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Pre Contract Award EVM 28 Mar 2019

AF Life Cycle Management Center. Pre Contract Award EVM 28 Mar 2019. Presenter Victoria Perez AFLCMC/FZCI 781-225-9914 DSN 845-9914 victoria.perez.6@us.af.mil. Overview. Planning for Earned Value starts early FM and Cost Analysts need to be involved well before a contract is awarded

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Pre Contract Award EVM 28 Mar 2019

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  1. AF Life Cycle Management Center Pre Contract Award EVM28 Mar 2019 Presenter Victoria Perez AFLCMC/FZCI 781-225-9914 DSN 845-9914 victoria.perez.6@us.af.mil

  2. Overview • Planning for Earned Value starts early • FM and Cost Analysts need to be involved well before a contract is awarded Outline of Topics • EVM Misconceptions • Acquisition Strategy • Request for Proposal • 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 3. Proposal Review

  3. Misconceptions About EVM • The data isn’t timely enough • The IPMR Data Item Description (DID) requires delivery of data between 12-17 days after the close of the contractor’s accounting cycle • The EVM process is intended to provide early warning of emerging risk items and worsening performance trends allowing for implementation of corrective actions quickly • So, too late to change history, but not the future, thus > 18 month PoPs • EVM costs too much • 2017 Joint Space Cost Council Study indicates earned value management implementation on Gov’t cost-type contracts should fall between 0.1% to 0.9% of a contract’s cost1 • It’s too time consuming • EVM actually helps to manage by exception so that decision makers need only focus on key driving areas (variances exceeding thresholds – Format 5) • EVM is a burden on contractors and they don’t like it • In 1998 Industry adopted the ANSI EIA-748 EVM Guidelines as a best-practice; since then, they use it on internal, fixed price, and commercial contracts whether the Gov’t asks for it or not!!! • Major DoD contractors have mature EVM systems and processes already in place, and have been using them for years because they know it works! *Joint Space Cost Council’s Better Earned Value Management Implementation Study, 2017

  4. Acquisition Strategy Definition: A business and technical management approach designed to achieve program objectives within the resource constraints imposed. It is the framework for planning, directing, contracting for, and managing a program. • Basis for functional plans and strategies • Acquisition Plan • Test and Evaluation Master Plan • Systems Engineering Plan Reference: 1

  5. Acquisition Strategy Key Points: • Required by DoDI 5000.02 on all acquisition programs • Must be approved by MDA prior to Request for Proposal (RFP) release • Entry point is the acqplanning start date as indicated by the PEO on the Program Charter, ADM, or similar document Reference: 2, 3

  6. Acquisition Strategy What is included in an Acquisition Strategy? • Acquisition Approach • Key Framing Assumptions • Business Strategy (EVM documented here) • Technical Strategy • Support Strategy • Risk Management • Relationship between acquisition phases and work efforts, such as decision points and reviews • Plan to support successful delivery of the capability at an affordable life-cycle price, on a realistic schedule References: 2, 4, 5

  7. Should EVM be part of this Acquisition Strategy? DoDI 5000.02, Change 3, 08/10/2017

  8. Decision Tree for EVM Application

  9. Acquisition Strategy Where is EVM included in an Acquisition Strategy? • Business Strategy • Summarize financial reporting for each contract, including EVM requirements • Not recommended to use EV indices (CPI/SPI) as a basis for incentives • Tailoring • If obtaining an EVM waiver, list here References: 5

  10. Request for Proposal FAR 15.203 • Requests for proposal (RFPs) are used in negotiated acquisitions to communicate Government requirements to prospective contractors and to solicit proposals. • RFPs for competitive acquisitions shall, at a minimum, describe the: • (1) Government’s requirement; • (2) Anticipated terms and conditions that will apply to the contract; • (3) Information required to be in the offeror’s proposal; and • (4) Factors and significant sub factors that will be used to evaluate the proposal and their relative importance. References: 6

  11. Request for Proposal • RFP information is divided up into sections • 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 References: 7

  12. Section C: Description • Section C contains the Statement of Work (SOW), or may contain the Statement of Objectives (SOO) • SOW: explicitly defines all non–spec work performance requirements for contractor effort (directly or by reference to docs) • SOO: Gov’t prepared document incorporated into the RFP that states the overall solicitation objectives to provide the maximum flexibility to each offeror to propose an innovative development approach References: 7, 8

  13. SOW/SOO EVM Language • The SOW should contain statements requiring: • Development of a contract work breakdown structure (CWBS) at a level adequate for management and contract control • The contracted technical effort to use a guidelines-compliant EVMS that correlates cost & schedule performance with technical progress • Designation of critical subcontractors by name for EVM compliance and flow down of EVMS compliance to subcontractors • Integrated Baseline Review(s) (IBRs), don’t limit to 1 • Reference to EVMS data items as part of Integrated Program Management reporting • The SOO should be higher level • Cite the specific portions of all applicable governing instructions, directives, specifications and standards with which the program must comply- cite EVM policy, such as portions of DoDI 5000.02 • Contractor will write the SOW and tailored CDRL • Sample SOW Language can be found on the EVM Sharepoint site: • https://cs.eis.afmc.af.mil/sites/ESCFMCCE/EVM/Examples/Forms/AllItems.aspx References: 7, 8

  14. Section I: General Provisions • DFARS Section 234.203 – Solicitation provisions & contract clause (Dec 2011) • Use the provision at DFARS 252.234-7001, Notice of Earned Value Management System, instead of the provisions at FAR 52.234-2 and FAR 52.234-3 in the solicitation • Use the clause at DFARS 252.234-7002, Earned Value Management System, instead of the clause at FAR 52.234-4 in the solicitation and contract • Use DFARS 252.242-7005, Contractor Business Systems, to allow for withholding payments due to non-compliant EVMS issue in the solicitation and contract • See DoD Class Deviation 2015-O0017 DoD Contracts use DFARS Clauses for EVM References: 7, 11

  15. Section J: Exhibits/Attachments • Work Breakdown Structure - MIL-STD-881C mandatory common WBS for CPR, IMS, IPMR & CCDRs through WBS Level 3 • EVM Related Data Item Descriptions (DIDs) • Integrated Program Management Report DI-MGMT-81861A (Supersedes CPR & IMS DIDs effective July 1, 2012) • FM & Cost Related Data Item Descriptions (DIDs) • Contract Work Breakdown Structure DI-MGMT-81334D • Contract Funds Status Report DI-MGMT-81468A • Cost and Software Data Reports DI-FNCL-81565C-81567C and 81831 • Contract Data Requirements List (CDRL) places IPMR DID on contract References: 7

  16. CDRL Tailoring • EVM CDRLs can and should be tailored within bounds of policy • Tailoring options are limited for contracts ≥ $50M • Many aspects are tailorable for contracts < $50M • Consider all risk factors when tailoring EVM DIDs • Type of contract (determined by cost risk) • Technology • Schedule • Past contractor performance • Sample CDRL tailoring language can be found on the EVM Sharepoint site: • https://cs.eis.afmc.af.mil/sites/ESCFMCCE/EVM/Examples/Forms/AllItems.aspx References: 7

  17. IPMR Tailoring: Required DID References: 9, 10

  18. IPMR Tailoring: Optional DID References: 9, 10

  19. IPMR Tailoring: Optional DID References: 9, 10

  20. IPMR Tailoring: Optional DID Equivalent Months References: 9, 10

  21. 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 Validation requires: • Reference to an Advance Agreement and a copy of the approved EVM system description; or • A plan to obtain EVM validation to include how the system will be validated. • Compliance Only requires: a written summary of the proposed EVMS reference in sufficient detail to show how it addresses all EIA-748 guidelines References: 7

  22. 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 validation is accurate and current. The system should be currently in use, and surveillance should not have identified significant, uncorrected problems. • For EVMS (without validation) - the EVM system description should be evaluated for completeness against the guidelines in ANSI/EIA-748. • 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 on-site visit may be required when approved by the Source Selection Board and Procuring Activity. • DCMA should be requested to provide insight regarding EVMS capability, quality, and past performance. References: 7

  23. Proposal Review • Review the Proposal • Does it meet the requirement? • Is the CTR trying to remove EVM? • Stay involved throughout the process • After contract award, ensure the data you receive meets contract requirements

  24. References • Defense Acquisition Portal https://dap.dau.mil/apps/mdidhome.aspx • DoDI 5000.02 • Air Force Life Cycle Management Center (AFLCMC) Standard Process For Pre-Award Acquisition Strategy (AS) and Request for Proposal (RFP) Development https://cs4.eis.afmc.af.mil/sites/1534/ProcDir/APD/Forms/UserView.aspx?View={61C252B5-886B-4B9D-B10F-A1D781DB1DC7}&FilterField1=Major%5Fx0020%5FProcess&FilterValue1=Acquisition • Program Manager’s e-Tool Kit https://acc.dau.mil/CommunityBrowser.aspx?id=294455 • OSD Acquisition Strategy Document Template https://www.my.af.mil/gcss-af/USAF/ep/contentView.do?contentType=EDITORIAL&contentId=cA4057E1F2FEAB256012FFF1E36190282&channelPageId=s6925EC13430A0FB5E044080020E329A9&programId=t2D8EB9D64456E2DC014478D91A7D08C1 References continued next slide…

  25. References • Federal Acquisition Regulation (FAR) 15.203 http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/15.htm#P75_14781 • EVM 201 Student Guide https://myclass.dau.mil/webapps/cmsmain/webui/institution/Courses/Deployed/EVM/EVM%20201/Student_Materials?action=frameset&subaction=view • MIL-HDBK-245 Preparation of Statement of Work (SOW) http://quicksearch.dla.mil/qsDocDetails.aspx?ident_number=53962 • IPMR Implementation Guide http://www.acq.osd.mil/evm/resources/PG-DIDs.shtml • IPMR DIDDI-MGMT-81861A (current) http://quicksearch.dla.mil/ • Class Deviation Memo, EVMS Threshold http://www.acq.osd.mil/evm/NewsList.shtml#n20150903 • EVM Sharepoint https://cs.eis.afmc.af.mil/sites/ESCFMCCE/EVM/default.aspx • PARCA EVM Application Determinations https://www.acq.osd.mil/evm/docs/PARCA%20EVM%20Application%20Determinations.pdf

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