Transcript Industry EVMS Issues and Position Summary

Program Management Systems Committee (PMSC)
Contract / Subcontract Issues Working Group
29 January 2009
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Team

Members
Mike Martin - P&W Rocketdyne (Lead)
Gay Infanti - Northrop Grumman
Eleanor Haupt - Consultant to the Institute for Defense Analyses
Dave Muzio - MCR
Peter Schwarz - MDA
Jeff Poulson - Raytheon
Mike Pelkey – OSD
Randy Steeno – Boeing
Debbie Tomsic – OSD
Larry Axtell – OSD
Fred Meyer – DCMA EV Center
John Pakiz – Boeing (Retired)
Dan Feeney – Lockheed Martin
Kathryn Flannigan – General Dynamics
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Issues List
 The following issues have been addressed by the Contracts Working
Group and consensus has been reached, on all but the last, among
industry and government participants concerning next steps:
– Contract vs. EVM system order of precedence.
– Subcontractor compliance, validation and surveillance
– Knowledge gap between EVM and contracting communities
– Integrated and virtual team (badgeless) subcontracting teaming
arrangements
– DCMA EV Standard Surveillance Operating Manual (SSOM)
– Under what circumstances can a supplier apply an existing
validation from one site to another? New
– DCMA EV Center is preparing a position paper on each of these
issues. After a review by other DOD segments, the position paper,
which will represent a consolidated DOD position, will be
published.
 The actions contained herein will be executed through a collaborative
industry / government effort
 OSD has requested that these issues be worked and closed out.
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Order of Precedence
Issue
 In addition to including FAR or DFARS
EVMS clauses on contracts, contracting
officers frequently include other provisions
that often require suppliers to modify or
depart from their standard, validated EVM
Systems to manage their contracts and
meet the requirements of their contracts.
These provisions may be found in sections
of the contract that take precedence over
Section I, where the EVMS clauses are
contained, e.g.,
– Section H – Special Provisions
– Section C – Statement of Work requirements
Team Position
 Contractors are obligated to follow the
contracts.
 In the sprit of cooperation the Contractor
and the cognizant CMO should notify the
PCO of the conflicting requirements
 The DCMA CMO and the PCO should
reach a solution with the government PM
which precludes noncompliance with either
the ANSI or the contractor’s validated
EVMS
 Previous DCMA Director has instructed the
EV Center not to initiate CARs when an
inconsistency exists
 DCMA must issue a communication
regarding this position to all CMOs and EV
Center personnel.
 DCMA’s stated policy is to issue Corrective
Action Request (s) against the contractor
for following contract direction.
Action: DCMA EV Center Director will
readdress this issue with new DCMA
Director.
.
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Subcontractor Compliance, Validation and Surveillance
Issue

Previously a subcontractor had the
ability to request one of three options
when required to have a validated
EVMS; the EVMIG and other guidance
documents vested primary
responsibility in the prime contractor.
1)
2)
3)



Prime Contractor Review Only
DCMA Review Only (at sub’s request)
DCMA and Prime Contractor Review
October 2006, DCMA revised the
EVMIG to assign DCMA sole
responsibility for subcontractor
validation.
The EVMIG may conflict with NDIA
EVMS System Acceptance Guide since
it appears to categorically eliminate the
consideration of other agencies’
acceptance.
Inconsistencies will result in dual
industry processes for subcontractor
validation and the potential for the same
at a single contractor facility.
Team Position
 Validation / Compliance Reviews:
DCMA has taken over responsibility for
subcontractor validation and surveillance,
however prime contractors will be
encouraged to participate in
subcontractor validation and/or
compliance reviews since they retain
responsibility for
– Subcontractor performance
– Accuracy and fidelity of CPRs, including
reported subcontractor data
 Suppliers with DoD contracts must review
their system descriptions to ensure they
comply with recent change.
 Who is responsible for notifying the
government of the need for a subcontractor
validation review?
 Surveillance:
– Program- Prime’s DCMA prime will issue a LOD to the
Subcontractor’s DCMA for program surveillance
– System – DCMA will conduct joint surveillance of sub’s
EVMS; Prime will participate
 General : EVMIG update is necessary for
clarification
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EVM Knowledge Gap
Issue
 Evidence that EVM and Contracting
experts are not collaborating, via IPTs, on
the contractual application and use of
EVMS during acquisition planning.
 Evidence of this is as follows:

–
Incorrect flow down and/or omission of EVM
contractual requirements.
–
Improper contract direction forcing the
contractor or subcontractor to violate their
approved system.
–
Over application of EVM requirements
–
Improper application of requirements for
follow on options
–
Improper use of Management Reserve (MR)
–
Integrated Baseline Review (IBR) timing
Knowledge gap is perceived cause
Team Position
 NDIA PMSC should establish an Industry /
Government team to generate a training
package which can be delivered to all federal
agencies and contractor organizations.
Action: D. Tomsic developed/delivered this
training on 7/29/08 through NCMA audio
seminar. Industry will review material to
ensure it is acceptable to a broader audience.
 Issue correspondence “EVM Contract
Requirements Checklist” under OUSD
signature to all commands.
Action: DPAP correspondence “EVM
Requirements and Reporting” issued 8/27/08
Memo addresses this item and references
checklist with link to web site to obtain current
version.
 DOD is considering the establishment of a
common Procurement Initiation Document
(PID) process to review contract requirements
prior to solicitation.
Action: TBD
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Integrated Subcontract EVMS Implementations
Issue

The use of a single EVMS by all
program participants to manage large
programs involving major subcontractors
is viewed as non-compliant to the
DFARS EVMS clause by DCMA.
–
–
This approach also referred to as
badgeless, virtual, or gray badge.
Characterized by adoption of a single
validated system to manage the effort
(typically the prime’s EVMS), use of a
common tool set, integrated schedules
and performance reporting.
Team Position
 Team will review matrix and establish
general guidance for various types of
integrated solutions.
 Establish Matrix of Variable
Implementations – Complete.
 Update Matrix to Establish Validation,
Compliance and System Surveillance
Responsibilities - Open.
 Completed guidance will be
communicated through NDIA PMSC and
agreed to via letter correspondence Open.
 Published in the EVMIG - Open.
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Standard Surveillance Operating Manual
Issue Issue to be Closed 3/31 Team Position


–
–
–
–
–
–
DCMA EV Standard Surveillance Plan
(SSP) will be implemented throughout
the agency without being distributed
for comment.
Issues include but are not limited to:
Existing AA provisions allowing system
description change after ACO notification.
Review and adjudication of all CARs by the
EV Center.
Risk Based Surveillance approach appears
to eliminate contractor input.
Level of detail and amount of data requests
to support surveillance have increased.
Training and Implementation Demonstrated DCMA response time for
final reports and system description
changes must be improved.
Relationship of NDIA Intent Guide to the
surveillance.
 NDIA PMSC will work with DCMA to achieve
a timely review and closure on any areas of
concern.
 DCMA has agreed to break out separate
small group of Industry and Government
participants to review the process and make
recommendations.
 Industry Representatives
–
–
–
–
–
–
Boeing : Randy Steeno
Lockheed Martin: Pete Wynne
Northrop Grumman: Gay Infanti
Raytheon: Jeff Poulson
Pratt & Whitney: Mike Martin
DCMA EV Center: Donna Holden, Kelli Coon
 Schedule
–
–
–
–
–
Industry Comments to DCMA: 01/09
Team Meeting: 1/30
Additional Team Meeting: Feb
Adjudication of Issues: 2/16 – 3/27
Final Industry Input : 3/31
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Application of Existing Validation to Another Company Site
Issue

Under what circumstance is it can the
validation (and system) from one
company site apply to another ?
Team Position
 Not Discussed
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Summary
 The following issues are still working toward closure:
– Contract vs. EVM system order of precedence.
– Subcontractor compliance, validation and surveillance.
 The following issue is still open:
– Knowledge gap between EVM and contracting communities.


Training Delivered and Correspondence Issued
Open Item - PID Process
 The team requests that the following issue be transferred to the Joint
OSD/Industry Working Group:
– Integrated and virtual team subcontracting teaming arrangements
 The following issue is new:
– Application of existing process and validation from one company site
to another.
 The following issue is being worked separately and is targeted for
closure by 3/31/08:
– DCMA EV Standard Surveillance Operating Manual (SSOM).
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