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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

Program Management Systems Committee

EVM for Service Contracts

Working Group

Joint Industry/Government


May 21, 2009

subcommittee charter
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
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
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 - 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.
evm and pbsa may apply on one contract
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 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
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