**UNITED STATES DEPARTMENT OF**

**TRANSPORTATION**

FEDERAL AVIATION ADMINISTRATION

 

 

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height="1.8145833333333334in"}

 

EARNED VALUE MANAGEMENT

SYSTEM ACCEPTANCE GUIDE

June 2008

© 2007-2008 Federal Aviation Administration (FAA).

FAA Earned Value Management System Acceptance Guide

March 10, 2008

Permission to copy and distribute this document is hereby granted
provided that this notice is retained on all copies, that copies are not
altered, and that the FAA is credited when the material is used to form
other copyrighted documents.

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height="1.2986111111111112in"}

Federal Aviation Administration\
800 Independence Avenue, SW\
Washington, DC 20591\
1-866-TELL-FAA (1-866-835-5322)\
www.faa.gov

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**TABLE OF CONTENTS**

[[1.0]{.smallcaps} [INTRODUCTION 5]{.smallcaps}](#introduction)

[1.1. EVM SYSTEM ACCEPTANCE OVERVIEW 5](#evm-system-acceptance-overview)

[1.2. BACKGROUND 5](#background)

[1.3. PURPOSE AND SCOPE 5](#purpose-and-scope)

[2.0 Major programs EVM System Acceptance
7](#major-programs-evm-system-acceptance)

[2.1. Program EVM System Acceptance Overview
7](#program-evm-system-acceptance-overview)

[2.2. PROGRAM EVMS ASSESSMENT PROCESS
7](#program-evms-assessment-process)

[2.2.1. Program EVMS Assessment Phase I -- Investment Analysis
7](#program-evms-assessment-phase-i-investment-analysis)

[2.2.2. Program EVMS Assessment Phase II - Solution Implementation
9](#program-evms-assessment-phase-ii---solution-implementation)

[2.2.3. Program EVMS Assessment Reviews
9](#program-evms-assessment-reviews)

[2.2.4. Program EVMS Assessment - Summary of Findings and
Recommendations
10](#program-evms-assessment---summary-of-findings-and-recommendations)

[2.3. PROGRAM EVMS ACCEPTANCE PROCESS
11](#program-evms-acceptance-process)

[3.0 Contractor EVM System acceptance
11](#contractor-evm-system-acceptance)

[3.1. Contractor EVM System Acceptance Overview
11](#contractor-evm-system-acceptance-overview)

[3.2. CONTRACTOR EVM SYSTEM ACCEPTANCE PROCESS
12](#contractor-evm-system-acceptance-process)

[3.2.1. Contractor EVM System Acceptance -- Planning
13](#contractor-evm-system-acceptance-planning)

[3.2.2. Contractor EVM System Acceptance - Validation Review
17](#contractor-evm-system-acceptance---validation-review)

[3.3. Contractor EVM System Acceptance - Formal Recognition
20](#contractor-evm-system-acceptance---formal-recognition)

[3.3.1 Contractor EVM System Acceptance -- Advance Agreement
20](#contractor-evm-system-acceptance-advance-agreement)

[3.3.2 Contractor EVM System Acceptance -- System Letter of Acceptance
21](#contractor-evm-system-acceptance-system-letter-of-acceptance)

[aPPENDIX A Glossary of terms 22](#appendix-a-glossary-of-terms)

[aPPENDIX B LIST OF ACRONYMS 23](#appendix-b-list-of-acronyms)

#  

# 

# INTRODUCTION

## EVM SYSTEM ACCEPTANCE OVERVIEW 

Systems Acceptance is a formal process that involves the reviewing,
validating and certifying of the design and implementation of an Earned
Value Management System (EVMS) that meets the requirements of the 32
EVMS Guidelines embodied in the American National Standards
Institute/Electronic Industry Alliance's (ANSI/EIA) EIA-748, Standard
for Earned Value Management Systems.

## BACKGROUND 

The Federal Aviation Administration (FAA) has established requirements
for the implementation, use and maintenance of validated earned value
management systems on capital asset investments, in order to strengthen
performance management and in response to the Government Performance and
Results Act (GPRA) and the Office of Management and Budget (OMB)
Circular A-11. The requirement for EVM systems that have been validated
to meet the ANSI/EIA 748 Standard -- EVMS is addressed in the
Acquisition Management System (AMS) and applies to both FAA lines of
business, service units and program offices responsible for planning and
managing of capital investments, as well as contractors supporting the
FAA. The EVM System Acceptance Guide provides guidance and a framework
to demonstrate that EVM systems used by FAA programs, organizations and
contractors meet the Guidelines for Earned Value Management and will
produce program performance data useful for capital investment
decision-making.

The Office of the Chief Information Officer (AIO) and the Acquisition
Executive / EVM Focal Point (ATO-A) are jointly responsible for
establishing policy and guidance related to the implementation of EVM as
the basis for capital investment program and performance management. The
FAA EVM Guide provides general guidance supporting the design and
implementation of EVM systems at the FAA and describes the overall
process for EVM systems acceptance and surveillance. The EVM System
Acceptance Guide, Surveillance Guide and Integrated Baseline Review
Guide provide more detailed guidance related to the execution of these
specific processes.

## PURPOSE AND SCOPE

> The intent of this guide is to establish the process and provide
> guidance for the review, validation and formal acceptance of EVM
> Systems depended on by the FAA to plan, manage, control, and report
> performance of capital investment programs. The goal of the EVMS
> System Acceptance process and the related EVMS Surveillance process is
> to ensure the integrity of program management systems and the reported
> performance data used by the FAA and its' suppliers. This is initially
> accomplished by:

-   verifying and acknowledging program compliance with FAA EVM policies
    related to the management and performance of capital investments

-   verifying and acknowledging contractor compliance with FAA EVM
    contractual requirements related to the management and performance
    of capital investments

-   verifying program performance data reliability and consistency.

The EVM System Acceptance Guide defines an evaluation and acceptance
process for FAA programs and FAA suppliers with an ANSI/EIA 748 Standard
-- EVMS requirement to:

-   Understand the needs for and effectively design an EVMS;

-   Successfully implement the EVMS on the requiring capital investment
    program;

-   Conduct an evaluation of system compliance and its implementation;

-   Prepare and provide substantiating documentation for evaluation and
    implementation;

-   Receive approval and documentation that will satisfy the current and
    future requirements for an approved EVMS.

![](media/image2.wmf){width="5.998611111111111in"
height="4.100694444444445in"}An overview of the EVM System Acceptance
process is depicted in Figure 1-1.

**Figure 1.1 EVM Systems Acceptance Process**

The EVMS Acceptance Process addresses the need to assess, validate and
accept program management systems used by both major FAA programs and
contractors. Programs develop the EVMS following the Initial Investment
Decision and undergo an assessment in two phases until the EVMS is
determined to meet the requirements. Contractors develop an EVMS and
undergo a Validation Review to determine compliance. The EVMS
Surveillance process begins once the EVMS has been formally accepted by
the FAA and is described in the FAA EVMS Surveillance Guide. In
succeeding sections, appropriate guidance will be provided to assist the
EVM system owner in fulfilling this responsibility.

#  Major programs EVM System Acceptance

## Program EVM System Acceptance Overview

FAA programs required by policy (AMS <http://fast.faa.gov/>), or
investment review board (i.e., JRC/ATO-EC/ITEB) direction to use an EVMS
must demonstrate that the EVMS meets the guidelines of EVMS Standard
(ANSI/EIA-748) and are assessed and formally accepted by the Chief
Information Officer (AIO). Additionally, AIO is responsible for program
performance surveillance, which includes EVMS surveillance to ensure the
program continues to meet the guidelines of the EVMS Standard
(ANSI/EIA-748).

AIO conducts EVMS validation reviews on programs prior to the final
investment decision. The assessment includes a review of program
documentation and interviews with program management and key personnel. 
The assessment includes a review of procedures and practices on the use
of earned value data by the program team.  The review focuses on three
main areas concerning use of earned value data:

-   Program planning of schedule and cost; including their integration
    and baseline control with the technical scope as defined in the
    program baseline WBS;

-   Program performance data analysis and reporting; including the
    usefulness and effectiveness to the program team to manage schedule
    and cost; and forecasts schedule and costs at completion; and the

-   Availability of timely and actionable program performance data used
    by the program team to analyse, anticipate and mitigate program
    risks.

The program EVM review includes data for government effort, major
contractors, and support contractors. 

## PROGRAM EVMS ASSESSMENT PROCESS

## Program EVMS Assessment Phase I -- Investment Analysis 

The assessment of an FAA Program's EVMS begins during the investment
analysis phase of the acquisition life cycle, between the Initial
Investment Decision and the Final Investment Decision.

The Program EVMS Assessment -- Phase I process and activities conducted
during the program's investment analysis phase are outlined in Figure
2.2.1.

![](media/image3.wmf){width="5.997222222222222in" height="4.23125in"}

**Figure 2.2.1 Program EVMS Assessment Phase I -- Investment Analysis**

An EVMS Assessment Orientation meeting is conducted to introduce the
program to the EVMS System Acceptance process and requirements. The
meeting prepares the program for the development of the EVMS Plan of
Action and Milestones, which outlines the program's plan and schedule
for achieving acceptance of the EVMS.

The assessment of the program's EVMS is achieved through a series of
EVMS assessment reviews that focus on the specific guidelines of the
ANSI/EIA 748 Standard -- EVMS that have been grouped into the following
areas:

-   Organizing

-   Planning

-   Performing

-   Analysis and Reporting

-   Baseline Change Management

The Organizing and Planning assessment reviews require completion prior
to the Final Investment Decision. However, some updates to the
Organizing and Planning assessment reviews may be necessary following
the Final Investment Decision.

## Program EVMS Assessment Phase II - Solution Implementation 

The assessment of an FAA program's EVMS continues during the Solution
Implementation phase following the Final Investment Decision. After the
Final Investment Decision (FID) the EVMS assessment reviews continue
with the update of the Organizing and Planning reviews to incorporate
change from the FID. After the Organizing and Planning assessments are
complete, the assessment reviews for the Performing, Analysis and
Reporting, and Baseline Change Management guidelines are conducted. The
program's goal is to complete all EVMS assessment reviews within 180
days of the Final Investment Decision.

The Program EVMS Assessment Phase II process and activities conducted
during Solution Implementation are outlined in Figure 2.2.2

> ![](media/image4.wmf){width="5.997916666666667in"
> height="4.017361111111111in"}

**Figure 2-2-2. Program EVMS Assessment Phase II -- Solution
Implementation**

## Program EVMS Assessment Reviews

The EVMS assessment reviews are conducted for each program to assess the
program management and EVM processes to determine if they meet the
intent of EVMS Standard (ANSI/EIA-748).  The basis for the assessment is
the EVMS Standard (ANSI/EIA-748) guidelines and the FAA Program Control
EVM Assessment Review Criteria.  The assessment uses a Red/Yellow/Green
rating system to assess EVM implementation for each guideline.  The
criteria for determining EVM compliance for each guideline is as
follows:

**Green** = The program has implemented an EVMS that complies with the
FAA's implementation of the EVMS Standard (ANSI/EIA-748) guideline.

**Yellow** = The program has partially implemented an EVMS that complies
with the FAA's implementation of the EVMS Standard (ANSI/EIA-748)
guideline. The program team is obtaining useful program performance data
to anticipate and mitigate program risks.  The program has an acceptable
action plan to reach full implementation.  

**Red** = The program has not implemented an EVMS that complies with the
FAA's implementation of the EVMS Standard (ANSI/EIA-748) guideline.

The FAA Program Control EVM Assessment Review Criteria includes specific
Green/Yellow/Red criteria for each guideline derived from the National
Defense Industrial Association (NDIA) Program Management Systems
Committee (PMSC) EVMS Standard Intent Guide. The specific criteria for
each EVMS guideline used as the basis for the EVMS assessment reviews
and evaluating the EVMS are described in the FAA Program Control EVM
Assessment Review Criteria maintained by and available from the AIO
office. Individual guideline ratings will be combined to report an
overall rating for each ANSI/EIA 748 category and the overall program
rating. Any individual guideline that has been rated "Red" will result
in the ANSI/EIA 748 category being rated at best "Yellow". Additionally,
any individual guideline that has been rated "Red" will result in the
program overall rating being rated at best "Yellow". The EVMS assessment
review process and follow-on activities conducted during each review are
outlined in Figure 2.2.3.

![](media/image5.wmf){width="6.103472222222222in"
height="2.8847222222222224in"}

**Figure 2-2-3. Program EVMS Assessment Reviews**

## Program EVMS Assessment - Summary of Findings and Recommendations 

The EVMS assessment team documents the results of the assessment reviews
in a Summary of Findings and Recommendations. The report is initially
issued as a draft report and submitted to the program for comment and to
an alternate EVMS Lead Assessor for a peer review. The comments from the
program and the alternate EVMS Lead Assessor are reviewed and
incorporated into the final report, as applicable. The final Summary of
Findings and Recommendations is the basis for executive and oversight
reporting on the status of Agency EVMS implementation. As illustrated in
Figure 2-2-3, the status of Agency EVMS implementation will be
documented by updating the EVM Flag according to the final report that
is issued.

## PROGRAM EVMS ACCEPTANCE PROCESS

The Office of the Chef Information Officer (AIO) conducts program EVMS
assessments of programs required by policy (AMS) or investment review
board direction (JRC/ATO-EC/ITEB) to use an EVMS as outlined in Section
2.2.

When the program achieves a "Green" rating as documented in the Summary
of Findings and recommendation Report described in Section 2.2.4; the
acceptance of the program EVMS remains active for the program's
performance period as defined in the Capital Asset Plan and Business
Case (Exhibit 300), provided that the program successfully participates
in the program performance EVM surveillance process, as outlined in the
FAA Program Performance Surveillance Guide. If the surveillance process
determines that a program has not maintained a "Green" status; the
surveillance process can result in a determination to conduct another
program EVMS assessment.

The acceptance status of the program EVMS and the results of the program
EVMS assessment reviews will be documented and reported to FAA
management and external oversight organizations, such as the Department
of Transportation (DOT), Office of Management and Budget (OMB), and the
General Accountability Office (GAO), in the FAA Major Programs -- EVMS
Assessment Summary (FAA EVM Flag). Programs with a "Green" program
assessment shall be authorized to state in the Capital Asset Plan and
Business Case (Exhibit 300) that they have successfully implemented and
are currently using an EVMS that meets the requirements of the EVMS
Standard (ANSI/EIA 748).

# Contractor EVM System acceptance

## Contractor EVM System Acceptance Overview

The FAA conducts EVMS validation reviews of contractors to verify they
have implemented an EVMS as required by the contract and following the
guidelines of the EVMS Standard (ANSI/EIA-748).  The AMS FAST includes
the EVM contract clauses and Data Item Descriptions under the
Procurement Tool Box, and FAA guidance for ANSI/EIA 748 compliant
implementation is in the FAA EVM Guide found in FAST. EVMS validation
reviews are conducted by the EVM Focal Point in accordance with this
guide and form the basis for formal acceptance of the contractor's EVMS.
The formal acceptance of the contractor's EVMS is approved by the
Acquisition Executive (ATO-A) and conveyed by the contracting officer
via a Letter of EVM Systems Acceptance and/or Advance Agreement, as
applicable

This section defines the process for conducting an EVMS validation
review and obtaining acceptance by the contracting officer.  It also
defines the application and use of initial validation reviews,
post-acceptance reviews and reviews for cause performed by the EVM Focal
Point.  The validation review consists of a capability analysis to
verify that the proposed EVMS satisfies the guidelines of the EVMS
Standard (ANSI/EIA-748) and a review of the EVMS' use on programs to
verify that it is being used as designed.    

Upon completion of the validation review by the EVM Focal Point and
correction of non-compliant areas, as required, the Acquisition
Executive approves acceptance of the proposed EVMS and directs the
preparation of an Advance Agreement. The contracting officer issues a
Letter of System Acceptance stating that the contractor's EVMS meets the
guidelines of EVMS Standard (ANSI/EIA-748). FAA also recognizes
contractor EVM Systems that have been reviewed and accepted by Defense
Contract Management Agency (DCMA).

When a contractor has a contract with the FAA and employs an EVMS that
has been formally accepted by the FAA or DCMA as compliant with FAA's
implementation of the EVMS Standard (ANSI/EIA-748), the Contracting
Officer may recognize the system as being acceptable for other
programs.  FAA's acceptance of the system for other programs depends on
the outcome of the EVMS surveillance process.  Because management
systems are dynamic due to personnel and other changes, surveillance
plays a key role in ensuring the continued integrity of the system. 
Without an effective surveillance plan and process, the FAA may not
unconditionally accept the EVM system. The EVM Focal Point and the
program manager jointly verify and demonstrate to the Acquisition
Executive and the contracting officer that the system is being used
properly and effectively.

## CONTRACTOR EVM SYSTEM ACCEPTANCE PROCESS

The objective of the contractor EVM System Acceptance process is for the
supplier to demonstrate that its EVM System follows the guidelines of
the ANSI/EIA 748 Standard -- EVMS, as required by the contract. Key
elements of the contractor EVM System Acceptance process include the
following:

-   An EVM Systems Implementation Plan is prepared by the contractor and
    reviewed by the FAA.

-   The contractor EVMS is designed and implemented.

-   The Validation Review Plan is prepared by the FAA and provided to
    the contractor.

-   An EVMS Progress Assistance Visit may be conducted (Optional).

-   The Validation Review is conducted; the Validation Review Report is
    prepared.

-   Corrective actions are identified, addressed and resolved.

-   The contractor EVMS is accepted and the Letter of Systems Acceptance
    or Advance Agreement is issued to the contractor. Usually, Agencies
    require an acceptable surveillance plan and system change management
    plan from the supplier to obtain an Advance Agreement.

-   EVMS surveillance commences.

The key event in the Systems Acceptance process is the EVMS Validation
Review. The Validation Review is coordinated between the contracting
officer and the supplier to provide the means to assess the contractor's
EVMS and to verify:

-   The system, as described, meets the intent of the 32 Guidelines as
    described by the EVMS Standard (ANSI/EIA-748) and the NDIA EVMS
    Intent Guide;

-   The system, as described, is fully implemented on the selected
    programs;

-   The implementation is successful and complies with the requirements
    of the system description/contractor's EVMS policy and procedures
    and (if appropriate) program unique procedures;

-   The system implemented provides timely, accurate, and auditable
    management information for both the contractor's project management
    and the FAA.

The EVMS Validation Review results are documented by the Validation
Review Team to provide a written record of the review and the
contractor's responses (if available) to the FAA Acquisition Executive.
The Acquisition Executive determines with the support of the FAA EVM
Focal Point, if the review results warrant acceptance of the contractor'
EVMS and the provision of an Advance Agreement to the supplier.

The contractor EVM System Acceptance process is described in greater
detail in the sections below.

## Contractor EVM System Acceptance -- Planning 

Planning for the formal acceptance of the contractor's EVMS is critical
to proposing and implementing an EVMS that is acceptable to the FAA. The
planning for EVMS System Acceptance begins with the establishment of the
requirement for the contractor to propose and provide an EVMS that
follows the guidelines of the EVMS Standard (ANSI/EIA-748). The
contractual requirement may include EVMS compliance with validation or
compliance only.

In the case of EVMS compliance with validation, the contractor that
proposes to use an EVMS previously accepted by the Government may
satisfy this requirement by citing and providing a copy of the current
[Advance
A](../../../../../../../../C:%5CDocuments%20and%20Settings%5CKevin%5CMy%20Documents%5CKMSG%5CClients%5CFAA%5CCIO%20EVMS%5CEVM%20Transition%20Activities%5CCertification%5CEVMIG.doc#AA%23AA)greement
and providing a copy of the approved system description. The FAA EVM
Focal Point in consultation with the Contracting Officer will review the
basis of the prior EVMS system acceptance and make a recommendation to
the FAA Acquisition Executive, as to whether the FAA should accept the
proposed EVMS and issue an FAA Advance Agreement or Letter of Systems
Acceptance. Factors to be considered by the FAA in reviewing the prior
systems acceptance include:

-   Current Memorandum of Agreement between the FAA and the responsible
    federal agency that issued the Advance Agreement.

-   If no Memorandum of Agreement exists, then the basis of the EVM
    System Acceptance (Advance Agreement) and the source of the
    supporting Validation Review.

-   Currency of the EVM System Acceptance and the supporting Validation
    Review.

-   Applicability of the EVM System Acceptance to the relevant
    contractor organization and/or location.

-   Current and ongoing EVMS surveillance, as demonstrated by current
    surveillance plans, surveillance reports and records of approved
    system changes

In the case of EVMS compliance with validation, the contractor that does
not have a previously accepted system should submit an EVMS
Implementation Plan, as required by the contract, to obtain the EVM
system acceptance.

In the case of EVMS compliance only, if the contractor proposes to use
an EVMS that has not been formally accepted, the proposal should include
a written summary of the EVMS. The description of the contractor\'s EVMS
must be in sufficient detail to show how it complies with the EVMS
Standard (ANSI/EIA-748) and address all guidelines. The FAA recognizes
the completion and submission of the Compliance Map Templates included
in Appendix A of the NDIA EVM Intent Guide, as a best practice to
demonstrate how the proposed EVMS complies with the contractor's
implementation of the EVMS Standard (ANSI/EIA-748). A contractor may
elect to keep the system description general and rely on
cross-referencing to internal procedures or policy manuals for a
discussion of the details. In this case, the procedures and policy
documents are to be referenced in, and considered a part of, the EVMS
summary description.

In the case of EVMS compliance only, the contractor may elect to propose
and use a previously accepted EVMS to meet this requirement and can
satisfy this requirement by citing the [Advance
A](../../../../../../../../C:%5CDocuments%20and%20Settings%5CKevin%5CMy%20Documents%5CKMSG%5CClients%5CFAA%5CCIO%20EVMS%5CEVM%20Transition%20Activities%5CCertification%5CEVMIG.doc#AA%23AA)greement
or Systems Letter of Acceptance, and providing a copy of the approved
system description.

Figure 3-2-1 provides an overview of the Contractor Systems Acceptance
planning process, assuming that compliance with validation is required
and the contractor has not proposed to use an EVMS, previously accepted
by a Government Agency. It may also apply to any contract that requires
compliance without a requirement for systems acceptance or validation,
wherein both the Government and the contractor agree it is in their best
interests to achieve a formal acceptance of the contractor's EVMS.

![](media/image6.wmf){width="5.997916666666667in"
height="3.222916666666667in"}

**Figure 3-2-1. Contractor EVM Systems Acceptance -- Planning**

The contractor prepares the EVMS Implementation Plan and submits the
Plan as part of the proposal in response to the Screening Information
Request. The Plan should:

-   describe the EVMS the contractor intends to use in performance of
    the contract, and how the proposed EVMS complies with the EVMS
    guidelines in ANSI/EIA-748

-   distinguish between the contractor\'s existing management system and
    modifications proposed to meet the EVMS guidelines

-   describe the management system and its application in terms of the
    EVMS guidelines

-   describe the proposed procedure for administration of the EVMS
    guidelines as applied to subcontractors

-   describe the process the contractor will use to determine
    subcontractor compliance with the EVMS Standard (ANSI/EIA-748)

-   the contractor shall provide information and assistance as required
    by the Contracting Officer to support review of the plan

-   the contractor's EVMS plan must provide milestones that indicate
    when the contractor anticipates that the EVMS will be compliant with
    the guidelines in ANSI/EIA-748

-   the contractor shall identify the subcontractors, or major
    subcontracted effort if subcontractors have not been selected, to
    whom the EVMS requirements will apply.

-   a schedule that provides a timetable of events leading up to
    Government validation of the contractor's EVMS. This schedule should
    include a Progress Assistance Visit (PAV), if requested. The formal
    EVMS Validation Review is conducted as soon as practicable.

The contractor's EVMS Implementation Plan is reviewed by the Contracting
Officer, the proposal evaluation team and the EVM Focal Point. The FAA
will approve the plan before contract award and monitor the contractor's
progress towards achieving formal acceptance of the EVMS.

The EVM Focal Point prepares an EVMS Validation Review Plan. The
following description of the Validation Review planning includes
reference to the exhibits used during the EVMS Validation Review. The
review plan and the content of the exhibits may be modified based on the
review scope and the understanding of the program(s) or contract(s)
being used for the validation review. The exhibits used for the
contractor EVMS validation reviews are maintained by and available from
the EVM Focal Point. The contractor EVMS validation exhibits are:

Exhibit A -- EVMS Implementation Plan

Exhibit B - EVMS Validation Review Team Assignments

Exhibit C - EVMS Validation Review Documentation Request

Exhibit C1 - EVMS Documentation Review Instructions

Exhibit D - EVMS Validation Review Agenda

Exhibit E - EVMS Validation Review - Corrective Action Request (CAR)

Exhibit F - EVMS Validation Review - Certification Report Outline

Exhibit F1 - EVMS Validation Review - Sub-Team Report of Findings

Exhibit F2 - EVMS Validation Review - Continuous Improvement Opportunity

Exhibit F3 - EVMS Validation Review - Corrective Action Request Log

Exhibit F4 - EVMS Validation Review - Continuous Improvement Opportunity
Log

Exhibit G - EVMS Validation Review - In-briefing Outline

Exhibit H - EVMS Validation Review - Out-briefing Outline

Exhibit I - Reserved

Exhibit J -- Reserved

Exhibit K1 - EVMS Validation Review - Executive Interview Guide

Exhibit K2 - EVMS Validation Review - Control Account Manager Interview
Guide

Exhibit K3 - EVMS Validation Review -- Business Manager Interview Guide

Exhibit K4 - EVMS Validation Review -- Schedule Analyst Interview Guide

Validation Review planning should result in a definition for the
following:

-   Validation Review Scope

> The scope of the review will depend on the number and size of
> contracts included in the review. Other considerations include the
> number of control accounts, the number of subcontractors with
> performance reporting requirements, and contractual reporting
> requirements. The supplier may have previously completed Government
> audits or financial reviews that may serve to satisfy some of the EVMS
> Standard (ANSI/EIA 748) Guidelines, such as, accounting and indirect
> cost guidelines. The Validation Review Plan will include copies of
> Government audits and system acceptances provided by the supplier. FAA
> will approve the request to use existing certifications to satisfy
> compliance with EVMS Standard (ANSI/EIA 748). The program(s) or
> contract(s) included in the Validation Review is documented in
> Validation Review Plan, (see Exhibit A).

-   Validation Review Schedule

> The agenda and schedule for the assessment is related to the review
> scope. Usually Validation Reviews are at least one week and seldom
> exceed two weeks. An example of a five day review is provided in
> Exhibit D, EVMS Validation Review Agenda and an outline of the
> in-briefing charts are provided in Exhibit G, In-briefing Outline.

-   Resource plan

> The resource plan is related to the review scope, review plan, and
> schedule. The review team will include a Team Lead and analysts that
> can conduct the assessment and prepare the Validation Review Report.
> The team members should be familiar with the EVMS Standard (ANSI/EIA
> 748), review methodology, and the products being reviewed. Training
> may be required for team members. The Validation Review team
> assignments are documented in Exhibit B, Review Team Assignments.

-   Progress Assistance Visit

> In some circumstances, it may be advisable for the supplier to have
> the FAA conduct a Progress Assistance Visit to determine the readiness
> of the supplier for the formal Validation Review. The Progress
> Assistance Visit is an initial assessment of the contractor's
> readiness to demonstrate its EVMS compliance. The visit is conducted
> prior to the Validation Review, identifies the supplier weaknesses and
> strengths, and usually combines a documentation review with an on-site
> 1 -- 2 day review. Recommendations are provided to the supplier to
> assist with their preparation for the Validation Review.\
> \
> The review is conducted by the FAA within 90 days or as mutually
> agreed to by the FAA and the contractor. Representatives of the review
> team should visit the contractor\'s facility and review the
> contractor\'s plans for implementing a guideline-compliant EVMS. The
> visit includes an initial review of the system description. Areas of
> noncompliance and potential problems are identified. This visit
> provides an early dialogue between the review team and the contractor
> on the validation review process. During this preliminary visit the
> contractor usually makes presentations on the system's design and
> operation and explains applicable reports. The team should examine
> selected documents and procedures proposed by the contractor and a
> schedule should be developed to accomplish the Validation Review in
> accordance with the EVMS Implementation Plan submitted by the
> contractor.

-   Pre-Validation Documentation Review Plan

> Prior to the Validation Review, documentation is reviewed by the
> assessment team to allow them to become familiar with the supplier
> EVMS and the program or contract that will be reviewed. An example of
> the documentation request is provided in Exhibit C, Documentation
> Request.

-   Validation Review Interview Guides

> After preparation of the Validation Review Plan and documentation, the
> interview guides should be reviewed to ensure that questions and areas
> are adequate and applicable. The templates for the interview guides
> are provided in Exhibits K, Validation Review Interview Guides.

-   Validation Review Template

> Prior to the Validation Review, the Validation Review Template is
> reviewed and updated to reflect the review strategy based on the
> review planning activities. The templates include a section for review
> strategy and documentation strategy; see Exhibit L, EVMS Validation
> Review Template. The templates include the EVMS Standard (ANSI/EIA
> 748) guidelines and the NDIA Intent Guide.

The EVMS Validation Review Plan, once prepared and approved, is
forwarded to the contractor to assist with their planning for the
Validation Review. The following criteria should be met prior to
conducting the EVMS Validation Review:

-   The contractor has a contractual requirement to implement an EVMS
    that follows the guidelines of the EVMS Standard (ANSI/EIA 748).

-   The EVMS Implementation Plan, including subcontractors is approved
    by the EVM Focal Point and the contracting officer.

-   The supplier has designed and implemented an EVMS and has managed
    the program using earned value management (on at least one program
    or contract) for at least two reporting periods.

-   Suppliers with major subcontractor EVM, schedule, or performance
    reporting requirements have major subcontractor systems approved by
    the supplier. The major subcontractors will have submitted at least
    one performance report(s).

## Contractor EVM System Acceptance - Validation Review 

The purpose of the Validation Review is to conduct a formal assessment
of the contractor's proposed EVMS compliance with the EVMS Standard
(ANSI/EIA 748). Successful demonstration of the EVMS and completion of
the review results in the validation of the contractor's EVMS. The
primary objectives of the Validation Review are to:

-   Evaluate management system capabilities against the EVMS Standard
    (ANSI/EIA 748).

-   Assess the description of the management system to determine if it
    adequately describes the management processes demonstrated during
    the review, and

-   Evaluate the application of the management system on the contract
    being reviewed.

![](media/image7.wmf){width="6.103472222222222in"
height="3.647222222222222in"}Figure 3-2-2 provides an overview of the
Contractor EVMS Validation Review process, and the issuance of the
system acceptance.

**Figure 3-2-2. Contractor EVM Systems Acceptance -- Validation Review**

The Validation Review begins no later than 90 days after the
implementation of the EVMS. The review consists of system documentation
reviews, data traces, and interviews with contractor personnel. The
contractor's EVMS is assessed against each guideline contained in
ANSI/EIA-748. The review should be organized to follow the system
approach taken by the contractor, i.e., orientation by ANSI/EIA-748
grouping or a process approach.

The contractor should have a current, approved written system
description available. Applicable procedures also need to be available
at the contractor's operating levels as necessary to demonstrate a
consistent approach. The review team examines the contractor's working
papers and documents to ascertain compliance and to document its
findings. The contractor should make documents used in the contractor's
EVMS available to the team. The documentation needs to be current and
accurate. The contractor demonstrates to the team how the EVMS is
structured and used in actual operation. The Validation Review includes,
but is not limited to, the following activities:

-   An overview briefing by the contractor to familiarize the review
    team with the proposed EVMS. The overview should identify any
    changes which have occurred since the most recent Progress
    Assistance Visit, if applicable.

-   A review, of the documentation that establishes and records changes
    to the baseline plan for the contract. This includes work
    authorizations, schedules, budgets, resource plans, and change
    records including management reserve and undistributed budget
    records. The purpose is to verify that the contractor has
    established and is maintaining a valid, comprehensive integrated
    baseline plan for the contract.

-   A review, on a sample basis, of the reporting of cost and schedule
    performance against the baseline plan, along with appropriate
    analyses of problems and projection of future costs. Also, a trace
    is conducted to summarize the cost/schedule performance data from
    the lowest level of formal reporting (normally the control account
    level) to the external performance measurement report. The purpose
    of this activity is to verify the adequacy of the control aspects of
    the system and the accuracy of the resulting management information.

-   Interviews with a selected sample of Control Account Managers
    (CAM)s, functional and other work teams, and PMs to verify that the
    contractor\'s EVMS is fully implemented and being used in the
    management of the contract.

-   An exit briefing covering the team\'s findings. During this
    briefing, any open system discrepancies should be discussed along
    with the contractor\'s corrective action plan, which establishes
    responsibility and a time‑frame for corrective action.

![](media/image8.wmf){width="6.233333333333333in"
height="3.2020833333333334in"}Figure 3-2-3 provides an overview of the
specific activities conducted during the Contractor EVMS Validation
Review.

**Figure 3-2-3. Contractor Validation Review**

After the exit criteria for the Validation Review has been met, the
on-site Validation Review usually concludes with the out-briefing
conducted by the review Team Lead. The purpose of the out-briefing is to
summarize major findings, strengths, weaknesses, and potential process
improvements. The out-briefing includes the plan to close open
Corrective Action Requests (CARs). An outline of the out-briefing charts
is provided in Exhibit H, Out-briefing Outline.

At the conclusion of the Validation Review, the Team Lead is responsible
for a written report within 30 working days after the completion of the
review. The written report shall be amended to reflect progress against
the contractor's corrective action plan to resolve material
discrepancies identified during the Validation Review.

> As a minimum, the following is required prior to completing the final
> Validation Review Report:

-   All Major Corrective Action Requests (CARs), see Exhibit E, are
    completed and accepted by the Validation Review team.

-   All minor CAR action plans are approved by the Validation Review
    team.

-   The final EVMS Validation Review Report is signed by the review team
    lead and the EVM Focal Point.

Exhibit F provides the Validation Review Report outline. The Validation
Review Report is supported with sub-team report of findings consistent
with the review team assignments. Exhibit F-1, Sub-Team Report of
Findings, provides the form to document the review team findings. The
supplier will be provided with a description of the potential process
improvements identified by the Validation Review team. Exhibit F-2,
Continuous Improvement Opportunities (CIO), is the form used to describe
the potential process improvements. The Validation Review Report will
include a log and disposition of CARs and CIOs which are provided in
Exhibit F-3, CAR Log, and Exhibit F-4, CIO Log.

Occasionally major CARs remain open beyond the review and should be
closed within a short period of time, usually 30 to 45 days. Major CARs
that are not closed out within a reasonable amount of time may require
an additional on-site review to close out the CAR. After all major
corrective actions have been addressed and approved by the review team
lead; the report is amended to reflect progress against the contractor's
corrective action plan to resolve material discrepancies. Minor CAR
status is reported to the FAA EVM Focal Point on a regular basis, i.e.,
monthly, until all CARs are closed. Contractual actions may be initiated
when Validation Review results dictate.

## Contractor EVM System Acceptance - Formal Recognition 

Contractor EVM system acceptance is formally granted to the contractor
through the issuance of either an Advance Agreement or a System Letter
of Acceptance. The Advance Agreement between the FAA, and contractor
represents a binding agreement that the contractor maintain and use the
accepted EVMS as an integral management process on current, as well as
future contracts with the FAA. The Advance Agreement also documents the
Government's intent to minimize system reviews and the contractor\'s
corporate commitment to continue to use and maintain the EVMS consistent
with the guidelines for current and future Government contracts through
an internal surveillance program. The System Letter of Acceptance
represents an acknowledgement by the FAA that the contractor has
satisfied an individual contractual requirement to implement and use a
program management system that follows the guidelines established by the
EVMS Standard (ANSI/EIA 748).

## Contractor EVM System Acceptance -- Advance Agreement

An EVM System Acceptance Advance Agreement between a supplier and the
FAA represents a binding agreement to:

1.  Maintain the corporate or business unit ANSI/EIA 748 compliant EVMS
    system and procedures as approved by the FAA. The business units
    and/or locations subject to the EVMS Advance Agreement are
    identified.

2.  Continuously improve the EVMS systems and obtain FAA EVM Focal Point
    approval for system changes. The Advance Agreement will define the
    process and of type of changes requiring the FAA EVM Focal Point
    approval.

3.  Participate in EVM surveillance with the FAA to ensure the supplier
    EVMS system is providing reliable, timely and actionable program
    performance data.

4.  FAA acceptance of the supplier EVMS system for future contracts
    requiring EVMS, contingent with the supplier compliance with the EVM
    System Acceptance Advance Agreement.

> The Advance Agreement may be executed following the successful
> completion of an EVMS Validation Review, the recommendation of the EVM
> Focal Point and the approval of the FAA Acquisition Executive. Once
> executed, the Advance Agreement remains in effect indefinitely and
> should be referenced and incorporated into each future contract
> requiring a validated EVM system. The Advance Agreement is signed by
> the responsible Contracting Officer and a contractor representative at
> the commensurate level. For example, if the validation is for an EVMS
> used throughout a corporation's division, the appropriate contractor
> representative may be the division manager. FAA Program Managers
> should be aware of the existence of Advance Agreements with their
> contractors in order to take maximum advantage of the agreements
> contained therein in establishing compliance with each individual
> contract requirement. The use of the Advance Agreement over the System
> Letter of Acceptance option should be considered whenever possible, as
> the Advance Agreement documents and codifies the contractor's
> commitment to maintain, apply and use the EVMS on future contracts and
> on a corporate basis.

## Contractor EVM System Acceptance -- System Letter of Acceptance

A Contractor EVM System Acceptance -- System Letter of Acceptance is
binding agreement to:

1.  Maintain the ANSI/EIA 748 compliant EVMS system and procedures as
    approved by the FAA. The business units and/or locations subject to
    the EVMS Letter of Acceptance are identified.

2.  Continuously improve the EVMS systems and obtain FAA EVM Focal Point
    approval for system changes. The Letter of Acceptance will define
    the process and of type of changes requiring the FAA EVM Focal Point
    approval.

3.  Participate in EVM surveillance with the FAA to ensure the supplier
    EVMS system is providing reliable, timely and actionable program
    performance data.

A System Letter of Acceptance is an alternative method to convey EVM
system acceptance following a successful Validation Review. The System
Letter of Acceptance documents the validation of the EVM system for use
within the contractor's facility, and for the instant contract that
established the requirement. The System Letter of Acceptance does not
extend acceptance to a corporate level, nor does it convey acceptance to
future contracts. In some cases, a company may only wish to agree to a
facility wide commitment to EVM. The System Letter of Acceptance may be
executed following the successful completion of an EVMS Validation
Review, the recommendation of the EVM Focal Point and the approval of
the Contracting Officer. The System Letter of Acceptance remains in
effect for the duration of the contract and should be referenced or
incorporated into each successive contract modification at the facility
requiring a validated EVM system.

# 

# aPPENDIX A Glossary of terms

  ----------------- -----------------------------------------------------
  *Accepted EVMS    An EVM system that has been formally accepted by an
  System*           organization, customer or third party representing
                    the customer as compliant with the ANSI/EIA 748
                    Standard -- EVMS. The acceptance of the EVMS is
                    documented by an EVMS Advance Agreement (AA) or an
                    EVM System Letter of Acceptance. .

  *Validated EVMS   An EVM System that has been formally reviewed and
  System*           determined to be compliant with the intent of the
                    ANSI/EIA 748 Standard -- EVMS and consistent with the
                    NDIA EVMS Intent Guide. ANSI/EIA 748 compliance is
                    determined by an independent qualified review team.

  *EVMS Validation  A formal process to assess an EVMS and determine EVM
  Review*           System Owner's compliance with the ANSI/EIA 748
                    Standard -- EVMS. The review determines if the intent
                    of the 32 EVMS Guidelines is embodied in the
                    integrated processes and sub-processes of an
                    organization's methods of operation that generates
                    reliable, timely, and actionable program/contract
                    performance data.

  *EVMS Compliance* ANSI/EIA 748 Standard -- EVMS compliance as required
                    by FAA policy for programs and suppliers.

  *Earned Value     The integrated set of policies, processes,
  Management System procedures, systems, and practices that meet the
  (EVMS)*           intent of the guidelines in American National
                    Standard ANSI/EIA-748, Earned Value Management
                    Systems.

  *EVMS Guidelines* The 32 EVMS guidelines contained in American National
                    Standards Institute/Electronics Industries Alliance
                    (ANSI/EIA) 748 - Current Version, Earned Value
                    Management Systems.

  *EVM System       The FAA program or supplier responsible for the
  Owner*            implementation and use of an Earned Value Management
                    System compliant with the ANSI/EIA 748 -- EVMS
                    Guidelines.
  ----------------- -----------------------------------------------------

#  aPPENDIX B LIST OF ACRONYMS

  ------------------ ----------------------------------------------------
  AA                 Advance Agreement

  AIO                Office of the Assistant Administrator for
                     Information Services

  AMS                Acquisition Management System

  ANSI               American National Standards Institute

  ATO-A              Air Traffic Organization - Acquisitions

  ATO-EC             Air Traffic Organization -- Executive Committee

  CAM                Control Account Manager

  CAR                Corrective Action Request

  CIO                Continuous Improvement Opportunities

  DCMA               Defense Contract Management Agency

  EIA                Electronics Industries Alliance

  EVM                Earn Value Management

  EVMS               Earned Value Management System

  FAA                Federal Aviation Administration

  FID                Final Investment Decision

  GAO                General Accounting Office

  GPRA               Government Performance and Results Act

  ITEB               Information Technology Executive Board

  JRC                Joint Review Committee

  NDIA               National Defense Industrial Association

  OMB                Office of Management and Budget

  PAV                Progress Assessment Visit

  PF                 Post FID

  PMSC               Program Management Systems Committee

  WBS                Work Breakdown Structure
  ------------------ ----------------------------------------------------

#