Evms - Earned Value in Civilian Agencies - Federal Sector Report

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EVMS - Earned Value in Civilian Agencies - FEDERAL SECTOR REPORT FEDERAL SECTOR REPORT June 2004 EVMS: See January 2006 GET SMART WITH EVMS IN THIS ISSUE EVMS in Civilian Agencies Links of the Month: OMB Updates Consulting Services Home Page (c) 2004 by the P2C2 Group, Inc. EVMS IN CIVILIAN AGENCIES Earned Value Management Systems (EVMS) are galloping into the federal civilian arena, promising to change the way agencies and their contractors conduct business. The change is occurring because
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  EVMS - Earned Value in Civilian Agencies - FEDERAL SECTOR REPORT FEDERAL SECTOR REPORT June 2004 IN THIS ISSUEEVMS in Civilian AgenciesLinks of the Month: OMB UpdatesConsulting ServicesHome Page (c) 2004 by the P2C2 Group, Inc. EVMS IN CIVILIAN AGENCIES Earned Value Management Systems (EVMS) are galloping into thefederal civilian arena, promising to change the way agencies and theircontractors conduct business. The change is occurring because theOffice of Management and Budget (OMB) has mandated that agenciesmust comply with an EVMS standard in order to receive funding for thedevelopment, modernization, or enhancement (DME) of majorinformation technology investments. EVMS is popping up on agencymanagement reviews. And, if OMB has its way, there will be arequirement in the Federal Acquisition Regulation (FAR) requiring anEVMS clause in certain contracts.EVMS is a structured procedure for project and investmentmanagement. It integrates the investment's scope of work with scheduleand cost elements for better investment planning and control. Thequalities and operating characteristics of earned value managementsystems are described in American National Standards Institute (ANSI)/ Electronic Industries Alliance (EIA) Standard -748. Earned Value is alsobecoming an area of practice recognized by the Project ManagementInstitute, a certifying body for project managers.EVMS has been used for years and years at the Department of EVMS: See January 2006   GET SMART WITH EVMS http://www.p2c2group.com/jun04nws.html (1 of 5)4/27/2009 7:17:37 PM  EVMS - Earned Value in Civilian Agencies - FEDERAL SECTOR REPORT Defense, but the emphasis that OMB is placing on the ANSI/EIAstandard ensures that it will be widely applied at civilian agencies aswell. Defense uses it largely to track and evaluate contractorperformance, take corrective action to avoid or mitigate cost overruns,and follow through on performance management of its planning andbudgeting system. It fits in very well with the emphasis on PerformanceBased Service Acquisition (FAR 37.6) and annual performance plans.There are software tools for tracking EVMS--with names such as C/SwInsight, Welcom Cobra, and Dekker Trakker. Primavera has apowerful EVMS component, and Microsoft has been busy adding EVMfunctions to MS Project. However, EVMS is primarily a businessprocess and project management method, not a software thing. Asbusiness process, EVMS is a methodology for: q   Planning all work for the program to completion.   q   Breaking down the program work scope into finite pieces thatcan be assigned to a responsible person or organization forcontrol of technical, schedule and cost objectives.   q   Integrating program work scope, schedule, and cost objectivesinto a performance measurement baseline plan against whichaccomplishments may be measured (including the control ofchanges to the baseline).   q   Using actual costs incurred and recorded in performing thework.   q   Objectively assessing accomplishments at the workperformance level.   q   Analyzing significant variances from the plan, forecastimpacts, and preparing an estimate at completion based onperformance to date and work to be performed.   q   Applying EVMS information in the agency managementprocesses.   The ANSI/EIS standard is based on 32 criteria, which are accessible athttp://www.acq.osd.mil/pm/faqs/criteria.htm. Additional links: q   A helpful listing of articles about EVMS is at Niwot RidgeResources,http://www.niwotridge.com/Resources/DomainLinks/ EarnedValue.htm.   q   David Christensen maintains a huge EVMS bibliography athttp:// www.suu.edu/faculty/christensend/ev-bib.html   q   The EVMS website referenced by OMB is   http://www.acq.osd.mil/pm/ .   http://www.p2c2group.com/jun04nws.html (2 of 5)4/27/2009 7:17:37 PM  EVMS - Earned Value in Civilian Agencies - FEDERAL SECTOR REPORT WHAT CAN YOU DO WITH EVMS? Now that you're required to embrace EVMS, what can you do with it?For a fairly simple-minded management tool (costs, schedule, workperformed), you can actually do quite a bit with it:It's project management for adults, as one person put it. It builds onproject management software, like MS Project and Primavera, to giveyou a very good idea of how you're doing in terms of schedule andcost … and whether you will complete the project over or underbudget.Agency leaders, even non-quantitative types, get the idea veryquickly. EVMS results can be summarized visually with bulls-eyecharts and trend analyses. Projects that are over budget, behindschedule, or crash diving into oblivion will be identifiable immediately.For government project managers, EVMS can quickly identify whichwork packages in the Work Breakdown Structure are causingproblems. It is also a tool for monitoring contractor performance, andEVMS gives the government mid-level manager some leverage:Shape up, contractor, or top management will know you're a turkeybecause of the EVMS results.On the other hand, well-managed contracts look really good, and thiscan be a competitive edge for winning new business. What's more,financial executives in contracting firms love it: The project is trackedby the value of work completed, and you have a pretty good idea ofwhether the contract is profitable or headed for doom. For theincreasingly popular firm-fixed price contracts, the EVMS tool iscrucial.Of course, good management doesn't happen through artificialintelligence. It takes qualified managers--on both the government andcontractor sides--to use EVMS well. This means a carefully plannedwork scope, Work Breakdown Structure, milestones, realistic metrics,and a realistic cost baseline. Accurate data about the schedule, workperformed, and costs are needed on at least a monthly basis. What'smore, the bottom line is to use the EVMS results regularly to monitorresults and take corrective action. EVMS tools require smart andexperienced managers who are proactive.For Exhibit 300s, Circular A-11 requires agencies to use EVMS forDME investments. So obviously, Section I.H. Funding Plan requires Ms. Liberty http://www.p2c2group.com/jun04nws.html (3 of 5)4/27/2009 7:17:37 PM  EVMS - Earned Value in Civilian Agencies - FEDERAL SECTOR REPORT considerable detail. But EVMS should also tie to the Acquisition Plan,since major contractors are required to have/use an ANSI/EIA-748compliant EVMS system. EVMS also is a tool for mitigating ProjectRisks, and generally the project risk cost should be monitored inEVMS. LINKS OF THE MONTH: OMB UPDATES Go tohttp://www.feapmo.govfor updates to the Federal EnterpriseArchitecture. There are significant updates applicable to Budget Year2006.Go tohttp://www.cio.gov/documents/fy2006.htmlfor guidance aboutpreparing agency Exhibit 53s and 300s. You will also find the draftFAR clause for major IT contractors. CONSULTING SERVICES We provide enterprise-level management consultingservices for federal agencies and the contractors whosupport them. Our current projects involve: q   Enterprise-Wide EVMS Implementation q   IT Capital Planning and OMB Exhibit 300s   q   Customer Satisfaction Survey and ProgramEvaluation   q   Performance-Based Service Acquisition   HOME PAGE I t's been a wildly busy summer. However, Elena and Idid go to Deep Creek Lake for Memorial Day, and we planto see July 4 th fireworks from the vantage point of the   Potomac River. Best wishes,Jim Kendrick   Certified Management Consultant   P2C2 Group, Inc.   4101 Denfeld Avenue   Kensington, MD 20895   kendrick@p2c2group.com   301-942-7985   Deep Creek Lake   http://www.p2c2group.com/jun04nws.html (4 of 5)4/27/2009 7:17:37 PM
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