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Program Management Systems Committee. EVM for Service Contracts Working Group. Joint Industry/Government Meeting May 21, 2009. Subcommittee Charter. Problem Statement

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Program Management Systems Committee

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Program Management Systems Committee

EVM for Service Contracts

Working Group

Joint Industry/Government

Meeting

May 21, 2009


Subcommittee Charter

  • Problem Statement

    • EVMS is being applied to a variety of services type work scenarios and there is no consistent guidance or policy on how EVMS should be implemented

  • Charter for Subcommittee:

    • To develop and recommend policy, process guidance, and/or training to support the implementation of EVMS on services type work

  • Targeted Exit Criteria:

    • White Paper - “Guidance for Implementing EVMS on Services Work


Earlier Conclusions

  • EVM is useful for managing services work; however its application should be scaled to balance the benefits of EVM with program risks and the cost of EVM implementation

  • EVM is compatible with performance based services acquisition,

  • It’s important to seek ways to define objective methods for measuring earned value of services

    • Over-reliance on LOE for services can mask progress on other work

    • Recommend separate analysis of performance data for development and service work

  • It may be more appropriate and beneficial to implement EVM at the program level rather than at the individual contract level, e.g., staff augmentation (personal services) work

  • More flexibility in EVM Systems may be required to enable optimal application of EVM to services contracts, e.g.,

    • Summary-level planning/shorter planning horizons

    • Allowances in the process for more frequent re time-phasing of budgets


Contract Element Required for EVM

  • A discrete SOW, from which an end product-oriented work breakdown structure can be defined, and a schedule. From these, a time-phased, resource loaded plan for executing the required work within the timeframe specified in the contract can be developed.

  • As stated in the NDIA PMSC EVMS Application Guide:

  • “Where work is discrete, EVM can be effectively employed. Where work is T&M/LOE, performance must be evaluated using other means that are not related to schedule milestones or measurement of progress.”

  • “For contracts issued in support of a program where the supplier does not control and manage the work scope and schedule (such as a staff augmentation contract), EVMS requirements should not be applied to the contract itself but at the program level where scope, schedule and cost are present.” (Source: NDIA PMSC EVMS Application Guide).


PBSA - Contracting

  • PBSA is a very disciplined way to write and manage service contracts

  • Performance standards (SLAs) that define the performance level required to meet contract requirement, are measurable and permit assessment of supplier’s performance.

  • Allow contractor maximum flexibility without government interference – Primarily FP Contracts

  • Quality Assurance Surveillance Plan to measure each service

  • Service measured during the payment period.

  • Service requirement starts over each payment period.


PBSA Measurement of Performance (ITIL)


EVM and PBSA May Apply on One Contract

  • EVM and PBSA are management frameworks.

  • Both use the WBS process to define the work

  • Work is of two types

  • Project, the work is done over a period of time with the benefit realized either at major milestone points during project execution or at the end of the project when the finished product is delivered. Use EVMS

  • In service efforts, the work is done in a continuous, often repetitive manner and the benefit is realized as the service is performed. Use PBSA

  • Projects can have a significant amount of service work.

  • Service programs can have significant project work.


Original Scope Has Evolved

  • Original – How can EVM be made to fit the management of service contracts.

  • New – Select the management technique(s) best suited to the effort based on the characteristics of the work and the contractual elements present.

  • Paper will contain recommendations for FAR Part 7, Acquisition Planning, changes.

    • Government use WBS to define the work and to identify the appropriate project management method.

    • Contracts can specify more than one management method

    • Contracts must indicate what areas require EVM and what areas require PBSA.

    • Proper use of EVM and PBSA will reduce LOE


Outline for Guidance Document

  • Define, compare and contrast products vs. services

  • Provide guidance for selecting appropriate management methods applicable to the contract scope of work

    • Many contracts are hybrids – both EVM and PBM could be used on different WBS elements within a single contract

    • Methods may also vary by contract type

  • Collect and describe characteristics of various types of services

  • Provide WBS examples for service work

  • Write guidance for each, e.g., IT, logistics, depot maintenance, program management, etc.

  • Provide guidance for contracting, i.e., to put management requirements on contract correctly


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