Intermediate Systems Acquisition Course. Integrated Baseline Reviews (IBRs)

Transcription

1 Integrated Baseline Reviews (IBRs) Holding an IBR is a best practice for all programs, and it supports the implementation of an earned value management system (EVMS). EVM can be a valuable tool for controlling and tracking contractor performance. The foundation of successful earned value management is the integrated baseline review (IBR). Both the Government and contractor benefit from the IBR. It enables both parties to have a mutual understanding of the contractor's plan for executing the program. The cornerstone of the IBR is the performance measurement baseline (PMB). The PMB lays out the contractor's plan for executing the program, and establishes a baseline against which progress can be measured. In this lesson, you will learn about the purpose and objectives of conducting an IBR. You will find out when to schedule the IBR, and get some pointers on where and how to conduct it. You'll walk through the steps for creating the PMB, and examine the relationship between the PMB and the integrated master schedule (IMS). You'll also learn about re-baselining the PMB in response to changing circumstances. You may print the Integrated Baseline Review lesson or save it for future reference. Page 1 of 26

2 For programs requiring EVM, program managers can find best practices and guidance in the Integrated Baseline Review (IBR) Guide (2010).

3 Objectives: Upon completion of this lesson, you should be able to: Identify the purpose, objectives, and process of conducting an integrated baseline review (IBR) Identify the steps in the development of a performance measurement baseline (PMB) Recognize the relationship between the contractor's performance measurement baseline (PMB) and integrated master schedule (IMS) Identify the three reasons for making changes to the performance measurement baseline (PMB) Page 2 of 26

4 Purpose of the IBR The IBR is a formal review conducted jointly by the Government and the contractor to verify the: Technical content of the contract's baseline Accuracy of the related budgets and schedules An effective IBR provides a mutual understanding between the Government and the contractor of the inherent risks in the contractor's performance plans. The primary purpose of the IBR is to confirm that the contractor's Performance Measurement Baseline (PMB) covers the entire technical scope of work, that the work is realistically and accurately scheduled, and that the proper amount and mix of resources have been assigned to accomplish the work. Page 3 of 26

5 IBR Objectives The participants in an IBR typically include the Government PM and technical staff, along with the related contractor PM and staff. Their objectives for the IBR are to ensure: Technical scope of work is fully included and consistent with authorizing documents Key schedule milestones are identified Supporting schedules reflect a logical flow to accomplish the technical scope of work Resources (budgets, facilities, personnel) are adequate and available Tasks are planned and can be measured objectively, relative to technical progress Underlying PMB and IMS rationale is reasonable and achievable Managers have appropriately implemented required management processes Page 4 of 26

6 IBR Benefits Conducting an IBR provides many benefits for the program manager. An IBR: Promotes Government PM and contractor PM knowledge of the PMB Improves communications by enabling a comparison of each PM s understanding of technical/schedule/cost objectives, and identification of any differences so they can be addressed before problems arise Ensures that meaningful and reliable performance monitoring techniques are employed Lays a solid foundation for mutual understanding of risks and opportunities Assesses the PMB s capability to provide timely, reliable, and actionable schedule, cost, and scope information Uncovers new or hidden risks that need to be analyzed and entered into the program s risk register Page 5 of 26

7 Scheduling the IBR At DHS, all contracts that require an ANSI/EIA-verified earned value management system (EVMS), also require an IBR to validate it. Post-award IBRs shall be completed within ninety days of contract award. Pre-award IBRs are appropriate only when the IBR results are essential for the source selection process, and the program has adequate funding to conduct IBRs. A pre-award IBR ensures the validity of the contractor's EVMS against the contract, and assesses the contractor's ability to perform successfully. Page 6 of 26 The American National Standards Institute (ANSI) Electronics Industries Alliance (EIA) standard 748; Standard for Earned Value Management Systems (EVMS); Version C updated March 1, 2013.

8 Additional IBRs Even the best laid plans are likely to change during the course of executing a program. From time to time, it may become necessary to revisit the PMB and conduct a follow-on IBR. When a follow-on IBR is conducted, the goal and objectives are the same as those of the initial IBR: to gain a mutual understanding and confidence in the baseline plan (the PMB). In-process IBRs are typically held at key points during program development, such as: At the completion of requirements development At the end of the Design phase of the SELC Following development and testing prior to implementation Subsequent IBRs may be required whenever an established PMB is unachievable, and a new PMB and/or IMS is required to manage the contract. Like the original IBR, the subsequent IBR evaluates the risks and validity of the new PMB and IMS. Page 7 of 26

9 IBR Process The following IBR process is a best practice based upon the National Defense Industrial Association's document, Integrated Baseline Review (IBR) Guide (2010). This is the best source for DHS program managers seeking guidance on preparing for, and conducting an IBR. This IBR Guide refers to the IBR as both an event and an ongoing process. The guide suggests that once the initial IBR establishes a PMB that is mutually accepted, the Government PM should strive to maintain his or her understanding of, and confidence in, the baseline throughout the period of execution. To achieve this objective, the guide outlines a three-step, iterative, IBR process. D Page 8 of 26 Graphic depicting the IBR Process. The three steps, conducted in order and repeatedly, are: IBR needs assessment, PMB development/maintenance, and Integrated Baseline Review. In the center of the graphic are the words "Program Managers' Mutual Understanding."

10 IBR Process: IBR Need Assessment Recall that for programs required to use EVM, an initial IBR is also required. The focus of any IBR is to review and understand the program's PMB. The objective of the need assessment is simply to determine whether or not an additional IBR is necessary. Changes to the program are inevitable, and some may require a revised PMB, which may (or may not) lead to another IBR. Generally, significant changes to the PMB warrant conducting an additional IBR. The Government PM is responsible for making this decision. D Page 9 of 26 Graphic depicting the IBR Process with the first step highlighted: IBR need assessment. In the center of the graphic are the words "Program Managers' Mutual Understanding."

11 IBR Process: PMB Development/Maintenance The PMB is the time-phased budget plan against which contract performance is measured. It is formed by the budgets established at the control account level. It establishes the baseline plan which, if followed, should lead to the successful achievement of program objectives. D Page 10 of 26 Graphic depicting the IBR Process with the second step highlighted: PMB Development/Maintenance. In the center of the graphic are the words "Program Managers' Mutual Understanding."

12 Developing the PMB The contractor will develop the PMB using some version of the following three step process. This is a simplified view of a very complex and iterative process used for comprehensive project planning. Step 1: Define the Work Decompose the statement of objectives or performance work statement (SOO/PWS) into executable work elements using the work breakdown structure (WBS). The executable work elements should represent discrete and measurable work whenever possible. These discrete elements of work are called control accounts. D Page 11 of 26 Graphic labeled "Scope" with a chart depicting a work breakdown structure. The top element is labeled 1.0, and is broken down into three parts: 1.1, 1.2, and is further broken down into boxes labeled and is further broken down into boxes labeled and is further broken down into boxes labeled and

13 Developing the PMB (continued) Step 2: Schedule the Work Develop the integrated master schedule (IMS) Determine task durations for each work element Define a logical sequence of work flow Establish inter-relationships among work elements The IMS contains the networked, detailed tasks necessary to ensure successful program execution. It shows how individual tasks are related by defining their predecessor and successor relationships. The IMS also shows the planned duration for each task. These are all key planning inputs into the creation of the PMB, which takes the IMS and adds the resource allocations (budgets) to provide a more fully integrated view of the baseline plan of execution. D Page 12 of 26 Graphic labeled "Schedule" depicting a chart with four columns labeled 1st quarter, 2nd quarter, 3rd quarter, and 4th quarter. Colored rectangles lie across the schedule, stretching between various columns.

14 Developing the PMB (continued) Step 3: Allocate Resources Establish budgets ο Determine labor requirements (skill mix, experience levels) ο Identify materials and other non-labor resources ο Identify resource constraints D Page 13 of 26 Graphic labeled "Budget" with three items listed. Materials at 10 million dollars, Labor at 60 million dollars, and security at 25 million dollars.

15 Knowledge Review Match each PMB activity to the step where it belongs. Activity Place in the PMB Process Establish budgets Break down the work into individual control accounts Determine task durations for each work element Define a logical sequence of work flow Determine labor requirements (skill mix, experience levels) Establish inter-relationships among work elements That's correct. View the correct answers. Page 14 of 26 Activity Establish budgets Break down the work into individual control accounts Determine task durations for each work element Define a logical sequence of work flow Determine labor requirements (skill mix, experience levels) Establish inter-relationships among work elements Place in the PMB Process Step 3: Allocate resources Step 1: Define the work Step 2: Schedule the work Step 2: Schedule the work Step 3: Allocate resources Step 2: Schedule the work

16 PMB Example This table shows how work breakdown structure (WBS) work elements (tasks) are time-phased with their monthly resource requirements. The cumulative totals at the bottom of the table represent the planned value (PV) for that period. For example, the planned value for all tasks to be completed by June is $237K. This table is one view of a program's PMB. See a graphical view of a similar PMB on the next screen. Project X Task Jan Feb Mar Apr May Jun 1.0 $17 $25 $55 $58 $60 $ $10 $10 $5 1.2 $5 $8 $ $2 $5 $9 $10 $ $5 $10 $ $8 $8 $8 $8 1.6 $5 $5 $10 $10 $10 $5 1.7 $5 $5 $5 $4 1.8 $5 $5 $5 $5 Planned Value * Dollars in Thousands $17 $42 $97 $155 $155 $237 Page 15 of 26 Planned value (PV) refers to a time-phased budget plan for work that is currently scheduled. It includes the cost of previous work completed and can address a specific period of performance or a date in time.

17 PMB Graph This graphical representation of a PMB shows the contractor's plan for executing the program. Each point on the PMB curve represents a dollar value of work effort that is planned to be accomplished by a specific point in time. The contractor's progress will be compared against this baseline over time to determine whether the program will be completed on schedule and within budget. D Page 16 of 26 Graph representing a notional PMB. The vertical axis is dollars and the horizontal axis is time. A line curves upward gently from left to right, representing the PMB, over time. The far right horizontal line is labeled Completion Date. The PMB line meets, and stops at, the completion date line.

18 Attributes of a PMB The PMB represents all work to be performed under the contract; it includes every task and activity needed to achieve the scope of work. Likewise, it does not include any task or activity that is extraneous to the scope of work. A well-developed PMB: Is reasonably time-phased to achieve specific contract and program milestones. Is appropriately budgeted or resourced; the PMB represents the integration of the work scope with the schedule and the budget; for work to be accomplished as planned, the plan needs to consider the proper number of people and right mix of skills, talents, and experience needed to accomplish the work Represents the consolidated inputs from the entire team (building a PMB is a highly participative process) Reflects risk assessments; the schedule durations and the budgets should be adjusted for risk Most important of all, a good PMB is realistic and achievable, as well as comprehensive and measurable. Page 17 of 26 The relationship between the two components of risk probability and consequence/impact is inherent in a risk assessment. The risk owner or risk assignee determines the probability of the risk's occurrence and its impact on the program's objectives. As risk assessments are completed for individually identified risks, the risk owner or assignee updates the information captured during risk identification. The assessment phase concludes when the risk owner believes that the data described in this section is complete and accurate.

19 Knowledge Review At a conference you attended last week, the speaker mentioned that the performance measurement baseline (PMB) is the contractor's baseline plan of execution for the project. Later, you heard another presenter at the same conference say that the integrated master schedule (IMS) is the plan the PM uses to guide program execution. It sounds like the IMS and PMB are the same thing, but your supervisor assures you they are not. Which best describes the relationship between the PMB and the IMS? A. Your supervisor is mistaken, the PMB and the IMS are essentially the same thing; both represent the plan of execution B. The IMS focuses on the details of the schedule, whereas the PMB integrates the schedule and the resources into a time-phased budget plan. C. The IMS represents the planning process, while the PMB represents actual performance data. In other words, the IMS looks forward, and the PMB focuses on the past. Correct! The IMS and the PMB are related, but are not the same. They each provide a different view of the project plan. The IMS shows the planned duration for each task, as well as their interdependencies. This information provides input for creating the PMB, which allocates resources (budget) to the tasks in the IMS. Page 18 of 26

20 IBR Process: Integrated Baseline Review Joint preparation by the Government and the contractor is key to a successful IBR. Both the government and contractor PMs must work closely together to establish mutual expectations for conducting the IBR and expected outcomes. A primary goal of the IBR is the identification and quantification of risks that may impact project execution, and the supplier's plans for handling them. The Government PM is ultimately responsible for the timely and successful execution of the IBR. He or she will determine the composition and work assignments of the government IBR team. The Government PM will also plan for IBR training. Many PMs have found it beneficial to conduct joint training with the Government and contractor teams. This approach helps to establish common expectations and can be used as a working session to continue making risk assessments. D Page 19 of 26 Graphic depicting the IBR Process with the third step highlighted: Integrated Baseline Review. In the center of the graphic are the words "Program Managers' Mutual Understanding."

21 IBR Process: Integrated Baseline Review (continued) IBR Execution The execution of the IBR refers to the conduct of the actual IBR event: the review itself. The focus of the review is on gaining a mutual understanding of the detailed program plan and the risks associated with the plan. There are a few time-tested best practices for conducting an IBR: The IBR should include those closest to the work IBR sessions are generally small group discussions, not formal presentations The primary source documents for the review are schedules, work authorization documents, control account plans, resource plans, and budgets The IBR is intended to be cooperative and frank, not confrontational; participants will focus on understanding the scope of work, assumptions made to support the plan, and risks to successful completion The IBR review is conducted in a professional manner in a spirit of constructive assessment and discovery that increases the probability of success for the execution of the project Page 20 of 26

22 Management Processes Once the IBR is complete, the Government PM relies on contractor management processes to carry out the plan and provide data to demonstrate progress. The health of these management processes are critical to the ultimate success of the program. The Government PM will look at three areas of management processes for which the contractor PM is responsible: Baseline maintenance - maintaining the PMB as the plan for accomplishing the remaining work Risk management - documenting and classifying risks associated with the PMB Business - providing effective and integrated technical/schedule/cost planning, and establishing and maintaining valid, accurate, timely, actionable performance data Each of these processes supports the management of the program. Inappropriate or inadequate use of these processes may not only fail to identify risks that could lead to failure of the program, but may actually add risk to the program. Page 21 of 26

23 Knowledge Review The Transportation Security Agency (TSA) is getting ready for an integrated baseline review (IBR) for the contract to develop a faster and more accurate screening device for air cargo placed on passenger aircraft. Which of the following best describes the primary objective of the IBR? A. Break down the work into individual control accounts B. Identify resource constraints on the program C. Ensure the program schedule and budget are realistic and achievable D. Review the contract clauses relating to performance measurement Correct! One of the primary purposes of the IBR is to ensure that the schedule and budget are realistic and achievable by validating the performance measurement baseline (PMB). Page 22 of 26

24 Changes to the PMB: Rebaselining How do we know when to change, or update the PMB? There are no established criteria for this. However, the intent of the PMB is to represent a realistic, achievable, measurable, and mutually understood plan. If, at any time, the PMB is found not to meet these criteria, then a change to the PMB is in order. There are three reasons a PMB will need to be revised or re-baselined: Contract changes - When the Government initiates a change to the contract scope, budget or schedule, the PMB will have to change to reflect the current contract. Internal replanning - During the normal execution of the program, the contractor may find opportunities to accelerate work. They might also need to delay work for various reasons. This is a normal part of the contractor PM managing the approved work effort. If these changes do not impact the total cost at completion or final delivery date, then the contractor simply does internal replanning. These changes are within the budget and time available in the baseline. Formal reprogramming - When the work remaining cannot be reasonably accomplished within the schedule and/or budget remaining, formal reprogramming becomes necessary. The remaining work is rescheduled, and a revised budget at completion (BAC) is developed and approved by both the government and the contractor. A formal reprogramming action will normally trigger an IBR to ensure the new PMB is understood and accepted. Page 23 of 26 Budget at Completion (BAC) is the total budget from which individual period EV values are derived. It serves as a benchmark for computing overruns and under runs at the end of the contract.

25 PMB Rebaselining Here is a closer look at the reasons for rebaselining the PMB that are initiated by the contractor. Select each of the buttons below to read the reasons for rebaselining. Internal Replanning PMB needs adjustment in response to problems or opportunity Formal Reprogramming Remaining budget and/or schedule are unrealistic or no longer reflect the contract scope of work Page 24 of 26 Internal Replanning Remaining work re-planned within the remaining budget and schedule PMB curve changes shape, but the end point (the budget at completion) remains unchanged Formal Reprogramming Contractor requires more time and/or dollars to complete planned work PMB exceeds the contract target cost; budget is insufficient Original objectives cannot be met Contract modification changes to scope, budget and/or schedule

26 Knowledge Review The United States Visitor and Immigrant Status Indicator Technology (US VISIT) awarded a contract to develop a new biometric system to identify foreign visitors to the United States. The period of performance is 18 months. Four months into the contract, the contractor identified serious supplier difficulties that will delay delivery of key components by two months. Installation of these components is on the critical path to developing and testing the system. What type of change to the PMB is appropriate? A. Formal reprogramming B. Contract change C. Internal re-planning Correct! Formal reprogramming is required to adjust the PMB and its components since the contract delivery date cannot be met. Associated contracting discussions would also be required. Page 25 of 26

27 Summary A well-constructed performance measurement baseline (PMB) is an essential first step to effective earned value management (EVM). This time-phased budget plan is developed by the contractor to serve as the baseline against which performance will be measured. Constructed from individual control accounts, the PMB integrates technical performance with the integrated master schedule (IMS) and the allocated budget for the program. The integrated baseline review (IBR) is conducted jointly by the Government and the contractor to verify that the PMB covers the entire scope of work and is realistic, measurable, comprehensive, and achievable. It provides an opportunity for both parties to gain a mutual understanding of the contractor's plan of execution and the associated risks. The first IBR should be held within 90 days of contract award. Subsequent IBRs may be held when a major change in the program occurs. If the established PMB becomes unachievable, it may be necessary to re-baseline the PMB. For changes that do not impact the total cost at completion or final delivery date, the contractor will simply do some internal replanning. For changes that impact the program budget or delivery date, formal reprogramming is needed, and an IBR must be held to verify the revised PMB. You may print the Integrated Baseline Review lesson or save it for future reference. Page 26 of 26

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