# Presentation: 768049

## Common Findingsfrom EVMS Reviews

**Common Findings****from EVMS Reviews**

**Don Grace;**
**OECM Designated Representative**
**on DCMA Led EVMS Reviews**
**November 15, 2006**

**2006**
**Project**
**Management**
**Workshop**

## Agenda

**Definitions**
**Common Findings (5)**
**Additional Observations (2)**

## Definitions

**Findings (Per DCMA’s EVMS Review Protocols):**
- Contractor’s EVMS is either:
- Documented (via its “Project Controls System Description”, and implementing procedures) in a manner that is non-compliant with ANSI 748, or
- Implemented in a manner that is inconsistent with its PCSD/ Implementing Procedures, plus
- The issue is sufficient to require a documented Corrective Action from the Contractor
- Findings documented (at the end of the on-site review) in the form of “Corrective Action Requests”

## Common Issues

**1.  “Annual”, vs “Project,” Baseline**
- Root Cause driven by focus on “annual funding”, and utilizing EVMS to limit/ control expenditures to the annual funding
- Although “Funds Control” is essential in the DOE environment, ANSI 748 does not address “annual baselines”, but rather “the Project” baseline.
- PCSDs, and implementing procedures, oftentimes use terms “Funds Change Control”, and “Budget Change Control” interchangeably
- Need to clearly distinguish between the two

## Common Issues

**2.  Fragmented “Work Authorization” Processes**
- Needs to be a documented “flow down” process
- Starts with the Contract, and
- Often breaks down at the final “flow down” to the “Control Account Managers” (CAMs)
- In support of above:
- The Contract captures the total project scope of work/ cost/ and schedule, and
- Contractor Management’s authorizing of Control Account Manager’s needs to reflect their total scope/ cost and schedule
- Within above context:
- The need to limit authorized work execution to the funding year is also recognized as needing control; however,
- Work Authorization process needs to clearly document each CAM’s total (& not just annual) scope, and associated costs and schedules

## Common Issues

**3.  Performance Measurement Baseline (PMB) Does not reflect a “meaningful/ useful” Plan**
- Various root causes can include:
- Unduly linking change of PMB to Change of Contract
- Developing PMBs based on overly optimistic funding profiles (thus “re-doing” the PMB)
- Contract being structured such that it does not allow for a risk based creation (and contractor managed use) of Contractor Management Reserve
- Overly cumbersome change control processes leading to excessively long periods of time for incorporation of changes

## Common Issues

**4.  Zeroing of Past Variances**
- Loose ability to learn from errors in prior planning, and/ or past work execution inefficiencies
- Root cause may be inter-related with others; e.g., may be
- Using EVMS Budget Control for purposes of annual Funds Control (without keeping issues separated)

## Common Issues

**5.  Being “Too Loose” as to when “Bottoms up” EAC is Required**
-  Although “change control” impacts EAC (in addition to BAC) and can be an indicator of changed conditions,
- Collectively changes are often “non-linear”, plus
- Basis of Estimates need to be revisited (e.g., commodity rates, etc)
- DCMA pushes for “at a minimum of annually”
- On case by case basis, may want to allow modifying to consider balancing of effort required, versus when next Critical Decision would require, versus how long it has been since last bottoms up estimate, versus what current monthly EAC update indicates, etc

## Additional Observations

**1.  Regarding where, and how, EVMS is implemented**
- It can either be
- An invaluable tool, or
- A tool where the value added may not exceed the effort required to implement and maintain
- Where Implemented
- No question should be invaluable for both typical capital projects, and in many areas of operations funded efforts (e.g., many aspects of EM work).
- May question if (and if so, how) it should be applied to more “production operations” oriented environments.

## Additional Observations

**1.  Regarding where, and how, EVMS is implemented (continued)**
- How Implemented for Production Operations
- Many of these type activities are budgeted as LOE, and with BCWP set equal to BCWS, you may look much better than you actually are
- Although “task performance” in a Production Operations Environment (e.g., Corrective and Preventive Maintenance) is important, other suites of tools should perhaps be considered for purposes of management control

## Additional Observations

**2.  Definition of the “EVMS Baseline”**
- Should/ Must EVMS Baseline = Contract Baseline?
- DCMA has not required to be equal; e.g.,
- Some project contracts limited to “design phase”, and EVMS Baseline also limited to this same SOW
- These, however, include bad examples wherein construction phase estimate has increased by several factors (while communication of this reality was significantly delayed)
- For other projects, judgments made to set equal to a more clearly definable “project scope” (and not limiting to a contract defined end date).
- Suggest
- Not requiring the two to be =,  and assessing on a case by case basis, plus
- Ensuring (for those cases where EVMS baseline does not include construction) that there are means (even if they are separate from EVMS, and the CD process) to require more timely updates of the entire project estimate