Subpart 534.2 - Earned Value Management

Systems.

Parent topic: Part 534 - Major System Acquisition

534.201 Policy.

(a) Policy. This Subpart provides policies and procedures for incorporating an Earned Value

Management System (EVMS) (see FAR 2.101) in GSA contracts, for the exclusive use of GSA,

pursuant to OMB Circular A-11, 7. It is a results-based tool that can also provide for the preclusion

of possible problems or concerns during the project.

(b) Definition of major acquisition. OMB Circular A-11, 7, Capital Planning Guide Supplement, refers

to the definition of “major acquisition” as a capital project that requires special management

attention because of its: (1) importance to an agency’s mission; (2) high development, operating, or

maintenance costs; (3) high risk; (4) high return; or (5) significant role in the administration of an

agency’s programs, finances, property, or other resources.

(c) Applicability. It is GSA policy to define major acquisition for the purposes of EVMS as follows:

(1) GSA acquisitions valued at $20 million or more. Cost-reimbursement or incentive contracts and

orders (see FAR subparts 16.3 and 16.4) shall require a formally validated EVMS (in accordance

with ANSI/EIA-748-A Earned Value Management System Acceptance Guide (see 534.201(d) below)).

EVMS requirements shall be included in contracts, MAS orders, and GWAC orders when the

requirements entail developmental or modernization work, as defined by OMB’s definition of

Developmental/Modernization/Enhancement in A-11, 7. Firm-fixed price, time-and-materials, and

labor hour contracts and orders that are solely for commercial products or commercial services

should not normally include EVMS.

(2) GSA acquisitions valued at less than $20 million. EVMS requirements apply for contracts and

orders of any type valued at less than $20 million if the program manager and contracting officer

determine that EVMS is needed in that instance. This rationale shall be documented in the

acquisition plan for the procurement.

(d) Resources and Guides. EVMS is based upon the application of an international standard,

ANSI/EIA-748-A (June 2007). EVMS resource and guides are available at

http://www.ndia.org/divisions/ipmd/division-guides-and-resources. These resources and guides

include:

(1) EVMS Application Guide.

(2) EVMS Surveillance Guide.

(3) EVMS Intent Guide.

(4) EVMS System Acceptance Guide.

(5) Program Managers’ Guide to the Integrated Baseline Review Process.

(6) Integrating Risk Management with Earned Value Management.
534.201-70 Procedures.

(a) General. Major acquisitions are designated by agency planners in coordination with OMB. All

major acquisitions should have a complete and approved acquisition plan, a performance-based work

statement, and a performance-based management system. The contracting officer should coordinate

with the program manager to determine whether the program has been designated a major

acquisition and, if so, to ensure that the following have been adequately addressed in order to apply

EVMS properly.

(b) Adequate funding. Before proceeding with the procurement, the contracting officer should verify

that the program budget contains sufficient funding to conduct required EVMS reviews and the

Integrated Baseline Review (IBR) (see FAR 34.202 and appropriate NDIA Guide).

(c) Contract work breakdown structure. The program manager is responsible for preparing the

Contract Work Breakdown Structure (CWBS) to be included in the work statement. The reporting of

progress, performance, and engineering evaluations, as well as financial data and variance analysis,

is based on the CWBS.

(d) Requirements Package language. When a proposed acquisition meets the requirements for EVM

applicability, the requirements package must address the Contract Work Breakdown Structure

(CWBS) and the performance schedule, and it must include in the work statement the requirement

for EVMS. Sample language is provided below and should be modified to fit particular program

requirements.

(1) EVMS statement for work statement.

“The Contractor must utilize an EVMS for planning, controlling, and integrating project scope,

schedule, and resources. The Contractor must provide documentation that its EVMS is compliant

with the Standard. If the Contractor proposes to use an EVMS or similar system that is not

compliant, the Contractor must submit with its proposal a comprehensive plan to develop and

implement a compliant EVMS.”

(2) Contract Work Breakdown Structure (CWBS). The program manager is responsible for preparing

a preliminary CWBS that is compatible with the Program Work Breakdown Structure (PWBS) and for

including the CWBS in the requirements package. When determining the appropriate reporting

level, the program manager should extend the CWBS only to the level that allows visibility into those

high-cost, high-risk, or specific areas critical to the success of the program. The CWBS should not

specify an excessive number of lower-level elements because it may impinge on the contractor’s

normal method of operations or result in excessive reporting. Sample CWBS language follows:

“The Contractor must extend the preliminary CWBS specified in the solicitation to meaningful

management or product-oriented lower levels that reflect the way it does business. The Contractor

must prepare and deliver a CWBS Index and Dictionary. The Contractor has complete flexibility in

extending the CWBS, but it must ensure that the CWBS is reconcilable with the Program WBS and

that reporting of progress, performance, and engineering evaluations, as well as financial data and

variance analysis, is based on the CWBS. The CWBS must be extended to the necessary level to

support development of a logical and efficient sequence of tasks designed to accomplish the effort

described in the Contract.”

(3) Performance Schedule. To ensure that the management control system is integrated, the

program manager is required to define requirements in the work statement for a schedule showing
the sequence of events and the critical path for program milestones or deliverables. Offerors should

be required to use this schedule in preparing their proposals, and the performance schedule will

ultimately result in an Integrated Master Schedule after completion of the IBR. Sample work

statement language follows:

“The Contractor must establish a performance schedule that describes in sufficient detail the

sequence of events needed to accomplish the requirements of the contract. The performance

schedule must also reflect congruent CWBS elements. The Contractor must ensure the performance

schedule portrays an integrated schedule plan to meet the milestones and delivery requirements of

the contract. The performance schedule also must identify the program’s critical path. The

performance schedule is to be constructed using a software tool compatible with standard

scheduling software. The Contractor must submit the performance schedule at the post-award

conference and an updated version monthly in program status reviews.”

(e) Acquisition planning. See FAR 7.105(b)(3) and (b)(10) for required acquisition planning for

EVMS.

(f) Reporting. Contractors are required to submit EVM reports on a monthly basis. These reporting

requirements shall be included as contract data deliverables. The work statement should require the

contractor to use appropriately tailored value information as the basis for preparing the monthly

EVM reports and to integrate and present cost, schedule, and technical performance reviews.

534.202 Integrated Baseline Reviews (IBR).

GSA policy prohibits the conduct of pre-award Integrated Baseline Reviews (IBR). Therefore, when

an Integrated Baseline Review is conducted, it shall be conducted after award.