PGI 234.201 Policy.

(1)(iii) When the program manager decides to implement earned value management on contracts

and subcontracts valued at less than $20,000,000, a cost-benefit analysis shall be conducted and the

results documented in the contract file. Considerations for determining the effectiveness of applying

earned value management in these situations and guidance for tailoring reporting can be found in—

(1) The Defense Acquisition Guidebook, Chapter 11, Section 11.3, at

https://akss.dau.mil/dag/DoD5000.asp?view=document; and

(2) The DoD Earned Value Management Implementation Guide at

https://acc.dau.mil/CommunityBrowser.aspx?id=19557.

(iv) In extraordinary cases where cost/schedule visibility is required and cannot be obtained using

other means, the program manager shall request a waiver for individual contracts from the

Milestone Decision Authority. In these cases, the program manager will conduct a business case

analysis that includes rationale as to why a cost or fixed-price incentive contract was not an

appropriate contracting vehicle. Considerations for determining the effectiveness of applying earned

value management in these situations and guidance for tailoring reporting can be found in—

(1) The Defense Acquisition Guidebook, Chapter 11, Section 11.3, at

https://akss.dau.mil/dag/DoD5000.asp?view=document; and

(2) The DoD Earned Value Management Implementation Guide at

https://acc.dau.mil/CommunityBrowser.aspx?id=19557.

(2) The procuring contracting officer shall obtain the assistance of the administrative contracting

officer in determining the adequacy of an earned value management system (EVMS) plan that an

offeror proposes for compliance with ANSI/EIA-748, under the provision at DFARS 252.234-7001,

Notice of Earned Value Management System. The Government will review and approve the offeror’s

EVMS plan before contract award. Instructions for performing EVMS plan reviews can be found at

http://guidebook.dcma.mil/39/instructions.htm.

(4) Additional guidance on earned value management can be found in—

(A) The Guidebook for Earned Value Management System (EVMS) System-Level Surveillance at

http://guidebook.dcma.mil/79/instructions.htm;

(B) The Guidebook for Earned Value Management System - Program Analysis at

http://guidebook.dcma.mil/248/guidebook_process.htm; and

(C) The Program Managers’ Guide to the Integrated Baseline Review Process (the IBR Guide) at

http://www.acq.osd.mil/pm/currentpolicy/currentpolicy.html.

(7) Disposition of findings.

(ii) Initial determination.

(B)(1) Within 10 days of receiving the report, if the contracting officer makes a determination that

there is a significant deficiency, the contracting officer should provide an initial determination of

deficiencies and a copy of the report to the contractor and require the contractor to submit a written
response.

(3) Evaluation of contractor's response. Within 30 days of receiving the contractor’s response, the

contracting officer, in consultation with the auditor or cognizant functional specialist, should

evaluate the contractor’s response and make a final determination.

(iii) Final determination.

(B)(1) Monitoring contractor's corrective action. The contracting officer and cognizant functional

specialist or auditor shall monitor the contractor's progress in correcting deficiencies. If the

contractor fails to make adequate progress, the contracting officer shall take whatever action is

necessary to ensure that the contractor corrects the deficiencies. Examples of actions the

contracting officer can take are: bringing the issue to the attention of higher level management,

implementing or increasing the withholding in accordance with 252.242-7005, Contractor Business

Systems.

(2) Correction of significant deficiencies.

(i) When the contractor notifies the contracting officer that the contractor has corrected the

significant deficiencies, the contracting officer shall request the cognizant functional specialist or

auditor to review the correction to determine if the deficiencies have been resolved.

(ii) The contracting officer shall determine if the contractor has corrected the deficiencies.

(iii) If the contracting officer determines the contractor has corrected the deficiencies, the

contracting officer’s notification shall be sent to the cognizant functional specialist; auditor; payment

office; appropriate action officers at the requiring activities; and each contracting and contract

administration office having substantial business with the contractor as applicable.

Parent topic: PGI 234.2 -EARNED VALUE MANAGEMENT SYSTEM