+-----------------------------------+-----------------------------------+
| National Aeronautics and          | ![](media/image1.png)             |
|                                   |                                   |
| Space Administration              |                                   |
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| **Headquarters**                  |                                   |
|                                   |                                   |
| Washington, DC 20546-0001         |                                   |
+-----------------------------------+-----------------------------------+

NM 7120-40

[NPR
7120.5C](http://nodis3.gsfc.nasa.gov/displayDir.cfm?Internal_ID=N_PR_7120_005C_&page_name=main)

March 6, 2006

Reply to Attn of: Office of the Chief Engineer

TO: Officials-in-Charge of Headquarters Offices

Directors, NASA Centers

FROM: Chief Engineer

SUBJECT: NASA Interim Directive to NPR 7120.5C, NASA Program and Project
Management Processes and Requirements

The attached Interim Directive replaces NPR 7120.5C Section 3.4.3.2.a,
which states the requirements for Earned Value Management; Section 3.1c,
which describes the process for submitting deviations and waivers; and
Appendix O, *NPR 7120.5C Requirements Deviations and Waivers*, which
provides guidance for waiver/deviation requests and the Deviation/Waiver
Form.

The major changes reflected in the Interim Directive include:

(1) Rescinding the requirement to apply a fully validated EVM system as
    defined by EIA-748-A to all projects exceeding \$50M in total
    project cost. This Interim Directive requires EVM principles to be
    applied to flight and ground support projects exceeding \$20M total
    project cost and requires EVM reports based on the EIA-748-A
    standard for all contracts exceeding \$50M in initial or modified
    contract value.

(2) Requiring approval of the NASA Chief Engineer for waivers and
    deviations to requirements in NPR 7120.5C.

The Interim Directive is enclosed with this memorandum and will be
submitted through the NASA Online Directives Information System (NODIS)
official review process. In parallel, the Office of the Chief Engineer
is in the process of rescinding NPD 9501.3A, *Earned Value Management*,
and NPR 9501.3, *Earned Value Management Implementation on NASA
Contracts*. This interim revision to NPR 7120.5C serves as the NASA
policy for Earned Value Management until re-issuance of a revised Earned
Value Management policy.

Please direct questions about the implementation of these requirements
to the Mike Blythe in the Office of the Chief Engineer. He can be
reached at 202-358-3910.

***Original signed by***

Christopher J. Scolese

Enclosure

Responsible Office: Office of the Chief Engineer

Subject: NASA Interim Directive (NID): NASA Procedural Requirement (NPR)
7120.5C, NASA Program and Project Management Processes and Requirements

The purpose of this NID is to issue interim requirement changes to NASA
Procedural Requirement (NPR) 7120.5C, NASA Program and Project
Management Processes and Requirements, in particular with respect to
Earned Value Management (EVM) policy.

This NID shall be in effect for one year from the date of this
memorandum, or until the release of an update to NPR 7120.5C, NASA
Program and Project Management Processes and Requirements, whichever
occurs first. This NID applies to NASA Headquarters and NASA Centers,
including Component Facilities.

The following describes the Interim Directive to NPR 7120.5C, NASA
Program and Project Management Processes and Requirements:

(1) Section I replaces Chapter 3, Section 3.4.3.2.a.

(2) Section II replaces Chapter 3, Section 3.1c.

(3) Section III replaces Appendix O. NPR 7120.5C Requirements Deviations
    and Waivers.

All other requirements established in NPR 7120.5C remain in effect.

**Section I:**

3.4.3.2.a **Execute the Project Control Plan.** The intent of this
requirement is to maintain close configuration control of requirements,
to assess the cost, technical and schedule status of the project
relative to the NAR Baseline. Therefore:

\(1\) EVM reports based on an EIA-748-A validated system shall be
required on cost reimbursable contracts exceeding \$50M in initial or
modified contract value.

\(2\) EVM principles as defined by EIA-748-A[^1] shall be applied to all
flight systems and ground support projects (contractor and civil
service) exceeding \$20M total project cost[^2]. However, the Mission
Directorate Associate Administrator (MDAA) (or Mission Support Office
Director (MSOD)) can require EVM principles be applied to any project or
activity provided the necessary tools and resources are made available.

\(3\) In implementing (1) and (2) above, the Project Manager shall
ensure (for all applicable procurements) the appropriate provisions and
clauses are included in solicitations and contracts.

\(4\) For projects requiring EVM, the Project Manager shall conduct and
complete Integrated Baseline Reviews (IBRs) on projects to ensure the
validity of the baseline.

\(i\) The IBR shall be accomplished within six months after contract
award or after approval of the Project Plan by the MDAA (or MSOD).

\(ii\) The IBR shall be accomplished within two months after
definitization of significant scope changes or after budget realignment.

\(5\) Surveillance of contractor EVM systems is normally delegated to
the Defense Contract Management Agency (DCMA) in accordance with the
NASA/DCMA Memorandum of Understanding (MOU) for Earned Value Management
System Acceptance/Surveillance and Earned Value Management Project
Surveillance. When such surveillance is to be delegated, the Project
Manager shall, in coordination with the Contracting Officer, initiate
the action for the Contracting Officer to issue a letter of delegation
to the responsible DCMA activity. The letter of delegation shall define
the specific support, products, services, etc., to be provided by the
DCMA. (See FAR Part 42.2.)

\(6\) Expenditures shall be accumulated according to the WBS established
for the project and in as near-real time as possible. Consistent with
Continuous Cost-Risk Management (see reference L.2.a(1)), in addition to
standard WBS-level performance measurement reporting, performance
measurement of medium- and high-risk WBS elements identified during
life-cycle cost estimation shall be provided to the Project Manager
through specification in the Cost Performance Report (CPR) Data
Requirements Description (DRD) and/or the Project Plan.

\(7\) The full cost of civil service labor shall also be accumulated
according to the WBS to permit later integration into full cost
accounting and reporting.

\(8\) Use of EVM is optional in contracts with research institutes and
in grants of any type. In such cases, when EVM is appropriate to the
project but not to such project components, the Project Manager shall
include in the Project Plan, Part 3, *Project Control*, the strategy for
integrating cost and schedule aspects of those project components.

**Section II.**

3.1.c Managers of projects identified in a Program Plan shall meet all
requirements outlined in this chapter *irrespective of the size of the
project and the program* of which it is an element. Requests for
deviations or waivers to NPR 7120.5C requirements shall be documented
and submitted for approval to Project Manager, the Program Manager, the
GPMC Chair and the NASA Chief Engineer. The Project Manager should
receive written authorization from the Office of Security and Program
Protection for waiver of activities related to security. Prior to the
NAR, these requests shall be documented in the NPR 7120.5C compliance
matrix attached to a single deviation or waiver to assure proper routing
and control.[^3] Deviations or waivers impacting formulation or
requiring long lead-time shall be submitted individually early in
formulation. Following the NAR, deviations or waivers shall be submitted
individually to the approving authority described above. The compliance
matrix, with approved deviations and waivers, shall be included as an
appendix to the Project Plan.

**Section III:**

**APPENDIX O. NPR 7120.5C Requirements Deviations and Waivers.**

This appendix provides information to guide requests for deviations or
waivers to requirements provided in this document.

Requests for deviations or waivers to NPR 7120.5C requirements shall be
documented and submitted for approval by the Project Manager, the
Program Manager, the Governing PMC Chair, and the NASA Chief Engineer.

Prior to the NAR, these requests shall be documented in the NPR 7120.5
compliance matrix and attached to a single deviation or waiver to assure
proper routing and control. Deviations or waivers impacting formulation
or requiring long lead time shall be submitted individually early in
formulation. Following the NAR, deviations or waivers must be submitted
individually to the appropriate authority.

NPR 7120.5C Deviation/Waiver Form

+-----------------------------+-------------------+----+-----+--------+
| Name of Program or Project  | Date of Request:  | Da |     |        |
| Requesting                  |                   | te |     |        |
| Deviation/Waiver:           |                   | De |     |        |
|                             |                   | vi |     |        |
|                             |                   | at |     |        |
|                             |                   | io |     |        |
|                             |                   | n/ |     |        |
|                             |                   | Wa |     |        |
|                             |                   | iv |     |        |
|                             |                   | er |     |        |
|                             |                   | is |     |        |
|                             |                   | N  |     |        |
|                             |                   | ee |     |        |
|                             |                   | de |     |        |
|                             |                   | d: |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Name and Organization of    | Requirement to be |    |     |        |
| Initiator :                 | Deviated/Waived:  |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Project Deliverable         | Deviation/Waiver  |    |     |        |
| Affected:                   | To:               |    |     |        |
|                             |                   |    |     |        |
| € None € Ground € Flight €  | € Policy €        |    |     |        |
| Software                    | Procedure €       |    |     |        |
|                             | Requirement €     |    |     |        |
| € Other                     | Other             |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Original Requirement of     |                   |    |     |        |
| Document to be              |                   |    |     |        |
| Deviated/Waived (list       |                   |    |     |        |
| Appropriate Sections or     |                   |    |     |        |
| Text)                       |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Deviation/Waiver Requested: |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Reason/Justification:       |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Risk Assessment of the      |                   |    |     |        |
| Program and Project if      |                   |    |     |        |
| Deviation/Waiver is         |                   |    |     |        |
| Approved:                   |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Approval Authority          | Signature         |    | D   | Ap     |
|                             |                   |    | ate | proved |
|                             |                   |    |     | (Y     |
|                             |                   |    |     | es/No) |
+-----------------------------+-------------------+----+-----+--------+
| Project Manager             |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| Program Manager             |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| GPMC Chair                  |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+
| NASA Chief Engineer         |                   |    |     |        |
+-----------------------------+-------------------+----+-----+--------+

# Officials-in-Charge of Headquarters Offices 

Deputy Administrator/Ms. Dale

Associate Administrator/Mr. Geveden

Chief of Staff/Mr. Morrell

Deputy Chief of Staff and White House Liaison/Mr. Jezierski

Associate Administrator for Aeronautics Research Mission Directorate/Dr.
Porter

Associate Administrator for Exploration Systems Mission Directorate/Dr.
Horowitz

Associate Administrator for Institutions and Management/Mr. Sutton
(Acting)

-   Assistant Administrator for Diversity and Equal Opportunity/Dr.
    Hayden-Watkins

-   Assistant Administrator for Human Capital Management/Ms. Dawsey

-   Assistant Administrator for Infrastructure and Administration/Mr.
    Sutton

-   Assistant Administrator for Procurement/Mr. Luedtke

-   Assistant Administrator for Security and Program Protection/Mr.
    Saleeba

-   Assistant Administrator for Small and Disadvantaged Business

> Utilization/Mr. Balinskas (Acting)

-   Chief Health and Medical Officer/Dr. Williams

-   Executive Director, NSSC/Mr. Arbuthnot

Associate Administrator for Program Analysis and Evaluation/Dr. Pace

Associate Administrator for Science Mission Directorate/Dr. Cleave

Associate Administrator for Space Operations Mission Directorate/Mr.
Gerstenmaier

Chief Engineer/Mr. Scolese

Chief Financial Officer/Ms. Sykes

Chief Information Officer/Ms. Dunnington

Chief Safety and Mission Assurance Officer/Mr. O'Connor

Chief of Strategic Communications/Mr. Davis

-   Assistant Administrator for External Relations/Mr. O'Brien

-   Assistant Administrator for Legislative Affairs/Mr. Chase

-   Assistant Administrator for Public Affairs/Mr. Mould

-   Chief Education Officer/Ms. Diaz (Acting)

General Counsel/Mr. Wholley

Inspector General/Mr. Cobb

# Directors, NASA Centers

Ames Research Center/Mr. Hubbard

Dryden Flight Research Center/Mr. Petersen

Glenn Research Center/Dr. Whitlow

Goddard Space Flight Center/Dr. Weiler

Jet Propulsion Laboratory/Dr. Elachi

Johnson Space Center/Mr. Coats

Kennedy Space Center/Mr. Kennedy

Langley Research Center/Ms. Roe

Marshall Space Flight Center/Mr. King

Stennis Space Center/Mr. Parsons

cc:

Executive Secretariat/Mr. Box

Senior Advisor to the Deputy Administrator/Mr. Hopkins

Office of the Administrator/Ms. Hutchinson

Assistant Associate Administrator/Ms. Johnson

Office of the Administrator/Ms. Mays

Senior Advisor to the Deputy Administrator/Mr. Ralsky

Special Assistant/Mr. Shank

Office of the Administrator/Ms. Soper

Office of the Deputy Administrator/Dr. Spyke

[^1]: These principles are listed here for clarity: (1) plan all work
    scope for the project to completion; (2) break down the project work
    scope into finite pieces that can be assigned to a responsible
    person or organization for control of technical, schedule, and cost
    objectives; (3) integrate project work scope, schedule, and cost
    objectives into a performance measurement baseline plan against
    which accomplishments may be measured and control changes to the
    baseline; (4) use actual costs incurred and recorded in
    accomplishing the work performed; (5) objectively assess
    accomplishments at the work performance level; (6) analyze
    significant variances from the plan, forecast impacts, and prepare
    an estimate at completion based on performance to date and work to
    be performed; and (7) incorporate Earned Value Management into the
    project's decision-making and review processes.

[^2]: EVM requirements are not levied on Basic and Applied Research and
    Advanced Technology Development projects, though project managers
    are encouraged to follow EVM principles on projects of significant
    size and scope. Institutional projects that are developmental and
    not fixed price in nature (facility, IT investment, etc.) must
    comply with the requirements of this section.

[^3]: The Compliance Matrix is provided as Appendix K.