivers Analysis • Why: To answer the question: Will the program achieve the APB technical requirements, have military utility, and meet the needs of the warfighter? • What: The systems engineering process: Develop and status technical risk metrics needed to quantify technical progress and manage technical risk elements • How: – – – – – Review risk assessment Evaluate technical performance status Identify technical drivers Correlate actual performance data with APB performance goals Correlate actual performance data with contract specification requirements – Review information and analyses presented at status and design reviews – Review IPMR Format 5 – Identify technical risk issues 45 EVM 202 November 2017 Lesson 6-49 LAR Vehicle TPM Status, December 2016 • Fuel Consumption: Outside the bound of the development plan, no improvement since June, impacting Range KPP • IR Signature: Analysis value at the upper tolerance level, impacting Survivability KPP 46 EVM 202 November 2017 Lesson 6-50 LAR Vehicle Technical Performance KPPs Driving WBS Element Technical Risk • Survivability: Body/Cab, Testing, Power Package (IR Signature), and Communications • Grade and Range: Power Package • Turning Radius: Suspension/Steering and Armament • Gross Vehicle Weight: Power Package, Armament, Body/Cab, and Auxiliary Equipment Current Performance Status, December 2016 • Survivability: 0.97 • Grade: 40o • Range: 385 Miles • Turning Radius: 25 Ft • Combat Vehicle Weight: 13,000 KGs 47 EVM 202 November 2017 Lesson 6-51 STEP 1.4 ANALYZE SCHEDULE DRIVERS 48 EVM 202 November 2017 Lesson 6-52 Step 1.4—Schedule Drivers Analysis • Why: To answer the question: Will the program be delivered on time to meet the APB schedule requirements, the contractual delivery requirements, and the needs of the warfighter? • What: Determine schedule drivers using IMS analysis and EVM schedule variances. • How: – Analyze IMS • Analyze critical path – Filter MS Project for critical path • Assess slipping tasks – Compare days slipped with total float – Filter MS Project for slipping tasks • Analyze network schedule for milestones – Check against APB and contract requirements – Filter MS Project for milestones • Collect BEI and Hit-Task Percentage metrics (from Step 1.1) – Analyze EVM schedule data at lowest level • Sort by SV$ • Sort by SV% – Review IPMR Format 5 49 EVM 202 November 2017 Lesson 6-53 Identify Critical Path 1. 2. 3. 4. 5. Add the Predecessor and Successor columns. Hide Summary Tasks by selecting the corresponding checkbox onthe Format tab. Select Critical from the View tab’s Filter drop-down menu (this filters for tasks with a float value of 0 or less). Insert Start column and then sort by Start Date (earliest to latest) to find the first task on the critical path. Any schedule item colored red is critical and has a float value of 0 or less. 50 EVM 202 November 2017 Lesson 6-54 Identify Critical Path (Cont.) 6. Review the LAR Vehicle program critical path WBS elements. What tasks are on the critical path to the next two milestones? – Exhaust to Subsystem CDR – Engine to System CDR 51 EVM 202 November 2017 Lesson 6-55 Critical Path Discussion Evaluate the Empower and MS Project schedule data for December 2016 and answer the questions below. 1. 2. 3. 4. What two tasks are on the critical path? Has either of these tasks been completed? Has either of these tasks started? Does the Empower data correlate with the MS Project data? 52 EVM 202 November 2017 Lesson 6-56 Slipping Task Filter 1. 2. 3. From the View drop-down menu, select Filter for > More Filters > Slipping Tasks from the pop-up window. Identify tasks with projected end dates later than their baseline finish, particularly if they are on the critical path. If they are not on critical path, how much float do they have? Are they close to the critical path? Review other filters: Completed Tasks, In Progress Tasks, and Incomplete Tasks. 53 EVM 202 November 2017 Lesson 6-57 Float and Duration Exercise • Compare float, duration, slip, and work progress to identify near critical path tasks and tasks with questionable status. • Float and slip time are work days (five-day weeks). • MS Project selects the longest float of sub-elements for the summary float. 54 EVM 202 November 2017 Lesson 6-58 Milestone Assessment 1. 2. 3. 4. From the View drop-down menu, select Filter for > Milestones and find the dates for the remaining milestones. Compare the milestone dates in the IMS with the information from your network schedule analysis to see if you think these dates might be off. Compare the IMS and the adjusted milestone dates with the APB schedule parameters. Are there potential issues? Compare the project milestone dates with the contract delivery requirement dates. Are there potential contract delivery issues? Milestone APB Objective APB Threshold Contract Dec 16 IMS Issue Subsystem CDR Jan 17 May 17 Feb 17 31 May 17 APB—No; at threshold Contract—Yes System CDR Sep 17 Dec 17 Sep 17 31 Dec 17 APB—No; at threshold Contract—Yes Production Prototype Delivery Jul 18 Dec 18 Nov 18 14 Nov 18 APB—No; at threshold Contract—No 55 EVM 202 November 2017 Lesson 6-59 Drill Down Button with Sort 1. 2. Select the Level 1 element. Select Drill button. a. 3. 4. Note: Drill Up, Down, and Off buttons now displayed on toolbar The Sort Window displays only level 2 elements (i.e., children of level 1). Select the Sort column. Use this feature to drill up and down the tree. Select the Sort column to bring the CV, SV, or VAC drivers to top. EVM 202 November 2017 56 Lesson 6-60 Schedule SV$ Analysis 1. 2. 3. 4. Select the Lowest Level button. Sort for SV$. This identifies the WBS elements with the most unfavorable SV in dollars. Note: Small dollar accounts may not be seen in a SV$ account. Do the WBS elements with the most unfavorable SV$ correlate with the technical drivers? If not, why not? Do the WBS elements with the most unfavorable SV$ correlate with the critical path? If not, why not? Technical Drivers IMS Analysis SV$ Correlates With 1 Engine Exhaust to SSCDR Armament Technical Driver 2 Cooling Body/Cab & Engine Body/Cab to Sys CDR Technical Driver 3 Exhaust IAT&C, Data, & Spares to PPD Susp/Str Technical Driver 4 Susp/Str System T&E to DT/OT System Eng 5 Armament Susp/Str, slipping Frame 6 Body/Cab Armament, slipping Project Mgmt Element Ranking EVM 202 November 2017 57 Lesson 6-61 Schedule SV% Analysis 1. 2. 3. Sort for SV%. This identifies the WBS elements with the most unfavorable SV%. Note: Empower treats all accounts equally. Do the WBS elements with the most unfavorable SV% correlate with the technical drivers? If not, why not? Do the WBS elements with the most unfavorable SV% correlate with the critical path? If not, why not? Technical Drivers IMS Analysis SV% 1 Engine Exhaust to SSCDR Integ & Assem 2 Cooling Body/Cab & Engine Aux Auto to Sys CDR 3 Exhaust IAT&C, Data, & Spares to PPD Electronics 4 Susp/Str System T&E to DT/OT Body/Cab Technical Driver 5 Armament Susp/Str, slipping Susp/Str Technical Driver 6 Body/Cab Armament, slipping Armament Technical Driver Element Ranking EVM 202 November 2017 Correlates With 58 Lesson 6-62 Format 5 Review—Schedule Drivers • Format 5—The IPMR DID requires analyses of cost and schedule variances subject to tailoring: – – – – Nature of problem Effect on immediate task Impact on total contract Corrective actions taken or planned • Format 5 tailoring variance analysis thresholds: – – – – – Fixed number of variances Percent or dollar Schedule Specified variances No thresholds specified 59 EVM 202 November 2017 Lesson 6-63 Determine Schedule Drivers • There are no absolute ways to identify schedule drivers: – – – – Review the technical drivers Identify the elements on the critical path Sort by SV$ and SV% Compare all elements to identify the schedule drivers • An analyst must be able to explain and defend their selections. Element Ranking Technical Drivers IMS Analysis SV$ SV% Schedule Drivers 1 Engine Exhaust to SSCDR Armament Int & Assembly Engine 2 Cooling Body/Cab & Engine to Sys CDR Body/Cab Aux Auto Exhaust 3 Exhaust IAT&C, Data, & Spares to PPD Susp/Str Electronics Armament 4 Susp/Str System T&E System to DT/OT Eng Body/Cab Int & Assembly 5 Armament Susp/Str, slipping Frame Susp/Str Susp/Str 6 Body/Cab Armament, slipping PM Armament Body/Cab 60 EVM 202 November 2017 Lesson 6-64 STEP 1.5 ANALYZE COST DRIVERS 61 EVM 202 November 2017 Lesson 6-65 Step 1.5—Cost Drivers Analysis • Why: To assess the actual cost performance (e.g., overruns and underruns) and to correlate this data with the network schedule, technical risk issues, and schedule drivers to identify the cost drivers • What: Determine cost variance metrics for all WBS elements; correlate these EVM metrics with the technical drivers, network schedule, and schedule drivers to determine the program cost drivers • How: – Analyze EVM cost data at lowest level • Sort by CV$ • Sort by CV% – Correlate EVM cost metrics with technical drivers, critical path tasks, and schedule drivers – Review IPMR Format 5 62 EVM 202 November 2017 Lesson 6-66 Cost CV$ Analysis 1. 2. 3. 4. Sort for CV$. This identifies the WBS elements with themost unfavorable CV. Do the WBS elements with the most unfavorable CV$ correlate with the technical drivers? If not, why not? Do the WBS elements with the most unfavorable CV$ correlate with the critical path? If not, why not? Do the WBS elements with the most unfavorable CV$ correlate with the schedule drivers? If not, why not? Element Technical IMS Analysis Ranking Drivers Exhaust to 1 Engine SSCDR 2 Cooling Body/Cab & Engine to Sys CDR 3 Exhaust IAT&C, Data, & Spares to PPD 4 Susp/Str System T&E to DT/OT 5 Armament Susp/Str, slipping 6 Body/Cab Armament, slipping Schedule Drivers Engine CV$ Correlates With Exhaust Armament Technical Driver, SV$, SV% Armament Susp/Str Technical Driver, SV$, SV% System Eng SV$ Int & Assbly G&A Susp/Str Cooling Body/Cab Engine Technical Driver, Slipping Task Technical Driver, Critical Path, Schedule Driver 63 EVM 202 November 2017 Lesson 6-67 Cost CV% Analysis 1. 2. 3. 4. Sort for CV%. This identifies the WBS elements with themost unfavorable CV%. Do the WBS elements with the most unfavorable CV% correlate with the technical drivers? If not, why not? Do the WBS elements with the most unfavorable CV% correlate with the critical path? If not, why not? Do the WBS elements with the most unfavorable CV% correlate with the schedule drivers? If not, why not? Element Technical IMS Analysis Ranking Drivers 1 Engine Exhaust to SSCDR 2 Cooling Body/Cab & Engine to Sys CDR 3 Exhaust 4 Susp/Str 5 6 Armament Susp/Str, slipping Body/Cab Armament, slipping IAT&C, Data, & Spares to PPD System T&E to DT/OT Schedule Drivers Engine CV% Correlates With Aux Auto SV% Exhaust Electronics SV% Armament Cooling Technical Driver, Slipping Task, CV$ Technical Driver, Critical Path, Schedule Driver, CV$ Int & Assbly Engine Susp/Str Body/Cab Mgmt Data Susp/Str Technical Driver, Slipping Task, SV$, SV%, Schedule Driver, CV$ 64 EVM 202 November 2017 Lesson 6-68 Format 5 Review—Cost Drivers • Format 5—The IPMR DID requires analyses of cost and schedule variances subject to tailoring: – – – – Nature of problem Effect on immediate task Impact on total contract Corrective actions taken or planned • Format 5 tailoring variance analysis thresholds: – – – – – Fixed number of variances Percent or dollar Schedule Specified variances No thresholds specified 65 EVM 202 November 2017 Lesson 6-69 Determine Cost Drivers • There are no absolute ways to identify cost drivers: – – – – – Review the technical drivers Identify risk elements from IMS analysis Review schedule drivers Sort by CV$ and CV% Compare all elements to identify cost drivers • An analyst must be able to explain and defend their selections. Element Technical IMS Ranking Drivers Analysis Schedule Drivers CV$ CV% Cost Drivers 1 Engine Exhaust to SSCDR Engine System Eng Aux Auto System Eng 2 Cooling Body/Cab & Engine to Sys CDR Exhaust Armament Electronics Engine 3 Exhaust IAT&C, Data, Armament & Spares to PPD Susp/Str Cooling Armament 4 Susp/Str System T&E to DT/OT Int & Assbly G&A Engine Susp/Str 5 Armament Susp/Str, slipping Susp/Str Cooling Mgmt Data Cooling 6 Body/Cab Body/Cab Engine Susp/Str Aux Auto Armament, slipping 66 EVM 202 November 2017 Lesson 6-70 Step 1—Analyze Past Performance Summary • Step 1: Analyze Past Performance is comprised of five substeps: – – – – – Step 1.1—Validate data Step 1.2—Analyze PMB Step 1.3—Analyze technical risk drivers Step 1.4—Analyze schedule risk drivers Step 1.5—Analyze cost risk drivers • Analyzing past performance prepares the EVM analyst and the IPTs for Step 2: Predict Future Performance, and both steps are critical inputs for Step 3: Formulate a Plan of Action. 67 EVM 202 November 2017 Lesson 6-71 STEP 2 PREDICT FUTURE PERFORMANCE • The EVM analyst and the IPTs focus on predicting the future by looking at: – – – – Trend data Future tasks Effort in the Integrated Master Schedule (IMS) Updated risk assessments • One of the key outputs of the analysis is an update to the program's estimate at completion (EAC). The updated EAC can be compared to the obligation profile to determine if funding is sufficient for the contract effort at any given time. 68 EVM 202 November 2017 Lesson 6-72 Step 2—Predict Future Performance (Cont.) • Why: To answer the question: Where are we going and when will we be done? After analyzing past performance, future tasks, and risks, CAMs generate EACs. Understanding EAC reasonableness provides for effective program management for overall contract and at different WBS levels. • What: Analyze EAC reasonableness and develop Government independent EAC • How: – Compute EVM performance metrics – Review EAC reasonableness • Test 1: Compare CPICUM to TCPI-EAC • Test 2: Generate “floor” and “ceiling” EACs – Evaluate trends: • • • • Contract Performance Chart C/S Variance Trends Chart CPI and SPI Charts Six Period Summary Report – Determine your performance factors and compute most likely Government independent EAC • Determine the schedule driver SPICUM trends • Determine the cost driver CPICUM trends – Generate price at completion (PAC) 69 EVM 202 November 2017 Lesson 6-73 Estimate at Completion (EAC) • Generate EACs by: – Analyzing past performance – Estimate future conditions – Incorporate risks and opportunities as appropriate • Government EACs: – Mostly generated using a formula – Subjective assessment with no one “right” formula • Contractor-generated EAC is sometimes called Latest Revised Estimate (LRE): – Bottoms-up Estimate to Complete (ETC) • Frequency and detail per contract requirement and internal system description • Only use formula-based ETC as a sanity check – Regardless of bottoms-up estimate frequency, LREs should always reflect the latest information • Document assumptions and justifications EAC = ACWP + ETC EAC = A C WP + [ Remaining Work ] Performance Factor EAC = ACWP +[ BAC - BCWP ] Performance Factor 70 EVM 202 November 2017 Lesson 6-74 EVM Performance Metrics Schedule Performance Index (SPI) • An efficiency factor representing the relationship between the performance achieved and the initial planned schedule • An index of 1.00 or greater indicates that work is being accomplished at a rate on or ahead of what was planned • An index of less than 1.00 suggests work is being accomplished at a rate below the planned schedule • An index of less than .95 is used as an early warning indication of execution and should be explained Cost Performance Index (CPI) • An efficiency factor representing the relationship between the actual cost expended and the performance accomplished • An index of 1.00 or greater indicates that work is being accomplished at a cost equal to or below what was planned • An index of less than 1.00 suggests work is accomplished at a cost greater than planned • An index of less than .95 is used as an early warning indicator of cost increase and should be explained CPI Calculation SPI Calculation SPI = EVM 202 BCWP BCWS CPI = November 2017 BCWP ACWP 71 Lesson 6-75 Review EAC Reasonableness There are two ways to test the reasonableness of an EAC: • When comparing CPICUM with TCPI, a difference of greater than 0.10 means that achieving the target is unrealistic. – When comparing CVCUM with VAC, a study has shown that once a program is about 15% to 20% complete and overruns, it is extremely challenging to recover the overrun. • EAC range: – Low bound: Using CPICUM as PF – Upper bound: Using CPICUM * SPICUM as PF • This is valid only when SPI is below 1.0. 72 EVM 202 November 2017 Lesson 6-76 EVM Performance Metrics (Cont. 1) CPI to To-Complete Performance Index (TCPI) • TCPI computes the future required cost efficiency needed to achieve a targeted budget, i.e., LRE, EAC, BAC. • CPI to TCPI comparison gauges the realism of the targeted budget. – A delta of ten or more percent is used as an early warning indication that the targeted budget could beunrealistic. TCPI Calculation BAC - BCWP TCPI_target = target -ACWP CPI to TCPI Calculation TCPI - CPI x 100 73 EVM 202 November 2017 Lesson 6-77 EVM Performance Metrics (Format 1) SPI CUM = CPI CUM = TCPI = BCWP 8e. 8 100647 = = = 0.89 BCWS 8e. 7 113463 BCWP 8e. 8 100647 = = = 0.92 ACWP 8e. 9 108876 BAC - BCWP 8e. 14 - 8e. 8 634392 - 100647 = = = 1.02 EAC - ACWP 6c. 1 - 8e. 9 633787 - 108876 CPI to TCPI = TCPI - CPI x 100 = 1.02 -0.92 x 100 = 10% The contractor’s most likely EAC may be too optimistic. EVM 202 November 2017 74 Lesson 6-78 Generate Floor and Ceiling EACs 1. 2. 3. EVM index-based EACs are essentially all generated from the same formula. The only thing that changes is the performance factor (PF). We should not expect an exact EAC but a reasonable EAC range. Research suggests that the CPICUM PF provides the floor (low) of the EAC range and CPICUM * SPICUM composite PF provides the ceiling (high). (This is applicable when SPI is below 1.0.) BAC -BCWP EAC = ACWP+ [ Performance Fa ] ctor Single Index • CPICUM • CPICUR • CPI3MTH • CPI6MTH • SPICUM • SPICUR • Performance Factor Composite (CPICUM ∗SPICUM) MICOM ‐ (CPI6MTH ∗ SPICUM) Weighted (0.8 ∗ CPICUM) + (0.2 ∗ SPICUM) (0.4 ∗ CPIFACTORY) + (0.4 ∗ CPITEST) + (0.2 ∗ CPIQUALITY) 75 EVM 202 November 2017 Lesson 6-79 Working with Empower Charts Chart Button • Select Line, Column, or Bar to change the chart type. • Select Show to apply the color background. • Select Hide to suppress the color background. 76 EVM 202 November 2017 Lesson 6-80 Working with Empower Charts (Cont. 1) Zoom Button • Pressing Zoom on the toolbar changes charts to display all months of data. Last Twelve Months— Default All Months— Zoom Selected Interactive X/Y Zoom • Left-click, hold, and drag your mouse to zoom in on a specific coordinate. 77 EVM 202 November 2017 Lesson 6-81 Working with Empower Charts (Cont. 2) Option Menu—Show/Hide Legend Data • Show includes data values for the most recent period in the legend. • Hide remove the data values from the legend. Print, Download, or Copy Chart • Select Print Chart to access the Print dialog box. • Download the chart and save/copy as a PDF, PNG, SVG, or EMF file. – Note that IE8, Chrome, Firefox use .PNGs or .EMFs. – If IE9 or higher, use .SVGs. – MS Windows and Mac compliant. • Use a snipping tool as an alternative. 78 EVM 202 November 2017 Lesson 6-82 Working with Empower Charts (Cont. 3) Show/Hide Chart Line • Select an item in the data legend to show/hide the line on the chart. Grayed out legend items do not display on the chart. 79 EVM 202 November 2017 Lesson 6-83 EVM Tools Empower: C/S Variance Trends Chart wInsight: : C/S Variance Trends Chart Cost/Schedule Variance Trends Contractor: Increda, Corp Contract: LAR EMD 2003 DAAH01-03-C-0076 CPIFEMD Program: LAR Vehicle AS OF: DEC 03 Complete Start 2.0 0.0 -2.0 -4.0 Dollars in Millions -6.0 -8.0 -10.0 2003 Cost Variance Schedule Variance Management Reserv e EVM 202 2004 2005 -0.823 -1.282 10% Threshold 1.272 Start/Comp Dates November 2017 2006 Cost Var Est @ Completion JPO -9.929 CTR 1.422 80 Lesson 6-84 EVM 202 November 2017 Lesson 6-85 Contract Performance Chart Contract Level—Contract Performance Chart 1. This chart is Empower’s version of the Gold Card chart. 2. This chart displays both unfavorable CV and SV. 3. The contractor’s Estimate at Completion (EAC) appears optimistic. 4. The PM raised his/her EAC this month. 81 EVM 202 November 2017 Lesson 6-86 C/S Variance Trends Chart Contract Level—C/S Variance Trends Chart 1. The C/S Variance Trends chart is used extensively by USD(A&S). 2. This chart displays unfavorable CV and SV for the LAR Vehicle. 3. This chart displays an unfavorable SV breach of the ±10% BCWPCUM reference bands. 4. This chart displays a slight use of MR. 5. The PM’s VAC is reasonable, and the Contractor’s VAC is unreasonable when compared with the CV projection line. 82 EVM 202 November 2017 Lesson 6-87 CPI/TCPI Chart Contract Level Chart—CPI/TCPI Chart 1. Compare CPICUM and TCPI-EAC. 2. 3. – When CPICUM and TCPI-EAC are within ± 0.10, the EAC is reasonable. CPICUM shows a smoothed line, which is useful for trend analysis. Plotting current period data can help you spot a significant change from the prior month and could be indicative of emerging problems. – Note the large deterioration in current CPI in this chart. You should investigate the causes. 4. A good trend cannot be determined from only four data points, but the LAR’s current and cumulative CPI trends are unfavorable. – Follow the trend over next few months to see if CPICUM trend continues to decline or bottoms out. 83 EVM 202 November 2017 Lesson 6-88 CPI/SPI Chart 1. 2. 3. 4. The CPI/SPI chart measures the accomplishment efficiency of the work being done. Like the SV, an unfavorable SPI metric may or may not indicate a late delivery. That can only be determined by reviewing the network schedule. The SPICUM is a more valuable EVM metric in early stages of the contract, and it is not unreasonable for the SPICUR data to spike up and down. Unfavorable SPI trends are a good forecaster of future unfavorable CPI trends. A good trend cannot be determined from only four data points, but the LAR Vehicle’s SPI trends are currently unfavorable. 84 EVM 202 November 2017 Lesson 6-89 Six Period Summary Report 1. The Statistic and Independent Forecasts section of Empower’s Six Period Summary Report uses a variety of PFs to compute the listed EACs. a. 2. 3. Shows how EACs change over time, reflecting the trend of PFs used. (e.g., CUM CPI Fcst increased significantly in DEC 16, indicating cost performance got worse.) The CPICUM usually represents the floor, and the CPICUM * SPICUM represents the ceiling. Selected Empower PF EAC definitions: a. b. c. Performance Factor = 1 Cost and Schedule Performance Factor = 0.5 CPICUM + 0.5 SPICUM MICOM EAC Performance Factor = CPI6MTH * SPICUM Statistic and Independent Forecasts Section of Six Period Summary 85 EVM 202 November 2017 Lesson 6-90 Hints for Trend Analysis and Selecting a PF for an EAC • Is the element’s performance steady or improving/declining at an accelerating or slowing rate? • Focus analysis on trends for the past 3-6 months. • Watch out for: – Sudden spikes – Changes in direction (i.e., positive to negative) • Based on knowledge of technical and schedule performance to date, remaining work, and risks ahead: – Is there a correlation between technical performance and earned value performance? – Can poor technical performance be used to predict future schedule and cost problems? • Technical performance and poor schedule performance are often leading indicators. Cost performance is generally a lagging indicator. • Based on analysis, predict the future trend. 86 EVM 202 November 2017 Lesson 6-91 Generating Government EAC • May generate at the contract level for quick turn exercises – Pros: Already provided on 6 Period Summary Report – Cons: Variances tend to cancel out and all elements are treated the same • Assumptions: – PF used: (0.5*CPI + 0.5*SPI) – No additional risks or opportunities – MR of $12.7M will be fully spent at the end (subtract BCWPCUM from BAC with MR included) EAC = ACWP + BAC+MR Low EAC High EAC $647M $700M $775M BAC -BCWP Performance Factor = $712M CPI TCPI CV VAC 0.924 0.906 ($8.2M) ($65.3M) 87 EVM 202 November 2017 Lesson 6-92 Generating Government EAC (Cont.) • Better to generate at the lower level WBS, IPT, or OBS level – Pros: Each element can use its performance and is fairly quick using EXCEL – Cons: Need to assess each level so will take longer • Assumptions: – – – – – PFs used: (0.5*CPI + 0.5*SPI) When indices are not available, used the contract level indices For LOE elements with positive CPI, used budget values No additional risks or opportunities MR will be fully spent at the end Format 2, OBS ACWP BAC BCWP CPI SPI EAC Program Office 9,010 50,094 10,905 1.210 1.000 50,094 Program Control 4,832 21,916 6,458 1.337 1.000 21,916 Support Service - 12,523 - 0.000 0.000 13,830 Manufacturing 13,786 187,852 13,513 0.980 1.000 189,886 QA 1,403 18,785 1,351 0.963 1.000 19,166 Procurement 18,767 118,973 18,947 1.010 1.000 118,295 Engineering 59,458 216,030 47,984 0.807 0.789 270,042 COM 1,622 8,218 1,490 0.919 0.987 8,943 G&A 15,584 - 14,377 0.923 0.991 - MR - 12,723 - - - 12,723 124,462 647,114 115,025 - - 704,895 TOTAL BAC+MR Low EAC High EAC CPI TCPI CV VAC $647M $700M $775M 0.924 0.917 ($8.2M) ($57.8M) 88 EVM 202 November 2017 Lesson 6-93 EVM CHART ANALYSIS EXERCISE 89 EVM 202 November 2017 Lesson 6-94 Price at Completion (PAC) From Empower Executive Summary DEC 2016 CONTRACT TYPE: CPIF CONTRACT PERIOD: 10 JUN 2016 to 30 May 2019 NEGOTIATED COST: 647,115,000 EST AUTH UNPRICED: 0.0 CONTR BUDGET BASE: 647,115,000 TOTAL ALLOC BUDGET: 647,115,000 PERF MEASUREMENT BL: 634,392,000 MANAGEMENT RESERVE: 12,723,000 TARGET FEE $: 77,007,000 TARGET FEE %: 11.90 TARGET PRICE: 724,122,000 SHARE RATIO ABOVE: 50/50 SHARE RATIO BELOW: 30/70 MIN FEE: 32,356,000 MAX FEE: 97,067,000 Contract Budget Base $647,115,000 Most Likely EAC $704,895,000 (Govt EAC @ Contract Level) Forecast Overrun/Underrun CBB – EAC Target Fee = -$57,780,000 $77,007,000 Share Ratio 50/50 - $28,890,000 Fee Adjustment (Over or Under* Share Ratio) Adjusted Fee Target Fee + (Fee Adjustment) $48,117,000 Check against min and max fees = $753,012,000 Price at Completion (PAC) EAC + Adjusted Fee* Do we have adequate funding? 90 EVM 202 November 2017 Lesson 6-95 PAC Exercise Use the Dec 16 Empower Executive Summary contract data and Six Period Summary EAC forecasts to compute a LAR Dec16 PAC. From Empower Executive Summary DEC 2016 CONTRACT TYPE: CPIF CONTRACT PERIOD: 10 JUN 2016 to 30 May 2019 NEGOTIATED COST: 647,115,000 EST AUTH UNPRICED: 0.0 CONTR BUDGET BASE: 647,115,000 TOTAL ALLOC BUDGET: 647,115,000 PERF MEASUREMENT BL: 634,392,000 MANAGEMENT RESERVE: 12,723,000 TARGET FEE $: 77,007,000 TARGET FEE %: 11.90 TARGET PRICE: 724,122,000 SHARE RATIO ABOVE: 50/50 SHARE RATIO BELOW: 30/70 MIN FEE: 32,356,000 MAX FEE: 97,067,000 From Empower Six Period Summary DEC 2016 Statistical and Independent Forecasts SEPT 16 OCT 16 NOV 16 DEC 16 CUR CPI 695,263,116 627,188,503 632,012,885 837,762,144 3 PER AVG 647,115,000 627,188,503 629,718,175 704,648,242 6 PER AVG 647,115,000 627,188,503 629,718,175 704,648,242 CUM CPI 695,263,116 679,023,301 669,234,539 700,023,774 CPI * SPI 734,461,584 721,124,185 726,155,131 775,298,246 MICOM EAC 647,115,000 665,692,475 682,771,842 780,511,577 COST & SCH 691,410,872 684,774,365 686,606,598 712,219,541 PF Over/ Under EAC Fee Adjustment Adjusted Fee Applied Fee PAC Do we have enough funds? 91 EVM 202 November 2017 Lesson 6-96 Step 2—Predict Future Performance Summary • Step 2: Predict Future Performance involves: – Analyzing EAC reasonableness – Developing an independent Government EAC • The EVM analyst and the IPTs consider trend data, future tasks, efforts in the IMS, and updated risk assessments. • A key output of this analysis is an updated program EAC, which can be compared to projected obligations to determine if sufficient funding is available for the contract effort at any given time. 92 EVM 202 November 2017 Lesson 6-97 September 2016 EVM 202—Lesson 6 Integrated Program Management Analysis Tools and Techniques (Part 2) STEP 3 FORMULATE A PLAN OF ACTION • Using the information gleaned in the other two steps, the EVM analyst and IPT formulate a plan of action for the PM to: – Meet schedule delivery dates – Stay within budget – Meet technical performance requirements • Typically in this step of the analysis model, funding and budgetary needs may be reassessed and a variety of trades may be made to remain within the bounds of the contract cost, schedule, and technical objectives. 2 EVM 202 November 2017 Lesson 6-97 Step 3—Formulate a Plan of Action (Cont.) • • Why: Given integrated analysis results, recognize the types of management decisions to achieve better acquisition outcomes What: – APB defines cost, schedule, and performance requirements that must be met by the program – EAC and price at completion (PAC) are essential requirements of program management – Compare CFSR and EVM data – Variety of trade-off decisions may be made to remain within APB parameters. • How: – Budget/funding decisions • • • • • Compute PAC and compare with program funding Compare CFSR with IPMR data De-scope the contract if funding is not sufficient, and/or Increase contract budget request, if necessary, and/or Obtain additional funding – Trade-off decisions • Relax the schedule, and/or 3 • Relax the technical scope Comparative Analysis • Why: To ensure a defendable and credible program consistent with Acquisition Program Baseline (APB) requirements and the program’s Planning, Programming, Budgeting, and Execution (PPBE) system allocations and estimated budgets What: • How: • – APB defines cost, schedule, and performance requirements that must be met by the program – Product delivery must be achieved within the available resources allocated to the program – The estimated price at completion (PAC) range for the program must be compared to the financial resources allocated and budgeted for the program – Compare the APB, R-4, and network schedule – Compare the Integrated Program Management Report (IPMR) and Contract Funds Status Report (CFSR) – Apply Earned Value Management (EVM) performance factors to determine the contract funding requirements needed for the most likely PAC and to ensure against potential Anti-Deficiency Act violations and misappropriations – Status the APB cost parameters 4 EVM 202 November 2017 Lesson 6-98 APB, R-4, and Network Schedule Comparison LAR Vehicle EMD AUG 2016 R-4 The R-4 should be consistent with the APB and the network schedule. Is it? LAR Vehicle Milestone Schedule DEC 2016 Shows 3 – 4 month slip from the R-4 dated Aug 2016, and is within the APB threshold (just barely) 5 Compare the IPMR and CFSR • Why: To ensure data is consistent in the CFSR and the IPMR • What: – Data will not necessarily match, but must be explainable – CFSR • • • • • Generally submitted by contractor quarterly At price (includes fee and/or profit) Data entries can reflect cumulative or non-cumulative data Includes actual costs from the accounting system May have separate reporting by Contract Line Item or appropriation – IPMR • • • • • EVM 202 Generally submitted by contractor monthly At cost (does not include fee and/or profit) Data entries can reflect cumulative or non-cumulative data IPMR may include “estimated actuals” for material, subcontracts How: – – – – – Compare report dates and contract data Compare actuals todate Compare billings todate Compare projected obligations Compare projected billings November 2017 6 Lesson 6-99 Compare IPMR and CFSR Report Dates and Contract Data • Why: To ensure that report dates and contract header data are consistent • What: CFSR states a report date of 16-12-31, Appropriation Identification of 2040, and Adjusted Contract Price (Target) of $724,120K Question: Does this align with the IPMR? Is any difference explainable? • How: – – – – Compare IPMR Format 1 Block 4, Report Period, to CFSR Block 6 Compare IPMR Format 1 Block 5, Contract Data, to CFSR Blocks 9, 10, 12, and 13 Compare IPMR Format 3 Block 5, Contract Data, to CFSR Block 11 Normalize the data to allow for comparison • IPMR values are at cost • CFSR values are at price • To compare IPMR and CFSR values, the IPMR value must have the appropriate fee added in: – LAR Vehicle Program’s Target Fee: 11.9% – LAR Vehicle Program’s Minimum Fee: 5% – LAR Vehicle Program’s Maximum Fee: 15% 7 Compare IPMR and CFSR Report Dates and Contract Data (Cont.) 8 EVM 202 November 2017 Lesson 6-100 Compare IPMR and CFSR Contract Data Do they align? YES. 1) CFSR Appropriation Identification 2040 = IPMR Phase EMD 2) To compare CFSR (at price) and IPMR (at cost) values, the IPMR value must have the appropriate Fee added in (in this case, LAR Vehicle Program’s Target Fee of 11.9%): IPMR Current Negotiated Cost and CBB + 11.9% Target Fee = the CFSR Contract Work Authorized amount 9 Compare IPMR and CFSR Actuals to Date • Why: To determine the actual costs the contractor has incurred against this contract • What: CFSR states contractor has $121,830K in Accrued Expenditures to date – Note that CFSR Block 12.b, Accrued Expenditures, are defined as recorded or incurred costs; this is not the same as Defense Finance and Accounting Service (DFAS) Expenditures Question: Does this align with the IPMR? Is any difference explainable? • How: – Compare IPMR Format 1 Block 8.g.9, Total Actual Cost of Work Performed (ACWP), Cumulative to Date (cum) for Dec 2016 to CFSR Block 12.b, Accrued Expenditures for Dec 2016 (Actual to Date) – Normalize the data to allow for comparison • IPMR Format 1 Block 8.g.9, ACWP(cum) is cumulative at cost • CFSR Block 12.b, Accrued Expenditures, Actual to Date, is cumulative at price 10 EVM 202 November 2017 Lesson 6-101 Compare IPMR and CFSR Actuals to Date (Cont.) Do these align? Is any difference explainable? NO. The CFSR appears to include a Target Fee of 11.9%. Why is the contractor billing at the Target Fee instead of the Minimum Fee, given their performance to date? 11 Compare IPMR and CFSR DEC Forecasted Billings • • Why: To determine how much the contractor has billed the Government against this contract – Knowing a contractor’s billing schedule allows the PMO to forecast DFAS Expenditures (after adding in a lag for DFAS processing time) What: CFSR states contractor has $87,560K in actual billings to date Question: Does this align with the IPMR? Is any difference explainable? • How: – Assuming a one-month lag from actual costs incurred to billing, compare IPMR Format 1 ACWP(cum) for Nov 2016 to CFSR Block 13, Forecast of Billings to the Government for Dec 2016 Actuals to Date Column • Nov 2016 actual costs incurred will be billed in Dec 2016 • Calculate Nov 2016 actual costs incurred by subtracting IPMR Format 1 Block 8.g.4, ACWP Current Period (cur) for Dec 2016, from Block 8.g.9, ACWP(cum) for Dec 2016 – Normalize the data to allow for comparison • IPMR Format 1 Block 8.g.4, ACWP(cur), is non-cumulative at cost • IPMR Format 1 Block 8.g.9, ACWP(cum), is cumulative at cost • CFSR Block 13, Forecast of Billings to the Government, is cumulative at price 12 EVM 202 November 2017 Lesson 6-102 Compare IPMR and CFSR DEC Forecasted Billings (Cont.) Do these align? Is any difference explainable? NO. The CFSR appears to include no fee. Why is the contractor now billing at zero fee instead of the Target Fee (as they did in Actuals to Date) or the Minimum Fee (given their performance to date)? 13 Compare IPMR and CFSR Projected Obligations • Why: To understand contractor price at completion (PAC) – Note that CFSR Block 12.b., Accrued Expenditures, is defined as recorded or incurred costs. This line includes actual accrued expenditures and time-phased projected accrued expenditures. • What: Compare the IPMR most likely estimate at completion (EAC) to the CFSR most likely PAC • How: Question: Are any differences in the reports explainable? – Compare IPMR Format 1, Block 6.c., Most Likely Estimate at Completion, to CFSR Block 12.b., Accrued Expenditures (At Completion) – Normalize the data to allow for comparison • IPMR Format 1, Estimate at Completion, is at cost • CFSR Block 12.b., Accrued Expenditures, is at price 14 EVM 202 November 2017 Lesson 6-103 Compare IPMR and CFSR Projected Obligations (Cont.) Do these align? Is any difference explainable? NO. The CFSR PAC should equal the IPMR most likely EAC, plus fee earned. The IPMR most likely EAC shows an underrun, so the contractor would share 70% in that underrun. The CFSR PAC is higher than that. It looks like they assume they will earn 100% of the underrun! 15 Compare IPMR and CFSR JAN Projected Obligations • Why: To understand contractor time-phased plans and estimates, necessary for comparison to fiscal year funding and budget documents – Note that CFSR Block 12.b., Accrued Expenditures, is defined as recorded or incurred costs. This is our proxy for projected obligations (Program Office Spend Plan). • What: CFSR states that the contractor needs $154,220K cumulative funds obligated to cover all projected Accrued Expenditures through Jan 2017 Question: Does this align with the IPMR? Is any difference explainable? 16 EVM 202 November 2017 Lesson 6-104 Compare IPMR and CFSR JAN Projected Obligations (Cont.) • How: – Compare IPMR Format 3 Block 6.c., Performance Measurement Baseline, to CFSR Block 12.c., Accrued Expenditures – Normalize the data to allow for comparison • IPMR Format 3 period Budgeted Cost for Work Scheduled (BCWS) is noncumulative at cost • CFSR Block 12.c., Accrued Expenditures, is cumulative at price • IPMR BCWS is not the latest EAC; CFSR Block 12.c. is the most likely EAC – Pull DEC 2016 BCWScum and JAN 2017 BCWScur and convert to reflect performance » Adjust BCWScur to account for cumulative schedule performance to date (SPI = 0.89) and to derive an estimate of a new schedule adjusted BCWP = BCWS * SPI » Adjust new BCWP profile to account for cumulative cost performance to date (CPI = 0.92): BCWP/CPI 17 Compare IPMR and CFSR JAN Projected Obligations (Cont. 1) 18 EVM 202 November 2017 Lesson 6-105 Compare IPMR and CFSR JAN Projected Obligations (Cont. 2) Do these align? Is any difference explainable? NO. The CFSR Jan 16 estimates are higher than the normalized IPMR BCWS $. They need to explain the difference. 19 Compare IPMR and CFSR JAN Projected Billings • Why: To determine how much the contractor is projecting to bill the Government against this contract next month – Knowing a contractor’s billing forecast allows the PMO to forecast DFAS Expenditures (after adding in a lag for DFAS processing time). This is a proxy for required expenditures (Program Office Expenditure Plan). • What: CFSR states contractor projects $32,400K in billings in Jan 2017 Question: Does this align with the IPMR? Is any difference explainable? • How: – Assuming a one-month lag from actual costs incurred to billing, compare IPMR Format 1 Block 8.g.4, ACWP(cur) for Dec 2016, to CFSR Block 13, Forecast of Billings to the Government for Jan 2017 • e.g., Dec 2016 actual costs incurred will be billed in Jan 2017 – Normalize the data to allow for comparison • IPMR Format 1 Block 8.g.4, ACWP(cur), is non-cumulative at cost • CFSR Block 13, Forecast of Billings to the Government, is non-cumulative at price 20 EVM 202 November 2017 Lesson 6-106 Compare IPMR and CFSR JAN Projected Billings (Cont. 1) Do these align? Is any difference explainable? NO. The CFSR includes the Target Fee of 11.9%. Why is the contractor back to projecting billings at the Target Fee instead of an amount greater than the Target Fee (as they did in Projected Obligations), zero fee (as they did in Billings to Date), or the Minimum Fee (given their performance to date)? 21 Compare IPMR and CFSR FEB Projected Billings • Why: To determine how much the contractor has billed the Government against this contract – Knowing a contractor’s billing schedule allows the PMO to forecast DFAS Expenditures (after adding in a lag for DFAS processing time) • What: CFSR states contractor has $32,400K in forecasted billings for Feb 2017 Question: Does this align with the IPMR? Is any difference explainable? 22 EVM 202 November 2017 Lesson 6-107 Compare IPMR and CFSR FEB Projected Billings (Cont. 1) • How: – Assuming a one-month lag from actual costs incurred to billing, compare IPMR Format 3, BCWS(cur) for Jan 2017, to CFSR Block 13, Forecast of Billings to the Government for Feb 2017 • Assume Jan 2017 actual costs incurred will be billed in Feb 2017 – Normalize the data to allow for comparison • IPMR Format 3, BCWS(cur) used for Government ACWP, is non-cumulative at cost • CFSR Block 13, Forecast of Billings to the Government, is cumulative at price • IPMR BCWS is not the latest EAC; CFSR Block 12c is most likely EAC – Pull JAN 2017 BCWScur and convert to reflect performance » Adjust BCWScur to account for cumulative schedule performance to date (SPI = 0.89) and to derive an estimate of a new schedule adjusted BCWP = BCWS * SPI » Adjust new BCWP profile to account for cumulative cost performance to date (CPI = 0.92): BCWP/CPI 23 Compare IPMR and CFSR FEB Projected Billings (Cont. 2) 24 EVM 202 November 2017 Lesson 6-108 Compare IPMR and CFSR FEB Projected Billings (Cont. 3) Do these align? Is any difference explainable? NO. The CFSR appears to include a fee greater than the Max Fee (15%). Is the contractor catching up on actuals and/or fee not billed previously? 25 IPMR/CFSR Comparative Analysis Exercise Compare the IPMR and the CFSR time-phased estimates. 1. Open the worksheet “IPMR CFSR Comparative Analysis Exercise” on Blackboard. 2. Locate the DEC 2016 LAR Vehicle Program IPMR Formats 1 and 3 and the CFSR in your Student Guide. 3. Enter the following information into the table using the IPMR: a. b. c. d. e. New program office PAC from Lesson 6 (At Completion) IPMR Format 3 BCWS for Cumulative to Date, JAN 17 to JUN 17, SEP 17, SEP 18, and To Complete SPICUM from Lesson 6 for JAN 17 to JUN 17, SEP 17, and SEP 18 EAC performance factor (CPICUM from Lesson 6) for JAN 17 to JUN 17, SEP 17, and SEP 18 Estimate fee for Cumulative to Date, JAN 17 to JUN 17, SEP 17, and SEP 18 (Use two decimal places for SPICUM and CPICUM.) 4. For columns that have no reported data, leave the cells empty. 26 EVM 202 November 2017 Lesson 6-109 Comparative Analysis Conclusions • Possible reasons for deltas between contractor CFSR and Government PAC time-phasing: – – – – Contractor used other than minimum fee (5%) Contactor used other than one-month lag between actual cost incurred and billing Errors in contractor submission Contractor CFSR includes risk items or worst-case scenario (since contractor appears to be forecasting funding in advance of when it is actually required) – Contractor CFSR includes efficiencies in CPI/SPI (Government PAC based on BCWS) or other (Should Cost) – Differences in reporting frequency (IPMR – monthly; CFSR – quarterly) • What action(s) should you take? – Communicate with contractor to understand differences • Hold quarterly conference call upon CFSR receipt and analysis – Adjust funding provided to contractor (don’t assume CFSR is correct)1 27 Evaluate PAC and Contractor Finances Evaluate the contractor’s PAC to determine potential Anti-Deficiency Act violations: 1. Start with the obligation results from the Comparative Analysis Exercise just completed. 2. Confirm budget availability from the R-3. 3. Determine projected excess funds. 28 EVM 202 November 2017 Lesson 6-110 Evaluate APB Requirements • • Is the current PAC consistent with the APB requirements? Is the APB funding profile supported by current R-documents? 29 Lesson 6 Summary • Terminal Learning Objective (TLO) – Given an Integrated Analysis Model, assess integrated program management data to make informed recommendations to support program management decisions • Enabling Learning Objective (TLO) – Explain key elements of an Integrated Analysis Model – – – – – – – – Identify current program technical, cost, and schedule requirements Assess Integrated Program Management Report (IPMR) data validity Analyze data to determine technical, schedule, and cost drivers Construct a realistic estimate at completion (EAC) and appropriate timephased price at completion (PAC) Analyze the Integrated Master Schedule (IMS) to determine the ability to meet schedule requirements Explain the influence of EVM analysis on budget and program documents Demonstrate if program funding/budget is consistent with the Contract Funds Status Report (CFSR) and the time-phased Government PAC Justify recommendations for program management decisions 30 EVM 202 November 2017 Lesson 6-111 Exercise Instructions Evaluate the integrated program management analysis approach presented by the DAU instructor. Determine how this approach applies to your duties in the LAR Vehicle PMO. Refresh your own analysis approach by reviewing the material contained in this lesson and by completing the exercises. Pay special attention to the following topical areas: • • • • IPMR terms, definitions, equations, and calculations; understand how all performance factors are linked, especially cost and schedule relationships EVM schedule health metrics and how to calculate them Techniques for reading and interpreting critical path schedules Analyzing sample IPMR, schedule, and technical performance data EVM 202 November 2017 Lesson 6-112 Program Control Book LIGHTWEIGHT, ASSAULT AND RECONNAISSANCE (LAR) VEHICLE DECEMBER 2016 EVM 202 UNCLASSIFIED Lesson 6-113 LAR Vehicle Program Control Book—DEC 2016 Table of Contents LAR Joint Program Office (JPO) Budget Documents.................................................................................. 116 Acquisition Program Baseline (APB)—March 2016............................................................................... 117 1. APB Dates ...................................................................................................................................... 117 2. Background ................................................................................................................................... 118 3. LAR Vehicle Acquisition Program Baseline .................................................................................... 119 Army Research, Development, Test, and Evaluation (RDT&E) Budget Item Justification and Defense Finance and Accounting Service (DFAS) Obligations and Expenditures ................................................ 123 ARMY RDT&E BUDGET ITEM JUSTIFICATION (R‐2)—August 2016 .................................................... 123 ARMY RDT&E BUDGET ITEM JUSTIFICATION (R‐3)—August 2016 .................................................... 124 ARMY RDT&E BUDGET ITEM JUSTIFICATION (R‐4)—August 2016 .................................................... 125 LAR EMD RDT&E DFAS Obligations—As of December 2016 ............................................................. 126 LAR EMD RDT&E DFAS Expenditures—As of December 2016 .......................................................... 127 Increda LAR Vehicle Documents ............................................................................................................... 128 Integrated Program Management Report (IPMR) Format 1—As of 31 Dec 2016................................. 129 IPMR Format 2—As of 31 Dec 2016 ...................................................................................................... 131 IPMR Format 3—As of 31 Dec 2016 ...................................................................................................... 132 IPMR Format 4 EAC—As of 31 Dec 2016 ............................................................................................... 133 IPMR Format 4 BAC—As of 31 Dec 2016............................................................................................... 134 IPMR Format 5—As of 31 Dec 2016 ...................................................................................................... 135 Contract Summary ............................................................................................................................ 135 Formal Reprogramming (OTB/OTS) .................................................................................................. 135 Estimate at Completion (EAC) ........................................................................................................... 135 Undistributed Budget (UB)................................................................................................................ 135 Management Reserve (MR) .............................................................................................................. 135 Integrated Master Schedule (IMS) .................................................................................................... 135 Format 3 Changes ............................................................................................................................. 135 Format 4 Changes ............................................................................................................................. 135 Cost and Schedule Variances ............................................................................................................ 136 At Completion Variances................................................................................................................... 136 Variance Analysis .............................................................................................................................. 136 Contract Funds Status Report (CFSR)—As of 31 Dec 2016 .................................................................... 139 System Engineering Documents................................................................................................................ 140 EVM 202 UNCLASSIFIED Lesson 6-114 LAR Vehicle Program Control Book—DEC 2016 Fuel Consumption December 2016 TPM .............................................................................................. 141 Operating Power December 2016 TPM ................................................................................................ 142 IR Signature December 2016 TPM ........................................................................................................ 143 Power Package Weight December 2016 TPM....................................................................................... 144 Mean Time Between Failure (MTBF) December 2016 TPM.................................................................. 145 Estimates for Selected Performance KPPs—As of December 2016 ...................................................... 146 Contract Specifications ..................................................................................................................... 146 Specification Estimates* Status as of 15 Dec 2016 ........................................................................... 146 Risk Assessment—As of December 2016 .............................................................................................. 147 EVM 202 UNCLASSIFIED Lesson 6-115 LAR Vehicle Program Control Book—DEC 2016 LAR Joint Program Office (JPO) Budget Documents U.S. Army Tank-Automotive & Armaments Command Acquisition Program Baseline for Lightweight, Assault and Reconnaissance Vehicle Program System Development & Demonstration March 2016 EVM 202 UNCLASSIFIED Lesson 6-116 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents Acquisition Program Baseline (APB)—March 2016 1. APB Dates Approval Date TBD EVM 202 Name Phase Event Authority Development APB Development Milestone (MS) B Defense Acquisition Executive (DAE) UNCLASSIFIED Base Year Original Change 2016 Yes No Lesson 6-117 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents 2. Background 1.1 Need—In October 2012, the Army leadership announced a vision of the future. This vision includes a Brigade structure and organization which is crucial to the Army's strategic responsiveness goals of deploying from a Continental United States (CONUS) base to a global theater of operation. These goals include deploying: one Brigade within 96 hours; one Division within 120 hours; and five Divisions within 30 days. To achieve this vision for the Army, the Tank-automotive and Armaments Command (TACOM) and United States Joint Forces Command (USJFC) initiated a Class II Joint Capability Technology Demonstration (JCTD) of a Lightweight, Assault and Reconnaissance (LAR) Vehicle. 1.2 Program Description—The LAR Vehicle will be a CH-47 and C-130 transportable armored vehicle capable of deployment to anywhere on the globe in a combat ready configuration. A LAR Vehicle-equipped Interim Brigade Combat Team (IBCT) will provide an immediate response by a lethal, versatile, tactically agile joint force capable of operational maneuver once in the Area of Operations. This capability addresses the dynamic asymmetric threat and operational environment essential to fulfilling the war-fighting needs of the National Command Authority. 1.3 Acquisition Strategy and Development Approach—Operational testing was completed on the JCTD LAR in December 2014. Survivability and suspension related issue were identified during testing, warranting additional development. Consistent with the approved LAR JCTD transition plan, the LAR Vehicle program is scheduled to transition as an Acquisition Category I (ACAT-I) Engineering and Manufacturing Development (EMD) program in FY16. An RFP for a full and open competition was prepared in the third quarter of FY15, and a source selection and contract award is planned for the second quarter of FY16. Contractors will present their concepts to address JCTD test and warfighter deficiencies and to demonstrate full military utility. A single contract will be awarded for the remaining development (EMD) and manufacture of four production prototype vehicles. Follow-on contracts will cover the production and support activities for the LAR Vehicle program. 1.4 References 1.4.1 LAR JCTD Transition Plan, TACOM-JCTD-2015-1, December 15, 2015. EVM 202 UNCLASSIFIED Lesson 6-118 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents 3. LAR Vehicle Acquisition Program Baseline Section A, Performance—03/21/16 Performance Parameters Objective Threshold Probability of Kill 0.92 0.90 Survivability* 0.95 0.95 Speed (MPH) 90 80 Side Slope 40⁰ 35⁰ Grade* 50⁰ 40⁰ Approach Angle 75⁰ 70⁰ Departure Angle 60⁰ 55⁰ Turning Radius* 20 ft. 25 ft. Range (miles)* 400 350 Combat Vehicle Weight (KG)* <11,000 13,500 Empty Vehicle Weight (KG) 11,500 <13,000 Payload Weight (KG) 2000 2000 See CDD See CDD Full Mission Capability Rate 0.95 0.90 Availability* 0.98 0.96 MMH/OH 0.05 0.1 MTTR 1 1.5 MTBCMF* 700 625 Missiles 4 3 Rounds 2500 2200 Noise (Max Decibels) <2xxx <2xxx Classified Classified Interoperability* Heat Emittance * Key Performance Parameters (KPPs) Acronyms and Abbreviations: CDD – Capability Development Document KG - Kilograms MMH/OH – Maintenance Man-hours per Operating Hour MPH – Miles per Hour MTBCMF – Mean Time between Critical Mission Failures MTTR – Mean Time to Repair NOTE: See CDD for further detail on KPPs. EVM 202 UNCLASSIFIED Lesson 6-119 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents Section B, Schedule—03/21/16 Milestones Objective Threshold ICD Approval OCT 2012 OCT 2012 JCTD Contract Award JUL 2013 JUL 2013 JCTD Delivery DEC 2014 DEC 2014 EMD Draft RFP Release AUG 2015 AUG 2015 JCTD Testing Complete DEC 2015 DEC 2015 ORD/TEMP Approved FEB 2016 FEB 2016 EMD Proposals Received FEB 2016 FEB 2016 MS B Decision MAR 2016 MAR 2016 EMD Contract Award MAR 2016 JUN 2016 Subsystem CDR JAN 2017 MAY 2017 System CDR SEP 2017 DEC 2017 PPD JUL 2018 DEC 2018 Draft LRIP/Production RFP Release JAN 2019 APR 2019 DT/OT Complete JAN 2019 APR 2019 LRIP Proposal Received JUN 2019 SEP 2019 MS C/LRIP/Prod Contract Awarded OCT 2019 APR 2020 LRIP First Unit Delivery JUL 2020 JAN 2021 FCA/PCA DEC 2020 JUN 2021 Live Fire & IOT&E Complete DEC 2020 JUN 2021 FRP Decision Review/Full Rate Option 1 JAN 2021 JUL 2022 IOC (100 LAR Vehicles) JUN 2022 DEC 2022 FOC (500 LAR Vehicles) DEC 2026 JUN 2027 Acronyms and Abbreviations: CDR – Critical Design Review DT – Developmental Testing EMD – Engineering and Manufacturing Development FCA – Functional Configuration Audit FOC – Full Operational Capability FRP – Full Rate Production ICD – Initial Capabilities Document IOC – Initial Operational Capability IOT&E – Initial Operational Test and Evaluation EVM 202 JCTD – Joint Capability Technology Determination LRIP – Low Rate Initial Production MS - Milestone ORD – Operational Requirements Document OT – Operational Testing PCA – Preliminary Configuration Audit PPD – Production Prototype Delivery Prod – Production RFP – Request for Proposals TEMP – Test and Evaluation Master Plan UNCLASSIFIED Lesson 6-120 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents Section C, Budget—03/21/16 Then-Year $M Objective Threshold RDT&E 1000 1100 Procurement 1250 1375 Total Acquisition Cost 2250 2475 O&S 5600 N/A Total Life Cycle Cost 7850 N/A Pro Acq Unit Cost ($M) 4.464 N/A Avg Proc Unit Cost ($M) 2.5 2.75 Base-Year $M (BY 2016) Objective Threshold RDT&E 943.0 1037 Procurement 1064 1170 Total Acquisition Cost 2007 2207 O&S 3725 4097 Total Life Cycle Cost 5732 6304 Pro Acq Unit Cost ($M) 3.982 4.380 Avg Proc Unit Cost ($M) 2.128 2.340 Quantity Objective Threshold RDT&E 4 N/A Procurement 500 N/A Acronyms and Abbreviations: Acq – Acquisition Avg – Average O&S – Operations and Support EVM 202 Pro – Program Proc – Procurement RDT&E – Research, Development, Test, and Evaluation UNCLASSIFIED Lesson 6-121 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents Submitted by: Clayton S. Paine 21 MAR 16 CLAYTON S. PAINE, Colonel, USA LAR Vehicle Program Manager Date Approved by: Gregory L Moatars 21 MAR 16 GREGORY L. MOATARS, Major General, USA Program Executive Officer Ground Combat Systems EVM 202 UNCLASSIFIED Date Lesson 6-122 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents Army Research, Development, Test, and Evaluation (RDT&E) Budget Item Justification and Defense Finance and Accounting Service (DFAS) Obligations and Expenditures ARMY RDT&E BUDGET ITEM JUSTIFICATION (R-2)—August 2016 APPROPRIATION/BUDGET ACTIVITY RDT&E Engineering and Manufacturing Development (EMD) PROGRAM ELEMENT 0604285A PROJECT NAME AND NUMBER Lightweight, Assault & Reconnaissance (LAR) Vehicle DC06 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 Cost to Total Cost Actual Estimate Estimate Estimate Estimate Estimate Estimate Complete LAR Vehicle EMD 168990 258860 303860 252390 0 0 0 0 984100 A. Mission Description and Budget Item Justification: This program supports the development of a LAR Vehicle. An immediate need exists for a CH‐47 and C‐ 130 transportable LAR Vehicle, capable of deployment to anywhere on the globe in a combat ready configuration. A dynamic asymmetric threat and operational environment demands full spectrum, strategically responsive, agile and dominate land forces. Immediate response by a lethal, versatile, tactically agile joint force capable of operational maneuver once in the Area of Operations is essential to fulfilling the warfighting needs of the National Command Authority. A LAR Vehicle‐equipped Interim Brigade Combat Team (IBCT) is this force. RDT&E funding will be used to transition the LAR Vehicle Joint Capability Technology Determination (JCTD) to system development and to produce four demonstration LAR Vehicles for full military utility assessment. Prior Year Accomplishments: LAR JCTD delivered and tested. FY 2016 Program: Achieved Milestone B EMD Contract Awarded FY 2017 Planned Program: Provides funds for continuation of EMD Contract Cost (in Thousands) B. C. Program Change Summary FY2017/2018 President's Budget (PB) Appropriated Value Adjustments from FY2017/2018 PB FY2018‐2022 Program Objectives Memorandum (POM)/ Budget Estimate Submission (BES) FY16 168990 168990 0 168990 FY17 258860 FY18 303860 FY19 252390 0 258860 0 303860 0 252390 Acquisition Strategy: In October 2012, the Army leadership announced a vision of the future. This vision includes a Brigade structure and organization which is crucial to the Army's strategic responsiveness goals of deploying from a Continental United States (CONUS) base to a global theater of operation. These goals include deploying: one Brigade within 96 hours; one Division within 120 hours; and five Divisions within 30 days. To achieve this vision for the Army, the Tank‐automotive and Armaments Command (TACOM) and United States Joint Forces Command (USJFC) initiated a Class II Joint Capability Technology Demonstration (JCTD) of a LAR Vehicle. Consistent with the approved LAR JCTD transition plan and Milestone B decision, the LAR Vehicle program transitioned as an Acquisition Category I (ACAT‐I) EMD program in March 2016. An RFP for a full and open competition was prepared and released in the third quarter FY15. EMD proposals were received from two contractors resulting in a third quarter FY16 source selection. A single contract was awarded in June 2016 for the remaining development (EMD) and manufacture of four production prototype vehicles designed to address JCTD test and warfighter deficiencies and to demonstrate full military utility. UNCLASSIFIED EVM 202 UNCLASSIFIED Lesson 6-123 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents ARMY RDT&E BUDGET ITEM JUSTIFICATION (R-3)—August 2016 PROJECT NAME AND NUMBER Lightweight, Assault & Reconnaissance (LAR) Vehicle DC06 PROGRAM ELEMENT 0604285A APPROPRIATION/BUDGET ACTIVITY RDT&E Engineering and Manufacturing Development (EMD) I. Product Development Contract Method & Type Performing Activity & Location Total PYs Cost FY 2017 Cost FY 2017 Award Date FY 2018 Cost FY 2018 Award Date Cost to Complete Total Cost Target Value of Contract a. EMD LAR CPIF Increda Corp, Los Angeles, CA 140000 229100 JUN 16 273500 JUN 2016 167100 809700 809700 140000 229100 167100 809700 809700 Total PYs Cost FY 2017 Cost FY 2017 Award Date FY 2018 Cost FY 2018 Award Date Cost to Complete Total Cost Target Value of Contract 430 1200 OCT 16 1800 OCT 16 1840 5270 5270 430 1200 1840 5270 5270 Total PYs Cost FY 2017 Cost FY 2017 Award Date FY 2018 Cost FY 2018 Award Date Cost to Complete Total Cost Target Value of Contract 0 0 NA 0 NA 54890 54890 54890 0 0 54890 54890 54890 Subtotal Product Development II. Support Costs Contract Method & Type Performing Activity & Location a. Other Gov’t Agencies MIPR TACOM, Warren, MI Various Subtotal Support Costs III. Test and Evaluation Contract Method & Type Performing Activity & Location a. EMD LAR Testing MIPR ATEC, APG, MD Subtotal Test and Evaluation 273500 1800 0 IV. Management Services Contract Method & Type Performing Activity & Location Total PYs Cost FY 2017 Cost FY 2017 Award Date FY 2018 Cost FY 2018 Award Date Cost to Complete Total Cost Target Value of Contract a. PMO Support NA TACOM, Warren, MI 15000 15000 NA 15000 NA 15000 60000 60000 b. SETA Contract FPLOE SETA Corp, Lansdale, PA 13560 13560 DEC 15 13560 DEC 15 13560 54240 54240 Subtotal Management Services 28560 28560 28560 28560 114240 114240 Total Program 168990 258860 303860 252390 984100 984100 EVM 202 UNCLASSIFIED Lesson 6-124 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents ARMY RDT&E BUDGET ITEM JUSTIFICATION (R-4)—August 2016 APPROPRIATION/BUDGET ACTIVITY RDT&E Engineering and Manufacturing Development (EMD) EVM 202 PROGRAM ELEMENT 0604285A UNCLASSIFIED PROJECT NAME AND NUMBER Lightweight, Assault & Reconnaissance (LAR) Vehicle DC06 Lesson 6-125 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents LAR EMD RDT&E DFAS Obligations—As of December 2016 FY16 Obligations JPO EMD LAR Contract Forecast DFAS EMD LAR Contract Actual JPO LAR SETA Contract Forecast DFAS LAR SETA Contract Actual JPO TACOM In‐House Forecast DFAS TACOM In‐House Actual JPO LAR PMO In‐House Forecast JPO LAR PMO In‐House Actual JPO LAR Total Forecast DFAS LAR Total Actual Budget Authority Oct‐16 140.00 140.00 13.50 13.50 0. 40 0. 40 15.0 13.8 168.90 167.70 169.00 Nov‐16 140.00 140.00 13.50 13.50 0. 40 0. 40 15.0 13.8 168.90 167.70 169.00 Dec‐16 140.00 141.30 13.50 13.50 0. 40 0. 40 15.0 13.8 168.90 169.00 169.00 Jan‐17 140.00 Feb‐17 140.00 Mar‐17 140.00 Apr‐17 140.00 May‐17 140.00 Jun‐17 140.00 Jul‐17 140.00 Aug‐17 140.00 Sep‐17 140.00 13.50 13.50 13.50 13.50 13.50 13.50 13.50 13.50 13.50 0. 40 0. 40 0. 40 0. 40 0. 40 0. 40 0. 40 0. 40 0. 40 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 169.00 FY17 Obligations JPO EMD LAR Contract Forecast DFAS EMD LAR Contract Actual JPO LAR SETA Contract Forecast DFAS LAR SETA Contract Actual JPO TACOM In‐House Forecast DFAS TACOM In‐House Actual JPO LAR PMO In‐House Forecast JPO LAR PMO In‐House Actual JPO LAR Total Forecast DFAS LAR Total Actual Budget Authority Oct‐16 76.40 0.00 13.60 0.00 1.20 0.00 1.30 0.00 92.40 0.0 258.90 Nov‐16 76.40 0.00 13.60 0.00 1.20 0.00 2.50 1.10 93.7 1.10 258.90 Dec‐16 76.40 0.00 13.60 13.60 1.20 1.20 3.80 2.20 94.90 17.0 258.90 Jan‐17 152.70 Feb‐17 152.70 Mar‐17 152.70 Apr‐17 229.10 May‐17 229.10 Jun‐17 229.10 Jul‐17 229.10 Aug‐17 229.10 Sep‐17 229.10 13.60 13.60 13.60 13.60 13.60 13.60 13.60 13.60 13.60 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 5.00 6.30 7.50 8.80 10.00 11.30 12.50 13.80 15.00 172.50 173.80 175.00 252.70 253.90 255.20 256.40 257.70 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 258.90 Cumulative FY15‐FY17 JPO EMD LAR Contract Forecast DFAS EMD LAR Contract Actual JPO LAR SETA Contract Forecast DFAS LAR SETA Contract Actual JPO TACOM In‐House Forecast DFAS TACOM In‐House Actual JPO LAR PMO In‐House Forecast JPO LAR PMO In‐House Actual JPO LAR Total Forecast DFAS LAR Total Actual Budget Authority Oct‐16 216.4 140.0 27.1 13.5 1.2 0.0 16.3 13.8 261.3 167.7 427.9 Nov‐16 216.4 140.0 27.1 13.5 1.2 0.0 17.5 14.9 262.6 168.8 427.9 Dec‐16 216.4 141.3 27.1 27.1 1.2 1.2 18.8 16.0 263.8 186.0 427.9 Jan‐17 292.7 Feb‐17 292.7 Mar‐17 292.7 Apr‐17 369.1 May‐17 369.1 Jun‐17 369.1 Jul‐17 369.1 Aug‐17 369.1 Sep‐17 369.1 27.1 27.1 27.1 27.1 27.1 27.1 27.1 27.1 27.1 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 20.0 21.3 22.5 23.8 25.0 26.3 27.5 28.8 30.0 341.5 342.8 344.0 421.7 422.9 424.2 425.4 426.7 427.9 427.9 427.9 427.9 427.9 427.9 427.9 427.9 427.9 427.9 EVM 202 UNCLASSIFIED Lesson 6-126 LAR Vehicle Program Control Book—DEC 2016 JPO Budget Documents LAR EMD RDT&E DFAS Expenditures—As of December 2016 FY16 Expenditures JPO EMD LAR Contract Forecast DFAS EMD LAR Contract Actual JPO LAR SETA Contract Forecast DFAS LAR SETA Contract Actual JPO TACOM In‐House Forecast DFAS TACOM In‐House Actual JPO LAR PMO In‐House Forecast JPO LAR PMO In‐House Actual JPO LAR Total Forecast DFAS LAR Total Actual Budget Authority Oct‐16 31.7 9.0 9.5 9.4 0.4 0.4 13.8 13.8 55.3 32.6 169.0 Nov‐16 53.3 38.5 10.8 11.8 0.4 0.4 15.0 13.8 79.5 64.5 169.0 Dec‐16 75.0 60.7 12.2 11.6 0.4 0.4 15.0 13.8 102.5 86.5 169.0 Jan‐17 96.7 Feb‐17 118.3 Mar‐17 140.0 Apr‐17 140.0 May‐17 140.0 Jun‐17 140.0 Jul‐17 140.0 Aug‐17 140.0 Sep‐17 140.0 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 169.0 169.0 169.0 169.0 169.0 169.0 169.0 169.0 16.9 169.0 169.0 169.0 169.0 169.0 169.0 169.0 169.0 169.0 FY17 Expenditures JPO EMD LAR Contract Forecast DFAS EMD LAR Contract Actual JPO LAR SETA Contract Forecast DFAS LAR SETA Contract Actual JPO TACOM In‐House Forecast DFAS TACOM In‐House Actual JPO LAR PMO In‐House Forecast JPO LAR PMO In‐House Actual JPO LAR Total Forecast DFAS LAR Total Actual Budget Authority Oct‐16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 258.9 Nov‐16 0.00 0.00 0.00 1.4 0.00 0.00 0.00 0.00 0.00 1.4 258.9 Dec‐16 0.00 0.00 0.00 2.8 0.1 0.00 1.3 0.00 1.4 2.8 258.9 Jan‐17 0.00 Feb‐17 0.00 Mar‐17 0.00 Apr‐17 19.1 May‐17 38.2 Jun‐17 57.3 Jul‐17 76.4 Aug‐17 95.5 Sep‐17 114.5 0.00 0.00 1.1 2.3 3.4 4.5 5.7 6.8 7.9 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 2.5 3.8 5.0 6.3 7.5 8.8 10.0 11.3 12.5 2.7 4.1 6.5 28.1 49.7 71.3 92.8 114.4 136.0 258.9 258.9 258.9 258.0 258.9 258.9 258.9 258.9 258.9 Cumulative FY15‐FY17 JPO EMD LAR Contract Forecast DFAS EMD LAR Contract Actual JPO LAR SETA Contract Forecast DFAS LAR SETA Contract Actual JPO TACOM In‐House Forecast DFAS TACOM In‐House Actual JPO LAR PMO In‐House Forecast JPO LAR PMO In‐House Actual JPO LAR Total Forecast DFAS LAR Total Actual Budget Authority Oct‐16 31.7 9.0 9.5 9.4 0.4 0.4 13.8 13.8 55.3 32.6 427.9 Nov‐16 53.3 38.5 10.8 13.2 0.4 0.4 15.0 13.8 79.5 65.9 427.9 Dec‐16 75.0 60.7 12.2 14.4 0.5 0.4 16.3 13.8 103.9 89.3 427.9 Jan‐17 96.7 Feb‐17 118.3 Mar‐17 140.0 Apr‐17 159.1 May‐17 178.2 Jun‐17 197.3 Jul‐17 216.4 Aug‐17 235.5 Sep‐17 254.5 13.5 13.5 14.6 15.8 16.9 18.0 19.2 20.3 21.4 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 17.5 18.8 20.0 21.3 22.5 23.8 25.0 26.3 27.5 171.7 173.1 175.5 197.1 218.7 240.3 261.8 283.4 152.9 427.9 427.9 427.9 427.0 427.9 427.9 427.9 427.9 427.9 EVM 202 UNCLASSIFIED Lesson 6-127 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents EVM 202 UNCLASSIFIED Lesson 6-128 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents Integrated Program Management Report (IPMR) Format 1—As of 31 Dec 2016 EVM 202 UNCLASSIFIED Lesson 6-129 LAR Vehicle Program Control Book—DEC 2016 EVM 202 Increda LAR Vehicle Documents UNCLASSIFIED Lesson 6-139 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents IPMR Format 2—As of 31 Dec 2016 EVM 202 UNCLASSIFIED Lesson 6-131 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents IPMR Format 3—As of 31 Dec 2016 EVM 202 UNCLASSIFIED Lesson 6-132 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents IPMR Format 4 EAC—As of 31 Dec 2016 EVM 202 UNCLASSIFIED Lesson 6-133 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents IPMR Format 4 BAC—As of 31 Dec 2016 EVM 202 UNCLASSIFIED Lesson 6-134 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents IPMR Format 5—As of 31 Dec 2016 Contract Summary The contract is behind schedule (11%) and over cost (8%), projecting a positive variance at completion (VAC) of $14.2M. Formal Reprogramming (OTB/OTS) There has been no reprogramming. Estimate at Completion (EAC) Best Case: $595.1M Worst Case: $647.1M Most Likely Case: $633.8M Due to a later start in the contract than originally planned, many subsystems’ design efforts are behind schedule. We project that once we get past the subsystem design packages and drawings, we will be back on schedule and will finish under cost. Undistributed Budget (UB) There is no UB. Management Reserve (MR) Minor internal replanning was performed this period, with small amounts of budget and scope removed from multiple Work Breakdown Structure (WBS) elements. $184K of work was removed from the performance measurement baseline (PMB) and returned to MR. Integrated Master Schedule (IMS) Subsystem Design activities on multiple subsystems are slightly behind schedule. Additional engineering support will correct this situation and meet critical milestone events. Milestones are still on track to complete per baseline schedule. An IMS Schedule Risk Analysis (SRA) was completed prior to the Integrated Baseline Review (IBR). We will perform another SRA during the summer 2017 timeframe. Format 3 Changes No engineering change orders (ECOs) were processed during the month of Dec 2016. However, to accommodate recovery in problem areas, some internal replanning of work was completed during the month of December. Format 4 Changes Changes in Format 4 were minor and were made to accommodate schedule shifts due to realignment of resources. EVM 202 UNCLASSIFIED Lesson 6-135 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents Cost and Schedule Variances Schedule Significant negative schedule variances were reported in the Armament, Body/Cab, Suspension Steering, and System Engineering areas. These variances resulted from delays in design activity for subsystems such as steering, and wheel and brake assemblies. Once the design activities are complete, the schedule variance will greatly improve. Cost The areas of System Engineering, Armament, Suspension Steering, and Cooling are driving the biggest cost variances. This is a result of attempts to utilize additional engineering expertise to expedite design activities, while ensuring we achieve the Key Performance Parameters (KPPs). Corrective Actions To get back on schedule and complete the subsystem design activities, some internal replanning budget shifts were implemented to reflect the changes in planned work. At Completion Variances With the current plan and additional resources, the program will realize efficiencies in finalizing designs and test & integration activities. Despite small negative cost variances, we project to underrun the contract at completion. Variance Analysis December 2016 Schedule Drivers December 2016 Cost Drivers EVM 202 UNCLASSIFIED Lesson 6-136 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents 1.1.10 Armament Schedule Variance (SV): -$4.36M Cost Variance (CV): -$1.4M. During the Armament design phase, we found some minor issues in size and weight of the side armor, as well as the gun barrel length. The planned redesign will get the program back on schedule and meet requirements. This has resulted in a schedule slip of 14 days and unexpected cost increase of $1.4M in labor charges. 1.1.2.2 Body/Cab SV: -$3.69M CV: -$6.36M (within threshold) The SV (-$3.69M) resulted from minor issues in size and weight of the side armor which affected the Armament activities. Due to this issue, we had to relook at position of the armor on the vehicle. Due to future efficiencies, this will recover in the next few months. Following the redesign of the armor placement, the budget for this task was reduced by $6K this period due to the change in future planned work. This is reflective of the efficiencies discovered when looking at the plan. 1.1.5 Suspension/Steering SV: -$3.27M CV: -$1.3M The steering and wheel systems are behind schedule by 4 weeks. This SV (-$3.27M) is caused by subsystem relooks due to the armament issues. Due to the length of the gun barrel, the probability of rollover while traversing slight grades was beyond limits. This rollover probability required a relook at the steering subsystem to identify ways to accommodate turning radius, while decreasing rollover threat. The CV (-$1.3M) indicates that this system is costing more than was planned. A breakdown of this variance indicates an impact on both material and labor. Also this month, the budget at completion (BAC) for the Suspension/Steering system has been reduced by $30K to account for change in scope associated with not requiring an additional subsystem design review, as originally baselined. This is reflective of efficiencies. EVM 202 UNCLASSIFIED Lesson 6-137 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents 1.4 System Engineering SV: -$2.79M CV: -$2.19M The SV (-$2.79M) is tied to the inability to meet baselined subsystem design activity deadlines. The performance of System Engineering activities is tied to other WBS elements. As those activities failed to claim performance, the System Engineering element also cannot claim performance. Once all subsystem design work is complete, this variance will improve. The CV (-$2.19M) is attributable to unexpected labor needs and has two main contributors: 1) an extensive design review requiring far more time than planned; and 2) a change in manpower mix using more senior engineers when junior engineers were reallocated to support work in other areas (Suspension/Steering). The CV (-$2.19M) will correct itself due to anticipated cost efficiencies as we plan to underrun this element. Junior engineers will return from working Suspension/Steering tasks this month, reducing the actual cost for future planned work. Additional meetings and the delay of acceptance test planning has the potential to delay System CDR if we attempt to reduce costs by adjusting the labor skill mix again. No further corrective action identified. EVM 202 UNCLASSIFIED Lesson 6-138 LAR Vehicle Program Control Book—DEC 2016 Increda LAR Vehicle Documents Contract Funds Status Report (CFSR)—As of 31 Dec 2016 DD FORM 1586 EVM 202 UNCLASSIFIED Lesson 6-139 LAR Vehicle Program Control Book—DEC 2016 System Engineering Documents LAR Vehicle Risk Management Technical Metrics Technical Performance Measurements (TPMs) As of December 2016 EVM 202 UNCLASSIFIED Lesson 6-140 LAR Vehicle Program Control Book—DEC 2016 System Engineering Documents Fuel Consumption December 2016 TPM EVM 202 UNCLASSIFIED Lesson 6-141 LAR Vehicle Program Control Book—DEC 2016 System Engineering Documents Operating Power December 2016 TPM EVM 202 UNCLASSIFIED Lesson 6-142 LAR Vehicle Program Control Book—DEC 2016 System Engineering Documents IR Signature December 2016 TPM EVM 202 UNCLASSIFIED Lesson 6-143 LAR Vehicle Program Control Book—DEC 2016 System Engineering Documents Power Package Weight December 2016 TPM EVM 202 UNCLASSIFIED Lesson 6-144 LAR Vehicle Program Control Book—DEC 2016 System Engineering Documents Mean Time Between Failure (MTBF) December 2016 TPM EVM 202 UNCLASSIFIED Lesson 6-145 LAR Vehicle Program Control Book—DEC 2016 System Engineering Documents Estimates for Selected Performance KPPs—As of December 2016 Contract Specifications KPPs Contract Specification Survivability 0.97 Grade 40⁰ Turning Radius 25 ft. Range 385 mi. Combat Vehicle Weight 13,000 kg Interoperability See CDD Availability 0.97 MTBCMF 680 Milestones Contract Specification Subsystem CDR FEB 2017 System CDR SEP 2017 PPD NOV 2018 Specification Estimates* Status as of 15 Dec 2016 Survivability – 0.97 Range – 385 mi. Turning Radius – 25 ft. Grade – 40° • • • • • • • • EMD$ – $624,910 Average Production Unit Cost – $2.75M Empty Vehicle Weight – 11,000 kg Combat Vehicle Weight – 13,000 kg KPPs Driving WBS Element Technical Risk • • • • • Survivability – Body/Cab, Testing, Power Package (IR Signature), & Communications Range and Grade – Power Package Gross Vehicle Weight – Power Package, Armament, Body/Cab, & Auxiliary Equipment Turning Radius – Suspension/Steering and Armament EMD$ – Driven by all Average Production Unit Cost – Calculated using actual and projected recurring costs. *All projections based on engineering design simulations and testing completed to date. Acronyms and Abbreviations: CDD – Capability Development Document CDR – Critical Design Review EMD – Engineering and Manufacturing Development EVM 202 MTBCMF – Mean Time between Critical Mission Failures MTTR – Mean Time to Repair PPD – Production Prototype Delivery UNCLASSIFIED Lesson 6-146 Risk Assessment—As of December 2016 Risk # Risk Element Risk Level 1 Engine High 2 Cooling System High 3 Exhaust System High 4 Suspension/Steering Moderate 5 Power Package/Drive Train Moderate 6 Fuel System Moderate 7 Controls/Instrumentation Moderate 8 Subsystem Test Moderate 9 Armament Moderate 10 Integration, Assembly, Test & Checkout Moderate 11 Other Power Package Components Moderate 12 Hull/Frame/Body/Cab Moderate 13 Auxiliary Automotive Low 14 Communications Low 15 Systems Engineering Low 16 Program Management Low 17 System Test & Evaluation Low 18 Training Low 19 Data Low 20 Peculiar Support Equipment Low 21 Initial Spares & Repair Parts Low EVM 202 UNCLASSIFIED Lesson 6-147 Exercise Instructions (Continued) Group Task: Program Requirements Analysis Exercise 1. Using the LAR March 2016 APB, review and identify the LAR Vehicle threshold and objective KPP values required for a production and deployment decision. (See the LAR Data Package.) 2. Identify any discrepancies of these values with the LAR Vehicle contract requirements. Team Whiteboard Assignments • • • Team A—APB Performance KPPs (Survivability and Grade) Team B—APB Performance KPPs (Turning Radius and Range) Team C—APB Schedule Parameters • Team D—APB Cost Parameters EVM 202 November 2017 Lesson 6-148 Group Task: Notional Data Validity Check Exercise Complete the last two columns of this chart. Put 1 if the data needs to be corrected or 2 if the finding needs to be investigated. Provide a brief explanation of your answer in the Notes/Actions column. Validity Check Checks for 1 or 2 100% Complete ACWP ≠ EAC Elements 100% complete, but EAC not equal to cumulative actual cost ACWP > LRE Elements with cumulative actual cost greater than LRE ACWP > BAC Elements where cumulative actual cost exceeds BAC ACWP increase without BCWP increase For the current period, there is ACWP with no BCWP BCWP increase without ACWP increase For the current period, there is BCWP with no ACWP BCWP > BAC Elements where BCWP exceeds BAC BCWS > BAC Elements where BCWS exceeds BAC CV < VAC (EAC realism) Elements where CVCUM is negative, VAC is greater than CVCUM TCPI-LRE – CPICUM = ±0.10 (EAC realism) Elements where TCPI-LRE differs from CPICUM by more than ±.10 1. Need Correction EVM 202 Notes/Actions 2. Need Investigation November 2017 Lesson 6-149 Individual Task: EVM Chart Analysis Exercise Program offices have received real IPMR data which when plotted would generate similar graphs. Answer each of the following questions. Each question is stand-alone and not related to any other question. Review the charts and circle the underlined terms to answer the questions. Performance Measurement Baseline $ BCWS BCWP ACWP Time Now EVM 202 November 2017 Completion Date Lesson 6-150 1. When comparing the time phased-budget baseline with the earned value to date this project is ahead of or behind schedule, indicating a favorable or unfavorable schedule variance. Based on the trend so far, the project will finish ahead of schedule, or the project will finish behind schedule, or you can’t make any conclusion about when the project will finish without a network schedule. 2. When comparing the actual costs with earned value, this project is overrunning or underrunning its budget, indicating a favorable or unfavorable cost variance. If this trend continues to completion, the project cost will be more than or less than the BAC, or you cannot tell without the contractor’s current EAC. EVM 202 November 2017 Lesson 6-151 Cumulative Variance Chart LAR EMD Dec 2016, LAR EVM 202 November 2017 Lesson 6-152 3. The BCWP is less than or greater than the ACWP. 4. The BCWP is less than or greater than the BCWS. 5. When will the contractor accomplish all of the planned work? 6. The BAC is less than or greater than the EAC. EVM 202 November 2017 Lesson 6-153 Schedule and Cost Performance Indices Chart, LAR EMD Feb 2017, Suspension/Str EVM 202 November 2017 Lesson 6-154 7. Has the contractor spent less than or more than planned to accomplish the tasks to date? 8. Has the contractor accomplished less work or more work than planned? 9. How would you explain the cumulative SPI? 10. How would you explain the cumulative CPI? EVM 202 November 2017 Lesson 6-155 Cost/Schedule Variance Trends Chart, LAR EM 2016 Dec 2017, LAR EVM 202 November 2017 Lesson 6-156 11. Has the contractor spent less than or more than planned to accomplish the tasks to date? 12. Has the contractor accomplished less work or more work than planned? 13. Can one project the value of the Cost Variance at the end of the project? 14. Can one project the value of the Schedule Variance at the end of the project? 15. Is the contractor predicting an underrun or overrun? Does this make sense? EVM 202 November 2017 Lesson 6-157 Estimate at Completion Chart, LAR EMD Dec 2017, Prime Vehicle EVM 202 November 2017 Lesson 6-158 16. Is the contractor projecting an underrun or overrun? 17. What does the EAC generated using CPI Forecast (Fct) represent? 18. What does the EAC generated using CPI*SPI Fct represent? 19. Does the contractor’s EAC make sense? EVM 202 November 2017 Lesson 6-159 EAC Realism Chart, LAR EMD Dec 2017, LAR 20. What can one assess about the contractor’s EAC realism by analyzing this chart? EVM 202 November 2017 Lesson 6-160 Group Task: Price at Completion (PAC) Exercise Use the Dec 16 Empower Executive Summary contract data and Six Period Summary EAC forecasts to compute a LAR Dec16 PAC. From Empower Executive Summary DEC 2016 CONTRACT TYPE: CPIF CONTRACT PERIOD: 10 JUN 2016 to 30 May 2019 NEGOTIATED COST: 647,115,000 EST AUTH UNPRICED: 0.0 CONTR BUDGET BASE: 647,115,000 TOTAL ALLOC BUDGET: 647,115,000 PERF MEASUREMENT BL: 634,392,000 MANAGEMENT RESERVE: 12,723,000 TARGET FEE $: 77,007,000 TARGET FEE %: 11.90 TARGET PRICE: 724,122,000 SHARE RATIO ABOVE: 50/50 SHARE RATIO BELOW: 30/70 MIN FEE: 32,356,000 MAX FEE: 97,067,000 From Empower Six Period Summary DEC 2016 Statistical and Independent Forecasts SEPT 16 OCT 16 NOV 16 DEC 16 CUR CPI 695,263,116 627,188,503 632,012,885 837,762,144 3 PER AVG 647,115,000 627,188,503 629,718,175 704,648,242 6 PER AVG 647,115,000 627,188,503 629,718,175 704,648,242 CUM CPI 695,263,116 679,023,301 669,234,539 700,023,774 CPI*SPI 734,461,584 721,124,185 726,155,131 775,298,246 MICOM EAC 647,115,000 665,692,475 682,771,842 780,511,577 COST & SCH 691,410,872 684,774,365 686,606,598 712,219,541 PF EAC EVM 202 Over/Under Fee Adjustment Adjusted Fee November 2017 Applied Fee PAC Do we have enough funds? Lesson 6-161 Group Task: EVM Metrics Review Exercise Using the data on the 31 Dec 2016 Integrated Program Management Report (IPMR) Format 1, from the LAR Vehicle Data Package, answer the following questions. 1. What is the Negotiated Contract Cost (NCC)? 2. What is the Budget at Completion (BAC) for the contract? 3. How much is in Management Reserve (MR)? 4. Why do we need Current Period data and Cumulative to Date data? 5. What is the Cumulative Cost Variance (CV) at the contract level? What does this CV tell us? 6. What is the Cumulative Schedule Variance (SV) at the contract level? What does this SV tell us? 7. Calculate the Cumulative CPI. What does this CPI tell us? 8. Calculate the Cumulative SPI. What does this SPI tell us? EVM 202 November 2017 Lesson 6-162 9. Using the data for the performance measurement baseline (PMB), calculate the Floor and Ceiling Estimates at Completion (EACs). Floor: Ceiling: 10. What is the contractor’s most likely EAC? 11. Based on the EAC calculations in Question 9, is the contractor’s EAC reasonable? Why or why not? 12. Calculate the To Complete Performance Index (TCPI) for the contractor’s most likely EAC. Why is this metric important? 13. What level of cost efficiency has the contractor been achieving? 14. Given the TCPI based on the contractor's EAC, what conclusion can you draw about the contractor’s EAC? 15. What EAC would you recommend for the program and why? EVM 202 November 2017 Lesson 6-163 IPMR/CFSR Comparative Analysis Exercise Instructions Compare the IPMR and the CFSR time-phased estimates. 1. Open the worksheet “IPMR CFSR Comparative Analysis Exercise” on Blackboard. 2. Locate the DEC 2016 LAR Vehicle Program IPMR Formats 1 and 3 and the CFSR in your Student Guide. 3. Enter the following information into the table using the IPMR: a. New program office PAC from Lesson 6 (At Completion) b. IPMR Format 3 BCWS for Cumulative to Date, JAN 17 to JUN 17, SEP 17, SEP 18, and To Complete c. SPICUM from Lesson 6 for JAN 17 to JUN 17, SEP 17, and SEP 18 d. EAC performance factor (CPICUM from Lesson 6) for JAN 17 to JUN 17, SEP 17, and SEP 18 e. Estimate fee for Cumulative to Date, JAN 17 to JUN 17, SEP 17, and SEP 18 (Use two decimal places for SPICUM and CPICUM.) 4. For columns that have no reported data, leave the cells empty. EVM 202 November 2017 Lesson 6-164 EVM 202 Lesson 7: Tool Analysis Case STUDENT GUIDE CONTENTS 1. Learning Objectives and Additional References 2. Exercise Instructions EVM 202 November 2017 Lesson 7-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 7-2 Learning Objectives and Additional References Terminal Learning Objective Analyze Integrated Program Management Report (IPMR) data using automated tools. Enabling Learning Objectives • • • Analyze cost and schedule data Analyze performance trends Demonstrate the results of IPMR analysis EVM 202 November 2017 Lesson 7-3 Exercise Instructions Individual Task: Tools Analysis Case Study Briefing (Use the Tools Analysis Case Study Briefing Template on Blackboard for this exercise.) Your goal with this task is to understand the basic operations of EVM tools. You will use the Tools Analysis Case Study Briefing Template and the tools listed under References on Blackboard to complete this task. The job aids on Blackboard are available for your reference. Use your team’s File Exchange on Blackboard under Team Groups > Team [A/B/C/D] > File Exchange to complete this exercise. File Exchange Instructions To complete your Tools Analysis Case Study Briefing: 1. Select the Lesson 7 tab from the Course Menu on Blackboard. 2. Download the Tools Analysis Case Study Briefing Template under Task: Tools Analysis Case Study Briefing. 3. Save the file to your computer. 4. Open the following under References: a. Empower LAR Vehicle EMD 2016—DEC 16 Dataset b. MS Project LAR Vehicle DEC 2016 Schedule c. Empower, EVM Chart Analysis, and MS Project job aids (as needed) 5. Following the directions in each section of the template: a. Answer the questions. b. Copy the specified Empower or MS Project views onto your slides. i. Use Empower line charts, not bar or column charts. 6. Save your updated file to your computer. Note: You will only need to brief one or more slides (i.e., one or more questions) to the class. 7. When directed by the instructor, save a copy of your briefing (Select Save as…): a. Name the file following this convention: Slide#_LastName_FirstName (e.g., 01_Cohe_Miriam; 02_Powell_Rick; 17_Doe_John; etc.) b. Delete all the slides except the one(s) you will brief. c. Save your updated file to your computer. EVM 202 November 2017 Lesson 7-4 8. Upload your final file to your team’s File Exchange: a. Select the Team Groups tab on the Course Menu. b. Select your team’s link under Groups. c. Select File Exchange under Group Tools to upload and share files. d. Select Add File to upload a file. e. Select Browse My Computer to locate the file on your computer. f. Enter a Name for your file in the Name field, using the naming convention listed above. g. Select Submit to post the file to your team’s File Exchange. EVM 202 November 2017 Lesson 7-5 EVM 202 Lesson 8: Integrated Product Team (IPT) Analysis and Performance Case STUDENT GUIDE CONTENTS 1. 2. 3. 4. Learning Objectives and Additional References LAR Vehicle Scenario Presentation Slides Exercise Instructions EVM 202 November 2017 Lesson 8-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 8-2 Learning Objectives and Additional References Terminal Learning Objective Assess IPT-level performance using program data and automated tools. Enabling Learning Objectives • • Assess program performance at the IPT level using the Integrated Analysis Model Defend the findings and recommendations of the evaluation Additional References • • • Defense Acquisition Portal (DAP) Acquisition Community Connection (ACC) EVM Community of Practice (CoP) Lesson 6 – Integrated Program Management (3-Step Process) EVM 202 November 2017 Lesson 8-3 LAR Vehicle Scenario Background It is July 9, 2017. COL Paine has just returned from Command Day with the warfighters where “The apparent lack of progress on the LAR Vehicle EMD contract” was a major discussion point. The LAR Vehicle continues to be a number one priority for the Army, but as the war on terrorism continues all programs are being scrutinized in the FY18 budget estimate submission. GEN Moatars has scheduled a command-level LAR Vehicle program status review for next week. COL Paine needs a status update and recommendations for a plan of action early this afternoon to brief GEN Moatars. The most current data we have is the LAR EMD JUN 17 Empower database and the LAR JUN 2017 schedule. BE PREPARED. COL Paine’s visit was, to say the least, THORNY! EVM 202 November 2017 Lesson 8-4 September 2016 EVM 202—Lesson 8 Integrated Product Team (IPT) Analysis and Performance Case EVM 202 November 2017 Lesson 8-5 STEP 3 FORMULATE A PLAN OF ACTION 2 EVM 202 November 2017 Lesson 8-6 Formulate a Plan of Action • Why: Need a way forward for issues uncovered during the three-step Integrated Analysis Model • What: Create action plans and recommendations for all issues and report them in a format that supports leadership review and action • How: – Create action plans – Generate Integrated Product Team (IPT) Reports 3 EVM 202 November 2017 Lesson 8-7 Create Action Plans • Why: To document the results of the integrated program analysis in a format for leadership and oversight reporting • What: Collect the key analysis decisions resulting from the three-step Integrated Analysis Model and report them in a format that supports leadership review and action • How: Effective EVM provides early insight for PM actions: – Update total program budget if necessary based on PAC – Ask IPTs for technical scope and/or schedule requirements trade-off opportunities – Ensure aggressive risk mitigation activities and attention to problemsolving – Reduce overall scope – Obtain additional funding 4 EVM 202 November 2017 Lesson 8-8 Generate Integrated Product Team (IPT) Reports • Why: To document the results of the integrated program analysis in a format for leadership and oversight reporting • What: Collect the key analysis decisions resulting from the three-step Integrated Analysis Model and report them in a format that supports leadership review and action • How: – Collect, summarize, and report contract issues – Collect, summarize, and report APB issues and program metrics – Collect, summarize, and report EVM program cost and schedule issues – Collect, summarize, and report program financial issues 5 EVM 202 November 2017 Lesson 8-9 IPT Reports—Contract Issues • Step 1.2 P0000 Status – Confirm that the PMB reflects all contract modifications • Step 1.3 Specification Issues – Identify any contract specification issues that current TPMs forecast will not be achieved – Identify proposed technical solutions • Step 1.4 Contract Delivery Issues – Identify any contractual deliveries that the current network schedule forecasts will not be met – Identify proposed schedule solutions • Steps 1.4 and 1.5 Contract Schedule and Cost Issues – Identify any schedule and cost drivers that may be impacting the contract (overtime to correct unfavorable SVs) – Identify proposed solutions • Step 3 Contractor Finance Issues – Identify any cash flow, obligation, expenditure, and termination liability issues that may exist on the contract – Identify proposed solutions for these issues 6 EVM 202 November 2017 Lesson 8-10 IPT Reports—APB Issues and Program Metrics APB Issues • Step 1.3 Performance KPPs – Identify performance KPPs where their associated TPM forecasts indicate they will achieve less than the required threshold and proposed technical solutions • Step 1.4 Schedule Parameters – Identify any schedule parameters that the current network schedule forecasts a completion date after the required ABP threshold date and proposed schedule solutions • Step 3 Cost Parameters – Identify any cost overrun estimates that exceed current APB-approved funding levels and proposed solutions Program Metrics • Step 1.1—EVMS Compliance and Integrated Baseline Development • Step 1.4—Baseline Execution Index • Step 1.2—Contract Modifications and Baseline Revisions • Step 2—SPIcum, CPIcum, and CPIcum vs. TCPI 7 EVM 202 November 2017 Lesson 8-11 IPT Reports—Earned Value Management Status • Step 1.2—Confirm the PMB is current and reflects all contract modifications – Identify inconsistent MR and UB issues – Explain baseline adjustments and OTBs • Step 1.4—Identify the top (3–5) schedule drivers using all available data (network schedule, technical drivers, and EVM schedule metrics) • Step 1.5—Identify the top (3–5) cost drivers using all available data (network schedule, technical drivers, EVM schedule and cost metrics) • Step 2—Determine at completion cost – Provide an EAC range of costs consistent with observed and forecast risks and EVM performance indexes – Provide a most likely PAC – When warranted (mature contracts) provide a risked-based EAC 8 EVM 202 November 2017 Lesson 8-12 IPT Reports—Financial Status • Step 3—Confirm that PPBE R&P Forms provide adequate resources to efficiently complete the program • Step 3—Report current budget obligations and expenditures and identify budget issues and proposed solutions 9 EVM 202 November 2017 Lesson 8-13 Step 3—Formulate a Plan of Action Summary • In Step 3: Formulate a Plan of Action, the EVM analyst and the IPTs use the information gleaned from the other two steps to recommend an action plan for the PM to: – Meet schedule delivery dates – Stay within budget – Meet technical performance requirements • Effective EVM provides early insight for PM actions, such as: – Update total program budget, if necessary, based on PAC – Ask IPTs for technical scope and/or schedule requirements trade-off opportunities – Ensure aggressive risk mitigation activities and attention to problemsolving – Reduce overall scope – Obtain additional funding 10 EVM 202 November 2017 Lesson 8-14 Exercise Instructions Group Task: IPT Analysis and Performance Briefing (Use the IPT Analysis and Performance Briefing Template on Blackboard for this exercise.) Your IPT will use the most current data to analyze your IPT’s assigned WBS element, or elements, and prepare an IPT briefing for COL Paine. At a minimum, the briefing should contain: • • • • • • • • Summarized IPT Earned Value Management (EVM) metrics and the EVM metrics for each of your WBS elements Three different IPT level charts that tell the story of what is happening A history of your IPT (baseline stability, budget changes, schedule problems, etc.) Critical path or float information: o WBS elements and tasks that are on the critical path to Subsystem Critical Design Review (CDR) and System CDR; OR o The amount of float time for incomplete non-critical tasks leading up to the Subsystem CDR, if none of your IPT’s WBS tasks are on the critical path Answers to the following questions: o What is the scheduled date for the Subsystem CDR? o What is the scheduled date for the System CDR? A technical performance assessment Three estimates at completion (EACs) (high, low, and most likely) and their associated to-complete performance indexes (TCPIs) A summary of issues and the way ahead or next steps Use your team’s File Exchange on Blackboard under Team Groups > Team [A/B/C/D] > File Exchange to complete this exercise. File Exchange Instructions To complete your team’s IPT Analysis and Performance Briefing: 1. Select the Lesson 8 tab from the Course Menu on Blackboard. 2. Download the IPT Analysis and Performance Briefing Template under Task: Integrated Product Team (IPT) Analysis and Performance Briefing. 3. Save the file to your computer. 4. Complete each section of the IPT Analysis and Performance Briefing as a team. 5. To share draft files with your team members: a. Select the Team Groups tab on the Course Menu. b. Select your team’s link under Groups. EVM 202 November 2017 Lesson 8-15 c. Select File Exchange under Group Tools to upload and share files. d. Select Add File to upload a file. e. Select Browse My Computer to locate the file on your computer. f. Enter a Name for your file in the Name field. g. Select Submit to post the file to your team’s File Exchange. 6. Upload your Final IPT Analysis and Performance Briefing to your team’s File Exchange. Note: Name your file “Final IPT Analysis and Performance Briefing” to distinguish it from any draft documents in your team’s File Exchange. EVM 202 November 2017 Lesson 8-16 EVM 202 Lesson 9: Integrated Program Management Case STUDENT GUIDE CONTENTS 1. Learning Objectives and Additional References 2. LAR Vehicle Scenario 3. Exercise Instructions EVM 202 November 2017 Lesson 9-1 This page is left blank intentionally. EVM 202 November 2017 Lesson 9-2 Learning Objectives and Additional References Terminal Learning Objective Assess program performance using program data and automated tools. Enabling Learning Objectives • • Assess program performance using the Integrated Analysis Model Defend the findings and recommendations of the evaluation Additional References • • • Defense Acquisition Portal (DAP) Acquisition Community Connection (ACC) EVM Community of Practice (CoP) Lesson 6 – Integrated Program Management (3-Step Process) EVM 202 November 2017 Lesson 9-3 LAR Vehicle Scenario Background The LAR Vehicle Program Engineering and Manufacturing Development (EMD) contract is well underway, and the program is moving into final assembly and testing. As part of DAU’s performance support mission, Colonel (COL) Paine has volunteered your team to help DAU develop an integrated program management case study using the LAR Vehicle program's Empower database and MS Project schedules. COL Paine has requested that you prepare a briefing that details the LAR Vehicle program at a snapshot in time. The briefing should correlate all elements of the Integrated Analysis Model. So that future generations can learn from the LAR Vehicle program's success story, you will have to evaluate and identify Acquisition Program Baseline (APB) issues based on the APBs that were valid at the time. EVM 202 November 2017 Lesson 9-4 Exercise Instructions Graded Team Activity: Integrated Program Management Case Study Briefing (Use the Integrated Program Management Case Study Briefing Template on Blackboard for this exercise.) This is a graded group exercise. It counts for 20 percent of your total EVM 202 grade. Your program office team will prepare a comprehensive contract status briefing. As a team, apply the Integrated Analysis Model to evaluate your assigned month of LAR Vehicle program data. Your team should review all available data and correlate cost, schedule, and technical performance to determine critical Work Breakdown Structure (WBS) elements. Be sure to review Integrated Program Management Report (IPMR) data, schedule performance data, technical performance data, as well as your current APB. Determine the top cost and schedule drivers and generate an independent estimate at completion (EAC) range. You will not be required to compare the Contract Funds Status Report (CFSR) to the IPMR. However, you should assess whether program execution is possible with existing budget resources. Each team will analyze a different month of data. The completion of the case studies will simulate the evolution of the LAR Vehicle program over time. Your team will have access to the following data: • • • • • LAR Vehicle program Empower database LAR Vehicle program MS Project Integrated Master Schedule (IMS) LAR Vehicle program Joint Program Office (JPO) documents, including APB, R-2, R-3, R-4, and budget documents (See the LAR Vehicle Program Control Book for your assigned month) Increda IPMR Formats 1–5 and CFSR (See the LAR Vehicle Program Control Book for your assigned month) System Engineering Technical Performance Measure (TPM) charts (See the LAR Vehicle Program Control Book for your assigned month) Deliverables and Scoring 1. Deliver one copy of the Integrated Program Management Case Study Summary form to the instructor and post your team’s briefing on Blackboard 4. Develop a briefing and be prepared to present it and address the following: a. Top three cost drivers—3 Points awarded if two of your top three cost drivers are consistent with the top five identified in the EVM 202 answer key b. Top three schedule drivers—3 Points awarded if two of your top three schedule drivers are consistent with the top five identified in the EVM 202 answer key EVM 202 November 2017 Lesson 9-5 c. Path to next two milestones—4 Points awarded if your critical path is consistent with the EVM 202 answer key; if a milestone is not on the critical path, you just need to say it is not on the critical path d. Baseline Execution Index (BEI)—1 Point awarded if your BEI is within ± 0.1 of the EVM 202 answer key e. Three EACs (high, low, and most likely), the price at completion (PAC), and the most likely To-Complete Performance Index (TCPI)—6 Points awarded if most likely falls between the reasonable range identified in the EVM 202 answer key, PAC is computed correctly, and corresponding TCPI is computed correctly f. All APB issues—3 Points awarded for correct identification without omissions when compared to the EVM 202 answer key g. At least three different management charts that tell the story of what is going on 5. Present the briefing to COL Paine and his staff. HINT: Pay attention to the briefings for previous time periods. You may wish to update your brief accordingly. Use your team’s File Exchange on Blackboard under Team Groups > Team [A/B/C/D] > File Exchange to complete this exercise. EVM 202 November 2017 Lesson 9-6 File Exchange Instructions To complete your team’s Integrated Program Management Case Study Briefing: 1. Select the Lesson 9 tab from the Course Menu on Blackboard. 2. Download the Integrated Program Management Case Study Briefing Template under Task: Integrated Program Management Case Study Briefing. 3. Save the file to your computer. 4. Complete each section of the Integrated Program Management Case Study Briefing as a team. 5. To share draft files with your team members: a. Select the Team Groups tab on the Course Menu. b. Select your team’s link under Groups. c. Select File Exchange under Group Tools to upload and share files. d. Select Add File to upload a file. e. Select Browse My Computer to locate the file on your computer. f. Enter a Name for your file in the Name field. g. Select Submit to post the file to your team’s File Exchange. 6. Upload your Final Integrated Program Management Case Study Briefing to your team’s File Exchange. Note: Name your file “Final Integrated Program Management Case Study Briefing” to distinguish it from any draft documents in your team’s File Exchange. EVM 202 November 2017 Lesson 9-7