Can anyone help answer this question which was posted to the Defense Acquisition University's "Ask a Professor", under the topic Program Management on 12/27/00 by XXXXXX ?

"The Scenario
Earned Value Management System - Gold Card - EVMS Criteria Approach Contract Cost Data Report (CCDR) Policy Memo - Jan 16, 1996

"The Question
In everything I can currently find - the indication is that EVMS should be applied to non-FFP competitive contracts.
Is EVMS applied to competitive FFP contracts?
If it is - - - How - in regard to cost data? "

"No answer available at this time" (As of January 23, 2001)
Happy Sails! Joel

Happy sails!

By Anonymous on Tuesday, January 23, 2001 - 12:16 pm:

Without doing some research, my immediate reaction is that in a firm fixed price contract the Government usually does not receive (or even have access to) the cost data that comprises the typical earned value systems. The cost accounting requirements usually don't apply, simply because we don't really care about the cost -- we're paying the fixed price. There may be a purpose served in tracking schedule variance, but there are no apparent reasons for the Government to even care about cost variances.

By Anonymous on Wednesday, January 24, 2001 - 12:11 pm:

Apparently no one cares.

By joel hoffman on Wednesday, January 24, 2001 - 01:49 pm:

Anon, I guess you are right, including the DAU. For the benefit of the questioner, EVMS is inapplicable from the Government side, on a FFP contract.

Since contractors generally hate EVMS and think it is a waste of resources and costly, they don't internally use the formal EVMS on their FFP contracts, either.

By bob antonio on Wednesday, January 24, 2001 - 04:06 pm:

Joel:

I was trying to find the support for the answer that you and anonymous provided in a document yesterday and did not have much time. Needless to say, I did not find the rule or regulation I was seeking.

Anonymous:

I agree. This forum appears to be on a death spiral. However, before making a decision on its fate I plan to do an analysis of posts since its inception. I believe about 80 percent of the posts were by two people. One of those individuals no longer posts. As a result, there are fewer posts from the second individual.

Forums need a certain chemistry to survive and flourish. This forum has lost that chemistry. The death spiral begins after the forum becomes quiet. Most readers are lurkers who post infrequently. They are drawn to the forum to read new posts. From time to time they add a note. That is part of the chemistry. However, as they stop viewing due to fewer and fewer posts, the potential for these infrequent posters to post diminishes. Soon, no one is viewing on a regular basis and the forum is closed.

There are still many more than enough viewers to turn this death spiral around. I have decided to step back and see if this forum will exist on its own.

By Eric Ottinger on Wednesday, January 24, 2001 - 04:48 pm:

Joel, Anon, and Bob,

I think industry hates oversight, period. I agree that EVMS is a nuisance and a waste of money if it is not used intelligently. However, there is no way to manage really large, complex projects without EVMS or something very much like EVMS.

EVMS is an industry standard and, for that matter, an international standard, adopted by the Australians among others.

Here is the answer out of DoD 5000.2 available in the Deskbook.

DoD 5000.2-R (Interim); Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition

2.9.3.4. -- Integrated Contract Performance Management
"The PM shall obtain integrated cost and schedule performance data to monitor program execution. The PM shall require contractors to use internal management control systems that produce data that a) indicate work progress; b) properly relate cost, schedule, and technical accomplishment; c) are valid, timely and able to be audited; and d) provide DoD PMs with information at a practical level of summarization. The PM shall require that contractors’ management information systems used in planning and controlling contract performance meet the Earned Value Management Systems (EVMS) guidelines set forth in American National Standards Institute/EIA 748-98, Chapter 251 (see Appendix D). The PM shall not require a contractor to change its system provided it meets these guidelines, nor shall the PM impose a single system or specific method of management control. These guidelines shall not be used as a basis for reimbursing costs or making progress payments.
51 American National Standards Institute (ANSI)/EIA Standard for Earned Value Management Systems (ANSI/EIA-748-98), Approved May 19, 1998
The PM shall apply EVMS guidelines on applicable contracts within acquisition, upgrade, modification, or materiel maintenance programs, including highly sensitive classified programs, major construction programs, and other transaction agreements. EVMS guidelines shall apply to contracts executed with foreign governments, project work performed in government facilities, and contracts by specialized organizations such as the Defense Advanced Research Projects Agency. EVMS guidelines shall apply to research, development, test, and evaluation contracts, subcontracts, other transaction agreements, and intra-government work agreements with a value of $73 million or more (in FY 2000 constant dollars), or procurement or operations and maintenance contracts, subcontracts, other transaction agreements, and intra-government work agreements with a value of $315 million or more (in FY 2000 constant dollars). Use DFARS Clauses 252.234-700052 and 252.234-700153 to place EVMS requirements in solicitations and contracts.
52 Defense Federal Acquisition Regulation Supplement (DFARS), Clause 252.234-7000, "Notice of Earned Value Management System."
53 Defense Federal Acquisition Regulation Supplement (DFARS), Clause 252.234-7001, "Earned Value Management System."
The C/SSR (see 7.15.7.3.) shall apply to contracts, subcontracts, other transaction agreements, or intra-government work agreements below these thresholds, unless the PM requires EVMS compliance. Use DFARS Clauses 252.242-700554 and 252.242-700655 to place Cost/Schedule Status Report (C/SSR) requirements in solicitations and contracts.
54 Defense Federal Acquisition Regulation Supplement (DFARS), Clause 252.242-7005, "Cost/Schedule Status Report."
55 Defense Federal Acquisition Regulation Supplement (DFARS), Clause 252.242-7006, "Cost/Schedule Status Report Plans."
THE PM SHALL NOT REQUIRE COMPLIANCE WITH EVMS GUIDELINES OR C/SSR REQUIREMENTS ON FFP CONTRACTS (including FFP contracts with economic price adjustment provisions), time and materials contracts, and contracts that consist mostly of level-of-effort work. For exceptions to this rule, the PM shall obtain a waiver for individual contracts from the MDA."

Bob,

I really don't know about a death spiral. I think between the holidays and the arrival of the new administration people are in a sort of sit back and watch mode until they see where things are going.

This is a unique resource and I really hope you can step back and not react too quickly to what may be a short term proplem.

Eric

By joel hoffman on Wednesday, January 24, 2001 - 07:52 pm:

Thanks, Eric. Note: EVMS is an abbreviation for: "Earned Value Management System" .

The short answer is: "THE PM SHALL NOT REQUIRE COMPLIANCE WITH EVMS GUIDELINES OR C/SSR REQUIREMENTS ON FFP CONTRACTS (including FFP contracts with economic price adjustment provisions), time and materials contracts, and contracts that consist mostly of level-of-effort work. For exceptions to this rule, the PM shall obtain a waiver for individual contracts from the MDA."

To lengthen that answer a little, a few reasons of the top of my head why EVMS is inapplicable:

The EVMS is a managment system for cost reimbursible contracts. There are commonly no "fixed prices" for a scope of work which may often not be 100% definable. However, it is common for individual subcontracts and some prime contract CLINS to be fixed price.

EVMS requires disclosure to the Government of the Contractor's "actual costs of the work performed", "budgeted costs of the work performed" , "budgeted cost of the work scheduled", "budget at completion", "estimate at completion", etc., etc. etc. For FFP contracts, the prime will probably use it's subcontract FFP as a "cost."

The Government is not entitled to this information on a FFP prime contract and should not be concerned with it. FFP performance is measured, using other criteria, such as variations of: "percentage complete" vs. "scheduled percentage complete" (schedule performance), "percent of CLINS values completed" (completion performance), etc.

Hope this helps those who don't know what EVMS is or why it is inapplicable to most FFP contracts. Happy Sails! Joel Hoffman

By joel hoffman on Thursday, January 25, 2001 - 08:18 am:

Correction to my 5th paragraph, above. For FFP "SUBCONTRACTS" on a cost reimbursable type prime contract, the prime will probably SHOW it's subcontract FFP as a "cost" in the EVMS Happy Sails!

By joel hoffman on Friday, January 26, 2001 - 08:09 am:

Thanks for your input, Anonymous. Happy Sails! joel