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Earned Value and Financial Management Reports

Earned Value and Financial Management Reports. Lesson 14 – External Reporting Curricula Development and Support Center. This file best viewed 1280 x 1024 pixels. Learning Objectives. Identify types of and uses for external reports

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Earned Value and Financial Management Reports

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  1. Earned Value and Financial Management Reports Lesson 14 – External Reporting Curricula Development and Support Center This file best viewed 1280 x 1024 pixels

  2. Learning Objectives • Identify types of and uses for external reports • Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. • Compare the features of the Cost Performance Report and the Cost Schedule Status Report. • Examine various methods to tailor the Cost Performance Report (CPR).

  3. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. Contract Cost Data Reporting Plan The CCDR Planis prepared by the PM in conjunction with the Cost Working Integrated Product team (CWIPT), and submitted to the Defense Cost and Resource Center (DCARC) (for ACAT I programs) or to designated Component organizations (for ACAT II and III programs) for approval. The CCDR Plan (DD Form 2794) is the key document in establishing reporting requirements throughout each phase of the acquisition program.There are two types of plans: Program Plans and Contract Plans. The program plan is used to identify ALL procurement costs associated with the related Major Defense Acquisition Program (MDAP). The contract plan serves three purposes: it specifies the line items that will be reported by the contractor to the government (e.g., the work breakdown structure (WBS) elements contained in the CCDR reports); it defines the format(s) to be used in reporting line items; and it identifies the frequency with which reports must be submitted. The plan also functions as a reference document for: identifying data requirements that should be on contract, ensuring actual contractor reporting is consistent with planned reporting, and comparing (along with the data dictionary) data plans, WBS elements, and definitions with other similar weapon systems.

  4. Contract Cost Data Reporting Plan – Sample Program Plan Identifies line items to be reported by the contractor (WBS elements) Defines Reporting Format Defines Report Frequency The CCDR Plan (DD Form 2794) is the key document in establishing reporting requirements throughout each phase of the acquisition program.

  5. Plan is also a reference document for identifying data requirements that should be on contract Contract Cost Data Reporting Plan – Sample Program Plan (cont) The CCDR Plan (DD Form 2794) is the key document in establishing reporting requirements throughout each phase of the acquisition program.

  6. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, & DAES. The CCDR (Contract Cost Data Report) • The CCDR System is prepared by the contractor and is the primary means by which the Department of Defense collects actual cost data on weapon systems for development and production costs from materiel developers. CCDR reports are used to populate the DoD cost estimating database. There are three basic reports used in the CCDR system for development and production contracts. • Cost Data Summary Report (DD Form 1921) this report aggregates incurred costs to date and estimated incurred costs to completion with units produced against Work Breakdown Structure (WBS) elements and categorizes them as either recurring costs or nonrecurring costs. • 2)Functional Cost Hour Report (DD Form 1921-1) This report displays incurred costs to date and estimated incurred costs to completion by functional area (i.e., engineering, tooling, quality control, manufacturing, and other). • 3)Progress Curve Report (DD Form 1921-2) This report shows actual and estimated recurring costs to completion by unit or lot for selected reporting elements. The report also shows direct labor hours for quality control and manufacturing.

  7. Work Breakdown Structure Recurring & Nonrecurring Cost to Date Recurring & Nonrecurring Cost to Complete Misc Items i.e. Fee, Management Reserve, Undistributed Budget, Cost of Money Cost Data Summary Report – DD Form 1921 The Cost Data Summary Report (1921) is always required and provides top-level view of contract costs by WBS and its recurring and non-recurring components

  8. Contractor To Date & At Comp Program Element Subcontracts To Date & At Comp Organization Structure Functional Cost Hour Report – DD Form 1921-1 The Functional Cost-Hour Report (1921-1) is typically required for the total contract and selected WBS elements and provides contract costs and hours in total and for selected WBS elements broken out by major functions and cost elements (material, labor, and overhead). It also shows the recurring and non-recurring split

  9. Recurring costs to completion by unit or lot Program Element Estimated Actual prime contractor subcontractor total costs by unit or lot Progress Curve Report – DD Form 1921-2 Also segregated by The Progress Curve Report (1921-2) is required only on high risk or high quantity programs from research and development through completion of low rate initial production (LRIP) and translates recurring costs and hours into standard functions and cost elements. This report allows cost analysts to develop learning curves.

  10. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. CFSR (Contract Funds Status Report) The CFSR The Contract Funds Status Report (CFSR), DD Form 1586, is typically a quarterly report prepared by the contractor to supply contract funding data to the Program Manager for: (a) updating and forecasting contract funds requirements, (b) planning and decision making on funding changes to contracts, (c) developing funds requirements and budget estimates in support of approved programs, (d) determining funds in excess of contract needs and available for deobligation, and (e) obtaining rough estimates of termination costs. The CFSR is applicable to contracts over 6 months in duration. No specific application thresholds are established, but application to contracts of less than $1,000,000 (constant fiscal year (FY) 1990 dollars) should be evaluated carefully to ensure only the minimum information necessary for effective management control is required. The CFSR will not be applied to firm fixed price contracts unless unusual circumstances require specific funding visibility.

  11. Key Contract & Contractor Data Appropriation Funding Required Expenditures to date Obligations to date Funding Information Contract Work Authorized (With Fee/Profit) – Actual Or Projected Expenditures Billings Termination Liability Remarks - additional information or remarks which support or explain data submitted in report. Contract Funds Status Report – DD Form 1586 The Contract Funds Status Report (CFSR) is designed to supply funding data about defense contracts to Program Managers. All values are at price (includes fee or profit). The Contract Funds Status Report (CFSR) is designed to supply funding data about defense contracts to Program Managers. All values are at price (includes fee or profit).

  12. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. Schedule Status Reports The Integrated Master Plan (IMP) - The IMP is a program plan prepared by the contractor for the program manager as a element of the contract proposal. It contains event-based descriptions and the key processes employed to achieve those events. The Government does not usually specify a particular IMP format. There are typically three IMP sections: Descriptive Section; Product IMP; and Process IMP. The IMP and IMS are developed in parallel during the proposal phase of an acquisition. The IMP is normally placed on contract, becoming the mutually agreed “event driven” approach for program execution. The Integrated Master Schedule (IMS) – The IMS is an integrated critical path schedule prepared by the contractor for the program manager. The contract IMP is the foundation of the program schedule and provides a hierarchy for schedule traceability and summarization. IMP events, accomplishments, and criteria are included in the schedule to monitor progress. The IMS is used to verify attainability of program objectives, evaluate the progress of the government and contractor team toward meeting the program objectives, and to integrate program schedule among all related components.

  13. Project X Integrated Master Plan (IMP) Project X Integrated Master Plan (IMP) Project X Integrated Master Plan (IMP) Processes Project X Integrated Master Plan (IMP) Project X Integrated Master Plan (IMP) Project X Integrated Master Plan (IMP) Processes 1.0 Introduction 1.0 Introduction Criteria 2.0 Event Definition Significant Accomplishments Criteria Criteria Criteria Criteria 2.0 Event Definition Typical Three Section Integrated Master Plan EVENT All three IMP sections typically go on contract Descriptive Section – Focuses on how to use the IMP and summarizes key programmatic ground rules such as: assumptions/guidelines; definitions for selected events and action verbs; description of purpose; expected results; and event closure criteria. Product IMP – An event-oriented representation of integrated product development listing events or milestones, significant accomplishments, and criteria. An “event” is a key point in the program where progress is demonstrated prior to proceeding to the next activity (CDR). Significant Accomplishments are groups of criteria that logically fit together and become the entry criteria for events (detailed design complete prior to CDR). Criteria are objective evidence that significant accomplishments have been met (90% of CDR drawing review complete). Next Process IMP – Describes critical program processes and functional plans (QA, configuration management, manufacturing). They are intended to describe how existing processes will be used and tailored, not just a restatement of existing processes. Each process is typically three to ten pages. Descriptive Section – Focuses on how to use the IMP and summarizes key programmatic ground rules such as: assumptions/guidelines; definitions for selected events and action verbs; description of purpose; expected results; and event closure criteria. Product IMP – An event-oriented representation of integrated product development listing events or milestones, significant accomplishments, and criteria. An “event” is a key point in the program where progress is demonstrated prior to proceeding to the next activity (CDR). Significant Accomplishments are groups of criteria that logically fit together and become the entry criteria for events (detailed design complete prior to CDR). Criteria are objective evidence that significant accomplishments have been met (90% of CDR drawing review complete). Process IMP – Describes critical program processes and functional plans (QA, configuration management, manufacturing). They are intended to describe how existing processes will be used and tailored, not just a restatement of existing processes. Each process is typically three to ten pages. Next Next

  14. IMP Event IMP Significant Accomplishments IMS Progress IMP Criteria IMS Added Task Relationships IMS Critical Path IMS Added Task Durations Integrated Master Schedule (IMS) The IMS includes all contract IMP events and milestones, accomplishments, criteria, and activities from contract award to contract completion. It is an integrated network that correlates the program WBS, SOW, and is vertically and horizontally traceable to the earned value reports (CPR, C/SSR). It depicts program events, task relationships, task durations, intermediate and detailed schedules, and periodic progress to date.

  15. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. CPR (Cost Performance Report) The CPR is typically a monthly management report prepared by the contractor for the program manager. It provides timely, reliable summary-level data with which to assess current and projected contract performance. The CPR's primary value to government program management is its ability to reasonably reflect current contract status. It is used by DoD program managers, engineers, cost estimators and financial management personnel, to confirm, quantify and track known or emerging contract problems and as a basis for communicating with the contractor. The CPR is used to obtain cost and schedule performance information on contracts requiring compliance with the Earned Value Management System criteria (EVMS). It can also be used for contracts not requiring EVMS. The CPR has five formats - Format 1 – Work Breakdown Structure - Format 2 – Organizational Categories - Format 3 - Baseline - Format 4 – Staffing - Format 5 – Explanations and Problem Analysis

  16. Cost Performance Report – Format 1 Key Contract & Contractor Data Signed Estimate at Completion range & most likely at cost Pop I Smith Format 1 provides summary level data to measure cost and schedule performance using a Work Breakdown Structure (WBS) layout. All CPR data is at cost (except Format 1 Box 5 Price Data)

  17. Cost Performance Report – Format 1 (Cont) Current and Cumulative EVM variables and selected metrics sorted by WBS Management Reserve Format 1 provides summary level data to measure cost and schedule performance using a Work Breakdown Structure (WBS) layout. All CPR data is at cost (except Format 1 Box 5 Price Data)

  18. Cost Performance Report – Format 2 Current and Cumulative EVM variables and selected metrics sorted by OBS Management Reserve Format 2 provides summary level data to measure cost and schedule performance using the contractor's organization structure. All Format 2 CPR data is at cost data (no fee or profit added).

  19. Cost Performance Report – Format 3 Key Budget, Contract and Programmatic data only found here The EV performance measurement baseline at beginning of the period The updated EV performance measurement baseline at end of period reflecting accomplishments and replanned activities—THE NEW PMB Format 3 provides the budget baseline plan against which performance is measured. Unlike Formats 1 and 2, which each report historical performance, Format 3 is an updated forecast for future work efforts.

  20. Cost Performance Report – Format 4 Format 3 Like Forecast Periods Format 2 Like Organizational Reporting Structure BAC Format Format 4 provides staffing forecasts for correlation with the budget plan and cost estimates. Format 4 is reported by staff months rather than dollars or hours. Staffing forecasts are often reported with both a BAC Format 4 (original plan) and a LRE Format 4 (latest revised estimate).

  21. Cost Performance Report – Format 4 Format 3 Like Forecast Periods Format 2 Like Organizational Reporting Structure LRE Format Format 4 provides staffing forecasts for correlation with the budget plan and cost estimates. Format 4 is reported by staff months rather than dollars or hours. Staffing forecasts are often reported with both a BAC Format 4 (original plan) and a LRE Format 4 (latest revised estimate).

  22. Cost Performance Report – Format 5 Format 5 is a narrative report used to explain significant cost variances, schedule variances, contract problems and selected topics. Below is print out of the type of data reported in a Format 5. Research has indicated that two thirds of the costs associated with EVMS can de attributed to variance analysis reporting. 10.2.6 Format 5 - Explanations and Problem Analyses. 10.2.6.1 General. Format 5, Explanations and Problem Analyses, is a narrative report prepared to supplement the other CPR formats. Format 5 will normally address 1) contractually required cost, schedule and estimate at completion variance analyses, 2) management reserve changes and usage, 3) undistributed budget contents, 4) differences between the best case, worst case, and most likely management estimate at completion, if any, 5) the difference between the most likely management estimate at completion and the estimate in Block 8.e of Column (15), if any, 6) significant differences between beginning of period PMB timephasing and end of period PMB timephasing in Format 3, 7) performance measurement milestones that are inconsistent with contractual milestones (Over Target Schedule), 8) formal reprogramming (Over Target Baseline) implementation details, and 9) significant staffing estimate changes in Format 4. However, any topic relevant to contract cost, schedule or technical performance can be addressed in this format. ….. 10.2.6.4 Other Analyses. In addition to variance explanations, the following analyses are mandatory: 10.2.6.4.1. Management Estimate at Completion. If the best or worst case management estimates at completion differ from the most likely estimate, the contractor must provide a brief explanation of the difference. Also, if the most likely management estimate at completion differs from the total entered in Column 15 of Format 1 or 2, the contractor must explain the difference. The explanations should focus on such areas as differences in underlying assumptions; a knowledgeable, realistic risk assessment; projected use of management reserve; estimate for undistributed budget; and higher management knowledge of current or future contract conditions. 10.2.6.4.2 Undistributed Budget. Identify the effort to which the undistributed budget applies. Also, explain any variance between the undistributed budget and the estimate for undistributed budget in Formats 1 and 2. 10.2.6.4.3 Management Reserve Changes. Identify the sources and uses of management reserve changes during the reporting period. For management reserve uses, identify the WBS and organizational elements to which applied, and the reasons for application. 10.2.6.4.4 Baseline Changes. Explain reasons for significant shifts in time-phasing of the PMB shown on Format 3. 10.2.6.4.5 Staffing Level Changes. Explain significant changes in the total staffing estimate at completion shown on Format 4. Also, explain reasons for significant shifts in time-phasing of planned staffing. 10.2.6.5 Formal Reprogramming (Over Target Baseline). If the difference shown in Block 5.g on Format 3 becomes a negative value or changes in value, provide information on the following: 10.2.6.5.1 Authorization. Procuring activity authorization for the baseline change which resulted in negative value or change. 10.2.6.5.2 Reason. A discussion of the reason(s) for the change. 10.2.6.5.3 CPR Reporting. A discussion of how the change affected CPR reporting (i.e., amount allocated to management reserve, adjustments to cost or schedule variances, etc.). 10.2.6.5.4 Schedule. Indicate whether the contract schedule was retained for performance measurement or was replaced with a schedule that exceeds the contractual schedule (Over Target Schedule). 10.2.6.6 Over Target Schedule. If a performance measurement schedule exceeding the contractual schedule (Over Target Schedule) has been implemented, provide a discussion of the pertinent information, such as authorization, reasons and significant dates. Best viewed in 1280 x 1024 pixels

  23. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. C/SSR (Cost / Schedule Status Report) The C/SSR is typically a monthly reportprepared by contractors for the program manager. It provides summarized contract cost and schedule performance information for program management purposes. The C/SSR is used to collect cost and schedule performance information on contracts over 12 months in duration where application of the CPR is not appropriate. There are no specific application thresholds for the C/SSR. However, application to contracts of less than $5 million (constant fiscal year 1990 dollars) should be evaluated carefully to ensure that only the minimum information necessary for effective management control is required. The C/SSR has two elements: 1. A formatted C/SSR Work Breakdown Structure Report 2. Variance and Contract Narrative Explanations

  24. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. UCR (Unit Cost Report) The UCR is a quarterly management report prepared by the program manager to control cost growth and to involve the top officials in the Department of Defense whenever excessive unit cost growth occurs. It is required by public law to report program costs, unit costs, and cost or schedule variance for major contracts. The UCR is reported as an element of the Defense Acquisition Executive Summary (DAES) and in the Selected Acquisition Report (SAR). The approved UCR baseline is defined by the current approved acquisition program baseline (APB). Congressional notification is required, when cost growth exceeding 15% is realized. This is often referred to as a “Nunn-McCurdy Breach”. When a 25% cost growth is realized, the Secretary of Defense must further validate that the program: - Is Essential to the National Security; - Has no alternatives of equal or greater military capability at less cost - The new estimates are reasonable - The management structure is adequate to manage the program The UCR has two elements - PAUC - Program Acquisition Unit Cost - APUC - Average Procurement Unit Cost

  25. Current Approved APB Latest Cost Forecast ** Nunn-McCurdy Breach if < - 15.0% Typical UCR Format The UCR is included in the Defense Acquisition Executive Summary and in the Selected Acquisition Report. • UCR Current Percent • Baseline Estimate Change • (Oct 1998 APB • Program Acquisition • Unit Cost * (PAUC) • (1) Cost (1995 BY$) 13116.6 13167.4 • (2) Quantity 181 181 • (3) Unit Cost 72.467 72.348 -0.16 • b. Average Procurement • Unit Cost * (APUC) • (1) Cost (1995 BY$) 11772.6 11738.6 • (2) Quantity 181 181 • (3) Unit Cost 65.042 64.854 -0.29 * See Note Page format for Program Acquisition Cost and Procurement Cost Definitions ** Current Estimate - Latest forecast of program acquisition cost, schedule, & performance, including changes such as contract awards, official reprogramming, schedule slips

  26. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. SAR (Selected Acquisition Report) • The SAR is a snap shot annual report (as of Dec 31) prepared by the Program Manager for Congress. It is due 60 days after the submission of the President’s Budget. SARs are required by law to report the status of the total program cost, schedule, and performance (technical) as well as progrma unit cost and unit cost breach information. The SAR applies to Major Defense Acquisition Programs (>$365M RDT&E or >$2.19M Prod FY00) and USD(AT&L) designated high interest programs. Subsequent quarterly exception SARs are required when a program’s unit costs increases more than 15% or a program’s schedule slips more than six months. The PM uses the Consolidated Acquisition Reporting System (CARS) to prepare and submit both hard and electronic copies of the SAR. The SAR includes nineteen sections of which eighteen are submitted to Congress. The Unit Cost Report (UCR) is included as part of the SAR. • Additional DoD uses for the SAR include providing: • Cost and schedule metrics for major programs • Extensive data bases to support DoD & government-sponsored analyses • Help for DoD to explain program changes to the Congress, press, & public • Nunn-McCurdy unit cost breach reports

  27. Clarify the purposes of the CCDR Plan, CCDR, CFSR, Schedule Status Reports, CPR, C/SSR, UCR, SAR, and DAES. DAES (Defense Acquisition Executive Summary) The DAES is a quarterly report prepared by the Program Manager for the USD(AT&L) (for MDAP programs) or ASD(C3I) (for MAIS programs). It is a multi-part document intended to improve communications throughout the acquisition chain of command and to provide early-warning of potential problems. The DAES describes actual program problems, warns of potential problems and describes mitigating actions taken. Program execution status is measured and reported against the Acquisition Program Baseline (APB). ACAT I and ACAT IA programs are assigned to quarterly reporting groups. The PM uses the Consolidated Acquisition Reporting System (CARS) to prepare and submit both hard and electronic copies of the DAES no later then 30 days after the end of the assigned reporting quarter. An out-of-cycle DAES is required when the PM determines that a Nunn-McCurdy unit cost breach has or will occur, and when a BES or POM submission causes an APB threshold deviation. There are seven DAES sections which include the Unit Cost Report and Earned Value data. DAES Report Sections: 1. Executive Summary 5. Approved Program Data 2. Assessments 6. Program Background Data 3. PM Comments 7. Supplemental Contract Cost Information 4. PEO & SAE Comments.

  28. Cost Schedule Status Report Cost Performance Report CSSR Variance Analysis PM Report Variance 1 Clarify the purposes of the CCDR, CPR, C/SSR, CFSR, and Schedule Status Reports.The Cost / Schedule Status Report (C/SSR) • Single Format (WBS or OBS structure) and Variance Report – electronic delivery • Cumulative Period Data Only • Not authorized with EVMS Criteria DFARS • Only with C/SSR DFARS • BCWS & BCWP Computed by any reasonable strategy • Five Formats - electronic delivery • Cumulative and Current Period Data • Required with EVMS Criteria DFARS • Optional for C/SSR DFARS • BCWS & BCWP Computed at Control Account

  29. Sample CPR CDRL Block 4: a. The CPR shall be submitted electronically, using the ANSI ASC X.12, Transaction Set 839 Version 3050.b. Report direct at the CWBS reporting level. Overhead, G&A and COM will be reported as a single-line entry for the total contract at the program level. A reconciliation of the CPR and the CFSR shall be submitted quarterly as an attachment to the CFSR.c. For Format 5, the contractor shall provide the top five (5) reporting level cost and schedule drivers (each ranked in descending order of criticality). Each report shall discuss schedule and technical status of these drivers. This discussion shall include current status, potential impacts to cost or schedule (positive or negative), anticipated problem solution, and the current projected cost at completion for each element. The Government reserves the right to modify, increase or decrease both the initial listing as well as the updates. If the contractor uses “critical path” scheduling techniques, then the identification of the ranked critical path by WBS reporting element shall meet the schedule drivers requirement. In addition, the Government reserves the right to request additional information for those reporting level WBS elements (not included in the top 5 list) that have experienced significant shifts in status from previous months. Cumulative variance analysis is not required; only current month analysis is required. Examine various methods to tailor the Cost Performance Report (CPR) • DD FORM 1423-1 is used to specify and tailor contract data requirements • Sample CPR tailoring is only one strategy and not meant as an endorsement See Note Page of this slide for additional tailoring strategies • CPR Format 5 is the most expensive element of the CPR and should always be tailored

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