CONTRACT MANAGEMENT

EARNED VALUE MANAGEMENT

EARNED VALUE

MANAGEMENT

FOR EACH CONTRACT

Evaluate

Status

- IBR

- C/SSR

- CPR

- Schedule

- WBS

Best 

Value Award

- Integrated

 Processes

- Past Performance

- Management

 Gov't

Mgmt Needs

- Integrated

 Planning

- Resources

- Teams

Contract

Approach

- Criticality

- EVMS

- Type

- Size

Team Success Factors Personality Type Empowerment Tea

Acquisition Strategy Development & Maturation

Provisional PMO

Requirements Analysis PROGRAM MANAGEMENT

AND LEADERSHIP

Strategic Planning, Team

Problem Solving

Risk Management & Program Review Activities (e.g., JRO

Functional Plan Development & M

Acquisition Strategy Execution and Reporting

200

195

190

185

180

175

170

165

160

155

150

Millions of Dollars

1990 1991 1992

Production Costs

Unit Price

Profits

360o Feedback

DEFENSE ACQUISITION MA

Activities

Phases Concept & Technology Development System Development &

Reviews Decision Review Interim Progress

Concept

Exploration

Component

Advanced

Development

System

Integration

Work

Efforts

Paper studies of 

alternative concepts for

meeting a mission 

Development of subsystems 

and components that must 

be demonstrated before 

integration into a system

System integration of 

demonstrated subsystems 

and components

Reduction of integration risk

Specific concept to be

pursued and 

technology exists

System architecture and 

technology demonstrated in

relevant environment

System prototype 

demonstrated in a relevant 

environment (e.g., first flight)

PRE-SYSTEMS ACQUISITION

Validated and

approved MNS

Concept in hand, but system 

architecture to be developed

Architecture complete, but 

components need to be integrated into complete system

Milestones A B A B

Technology Opportunities & User N

PURPOSES OF W

ENTRANCE C

DESIRED O U

ACQUISITION POLICY
Evaluate

Status

- IBR

- C/SSR

- CPR

- Schedule

- WBS

Best 

Value Award

- Integrated

 Processes

- Past Performance

- Management

 Gov't

Mgmt Needs

- Integrated

 Planning

- Resources

- Teams

Contract

Approach

- Criticality

- EVMS

- Type

- Size

Evaluate

Status

- IBR

- C/SSR

- CPR

- Schedule

- WBS

Best 

Value Award

- Integrated

 Processes

- Past Performance

- Management

 Gov't

Mgmt Needs

- Integrated

 Planning

- Resources

- Teams

Contract

Approach

- Criticality

- EVMS

- Type

- Size

ent Team Dynamics Conflict Management & Strategies

PMO Organization Established (Charter, IPPD & IPT Structure)

Planning

Organizing & Staffing

Controlling

Leading

Business Process Re-engineering Strategies

anning, Team Building, Systems Integration, Change Management

oblem Solving/Decision Support Techniques (e.g., Risk Assessment, Decision Analysis)

es (e.g., JROC, OIPT, DAB Reviews; SAR & DAES Reports; IBR,EVMS)

Program Control Tools (e.g., Schedules; Configuration Management; IDE; APB)

PMO Staffing/Personnel Management

elopment & Maturation

Interpersonal Communications

MANAGEMENT FRAMEWORK

elopment & Demonstration Production & Deployment Operations and Support

rim Progress Review FRP Decision Review

System

Demonstration

Low-Rate

Initial Production

(LRIP)

Full-Rate

Production &

Deployment

tems 

on risk

Demonstrate engineering

development models or

integrated commercial 

items

Combined DT/OT

IOT&E, LFT&E of production

representative articles

Establish full manufacturing

capability

Execute low-rate initial

production

Execute full-rate production

Deploy system

Monitor readiness and 

sustainability of deployed 

system

Support fielded system

Modify/upgrade system 

as required

Disposal, demilitarization, 

detoxification, waste storage 

and/or recycling (as applicable)

evant 

st flight)

System demonstrated in

its intended environment

System operationally 

effective, suitable and 

ready for full-rate production

SYSTEMS ACQUISITION SUSTAINMENT

Full operational capability; 

deployment complete

End of economic or physical 

service life

e, but 

be intesystem

System prototypes

demonstrated in relevant 

environment

Technically mature

No significant manufacturing 

risk

Acceptable interoperability

Acceptable operational 

supportability

Sustainment Disposal

B C IOC FOC

User Needs

Evolutionary Acquisition See Note 2 below

BLOCK 1

O F WORK EFFORT

CE CRITERIA

D OUTCOMES

See Note 1 

below

BLOCK 2

BLRIP & LFT&E reports

prior to FRPDR

Successful FRPDR

Fielded system

Operationally capable

ready system

Disposed of system
System

Concept(s)

Initial

Software

Req'ts.

Info.

Superiority

Interop.

Req'ts.

JOA

Clinger-Cohen

Act (CCA)

JTA

MAIS CCA

Certification

MAIS

Economic Analysis

C4ISP JTA

Spiral-Driven

Software

Development

System

Architecture

Evolutionary

or Single-Step

Acq. Strategy

SWSW

System

System

Concept(s)

Initial

Software

Req'ts.

MNS

IT System

Registration DII-COE

SYSTEMS 

ENGINEERING

Concept

Configuration

Management

Baselines

Technical Management Plan (TMP)

Alternative

Concepts

System

Reduced Risk

Alternative

Sub

Gain Thorough Familiarity

with Threat and Operational

Requirements Reassess Threat Reassess Threat

Preplanned Product Improvement (P3I)

Design

Reviews

and Audits

Program Definition

ASR

Update

SRR SFR SSR PDR

System

Threat

Assessment

Mission

Need

Statement

System

(Product)

Definition

The Common Thread

Linking ALL Disciplines

Draft Contractor Sets

Alternative

Concepts One or More 

Concepts, Des

Approaches,

and/or Paralle Technologies

Operational

Requirement

Document

(ORD)

Requirements Generation System

Government Approves

Syste Thre

Assess

Operational

Requirement

Document

(ORD)

Requirements Analysis

Verification

System Analysis & Control

(Balance)

Synthesis

Functional Analysis/Allocation

Systems

Engineering

Process

Requirements Analysis

Verification

System Analysis & Control

(Balance)

Synthesis

Functional Analysis/Allocation

Systems

Engineering

Process

Cost

 Estimation 

Methods

= % of time 

used

Planning,Programming

 & Budgeting System

Analogy

Parametric

LCC

Note:

PPBS & Enactment are 

Calendar-Driven Processes.

Planning and Programming include 

estimates for outyears.

Planning Programming Budgeting Execution Enactment

Planning Execution Programming Budgeting Enactment

Planning Execution Programming Budgeting Enactment

Planning Enactment Programming Budgeting

POM Yr A

POM Yr B

POM Yr C

POM Yr D

FUNDS 

MANAGEMENT

ESTIMATE

Gross Estimating

*M

- = M

+M

-M

1 2 3

4 5 6

7 8 9

00 0 ¥

%

Ö

+

= x

ON

CE

C

.99

1.75

3.16

28.03

7.15

2.90

RDT&E

(Advanced Technology Development)

RDT&E

(Demonstration Validation)

Study

Contracts

RFP

SOW/SOO

SYS SPEC

CDRL

etc.

Draft

RFP

Presolicitation

Conference

RFP

SOW/SOO

DEV SPEC

CDRL

etc.

Draft

RFP

Development

Contract

Demonstration

Contract

Contract

Type

Cost Type or

Firm Fixed Price

(Level of Effort)

Cost Plus Fixed Fee

Cost Plus Incentive Fee

Cost Plus Award Fee

Nature

of

Effort

Presolicitation

Conference

Contract Type

Selection

CONTRACT MANAGEMENT

Research

(Very Broad Requirement) Development

EARN

MANA

FOR EAC

- Integrated

 Processes

- Past Performance

- Management

g

- Integrated

 Planning

- Resources

- Teams
System

Software Development (Tailored Spiral Life cycle)

ven

re

ment

System

Spiral-Driven

Software

Development

SW-CMM Level III

SW Developers

Commercial SW

Development Stds.

Info. Assurance

Acceptability

SDP

Software

Operations 

and Support

JTA

DII COE

SW-CMM Level III

SW Developers

Software Maturity

Assessment

PDSS

Agency

Software

Releases

DII COE

Functional Baseline

Allocated Baseline

Subsystems

Detailed

Design

Refined

Final Detail

Modifications

Product 

Improvements

Evolutionary 

Development

Deficiency

Correction

Product

Improvement

Design Documentation Necessary for Production Complete

Reassess Threat Reassess Threat Reassess Threat

vement (P3I)

System Performance Specification

SSR PDR CDR TRR FCA

SVR PCA

Update

Item Performance Specifications

Item Detail Specifications

Engineering Change Reviews

Product Baseline

One or More 

Concepts, Design

Approaches,

and/or Parallel

Technologies

Deployed

System

Production

Design

Update

Stable, Interoperable,

Producible, Supportable,

Cost-effective Design

Modernized

System

Modifications

Operational

Capability

That Satisfies

Mission Needs

Note: Technical reviews may be tailored based on system maturity and need.

roves

System

Threat

Assessment

perational

quirement

ocument

(ORD)

Requirements Analysis

Verification

System Analysis & Control

(Balance)

Synthesis

Functional Analysis/Allocation

Systems

Engineering

Process

Requirements Analysis

Verification

System Analysis & Control

(Balance)

Synthesis

Functional Analysis/Allocation

Systems

Engineering

Process

Requirements Analysis

Verification

System Analysis & Control

(Balance)

Synthesis

Functional Analysis/Allocation

Systems

Engineering

Process

Engineering

Actuals

Detailed Estimating

Execution

Enactment Execution

Planning Programming Budgeting Execution Enactment

Planning Execution Programming Budgeting Enactment

Planning Execution Programming Budgeting Enactment

Planning Execution Programming Budgeting Enactment

POM Yr W

POM Yr X

POM Yr Y

POM Yr Z

ESTIMATE ESTIMATE

&E

n Validation)

RDT&E

(EMD)

RDT&E/Proc. MILCON

(EMD)

Procurement O & M / MILPERS

E

C

P

s

RFP

OW/SOO

DEV SPEC

CDRL

tc.

Demonstration

Contract

Cost Plus Incentive Fee

Fixed Price Incentive Firm

Cost Plus Award Fee

d Fee

ve Fee

d Fee

Fixed Price Incentive Firm

Firm Fixed Price

Fixed Price Incentive Firm

Firm Fixed Price

Follow-on

ProductionUpgrade/

Sustainment

Contract

RFP

SOW/SOO

PROD SPEC

CDRL

etc.

Draft

RFP

Presolicitation

Conference

RFP

SOW/SOO

SPEC

CDRL

etc.

DRAFT

RFP

Presolicitation

Conference

E

C

P

s

E

C

P

s

Production

(Well-defined Requirements)

Follow-On Production

Upgrade/Sustainment

Production

Contract

ent Demonstration

Value Award - WBS

- Integrated

 Processes

- Past Performance

- Management

Mgmt Needs

- Integrated

 Planning

- Resources

- Teams

Value Award - WBS

- Integrated

 Processes

- Past Performance

- Management

Mgmt Needs

- Integrated

 Planning

- Resources

- Teams
Please address

improvement 

suggestions to:

Note 1. The actual entry point into the acquisition system will depend on the potential program's ability to meet the entrance criteria 

for the intended work effort, the demonstrated level of technology maturity, validated requirements (including urgency of user need), 

and affordability. The overall program structure (milestone reviews, phases, and work efforts) will be approved by the Milestone 

Decision Authority (MDA) for each individual program at program initiation. (Milestone B will normally be formal program initiation.)

Larry Heller - Faculty Division Email: acq.chart@dau.mil

Defense Systems Management College (DSMC)

Fort Belvoir, Virginia 22060-5565

Requirements Analysis

Verification

System Analysis & Control

(Balance)

Synthesis

Functional Analysis/Allocation

Systems

Engineering/

Supportability

Analysis

Process

LOGISTICS

MANAGEMENT

Readiness &

Total Ownership

Cost Objectives

Product

Support

Management

Plan

Evaluate Alternative

Logistics Concepts

Support

Concept

Support

Strategy

Acquisition

Strategy

Performance

Based

Logistics

Inputs to:

• ORD

• TEMP

• APB

• Contract Requirements Analysis

Verification

System Analysis & Control

(Balance)

Synthesis

Functional Analysis/Allocation

Systems

Engineering/

Supportability

Analysis

Process

Influence

Product De

GOAL 1

for Support

Design &

Develop

GOAL 2

Support Sy

MANUFACTURING

& PRODUCTION

To Integrate

Subsystems &

Suppport into a 

complete System:

IMPLEMENT &

REFINE

To Obtain key 

Components &

Subsystems:

IDENTIFY, 

EVALUATE & 

IMPROVE

MFG Process Mgmt.

& Technology

Advancements

(Lean, e-Mfg, etc.)

Design

Producibility

Requirements & Goals

MFG Capability

Risk Reviews

(MCCRs)

Scheduling

System &

Subsystems

Production

Strategies

& Plans

Industrial

Capabilities

Analysis (Mandatory for B and C

Milestones)

MFG Risk Reduction

Efforts such as

Variation Control,

Process,

Proofing,etc.

Key Supply

Chain Quality

Mgmt Structures

MFG Process

Capabilities

(5 Ms) of Key

Supply Chain

Members

MFG Process Mgmt.

& Technology

Advancements

(Lean, e-Mfg, etc.)

Frequent MFG Capability

Risk Reviews

(MCCRs)

System &

Subsystems

Production

Strategies

& Plans

Industrial

Capabilities

Analysis (Mandatory for B and C

Milestones)

MFG Process

Capabilities

(5 Ms) of Key

Supply Chain

Members

TEST AND EVALUATION

Evaluation Strategy TEMP

Component T&E Prototype T&E

Qualification T&E

Live Fire T&E (Vulnerability/Lethality)

OA

LFT&E Waiver

Computer Resources

Support Plan

SOFTWARE

ACQUISITION

MANAGEMENT

System

Concept(s)

Initial

Software

Req'ts.

Info.

Superiority

Interop.

Req'ts.

JOA

Clinger-Cohen

Act (CCA)

JTA

MAIS CCA

Certification

MAIS

Economic Analysis

Software Support

Planning

C4ISP JTA

Spiral-Driven

Software

Development

System

Architecture

Evolutionary

or Single-Step

Acq. Strategy

ORD Computer

Resource Req'ts.

Protot

Matura

SW-CMM 

SW Deve

SD

System

System

Concept(s)

Initial

Software

Req'ts.

MNS

IT System

Registration DII-COE

ENGINEERING with Threat and Operational

Requirements Reassess Threat Reassess Threat
Note 2. Evolutionary acquisition is the preferred (but not only) acquisition approach. An evolutionary approach delivers an initial 

capability with the explicit intent of delivering improved or updated capability in the future. Block 1 provides the initial deployment 

capability while subsequent blocks (Block 2, Block 3, etc.) provide improved or updated capability. The acquisition strategy defines 

how each block will be funded, tested, produced, and operationally supported.

trance criteria 

of user need), 

Milestone 

am initiation.)

DSMC CHART#3000R4

2001 To order copies or obtain

digital files see back.

Product

Support

Management

Plan

Product

Support

Management

Plan

Product

Support

Management

Plan

Influence

Product Design

GOAL 1

for Supportability

Design &

Develop

GOAL 2

Support System

Acquire & Deploy

Supportable

GOAL 3

System

IOC

Demonstrate

Supportability

& Life Cycle

Affordability Demonstrate

Supportability

& Life Cycle

Affordability

FACTORY

CLOSED

FACTORY

CLOSED

Modifications and Technology Insertion

Post Deployment Evaluations

Maintain/Improve

Readiness & Improve

GOAL 4

Affordability

Demil

&

Disposal

Demil

&

Disposal

Post Production Support

To Integrate

Subsystems &

Suppport into a 

complete System:

IMPLEMENT &

REFINE

To Modify, 

Extend, or

Replace the

System:

REVIEW &

REVISE

MFG Process Mgmt.

& Technology

Advancements

(Lean, e-Mfg, etc.)

Design

Producibility

Requirements & Goals

Frequent MFG Capability

Risk Reviews

(MCCRs)

System &

Subsystems

Production

Strategies

& Plans

Industrial

Capabilities

Analysis (Mandatory for B and C

Milestones)

MFG Risk Reduction

Efforts such as

Variation Control,

Process,

Proofing,etc.

Key Supply

Chain Quality

Mgmt Structures

MFG Process

Capabilities

(5 Ms) of Key

Supply Chain

Members

MFG Process Mgmt.

& Technology

Advancements

(Lean, e-Mfg, etc.)

Design

Producibility

Requirements & Goals

MFG Risk Reduction

Efforts such as

Variation Control,

Process,

Proofing,etc.

Key Supply

Chain Quality

Mgmt Structures

MFG Process

Capabilities

(5 Ms) of Key

Supply Chain

Members

To Provide, 

Spare, & Support

the System:

CONTINUE &

ENHANCE

MFG Process Mgmt.

& Technology

Advancements

(Lean, e-Mfg, etc.)

Design

Producibility

Requirements & Goals

Frequent MFG Capability

Risk Reviews

(MCCRs)

System &

Subsystems

Production

Strategies

& Plans

Industrial

Capabilities

Analysis (Mandatory for B and C

Milestones)

MFG Risk Reduction

Efforts such as

Variation Control,

Process,

Proofing,etc.

Key Supply

Chain Quality

Mgmt Structures

MFG Process

Capabilities

(5 Ms) of Key

Supply Chain

Members

TEMP Update TEMP Update

EDM T&E Production Acceptance T&E

ualification T&E PQT&E

Full-System Mission T&E Modification T&E

IOT&E FOT&E

Prod. Rep. T&E

Full-Up Live Fire T&E

BLRIP Report to Congress

LFT&E Report to Congress

System

Software Development (Tailored Spiral Life cycle)

Computer Resources

Support Plan Updates

Computer Resources

Support Plan Updates

System

Spiral-Driven

Software

Development

Prototype

Maturation

SW-CMM Level III

SW Developers

Commercial SW

Development Stds.

Info. Assurance

Acceptability

SDP

Software

Operations 

and Support

JTA

DII COE

SW-CMM Level III

SW Developers

Software Maturity

Assessment

SDP SW Transition

Plans (STrP)

Implement

SW Support

PDSS

Agency

Software

Releases

COE

sess Threat Reassess Threat Reassess Threat