1. Global Business ServicesPublic SectorEVMS Self-Evaluationand Certification NASA Program Management Challenge 2012 Evolve and Excel February 22-23, 2012 2012 IBM Corporation

2. Global Business ServicesPublic SectorPresenters Randy Simpson, PMP IBM GBS Public Sector NASA Account Lead/EVMS SME Michael Lee, PMP IBM GBS Public Sector EVMS PMO Leader Both are members of the IBM Public Sector Earned Value Management Systems Program Management Office (EVMS PMO)2 2012 IBM Corporation

3. Global Business ServicesPublic SectorObjectives To provide a perspective of the EVMS Certification challenge To identify the areas of focus necessary to position an organization for a successful run at certification3 2012 IBM Corporation

4. Global Business ServicesPublic SectorGovernment Accountability Initiatives Government Performance Results Act (GPRA-1993) Federal Acquisition Streamlining Act (FASA-1994) Clinger Cohen (ITMRA-1996) Sarbanes Oxley Act (2002) OMBs Circular A-11 (2002) Interim Defense Acquisition Guidebook (2002) NPD 9501.3 Earned Value Performance Management FAR 34.201, 2, 3 & FAR 52.234-2, 3, 4 EVMS (July 2006) ANSI/EIA-748A-1998 EVMS (May 1998) NDIA PMSC EVMS Intent Guide (Nov 2006)4 2012 IBM Corporation

5. Global Business ServicesPublic SectorEarned Value Management (EVM) Overview Rigorous, distributed program management methodology and system Integrates Scope Schedule Resource Underlying foundation Program Manager has limited span of control Responsibility must be distributed Consistent methodology needed to aggregate performance measures on large programs Isolate performance to individual work package Facilitates direct strike on elements of program needing course correction5 2012 IBM Corporation

6. Global Business ServicesPublic Sector EVMS in a Nutshell EAC BAC Projection of Cost BCWS Variance at Completionm Target Schedule Projection of Schedule Delay at Completion ETCC O S T Current Schedule To-Date FCST Schedule Variance To-Date Cost Variance ACWP BCWS Budgeted Cost of Work Scheduled BCWP Budgeted Cost of Work Performed (Earned Value) ACWP Actual Cost of Work Performed FCST Forecast of Remaining Work BAC Budget at Completion ETC Estimate to Complete BCWP EAC Estimate at Completion Data Date T I M E 6 2012 IBM Corporation

7. Global Business ServicesPublic Sector FIVE BASIC PERFORMANCE DATA QUESTIONS & ANSWERS QUESTION ANSWER ACRONYM* How much work should Budgeted Cost for BCWS be done? Work Scheduled How much work is done? Budgeted Cost for BCWP Work Performed How much did the is done Actual Cost of ACWP work cost? Work Performed What was the total job Budget at Completion BAC supposed to cost? What do we now expect the Estimate at Completion EAC total job to cost?* PMI has adopted some new terminology & acronyms for these elements (but the theory is unchanged) 7 2012 IBM Corporation

8. Global Business ServicesPublic SectorPerspective of EVMS Certification is not focused; it isCertification comprehensive Stakeholders IBR Focus (Process is limited) Process Baseline Development Status & Forecasting Focus of most discussions on EVMS Tools Metrics & Reports Management Corrective Action 8 2012 IBM Corporation

9. Global Business ServicesPublic SectorTenets of EVMS Certification Tenet 1 Stakeholders Documented EVMS system meets all 32 of the ANSI 748 guidelines Process Tenet 2 Project(s) are executing the Baseline Development documented system Tenet 3 Status & Forecasting Project Managers, Functional Managers and Control Account Metrics & Reports Managers are using the system to manage the program Management Tenet 4 The EVMS is sustainable and an Corrective Action adequate surveillance plan is in place9 2012 IBM Corporation

10. Global Business ServicesPublic SectorEVMS Guidelines, Systems & Process Groups EVMS Process Managerial Wor k Change Indirect Rate Material Subcontract Groups (EVMIG) Organizing Scheduling Accounting Mgm t Analysis Authorization Incorporation Management Management BaselineEVMS Processes Commonly Estimates At Variance Schedule Schedule Change Data Indirect Rate Subcontract Organizing Work Auth Status & Budgeting Accumulation & Material Control Management (Grey Implemented Complete Analysis Devt Update (Internal & Reporting Man agement Badge & Traditional) External ) Self-Evaluation Manager ial Baseline Management Accounting Outsour cing Organizational Structure Executive D ashboard & Schedule , Cost & Integration Management CAS Compliant Accounting Tools & Sys tems Portfolio Management Certified Procurement Tools System System Tools 22. Monthly 8. Time - phased 8. Time- phased 28. Incor porate 28. In corpor ate 16. Actual 4. Orgs EVMS Budget Baseline Budg et Baseline Authorized Author ized Costs Recorded Responsible 21. Cost 1. WBS Reports Changes Changes Consistent w/ For Accumulatio n & Contr ibu ting 9. . Elementof 9 Element of 29. Reconcile 29. Reconcile Budgets Overhe ads Assignment to Element Only; 23. Variance Cost Br eakdown Cost Br eakdown 6. Sequence Current Bud get Cur rent Budget CAs ; Appro priate Subcontractors 17. Summarize 13. Overhe ad Analysis 10. Wor kk & Plan & To Pr io r bbudgets To Prior udgets Cost Per for mance & Subcontr acts 10. Wor & Plan-- Inter- Costs into WBS; Budgets & 25 . Roll- up ning Packages nin g Packages depe ndencies 30.30. Retr oactive Retr oactive No Allocation Allocation Measure ment; must also be Changes Full Accou ntability compliant with Var ia nces & 11. CA 11. CA 19. Recor d 2. OBS 18. Summarize For Mater ial the stand ards Report Reconcilia tion Reconciliation 31. Pre vent 31. Prevent Indir ect Costs Costs into OBS ; Purchased on to the degree 26. Implement Unauthorized Unauthorized For Project Project that they apply Guidelines & 12 . LOE Time 12. LOE Time text No Allocation Managerial Changes Changes Allocation Supporting Phase d Budgets Phased Budgets Processes Action 3 2. Document 32. Document 20. Un it or Lot 24. Manage 3 . Bu sin ess 14. Mgmt 14. Mgmt 27 . Revised Changes Costs, if And Report On Pr ocess Reserve && UB Reserve UB Material Estimates at 7. Products, applicable Overhe ads Integr ation Con tro l Complete (EAC) 15. Prog ram 15. Pr ogram Milestones & Per for mance Contracts Policies Reco nciliation Reconciliation Measures & Procedures Estimating Contracts Pricing & Accounting Indirect Rate Subcontract 5. RAM Estimating Policies & Mgmt Policies & Pr icing & Policy & Risk & Proced ures Pr ocedur es Estimating Procedures Cor rective Id entification , Pro curement Action Development Policie s & Scope & Impact & PM/EVMS Management Methodology Tr acking Procedur es Policy Requirements Definition o f Chan ges Qualified Project , Qualified Schedulers , Estimators, Cost Qualified Enterprise Qualified Procurement People Functional and Control Analysts, EV Analysts & C ontract Financial Analysts and Specialists and Subcontract Account Managers Administrators Management Accountants Administrators Leadership Executive Sponsorship & Subscription10 2012 IBM Corporation

11. Global Business ServicesPublic SectorSo why Certify? EVMS certification candidate is mandated by the customer pursuant to RFP and contract clause imposition (e.g. DFAR 252.234-7000/1) NOTICE OF EARNED VALUE MANAGEMENT SYSTEM (MAR 1998) (a) The offeror shall provide documentation that the cognizant Administrative Contracting Officer (ACO) has recognized that the proposed earned value management system (EVMS) complies with the EVMS criteria of DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs, or that the proposed cost/schedule control system has been accepted by the Department of Defense. (b) If the offeror proposes to use a system that does not meet the requirements of paragraph (a) of this provision, the offeror shall submit a comprehensive plan for compliance with the EVMS criteria. Certified EVMS as a competitive advantage11 2012 IBM Corporation

12. Global Business ServicesPublic SectorMethodologies for Certification Government Agency Certification (~>95%) DoD (DCMA), NASA, DOE, Security Agencies Other Agencies developing capability but this will likely be measured in years, not months Most follow DCMA protocol Self Evaluation with Government Participation (~ If discrepancies can be resolved in relatively short time > Follow-up review should be scheduled to continue Certification process Documentation Process Group Executive Summaries Guide Evaluations (primary and supporting) Corrective Action Request (CAR) Log and disposition Continuous Improvement Opportunities (CIO)33 2012 IBM Corporation

34. Global Business ServicesPublic SectorProcess to Certification Program Team & Deliver CARs to Self Evalutation Out Self Eval Team Project Team Develops Project Program Brief Meeting(s) to Corrective Action Plan(s) Team Discuss CARS Disapproves Additional Action(s) Reqd Project Team Self-Eval Team Self-Eval Team Approves Executes Assures Closure Reviews Corrective Corrective Action Corrective Action Action Plan(s) Plan(s) Requests Action(s) Closed Self-Eval Team Validation Director Provides Validation Executive Agent All Discrepancies provides Director Final EVMS Grants EVMS Closed Recommendation to DoD Certification Report & Certification Executive Agent Reccomendation34 2012 IBM Corporation

35. Global Business ServicesPublic SectorFinal Report Executive Summary CAR Log CIO Log Management Sub-Team Baseline Management Sub-Team Accounting Sub-Team Outsourcing Sub-Team Process Group Process Group Process Group Process Group Process Group Process Group Process Group Process Group Process Group Summary Summary Summary Summary Summary Summary Summary Summary Summary P 22. Monthly 8. Time - phased 8. Time- phased P 28. Incorporate 28. Incorporate 16. Actual 4. Orgs Support forms for Authorized Authorized Costs Recorded 21. Cost 2,9,10,12,16,22,23 P EVMS P Budget Baseline Budget Baseline P Responsible Changes Changes Consistent w/ & 27 1. WBS Reports For P Accumulation & 23. Variance P 9. Element of 9. Element of 29. Reconcile 29. Reconcile P Budgets P Overheads Assignment to CARs Analysis Cost Breakdown Cost Breakdown 6. Sequence Current Budget 17. Summarize Current Budget CAs ; Appropriate P & To Prior budgets Costs into WBS; To Prior budgets 13. Overhead 10. Work & Plan- 10. Work & Plan - Cost Performance P Inter- P No Allocation Budgets & Pning Packages ning Packages P Measurement; CIOs 25. Roll- up dependencies 30.30. Retroactive Retroactive Allocation P Variances & Changes Full Accountability P 11. CA 11. CA 19. Record 2. OBS P Report 18. Summarize For Material Reconciliation Reconciliation 31. Prevent P Costs into OBS; 31. Prevent Indirect Costs Purchased on Unauthorized Unauthorized No Allocation For Project 26. Implement P 12. LOE Time 12. LOE Time Project Process Group P P P Managerial Changes Changes Allocation P Forms P Phased Budgets Phased Budgets P P Action 32. Document 32. Document 20. Unit or Lot 24. Manage Support forms for 3. Business P 14. Mgmt 14. Mgmt 27. Revised Changes Costs, if And Report On 9,10,12,22, 23 & Process Reserve && UB Reserve UB Integration Estimates at Complete (EAC) 7. Products, applicable P Overheads 27 P P 15. Program 15. Program Milestones & CARs CARs Reconciliation Reconciliation Performance CARs CARs P CARs Measures CIOs CIOs Support form for 22 5. RAM CIOs CIOs CIOs P CARs Support form for 23 Support forms for 9,10,22,26 & 27 CIOs CARs CARs CIOs CIOs EVMS Process Managerial Work Change Indirect Rate Material Subcontract Organizing Scheduling Accounting Mgmt Groups Analysis Authorization Incorporation Management Management Narratives Forms P Primary Guideline Compliance Disposition Form35 2012 IBM Corporation

36. Global Business ServicesPublic SectorCertification Conduct Review Identify/ correct discrepancies Prepare Final Report Submit Final Report to Certifying Agency Agency Review (4-6 weeks) Letter of Certification issued36 2012 IBM Corporation

37. Global Business ServicesPublic SectorSummary EVMS Self-Evaluation is a valuable and viable method to achieve certification A great training ground for contractor personnel Takes some of the burden off government agencies May enable a contractor to significantly accelerate certification because agency scheduling is not an issue Builds contractor resource pool for surveillance and other contract implementations Communication and positioning is the key Agencies have to be willing to allow a self-evaluation with their participation Some agencies have not permitted this methodology Should communicate and coordinate with your customer and CFA to explore if this could be an option Having a credible team of EVMS folks to lead this helps an awful lot And lastly, it isnt free there is a cost for self-evaluation but its benefits far exceed this cost must look at it as an investment in your EVMS capability because that is what it is37 2012 IBM Corporation

38. Global Business ServicesPublic SectorAppendix 2012 IBM Corporation

39. Contract Price Earned Value Management Gold Card NCC TAB CBB Profit / Fees AUW OTB OVERRUN EAC TAB PMB Management Management Reserve Reserve BAC PMB Undistributed Control Summary Level Budget Accounts Planning Packages Schedule Variance Work Packages Planning Packages Cost $ Variance TERMINOLOGY ACWP NCC Negotiated Contract Cost Contract price less profit / fee(s) AUW Authorized Unpriced Work Work contractually approved, but not yet negotiated / definitized BCWS CBB Contract Budget Base Sum of NCC and AUW OTB Over Target Baseline Sum of CBB and recognized overrun BCWP TAB Total Allocated Budget Sum of all budgets for work on contract = NCC, CBB, or OTB BAC Budget At Completion Total budget for total contract thru any given level PMB Performance Measurement Baseline Contract time-phased budget plan time Time Completion MR Management Reserve Budget withheld by Ktr PM for unknowns / risk management Now Date UB Undistributed Budget Broadly defined activities not yet distributed to CAs CA Control Account Lowest CWBS element assigned to a single focal point to plan & control scope / schedule / budgetVARIANCES Favorable is Positive, Unfavorable is Negative WP Work Package Near-term, detail-planned activities within a CA PP Planning Package Far-term CA activities not yet defined into WPsCost Variance CV = BCWP ACWP CV % = (CV / BCWP) *100 BCWS Budgeted Cost for Work Scheduled Value of work planned to be accomplished = PLANNED VALUE BCWP Budgeted Cost for Work Performed Value of work accomplished = EARNED VALUESchedule Variance SV = BCWP BCWS SV % = (SV / BCWS) * 100 ACWP Actual Cost of Work Performed Cost of work accomplished = ACTUAL COSTVariance at Completion VACOVERALL STATUS = BAC EAC EAC Estimate At Completion Estimate of total cost for total contract thru any given level; may be generated by Ktr, PMO, DCMA, etc. = EACKtr / PMO / DCMA% Schedule = (BCWSCUM / BAC) * 100 LRE Latest Revised Estimate Ktrs EAC or EACKtr SLPP Summary Level Planning Package Far-term activities not yet defined into CAs% Complete = (BCWPCUM / BAC) * 100 TCPI To Complete Performance Index Efficiency needed from time now to achieve an EACDoD TRIPWIRE = (ACWPCUM / BAC) > 100Unfavorable is < 1.0% Spent METRICS Favorable is * 1.0, EVM POLICY: DoDI 5000.2, Table E3.T2 . EVMS in accordance with ANSI/EIA-748 is required for cost or incentiveCost Efficiency CPI = BCWP / ACWP contracts, subcontracts, intra-government work agreements, & other agreements valued > $20M (Then-Yr $). EVMSSchedule Efficiency SPI = BCWP / BCWS contracts > $50M (TY $) require that the EVM system be formally validated by the cognizant contracting officer. Additional Guidance in Defense Acquisition Guidebook and the Earned Value Management Implementation Guide (EVMIG). EVMS isBASELINE EXECUTION INDEX (BEI) (Schedule Metric) discouraged on Firm-Fixed Price, Level of Effort, & Time & Material efforts regardless of cost.BEI = # of Baseline Tasks Actually Completed / # of Baseline Tasks Scheduled for Completion EVM CONTRACTING REQUIREMENTS:CRITICAL PATH LENGTH INDEX (CPLI) (Schedule Metric) Non-DoD FAR Clauses Solicitation 52.234-2 (Pre-Award IBR) or 52.234-3 (Post Award IBR)CPLI = (Critical PathBaseline Duration + Float Duration) / Critical PathBaseline Duration Solicitation & Contract 52.234-4TO COMPLETE PERFORMANCE INDEX (TCPI) # DoD( $20M) DFAR Clauses - 252.242-7001 for solicitations and 252.242-7002 for solicitations & contractsTCPIEAC = Work Remaining / Cost Remaining = (BAC BCWPCUM) / (EAC ACWPCUM) Contract Performance Report DI-MGMT-81466A * 5 Formats (WBS, Organization, Baseline, Staffing & Explanation) Integrated Master Schedule DI-MGMT-81650 * (Mandatory for DoD EVMS contracts)ESTIMATE AT COMPLETION # Integrated Baseline Review (IBR) - Mandatory for all EVMS contractsEAC = Actuals to Date + [(Remaining Work) / (Efficiency Factor)] * See the EVMIG for CPR and IMS tailoring guidance.EACCPI = ACWPCUM + [(BAC BCWPCUM) / CPICUM ] = BAC / CPICUM EVM Home Page = https://acc.dau.mil/evm eMail Address: EVM.dau@dau.milEACComposite = ACWPCUM + [(BAC BCWPCUM) / (CPICUM * SPICUM)] DAU POC: (703) 805-5259 (DSN 655) Revised December 2006# To Determine a Contract Level TCPI or EAC; You May Replace BAC with TAB To Determine the TCPI BAC,LRE Replace EAC with either BAC or LRE

40. Global Business ServicesPublic SectorTo perform quality project management & financial analyses... CAN NOT DO THIS (Integrated EVM, Measurement & Forecasting & Forecasting).. Economic, Risk & Opportunity WITHOUT THIS Analysis (Minimum Essential Baseline Status Collection Requirements) Change & Reporting Mgmt Admin Baseline Development & Authorization/Resource Planning Procedures/Methods Estimating System Project Accounting System Critical Mass (Personnel) in Planning, Project Accounting & Estimating Functions Senior Management Buy-In, Support & Subscription must build from the bottom40 2012 IBM Corporation

41. Global Business ServicesPublic Sector Documentation Requirements EIA-748 Guidelines Organization Planning, Scheduling & Budgeting Accounting Analysis & Mgmt Reports Revisions/Data Maint Twenty Seven (27) Twenty Three (23) Twenty Eight (28) Twenty Four (24) Twenty Nine (29) Twenty One (21) Twenty Two (22) Twenty Five (25) Twenty Six (26) Seventeen (17) Thirty One (31) Thirty Two (32) Fourteen (14) Nineteen (19) Eighteen (18) Thirteen (13) Sixteen (16) Twenty (20) Twelve (12) Eleven (11) Fifteen (15) Thirty (30) Seven (7) Three (3) Eight (8) Ten (10) Four (4) Nine (9) One (1) Two (2) Five (5) Six (6) Item Description1 Accounting Manual 1 1 12 Accounting System Data 1 13 Action Item Lists Authorization Docuements for Retroactive4 1 Budget Adjustments5 BCWS Supporting Documentation 16 Bill of Materials 17 Budget Logs 1 18 Budget Records (Including MR & UB) 1 19 Budget Revision Records 110 Change Authorization Documents 111 Change Control Procedure 1 112 Change Control Records 113 Charge Number Structure 114 Contract Change Documentation 115 Contract Data Requirments 116 Contract Work Breakdown Structure 1 1 1 117 Contractors Accounting Manual 118 Contractual Instruments 119 Control Account Plans 1 1 1 1 1 120 CWBS Dictionary 1 121 DCAA Audit Reports 122 DCAAM 7640.1 123 Desktop Procedures 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 124 Disclosure Statements (CAS, etc.) 1 1 125 EAC Procedure 126 EAC Supporting Documentation 127 External Reports (CPR, CFSR) 1 1 1 1 1 1 1 41 2012 IBM Corporation

42. Global Business ServicesPublic Sector Documentation Requirements Organization Planning, Scheduling & Budgeting EIA-748 Guidelines Accounting Analysis & Mgmt Reports Revisions/Data Maint Twenty Seven (27) Twenty Three (23) Twenty Eight (28) Twenty Four (24) Twenty Nine (29) Twenty One (21) Twenty Two (22) Twenty Five (25) Twenty Six (26) Seventeen (17) Thirty One (31) Thirty Two (32) Fourteen (14) Nineteen (19) Eighteen (18) Thirteen (13) Sixteen (16) Twenty (20) Twelve (12) Eleven (11) Fifteen (15) Thirty (30) Seven (7) Three (3) Eight (8) Ten (10) Four (4) Nine (9) One (1) Five (5) Two (2) Six (6) Item Description28 FAR 31.203 129 GAAP 130 Intermediate Level Management Results 131 Internal BCWS Reports 132 Internal Data Reports 1 Internal Factory Standards Planning33 1 Docuements34 Internal Material Performance Data 1 135 Internal Performance Reports 1 1 1 1 1 1 1 1 1 1 136 Internal Time-Phased Baseline Documents 137 Journal Vouchers 138 Manager Interview Results 1 1 1 1 1 1 1 139 Manufacturing Breakdown Structure (if appl.) 140 Manufacturing Cost Account Plans (if appl.) 141 Material Manager Interviews 142 Material Trace 143 Material Variance Analysis Docuementation 1 1 144 Organization Charts (All, including Subs) 1 1 1 1 1 1 145 Overhead Budgeting Policies & Procedures 1 1 1 146 Prime to Subcontractor Reconcilitation 1 147 Program Schedules 1 1 1 148 Program Status Review Documents 149 Rate Table for EAC Valuation 150 Schedule Trace 1 1 151 Schedule Variance Analysis Documents 152 Statement of Work 153 Subcontract Control Account Plans 1 1 154 Subcontract Manager Interviews 1 42 2012 IBM Corporation

43. Global Business ServicesPublic Sector Documentation Requirements Organization Planning, Scheduling & Budgeting Accounting Analysis & Mgmt Reports Revisions/Data Maint