252.234-7002 Earned Value Management

System.

As prescribed in 234.203 (2), use the following clause:

EARNED VALUE MANAGEMENT SYSTEM (MAY 2011)

(a) Definitions. As used in this clause——

“Acceptable earned value management system” means an earned value management system that

generally complies with system criteria in paragraph (b) of this clause.

“Earned value management system” means an earned value management system that complies with

the earned value management system guidelines in the ANSI/EIA-748.

“Significant deficiency” means a shortcoming in the system that materially affects the ability of

officials of the Department of Defense to rely upon information produced by the system that is

needed for management purposes.

(b) System criteria. In the performance of this contract, the Contractor shall use—

(1) An Earned Value Management System (EVMS) that complies with the EVMS guidelines in the

American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value

Management Systems (ANSI/EIA-748); and

(2) Management procedures that provide for generation of timely, reliable, and verifiable

information for the Contract Performance Report (CPR) and the Integrated Master Schedule (IMS)

required by the CPR and IMS data items of this contract.

(c) If this contract has a value of $50 million or more, the Contractor shall use an EVMS that has

been determined to be acceptable by the Cognizant Federal Agency (CFA). If, at the time of award,

the Contractor’s EVMS has not been determined by the CFA to be in compliance with the EVMS

guidelines as stated in paragraph (b)(1) of this clause, the Contractor shall apply its current system

to the contract and shall take necessary actions to meet the milestones in the Contractor’s EVMS

plan.

(d) If this contract has a value of less than $50 million, the Government will not make a formal

determination that the Contractor’s EVMS complies with the EVMS guidelines in ANSI/EIA-748 with

respect to the contract. The use of the Contractor’s EVMS for this contract does not imply a

Government determination of the Contractor’s compliance with the EVMS guidelines in

ANSI/EIA-748 for application to future contracts. The Government will allow the use of a

Contractor’s EVMS that has been formally reviewed and determined by the CFA to be in compliance

with the EVMS guidelines in ANSI/EIA-748.

(e) The Contractor shall submit notification of any proposed substantive changes to the EVMS

procedures and the impact of those changes to the CFA. If this contract has a value of $50 million or

more, unless a waiver is granted by the CFA, any EVMS changes proposed by the Contractor require

approval of the CFA prior to implementation. The CFA will advise the Contractor of the acceptability

of such changes as soon as practicable (generally within 30 calendar days) after receipt of the

Contractor’s notice of proposed changes. If the CFA waives the advance approval requirements, the
Contractor shall disclose EVMS changes to the CFA at least 14 calendar days prior to the effective

date of implementation.

(f) The Government will schedule integrated baseline reviews as early as practicable, and the review

process will be conducted not later than 180 calendar days after—

(1) Contract award;

(2) The exercise of significant contract options; and

(3) The incorporation of major modifications.

During such reviews, the Government and the Contractor will jointly assess the Contractor’s

baseline to be used for performance measurement to ensure complete coverage of the statement of

work, logical scheduling of the work activities, adequate resourcing, and identification of inherent

risks.

(g) The Contractor shall provide access to all pertinent records and data requested by the

Contracting Officer or duly authorized representative as necessary to permit Government

surveillance to ensure that the EVMS complies, and continues to comply, with the performance

criteria referenced in paragraph (b) of this clause.

(h) When indicated by contract performance, the Contractor shall submit a request for approval to

initiate an over-target baseline or over-target schedule to the Contracting Officer. The request shall

include a top-level projection of cost and/or schedule growth, a determination of whether or not

performance variances will be retained, and a schedule of implementation for the rebaselining. The

Government will acknowledge receipt of the request in a timely manner (generally within 30

calendar days).

(i) Significant deficiencies. (1) The Contracting Officer will provide an initial determination to the

Contractor, in writing, of any significant deficiencies. The initial determination will describe the

deficiency in sufficient detail to allow the Contractor to understand the deficiency.

(2) The Contractor shall respond within 30 days to a written initial determination from the

Contracting Officer that identifies significant deficiencies in the Contractor's EVMS. If the

Contractor disagrees with the initial determination, the Contractor shall state, in writing, its

rationale for disagreeing.

(3) The Contracting Officer will evaluate the Contractor's response and notify the Contractor, in

writing, of the Contracting Officer’s final determination concerning—

(i) Remaining significant deficiencies;

(ii) The adequacy of any proposed or completed corrective action;

(iii) System noncompliance, when the Contractor’s existing EVMS fails to comply with the earned

value management system guidelines in the ANSI/EIA-748; and

(iv) System disapproval, if initial EVMS validation is not successfully completed within the time

frame approved by the Contracting Officer, or if the Contracting Officer determines that the

Contractor's earned value management system contains one or more significant deficiencies in highrisk guidelines in ANSI/EIA-748 standards (guidelines 1, 3, 6, 7, 8, 9, 10, 12, 16, 21, 23, 26, 27, 28,

30, or 32). When the Contracting Officer determines that the existing earned value management
system contains one or more significant deficiencies in one or more of the remaining 16 guidelines in

ANSI/EIA-748 standards, the Contracting Officer will use discretion to disapprove the system based

on input received from functional specialists and the auditor.

(4) If the Contractor receives the Contracting Officer’s final determination of significant deficiencies,

the Contractor shall, within 45 days of receipt of the final determination, either correct the

significant deficiencies or submit an acceptable corrective action plan showing milestones and

actions to eliminate the significant deficiencies.

(j) Withholding payments. If the Contracting Officer makes a final determination to disapprove the

Contractor’s EVMS, and the contract includes the clause at 252.242-7005 , Contractor Business

Systems, the Contracting Officer will withhold payments in accordance with that clause.

(k) With the exception of paragraphs (i) and (j) of this clause, the Contractor shall require its

subcontractors to comply with EVMS requirements as follows:

(1) For subcontracts valued at $50 million or more, the following subcontractors shall comply with

the requirements of this clause:

[Contracting Officer to insert names of subcontractors (or subcontracted effort if subcontractors

have not been selected) designated for application of the EVMS requirements of this clause.]

(2) For subcontracts valued at less than $50 million, the following subcontractors shall comply with

the requirements of this clause, excluding the requirements of paragraph (c) of this clause:

[Contracting Officer to insert names of subcontractors (or subcontracted effort if subcontractors

have not been selected) designated for application of the EVMS requirements of this clause.]

(End of clause)

Parent topic: 252.234 RESERVED