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1 This lesson describes how to formulate a plan in the context of integra ted analysis. This includes synthesizing the information from other s teps of the Integrated Analysis Model, and informing leadership of any issues. The terminal learning objective for this lesson is to demonstrate the Formula te a Plan o f Ac tion step of the Integrated Analysis Model.... I Poge1of23 I... Back

2 This lesson describes how to formulate a plan in the context of integrated analysis. This includes synthesizing the information from other steps of the Integrated Analysis Model, and informing leadership of any issue l ong De scription The terminal learning o to demonstrate the Fo step of the Integrated Integrated analysis model consists o f three steps: analyze past performance, predict future performance, and formulate a plan of action. Formulate a plan of action is highlighted.... I Poge1of23 I... Back

3 In this lesson, you will: Given integrated analysis results, recognize types of management decisions that Earned Value Management (EVM) information supports... I Pogelof23 I... Back i 1

4 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Formulating a Plan Recall the three steps of the Integrated Analysis Model. The reason for conducting an integrated analysis and updating estimates at completion {EACs) is to determine what actions, if any, are necessary to successfully complete a contract or program within i ts cost, schedule, and technical objectives. The program manager { PM) should assess the results of the integrated analysis against the Acquisition Program Baseline {APB) objectives and the program's Planning, Programming, Budgeting and Execution {PPBE) budgets and funding levels. This step answers the question: What are w e doing t o get where we need t o be? Typically, in this step of the model, funding and budgetary needs may be reassessed a nd a variety of trade-off decisions may be made to remain within APB parameters. Finally, the Integrated Product Team { IPT) documents the results o f the integrated analysis in a format that supports leadership review and oversight reporting.... I Poge3of23 I... Back W 1

5 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Formulat ing a Plan Recall the three steps of the Integrated Analysis Model. The reason for conducting an integrated analysis and updating estimates at completion {EACs) is to determine what actions, if any, are necessary to successfully complete a its cost, schedule, and l ong Description program manager {PM) the integrated analysis Integrated analysis model consists o f three steps: Program Baseline {APB) analyze past performance, predic t future performance, Planning, Programming, and formulate a plan of action. {PPBE) budgets and t"ur di~l'!!""''!!'t'l!!-.-1!1"!1~ ~ answers the question: What are w e doing t o g e t where w e n eed t o b e? Typically, in this step of the model, funding and budgetary needs may be reassessed and a variety of trade-off decisions may be made to remain within APB parameters. Finally, the Integrated Product Team {IPT) documents the results of the integrated analysis in a format that supports leadership review and oversigh t reporting.... I Poge 3of23 I... Back W 1

6 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Key Inputs for Decision Making Th e r esults of integrated analysis may r ev eal issues such as cost or schedule v ariances. The types of decisions PMs make to bring their programs b ack in line with cost, sch edule, a nd technical obj ectives include decisions in the categories shown below. Budget/Funding Decisions Trade-Off Decisions The PM can base some important financial decisions on the gap be tween the EAC ( including applicable fee/profit) and the program financial data as shown in the program budget, life cycle cost estima te, or APB, including : Program Financial De-scope the contract if funding is not vs. Documents sufficient Increase contract budget request, if necessary Obtain additional funding "'iiiillllll I Pilge 4 of Back ii I You must select each tab to move on.

7 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Key Inputs for Decision Making The results of integrated analysis may reveal issues such as cost or schedule variances. The types of decisions PMs make to bring their programs back in line with cost, schedule, and technical objectives include decisions in the categories shown below. IBudget/Funding Decisions Trade-Off Decisions If necessary, the PM can make "trade-off decisions". Trade-off decisions can include deciding to: Relax the schedule Relax the technical scope Reduce the technical performance requirements to either reduce costs or meet the schedule "'iiiillllll I Pilge 4 of13 I... Back ii 1 You must select each tab to move on.

8 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review Which of the following is a key input the program manager {PM) uses to make financial decisions? Schedule variance { SV) and cost variance {CV) ~ The gap between estimate at completion {EAC) {including applicable fee/profit) and the program and program financial data The Acquisition Program Baseline {APB) Cost performance index (CPI) and schedule performance index (SPI) The PM can base some important financial decisions on t he gap between the EAC (including applicable fee/profit) and the program and program financial data. SV, CV, CPI, and SPI are good sources of information but do not alone provide the input the PM needs to make financial decisions.... I Poge Sof 23 I... Back

9 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Compare EACs to PPBE The financial manager uses updated Earned Value Management ( EVM) data to assist the PM in making financial decisions. The following are typical uses of EVM data for financial decision making: Comparing the EAC and Integrated Master Schedule ( JMS) projections to PPBE budget documents to determine if there is a disconnect Comparing the EAC to funding authority to determine if there is a disconnect Comparing the EAC and schedule projections from the IMS to the APB We know the lightweight, Assault and Reconnaissance ( LAR) Program Management Office's ( PMO's) Detailed EAC for the Engineering phase contract is $77.2 million. The EAC is only an estimate of costs, while budget requests typically include contract requirements at price which includes profit or fee. The LAR PMO financial manager, with input from the EVM analyst, has to add the estimated fee to the EAC, resulting in an estimated contract price of $80.4 million for the LAR Engineering, Manufacturing, and Development ( EMD ) contract. Comparing this to the budget information in the R-3, we note that the program is budgeted for $80.9 million, so there is just enough funding for the contract. The PM will want to keep a close eye on this. UNCLASSIFIED LAR Aug 2013 BES fl.3 LAR Cost Estimate... I Page6of 23 I... Back

10 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Compare EACs t o PPBE The financ ial manager uses updated Earned Value Management ( EVM) data to assist the PM in making financ ial decisions. The f ollowing are typic al uses of EVM data for financ ial decision making : Comparing the EAC and Integrated Master Schedule ( JMS ) proj ections t o PPBE budge t documents t o de termine if there is a disconnect Comparing the EAC t o funding authori ty to de t ermine if there is a disconnect Comparing the EAC and sc hedule proj ections from the I MS to the APB We know the t w eight, Assault and Reconnaissance ( LAR) Program Management Office's ( PMO's ) De tailed EAC f or the ~ nnir,.><oriron contrac t is $77.2 million. The EAC is an estimate of costs, while t UNCLASSIFIED lar Aug 2013 BES R 3... I Page6 of23 I... Bac k Select the table to enlarge.!!

11 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Compare EACs t o PPBE The financial manager uses updated Earned Value Management ( EVM) data to assist the PM in making financial decisions. The following are typical uses of EVM data for financial decision making: Comparing the EAC and Integrated Master Schedule ( JMS ) projections to PPBE budget documents to determine if there is a disconnect Comparing the EAC to funding authority to determ1 R-3 Comparing the EAC and schedule projections from We know the lightweight, Assault and Reconnaissance ( R-Forms, including the R- 2, R- 2a, R- 3, R- 4, R- 4a, and R- 5 provide justification for iled EAC for the Engineering phase contract is $77.2 million., Research Development Test and Evaluation et requests typically include contract requirements at price (RDT&E ) appropriation requests. The R- 3 is ial manager, with input from the EVM analyst, has to add th the Project cost Analysis form. estimated contract price of $80.4 million for the LAR Eng'lr.... contract. Comparing this to the budget information in the R-3, we note that the program IS budgeted for $80.9 million, so there is just enough funding for the contract. The PM will want to keep a close eye on this. UNCLASSIFIED LAR Aug 2013 BES R-3 LAR Cost Estimate... I Page6of23 I... Back

12 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Compare EACs to PPBE T he financial manager uses updated Earned Value Management ( EVM) data to assist the PM in making financial decisions. T he following are typical uses of EVM data for financial decision making : Comparing the EAC and Integrated Master Schedule ( JMS ) projections to PPBE budget documents to determine if there is a disconnect Comparing the E-",..._liooo.,..IOiolllioioiil;o"""'w"""-"""'""'"i.l;l-...,;.,._....,... l o ng Descriptio n Comparing the E We know the l ightw ei( R- 3 excerpt show ing the target v alue of the LAR project :Jffice's ( PMO's ) Detailed EAC for the Engineerin is $80.97 million. of costs, w hile budget requests typically inclu. r r. The LAR PMO financial manager, with input from the EVM analy st, has to add the estimated fee to the EAC, resulting in an estimated contract price of $80.4 million for the LAR Engineering, Manufacturing, and Dev elopment ( EMD ) contract. Comparing this to the budget information in the R- 3, w e note that the program is budgeted for $80.9 million, so there is just enough funding for the contract. The PM w ill w ant to keep a c lose ey e on this. UNCLASSIFIED LAR Aug 2013 BES fl.3 LAR Cost Estimate... I Page6of 23 I... Back

13 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Compare EACs to Funding I t is also important to determine if there is sufficient fiscal year funding to execute the contract. The PMO EVM analy st and/ or cost estimator can time- phase the PMO EAC by fiscal year so that comparisons with fiscal year funding are possible. Since funding profiles must also cover contractor profit or fee, the PMO EVM analy st should add the profit/fee to the PMO EAC for these comparisons. The Contract Funds Status Report ( CFSR) is also helpful since it reports the contractor's most likely estimate time- phased by fiscal year, and includes profit/fee in the estimates. Here is an example of the LAR Program CFSR EAC at Price to Government financial manager's ( FM's ) comparison of the CFSR projections to the PMO budget and obligation plans. T he analy sis show s there is sufficient budget to execute the program if the contractor's EAC is accurate. How ev er, the PMO EAC at price is significantly higher than the contractor EAC, so 5000 doing a similar analy sis with the PMO EAC may result in funding shortfalls. -/ Contract Period of Performance CFSRForecast Government Funding and Budget I... I Page7of 23 I... Back Select the graphic to enlarge..q

14 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan o f Action RESOURCES I PRINT I HELP Compare EA Cs to Funding It EV fi s EV Re ye Comparison CFSR Projected EAC at Price to Government Budget/Funding e PMO with M O ta tu s cal He fin th bu $000 an bu co th hi do EA nding 0 eft' v ~ ~ ~ ~ ~ ~ <:>~ ~J>.p- ')'><:-' ~v~ oc- <:>~ ~J> ~ '>'><: ~ ~ ~ ~~~ oc- <::JI/ ~J> Contract Period of Performance I CFSR Forecast - Government Fu nding and Budget I Select the graphic to enlarge..q... I Page7of 23 I... Back

15 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Compar e EACs to Funding It is also important to determine if there is sufficient fiscal year funding to execute the contract. The PMO EVM analyst and/ or cost estimator can time- phase the PMO EAC by fiscal year so that comparisons with fiscal year funding are possible. Since funding profiles must also cover contractor profit or fee, the PMO EVM analyst should add the profit/fee to the PMO EAC for these comparisons. The Contract Funds Status Report (CFSR) is also helpful since it reports the contractor's most likely estimate time- phased by fiscal year, and includes profi t/fee in the estimates. Here is an example of l o ng De scriptio n financial manager's the CFSR projections Comparison of CFSR projected EAC at price to the budget and obligation Government budget/funding across the contract's period analysis shows there of performance. The comparison shows there is sufficient budget to execute the funding through FY14, sufficient budget through FYlS and contractor's EAC is sufficient budget through FY16. the PMO EAC at pric:;,e~ )"''!!l'l'lm~!'i'i'pi'!!"'-~!!'!'"-r "!!!111111!~!:.: higher than the contractor EAC, so doing a similar analysis with the PMO EAC may result in funding shortfalls. -/ Contract Period of Performance CFSRForecast Government Funding and Budget I... I Page7 of 23 I... Ba c k Select the graphic to enlarge..q

16 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Contract and APB Impacts EVM data provides both cost and schedule performance information that can help the PM assess the likelihood of achieving contract and APB cost and schedule objectives. The analysis of the most recent JMS (Integrated Program Management Report ( JPMR) Format 6 ) will help the PM determine if the APB and contractual milestone dates will be met. For example, assume the LAR EMD contract January JMS projects a date of 7/ 16/ 2016 for developmental testing/ operational testing (DT/ OT) complete. This is later than both the contract date and the APB threshold date ( see below ). The PM will have to make some decisions and take action to respond to this performance information. Government APB Key Event Objective Threshold Contract DT/OT 02/ 16/ / 16/ / 16/ 2016 Complete IMS projected complet1on: 07/16/ I Page8of 23 I... Back

17 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Contract and APB Impacts EVM data provides both cost and schedule performance information that can help the PM assess the likelihood of achieving contract and APB cost and schedule objectives. The analysis of the most recent JMS (Integrated Program Management Report ( JPMR) Format 6 ) will help the PM determine if the APB and contractual milestone dates will be met. For example, assume the LAR EMD contract January JMS projects a date of 7/ 16/ 2016 for developmental testing/ operational testing (DT/ OT) complete. This is later than both the contract date and the APB threshold date ( see below ). l ong Descript ion Government APB data for key event DT/ OT Complete shows objective date of February 16, 2016, threshold date of May 15, 2016, and contract date of February 16, IMS projected completion : July 16, \ey tvem UOJecuve 1 nresn01o --~ DT/OT 02/ 16/ / 16/ / 16/ 2016 Complete IMS projected complet1on: 07/16/ I Page8of23 I... Back

18 EVMlOl Fundamentals of Earned Value Management lesson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Make Trade-Off Decisions The Government PM has some trade- off options between cost, schedule, and performance objectives. Some examples of possible trade- off decisions for the LAR program are : Remove the requirement for interior fittings to reduce the scope, and decrease the cost Reduce the contract specification requirements for the Range key performance parameter ( KPP ) shown below to be closer to the threshold of 350, to achieve cost savings EMD Baseline Contract KPP Objective Threshold Specifications Range Contractors make similar decisions internally. While they cannot make reductions in contractual scope or make decisions that impact contractual milestones or budget, they regularly make assessments as to where and how to improve their own performance.... I Page9of 23 I... Back

19 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Make Trade-Off Decisions The Government PM has some trade- off options between cost, schedule, and performance objectives. Some examples of possible trade- off decisions for the LAR program are : Remove the requirement for interior fittings to reduce the scope, and decrease the cost Reduce the contract specification requirements for the Range key performance parameter ( KPP ) shown below to lp...,_,.,._lllooooill_...,...,...,...,...,...,.,. l o ng De scriptio n KPP data for the Range on the EMD baseline and contract displays as follows: the objective is 400, the threshold is 350, and the contract specifications are 385. I I I Contractors make similar decisions internally. While they cannot make reductions in contractual scope or make decisions that impact contractual milestones or budget, they regularly make assessments as to where and how to improve their own performance.... I Page9of 23 I... Ba ck

20 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review A Program has the following contract and Acquisition Program Baseline (APB ) schedule objectives. Select the type of information Earned Value Management ( EVM) provides related to these objectives. Government APB Key Event Object ive Threshold ontract Production 07/ 13/ / 31/ / 13/ 2015 Prototype Delivery 0 EVM data does not provide any schedule insight that would help assess the likelihood of achieving these schedule dates. ~ The Integrated Master Schedule ( I MS ) in the Integrated Program Management Report ( IPMR) Format 6 provides the contractor's updated schedule forecasts which can be used to assess the likelihood of achieving these schedule dates. 0 The IPMR Format 1 provides schedule variance data and updated schedule forecast dates which can be used to assess the likelihood of achieving these schedule dates. 0 EVM data is useful in assessing the contract schedule objectives, but has no relationship to APB objectives. Check Answer The IMS in IPMR Fo rmat 6 p r ovides the contractor 's u p dated schedule forecasts w h ich can b e used t o assess the likelihood o f a chiev ing these schedule dates.... I Page10of 23 I... Back

21 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review A Program has the following contract and Acquisition Program Baseline ( APB ) schedule objectives. Select the type of information Earned Value Management ( EVM) provides related to these objectives. Government APB Key Event Object ive Threshold ontract Production 07/ 13/ / 31/ / 13/ 2015 Prototype Delivery c=j EVM data do~e~ s ~n=o~tr===============:=:=:==::=;;;::=:=:=:;;;;;;;~... achieving these sc long Description d of Table shows two key events from the Government APB. The ~ The Integrated Mas rt ( IPMR) Format 6 provides t first event, Production Delivery Prototype, has an objective to assess the likelihood of ac date of July 13, 2015, a threshold date of December 13, 2015, and a contract date of November 13, c=j The IPMR Format 1 "'"m~~!'l'l'l!!'l!!!'l'!!"ll"m'ml'ft!'l!!"'!!'!ml"'m'l'll"''!!l"'m!!'l!'~~~!!"''l!!l'!!~~ dates which can be used to assess the likelihood of achieving these schedule dates. c=j EVM data is useful in assessing the contract schedule objectives, but has no relationship to APB objectives. Check Answer The IMS in IPMR Format 6 p r o vides the co ntractor's u p dated schedule forecasts which can b e used t o assess the likelihood o f achieving these schedule dates.... I Page 10 o f23 I... Back

22 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review Which of the following is a true statement? Earned Value Management (EVM) data only provides cost and schedule performance information for a specific contract, so it does not provide enough information to draw any conclusions about Acquisition Program Baseline (APB) cost and schedule objectives. The program manager ( PM ) should only use information from Integrated Program Management Report (IPMR) Format 3 when assessing the likelihood of achieving APB contrac t cost and schedule objectives. ~ The IPMR includes updated contractor estimates at completion ( EACs) and EVM data that can be used to develop ot her EACs, which may give early warning information useful as inputs for assessing t he likelihood of achieving APB cost objectiv es. The IPMR includes updated contractor EACs, but these are not useful inputs for assessing the likelihood of achieving APB cost objectives because they only relate to a contract. Check Answer The IPMR includes updated contractor EACs a nd EV M dat a t h at can be used to develo p other EACs, whic h m a y give early warning information useful a s inputs for assessing the likelihood o f a c hieving A PB co st obj e ctives.... I Poge 11 of 23 I... Back

23 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review Th e Lightweight, Assault and Reconnaissance (LAR) program manager (PM) must determine if there is sufficien t fun ding for the contract. What sources could the PM exa mine to help make that decision? Select all that apply. ~ Planning, Programming, Budgeting and Execution ( PPBE) documents for the program ~ Con tractor's es timate a t completion ( EAC) ~ Government's detailed EAC ~ Integrated Master Schedule ( IMS) and schedule analysis results Check Answ e r All o f t h e o pt io ns listed are i nputs for t h is decision. The PM can work with the financial manager (FM ) to compare PPBE documents to the contractor's and the Government's EACs. The FM can also use the IMS to time-phase the budget and further inves tigate impac ts to funding for the PM.... I Poge 1lof23 I... Back

24 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Program Management Actions EVM data can give the PM an early insight into when the contractor migh t exceed cost limitations. Based on information from the integrated a nalysis, the PM should start considering possible actions. These actions may include : Program Manager Updating the to tal program budget if necessary based on the t,..;.. updated price a t completion Asking the IPTs to consider ways of trading o ff technic al requiremen ts and scope in order to save cos t or redis tribute it to ano ther fiscal year Working wi th the cont rac tor PM t o ensure aggressive risk mitigation activities and attention t o problem- solving Reducing scope Obtaining additional funding... I Poge 13of 23 I... Back

25 EVMlOl Funda me ntals of Earned Value Management l esson 5.4 Formulating a Plan of Action RESOURCES I PRINT I HELP Contr acting Officer Role Once the PM has determined what actions to take, he or she works with the contracting officer to determine if contractual remedies or Contracting actions are needed. Officer With the assistance of the FM, the contracting officer is responsible for promptly obtaining funding and programming information pertinent t o the contract's continuation. He or she must identify any cash flow, obliga tion, expenditure, and terminat ion liability issues that may exist on the contract, and identify proposed contractual solutions. The con trac ting o fficer is responsible for no ti fying the contractor in writing about decisions such as: Additional funds being obligated Negotiated contract changes {contract modifications) Authorization to begin work prior to an agreed-upon price {authorized unpriced work) Work being stopped {stop work notification) The contract being terminated ~ I Page14of23 I ~ Back

26 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP Remediation Actions for EVMS Deficiencies In the process of looking at the EVM data and working with the Defense Contract Management Agency (DCMA ), the Government PM may realize there are issues with the contractor's Earned Value Management System ( EVMS ). The PM will work with the contracting officer and DCMA to determine the remedy. Remediation actions include: Creating an EVMS Oversight Group I ncluding a summary of the issues in the past performance information documented in a Contractor Performance Assessment Report ( CPAR) (which is used in future source selection evaluations ) Reviewing the contract EVMS for non compliance ( by DCMA ), and appropriate actions including: Development and issuance of a corrective action request (CAR) to request necessary planning and implementation of corrective actions, Initiation of formal Compliance Review, and Ultimate disapproval of the EVMS I mplementing financial remedies/ penalties, such as those addressed by Defense Federal Acquisition Regulation Supplement (DFARS ) clause , Contractor Business Systems This clause states that the contractor shall establish and maintain acceptable business systems in accordance with the terms of the contract, and explicitly includes EVMS as a "contractor business system." I t also details how the contractor responds to deficiencies pointed out by the Government. It describes processes for w ithholding pa y ments if signif icant def iciencies are found, including percentage limits on payments that are withheld. Finally, it details the steps to take after the contractor notifies the Government that they have addressed the deficiencies. Reducing award fees ( if applicable, and the proper award fee criteria has been added ) -pp... I Page1Sof 23 I... Back

27 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP DAES and SAR for ACAT I Programs EVM provides management information to all levels of Department of Defense ( DoD ) management as well as to Congress. For instance, EVM is an important input to the Defense Acquisition Executive Summary ( DAES) process and to the Selected Acquisition Report ( SAR) to Congress. The DAES process enables the Under Secretary of Defense for Acquisition, Technology, and l ogistics (USD (AT&l)) to fulfill statutory requirements to manage and oversee Major Defense Acquisition Programs ( MDAPs ) and Major Acquisition I nformation System ( MAI S) Acquisition Category ( ACAT) I programs. The DAES is not just a report; it is a process which facilitates communication between key stakeholders in OSD, the Joint Staff, the Components, and Program Offices. EVM information is provided monthly as part of the DAES process. Key contract level EVM data is provided including: ACWP BCWS BCWP Total allocated budget (TAB ) Contract budget base ( CBB ) Contractor EAC PM's EAC... I Page16of 23 I... Back

28 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP DAES and SAR for ACAT I Programs, Cont. Via the DAES process, charts of EVM information are produced and management can use these to assess contract cost and schedule performance. Note that the PM EAC produced as part of the integrated analysis process just discussed is reported via the DAES process. T he DAES process is an internal management system meant to fulfill the needs of senior DoD executives. However, information gathered as part of the DAES process is also used to generate the statutorily required SARs which the Secretary of Defense submits to Congress for all MDAPs. T he SAR: Provides Congress with the status of total program cost, schedule, and performance Includes information on major contracts under the program Includes the reasons for any cost or schedule variances under major contracts under the program T his information is obtained from the IPMR, as well as the Government PMO's own independent assessments. All levels of management can make good use of EVM information!... I Page 17 of 23 I... Back

29 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review The program manager {PM) worked with the financial manager to compare budget documents and funding information to both the Government's and the contractor's estimates at completion. This analysis has shown the contractor might exceed cost limitations. What action(s) can the PM take? Select all that apply. ~ Ask the technical team to consider trade-off op tions between technical requirements and scope ~ Ob tain additional funding ~ Reduce the scope Bring on an additional contractor to help the program get back on track Check Answer The PM can: a sk t h e technical team to consider trade- off o ptions between technical require ments a nd scope, o btain additional funding and reduce t he scope.... I Poge18of23 I... Back

30 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review What is the role of the contracting officer in using Eamed Value Management (EVM) information to take necessary contractual actions with regard to contract costs and funding decisions? Ask the contractor to consider trade-off options between technical requirements and scope U Determine what actions to take as a result of EVM data analysis ~ Identify issues tha t may exist on the contract, and identify proposed contractual solutions Reduce scope or obtain additional funding Check Answer The contracting officer must id e ntify issues t h at m ay exist o n t he contract, a nd ide nt ify proposed contractu a l solutio ns.... I Poge1Qof23 I... Back

31 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Knowledge Review What kind of EVM data is reported in management reports such as the Defense Acquisition Executive Summary (DAES)? Select all that apply. Quarterly exception reports ~ Cost variance ~ Schedule variance ~ Estimate a t completion Check Answer The DAES includes EVM information such as cost v a riance, schedule variance, estimates at completion, budgeted cost for work scheduled, and actual cost of work performed.... I Poge 10of13 I... Back

32 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP lesson Summary Congratulations! You have completed the Formulating a Plan of Action lesson. You should now know the following key points about this lesson: The PM should assess the results of the integrated analysis against the APB objectives and the program's PPBE budgets and funding levels. This step answers the question: What are w e doing to get whe re we need to be? The results of integrated analysis may reveal issues such as cost or schedule variances. The PM may make: Budget/funding decisions Trade-off decisions As part of making these decisions, the PM will want to: Compare the PMO's EAC to the budgets that were submitted through the PPBE process Work with the FM to compa re the contractor's EAC reported in the CFSR to funding information Compare schedule targets in the APB to IMS... I Poge ll of l3 I... Back

33 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP l esson Summary Congratulations! You have completed the Formulating a Pla n o f Actio n lesson. You should now know the following key points about this lesson : The PM should assess the results of the integrated analysis against the APB objectives and the program's PPBE budgets and funding levels. This step answers the question: Wh a t are w e d o ing t o get w here w e need t o b e? The results of integrated analysis r.----"""'----" cost or schedule variances. The Budget/ funding decisions Budget/ funding decisions Trade-off decisions As part of making these decisior s Compare the PMO's EAC to submitted through the PPBE Work with the FM to co1mparl reported in the CFSR to The PM can base some important financial decisions on the gap between the EAC and the program financial data as shown in the program budget, life c ycle cost estimate, or APB, including : Obtain additional funding De- scope the contract if funding is not sufficient I ncrease contract budget request, if necessary Compare schedule targets in the APB to JMS... I Page21of 23 I... Back

34 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP l esson Summary Congratulations! You have completed the Formulating a Pla n o f Actio n lesson. You should now know the following key points about this lesson : The PM should assess the results of the integrated analysis against the APB objectives and the program's PPBE budgets and funding levels. This step answers the question: Wh a t are w e d o ing t o get w here w e need t o b e? r.----"""'----" The results of integrated analysis cost or schedule variances. The Trade-off decisions Budget/ funding decisions Trade-off decisions As part of making these decisior s Compare the PMO's EAC to submitted through the PPBE Work with the FM to co1mparl reported in the CFSR to I f necessary, the PM can make " trade- off decisions". Trade- off decisions can include deciding to: Relax schedule Relax the technical scope Reduce technical performance requirements to reduce costs or meet schedule Compare schedule targets in the APB to I MS... I Page21of 23 I... Back

35 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP lesson Summary Congratulations! You have completed the Formulating a Plan of Action lesson. You should now know the following key points about this lesson: The PM should assess the results of the integrated analysis against the APB objectives and the program's PPBE budgets and funding levels. This step answers the question: What are w e doing e:.:: e:.::d:...to b.::~ to get whe re we nr :;:~e?------~ , As part of making l ong De scription Integrated analysis model consis ts o f three steps: analyze past performance, predic t future performance, and formulate a plan of action. Formulate a plan of ac tion is highlighted. Compare the PMO's EAC to the budgets that were submitted through the PPBE process Work with the FM to compa re the contractor's EAC reported in the CFSR to funding information Compare schedule targets in the APB to IMS... I Poge ll of l3 I... Back

36 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP lesson Summary, Cont. EVM data can give the PM an ear1y insight into when the contractor might exceed cost limitations. The PM should start considering possible actions: Updating the total program budget Asking the lpts to consider way s of trading off technical requirements and scope to save or redistribute cost Working with the contractor PM to ensure aggressive risk mitigation activities and attention to problem-solving Reducing scope Obtaining additional funding Integrated analysis may reveal issues with a contractor's EVMS. The PM has options for what remedjatjon actions to take in these situations. On ACAT 1 MDAP and MA!S programs, the information and results of the integrated analysis is reported to DoD management and Congress in reports such as the DAES a nd SAR. The following EVM data is reported in the DAES: ACWP CBB sews Contractor EAC BCWP PMs EAC TAB... I Poge llof l3 I... Back

37 EVMlOl Fundamentals of Earned Value Management l esson 5.4- Formulating a Plan of Action RESOURCES I PRINT I HELP l esson Summary, Cont. EVM data can give the PM an early insight into when the contractor might exceed cost limitations. The PM should start considering possible actions: Updating the total program budget Asking the IPTs to consider ways of trading off technical requirements and scope to save or redistribute cost Working with the contractor PM to ensure aggressive risk mitigation activities and attention to problem-solving Reducing scope Obtaining additional funding r-~------~~~~~~~~~~~ Integrated analysis may r remediation actions what remediation ac tions Create an EVM Oversight Group On ACAT I MDAP and MAl reported to DoD manage data is reported in the D ACWP BCWS BCWP TAB CB Co PM Include a summary of the issues in the past performance information documented in a CPAR (which is used in future source selection evaluations ) Implement financial remedies/ penalties, such as those addressed by DFARS clause , Contractor Business Systems Withhold payments if significant deficiencies are found Reduce award fees ( if applicable, and the proper award fee criteria has been added )... I Page 22of 23 I... Back

38 EVMlOl Fundam entals of Earned Value Managem ent lesson Formulating a Plan of Action RESOURCES I PRINT I HELP Module Completion You have completed the content for this lesson. At this point, you should have comple ted all of the lessons in this module. Please take the Module Exam and comple te the Module Survey so you may recieve credit for this course. If you have closed or hidden the Table of Cont ents, click the Show TOC button in the Atlas Navigation at the top of the screen.... I Poge 13of13 I... Back