EARNED VALUE MANAGEMENT SYSTEMS (EVMS)

Transcription

1 NOT MEASUREMENT SENSITIVE DOE G XX-XX-08 EARNED VALUE MANAGEMENT SYSTEMS (EVMS) [This Guide describes suggested nonmandatory approaches for meeting requirements. Guides are not requirements documents and are not to be construed as requirements in any audit or appraisal for compliance with the parent Policy, Order, Notice, or Manual.] U.S. Department of Energy Washington, D.C AVAILABLE ONLINE AT: INITIATED BY: Office of Management

2 DRAFT XX-XX-08 i FOREWORD This Department of Energy Guide is for use by all DOE elements. This Guide intends to provide approaches for implementing the Earned Value Management Systems (EVMS) requirements of DOE O 413.3A, Program and Project Management for the Acquisition of Capital Assets in compliance with the American National Standards Institute/Electronic Industries Alliance (ANSI/EIA) Standard 748-A, Earned Value Management Systems. DOE Guides, which are part of the DOE Directives System, provide supplemental information for fulfilling requirements contained in rules, regulatory standards, and DOE directives. Guides do not establish or invoke new requirements nor are they substitutes for requirements.

3 DRAFT XX-XX-08 iii CONTENTS SECTION I. Guide Introduction Goal, Guide Objective, and Applicability SECTION II. EVMS Description, Critical Information, Suggested Uses, and Tools SECTION III. Certification Process Review Strategic Planning/Scheduling, and Detailed Review Process SECTION IV. Surveillance Process SECTION V. Lessons Learned SECTION VI. References (Legislation, Policies, Standards, Directives) APPENDIX A. DOE EVMS Gold Card APPENDIX B. Contract Performance Reports and Quick Look Checklist APPENDIX C. Schedule Metrics APPENDIX D. Typical Review Documentation APPENDIX E. EVMS Certification Review Strategic Planning APPENDIX F. EVMS Certification Review Detailed Planning and Execution APPENDIX G. Acronyms

4 DRAFT XX-XX-08 I-1 (and I-2) SECTION I GUIDE INTRODUCTION 1. GOAL. To support the Department s initiatives to improve program, project, and contract management through the implementation and surveillance of contractors earned value management systems (EVMS) that are in conformance with the 32 guidelines set forth in the American National Standards Institute/Electronic Industries Alliance (ANSI/EIA) Standard 748-A, Earned Value Management Systems and as specified in DOE O 413.3A, Program and Project Management for the Acquisition of Capital Assets 2. OBJECTIVE. To provide an overview of EVMS that: a. Describes EVMS and critical information available to a federal project director (FPD) and federal program manager and other senior leaders, and suggests how to use it. To these ends it: (1) Suggests a common reporting format to communicate consistently across DOE. (2) Promotes implementation of EVMS as early in a project life cycle as practical. b. Provides a description of the DOE EVMS certification process used to verify compliant implementation, including involved organizations and their EVMS certification process related roles and responsibilities. c. Provides a high-level description of the DOE EVMS surveillance process used to ensure ongoing compliance. d. Describes lessons learned. This is not intended to be a comprehensive training document, and it is not intended to address detailed systems requirements necessary for one to properly implement a certified EVMS; those topics are beyond the scope of this guide. Also, the body of this guide provides an overview discussion of the various topics that comprise the subject area, and makes reference to appendices that contain more detailed descriptions of the various topical areas. 3. APPLICABILITY. To all DOE federal project directors (as the primary audience) and other DOE elements and contractors for which a certified EVMS is required by DOE O 413.3A.

5 DRAFT XX-XX-08 II-1 SECTION II EARNED VALUE MANAGEMENT SYSTEMS (EVMS) 1. DESCRIPTION. a. What is EVMS? An integrated set of policies, processes, procedures, systems, and practices that meet the intent of ANSI/EIA Standard 748-A, The primary purpose of the system is to support program and project management. An EVMS: Integrates cost, schedule, and scope. Tracks - Planned value of work to be performed (termed budgeted cost of work scheduled, BCWS), - Earned value of actual work performed (termed budgeted cost of work performed, BCWP), and - Actual cost of work performed (termed actual cost of work performed, ACWP). Provides an objective measure of performance against a baseline. Provides a disciplined means of identifying, reviewing and approving, and incorporating changes to the baseline. Enables trend analysis and evaluation of estimated cost at completion. Provides a sound basis for problem identification, corrective actions, and management re-planning. EVMS is a program and project management, decision enhancing, tool and a critical component of risk management on major investments. Office of Management and Budget (OMB) Circular A-11 states, Earned value management (EVM) is a project (investment) management tool effectively integrating the investment scope of work with schedule and cost elements for optimum investment planning and control. b. What is the purpose? To measure actual performance of work scope and the associated cost and schedule versus an agreed to baseline plan, while using disciplined means of baseline change control for documenting any changes to the agreed to baseline plan. c. Why use it? EVMS incorporates best practices and standards adopted by Government and industry. DOE O 413.3A and external policies from OMB, the

6 II-2 DOE G DRAFT XX-XX-08 Government Accountability Office (GAO), and the Federal Acquisition Regulation (FAR) require EVMS. d. When is it used? OMB Circular A-11 specifically states, Agencies must use a performance-based acquisition management or earned value management system, based on the ANSI/EIA Standard 748, to obtain timely information regarding the progress of capital investments. The system must also measure progress towards milestones in an independently verifiable basis, in terms of cost, capability of the investment to meet specified requirements, timeliness, and quality. (1) EVMS should be implemented as early as possible in a project life cycle. (a) (b) Early in the life cycle the performance baseline may cover only the early design stages (e.g., preliminary design, for a design/construction project). As soon as is meaningfully possible, and by no later than critical decision (CD) phase 2, the baseline must cover the entire project life cycle (i.e., through CD-4, for a design/construct project, and through the near term baseline period for an EM cleanup project). (2) DOE O 413.3A requires that the contractor employ an ANSI-compliant EVMS prior to CD-2. The EVMS should be certified as soon as possible, but no later than CD-3. In most cases, EVMS certification will be a condition for CD-3 approval. Therefore, efforts need to be made to plan and execute the certification reviews (discussed in Section III) on a schedule that can meet this requirement. (3) It should be recognized that a contractor s implementation of a life cycle performance baseline should not await the CD review and approval process, but should implement this performance baseline by no later than when developing and submitting the CD-2 package for DOE review and approval. If, then, changes are required to reflect final DOE review and approval, this can be handled through the baseline change process. e. What are the criteria? The 32 guidelines defined in ANSI/EIA Standard 748-A provide the basis to evaluate the contractor s system. 2. CRITICAL INFORMATION AND SUGGESTED USES. Following are some of the more critical items that federal project directors and other stakeholders should closely monitor to ensure successful implementation of an EVMS and continued compliance and most importantly, to help make informed decisions and complete projects within scope, schedule, and cost objectives:

7 DRAFT XX-XX-08 II-3 OMB Circular A-11 also states, Agency Heads must review major acquisitions not achieving 90 percent of the goals to determine whether there is a continuing need and what corrective action, including termination, should be taken. a. Variances that identify cost, schedule and estimate at completion deviations from the plan (termed performance measurement baseline or PMB) should be reviewed to ensure that their causes, corrective action plans, and impacts to the project are clear, meaningful, and attempt to recover negative deviations from the plan and address reasons for significant positive deviations from the plan. Managers should ensure that variances are accurately reported for the current month, cumulative-todate, and against the budget at completion (BAC), and should monitor the effectiveness of corrective actions. In addressing variances, actions to eliminate variances to date (e.g., zeroing past variances and thereby changing historical performance records) do not meet the intent of ANSI/EIA Standard 748-A. b. Indices that measure how efficiently a project has executed the baseline to the present time should be closely monitored. They are great indicators that could predict future performance but they do not stand alone (e.g., by themselves they do not monitor whether the critical path work is being performed as planned). (1) Schedule performance index indicates the dollar worth of work accomplished (BCWP) versus the dollar worth of work planned (BCWS). (2) Cost performance index (CPI) indicates the dollar worth of work accomplished (BCWP) versus the actual cost of work accomplished (ACWP). (3) To complete performance index (TCPI) indicates the budget for work remaining versus the estimate for work remaining. c. Risks represent uncertainties in the ability to execute a project as planned. They usually threaten the success of a project and should be clearly defined, closely monitored and acted upon. Attention should be focused on higher risk items and identification of new risks and their entrance into the risk management process. In addition, opportunities should be identified and implemented that could serve to reduce costs and schedules while still achieving the technical objectives. d. Critical path represents the sequence of tasks with the longest duration in the schedule that will control the overall project duration. The critical path tasks should be defined at the lowest level possible to permit assessment of the details with the objective of reducing the path duration. In general these assessments should ensure that there is sufficient schedule float to accommodate remaining schedule risks and that the project will therefore complete in a timely manner. e. Baseline management is crucial for properly documenting, approving, and implementing changes to the performance measurement baseline (PMB). In addition to the PMB, other terms and concepts that are critical to this management

8 II-4 DOE G DRAFT XX-XX-08 process include uncertainties/risks inherent to the defined scope of work and establishment of an associated contractor management reserve, and technical and programmatic risks and establishment of an associated DOE contingency. For a more detailed discussion of these terms and their inter-relationships, refer to paragraphs 2, 3, 4, and 5 of Section V of this Guide (Lessons Learned). 3. TOOLS. Additional tools to help understanding the terms and concepts are clarified below. a. DOE Gold Card This provides a comprehensive summary of key EVMS terms, their interrelationships, and how they are used to measure project progress versus plan. These terms then serve as the foundation upon which the example reports of Appendix B are derived. Reference Appendix A. b. Contract Performance Report (CPR) Reference Appendix B. (1) An effective EVMS has a work breakdown structure (WBS) that captures all of the required work and facilitates assigning it to a responsible party. (2) It also can provide a report of progress against the plan by both the WBS and the organizational breakdown structure. Suggested formats for providing these reports are shown in Standard Formats 1 and 2 of Appendix B. (3) Additional standard reports provided within Appendix B include Format 3 (changes to the PMB), Format 4 (actual to-date and future planned staffing levels by organizational element, and can therefore provide insights as to whether planned staffing levels will be achieved to support the planned work), and Format 5 (a narrative report used to explain significant cost and schedule variances and other identified contract problems and topics). (4) When viewed in total and over a period of time, these formats can provide significant insights regarding project performance. c. EVMS Quick Look Checklist Provides a checklist of items for the federal project director to review to ensure that the Formats 1 through 5 reports are properly prepared. Reference Appendix B. d. Schedule Metrics Developing a quality schedule is a fundamental element of an effective EVMS, and Appendix C provides example schedule metrics by which one can assess the quality of the schedule. e. Lessons Learned Although there is a separate guide addressing lessons learned, based on the certification reviews performed to date there are many EVMS related lessons learned that warrant a stand-alone discussion within this guide. Section V of this guide provides that discussion, and if not properly addressed could negatively impact the ability of a contractor to have his EVMS certified.

9 DRAFT XX-XX-08 III-1 SECTION III CERTIFICATION OF A CONTRACTOR S EVMS 1. REVIEW SCHEDULING/STRATEGIC PLANNING a. What Certification Means. Certification (systems acceptance) is a process that involves reviewing, approving and certifying that the design and implementation of a contractor s EVMS meets the requirements of the 32 guidelines embodied in the ANSI/EIS Standard 748-A. The goal is not to verify how well projects are doing but to assess both the capability of the management system to provide an objective measure of progress, and the effective use of that system by the contractor. Elements of the EVMS (i.e., the design as reflected by policies, practices, procedures, processes, and systems; and the implementation as reflected by reports and other documents) are evaluated individually and as a whole to ensure they meet the intent of the guidelines. The contractor s EVMS is being reviewed during the certification process and not the project or the program. Projects are simply means of demonstrating compliance. b. Planning When to Conduct Certification Reviews. (1) Where the total project cost is in excess of $50M, DOE O 413.3A requires that the certification review be executed under the direction of DOE s Office of Engineering and Construction Management (OECM), who often then executes this role via the use of independent contractors working under the direction of OECM. (2) Within the context of this guide, strategic planning refers to the process by which OECM works with the program offices and the independent contractor to develop a schedule by which these EVMS certification reviews are to be conducted. A more detailed description of the organizations involved in this process, and their roles and responsibilities, is provided in Appendix E. c. Certification Review Scope will encompass a project s statement of work as reflected by a project specific contract, or, especially in the case of an M&O contractor, may be reflected in a project execution plan. (1) When a contractor has multiple projects, certification may be accomplished on a single or multiple project basis, with this decision being dependent primarily on the types of projects being managed and where each project is in its life cycle. (2) An over-riding objective in making this decision is to ensure that the review is conducted on projects that are sufficiently mature and provide a representative sampling of the contractor s total efforts to implement an ANSI/EIS Standard 748-A compliant EVMS.

10 III-2 DOE G DRAFT XX-XX-08 d. Self Assessment. (1) Projects below $50M are self-assessed by the contractor. Government oversight of the self-assessments is preferred as the means to gain confidence in the contractor s EVMS implementation. (2) It is recommended that the contractor consider using independent resources to assess the EVMS. (3) While the EVMS standard and its guidelines are the foundation for the system, a recommended basis for self-assessment is the National Defense Industrial Association (NDIA) ANSI/EIA-748 Earned Value Management System Intent Guide. 2. OECM CERTIFICATION; DETAILED REVIEW PROCESS. For projects with a total cost greater than or equal to $50M that require certification of the contractor s EVMS by the OECM, and consistent with the practice it employs for external independent reviews, OECM often utilizes an external independent agency or contractor to lead the EVMS certification reviews (systems acceptance). Upon completion of the EVMS review and correction of non-compliant areas, the Department will issue a letter of certification. This section provides a high-level over-view of the major steps of the OECM administered EVMS certification process. For a more detailed discussion of the various organizations involved in the detailed planning and executing of this process, and their roles and responsibilities, refer to Appendix F of this guide. a. Readiness Assessment (RA) is a one-day meeting with the contractor two or more months before the on site review to ensure that the contractor is ready for an EVMS certification review. Items discussed are (1) the general scope of the projects for which a review of the EVMS will be conducted; (2) the purpose, scope and requirements of the certification review including DOE expectations, and (3) the on site review process including required documents, interview schedule, timeframe for the on site review and all administrative support needed to conduct a quality review. An example listing of typical documents that might be required as part of the readiness assessment, and to support preparation of the EVMS review team prior to its arrival on site, is provided in Appendix D. In requesting this documentation, the certification team should make efforts to obtain and work with existing documents wherever possible to minimize the creation of new documents.

11 DRAFT XX-XX-08 III-3 b. Onsite Review is a four- to five-day assessment. The contractor s statement of work (SOW), project execution plan (PEP) as it relates to EVMS, the project control system description, EVMS implementing procedures, information systems, reports and other pertinent documentation are reviewed. Interviews are conducted with control account managers, functional managers, and senior managers. A detailed analysis of the EVMS is performed to determine compliance with the 32 guidelines of ANSI/EIA Standard 748-A. The review team presents a final out-brief in which positive practices that were observed are highlighted and review findings are documented. Additional findings are possible if concerns arise after departure (such as coordination with the external independent review team or additional examination of project EVMS documentation). All findings are documented in the form of corrective actions requests (CARs). At the conclusion, the contractor is provided with both CARs, and continuous improvement opportunities (CIOs; see definitions below). (1) Corrective action requests (CARs). Each and every finding will be documented via a CAR, which requires a corrective action plan (CAP) for resolution. CARs are further categorized as follows: (a) major, systemic non-compliance to ANSI/EIA Standard 748-A and/or significant impact to reporting and (b) minor, limited occurrences of non-compliance to ANSI/EIA Standard 748-A and/or minimal impact to reporting. (2) Continuous improvement opportunity (CIO) is a recommended improvement or expansion of good practices for wider application but does not require corrective action plans. c. Corrective Action Plans (CAPs) address CARs and include schedules for resolution. CAPs submitted to OECM for review and approval within 30 days of receipt of the findings. It represents the proposed action to satisfy the finding. It might take a few revisions before the CAP is accepted. d. CAP Approval: Once OECM approves the plan, the contractor completes implementation of the actions agreed upon in the plan. e. Followup: Once a contractor confirms that the corrective actions are implemented, a followup review is scheduled generally within 2 to 3 months to witness that the corrective actions were properly implemented. The followup can be either onsite or via telecom depending on the complexity and number of CARs. Once all CARs are officially accepted by OECM as closed, the contractor s EVMS is considered to be certified. f. Certification: Upon completion of the review and correction of non-compliant areas, OECM prepares and provides to the contractor a letter of certification that is approved and forwarded by the DOE Office of Management. It is expected that

12 III-4 DOE G DRAFT XX-XX-08 an EVMS should be ready for certification within six months of the onsite review. If the time between the onsite review and certification is longer than six months, then another onsite review may be necessary. In no case, should it extend beyond one year without restarting the certification process. g. OMB Reporting: In addition to developing and executing the above efforts, there is a requirement to submit EVMS certification plans to the Office of Management and Budget (OMB) and to report progress against these plans. This reporting is provided by OECM.

13 DRAFT XX-XX-08 IV-1 SECTION IV SURVEILLANCE PROCESS Surveillance is the recurring process of reviewing a contractor s EVMS to ensure continued compliance with the ANSI/EIA Standard 748-A. An effective surveillance process ensures that the key elements of the system and the use of the system are maintained over time and on subsequent applications (e.g., on new projects). DOE uses as its guide the standard industry surveillance approach identified by the National Defense Industrial Association, Program Management Systems Subcommittee, Surveillance Guide. The purpose of surveillance is to ensure that the contractor is continuing to use their EVMS effectively to monitor and manage cost, schedule, and technical performance. Through the process of surveillance, successful practices may be shared as part of the lessons learned process. 1. CONTRACTOR SURVEILLANCE. The contractor has the primary responsibility for implementing and maintaining a surveillance program to ensure the continued compliance of the system with the ANSI/EIA Standard 748-A. An acceptable approach to surveillance planning could begin with the establishment of a comprehensive surveillance plan prepared by the contractor and provided for information and comment to the DOE federal project director. The surveillance plan would include a clear definition of the scope of surveillance, the responsibilities, methods for conducting, and the schedule. The plan would typically span multiple years and be supplemented by an annual schedule and any additional detail regarding the planned surveillances, and the projects and specific aspects of the EVMS selected for review. Responsibility for EVMS surveillance needs to be within an organization separate from the contractor s line management. 2. DOE LINE MANAGEMENT OVERSIGHT While the contractor has the primary responsibility for EVMS surveillance, DOE line management (i.e., the field federal project director up through the program office) also shares in the responsibility. DOE line management will assess the results of the contractor surveillance program to determine if additional DOE-led surveillances are necessary. To this end, in reviewing the results of the surveillances, DOE line management may decide to initiate program office directed surveillances, or it may request (through its program office) that OECM lead a surveillance review. 3. DOE OECM OVERSIGHT As part of DOE s continuous effort to institutionalize EVMS across the Agency and export best business practices across programs, OECM will conduct periodic surveillance reviews. Many things, such as a request from the field or program office, negative performance indicators, OECM schedules, etc., can trigger reviews. This does not abrogate the responsibility of the field office or contractor to establish their EVMS surveillance program. The HQ surveillance program is one of oversight.

14 V-1 DRAFT XX-XX-08 SECTION V LESSONS LEARNED The EVMS lessons learned contained within this section originate from CARs and CIOs identified during certification or surveillance reviews. They may also arise from external independent reviews, day-to-day execution, and other industry sources. 1. LESSONS LEARNED PROCESS A lessons learned program would enhance lines of communications between DOE and contractors. An effective program would include a development process to identify, document, validate, and disseminate and a means to utilize and incorporate lessons learned. Effective lessons learned would include processes to measure operational performance improvements and program effectiveness. 2. LESSONS LEARNED ISSUES Based on the certification reviews performed to date there are many EVMS related lessons learned, and there are ten common issues that merit discussion. a. Acquisition Process. (1) The request for proposal (RFP) that will lead to a contract should specify what is required of the contractor as it relates to EVMS, and (as may be appropriate) should make specific reference to ANSI/EIA Standard 748-A. (2) Given that projects are subject to annual funding limits, the RFP should provide realistic funding profiles without which the performance measurement baseline could fail to reflect a realistic work plan, schedule could be stretched and costs could increase. b. Budget Versus Funds and the PMB: The following basic concepts are often confused and can result in non-compliance. (1) Budget equates to the plan, i.e., the performance measurement baseline that represents the performance plan against which the contractor is measured as he executes his total (and not just annual) project scope of work. (2) Funds are a monetary resource provided to execute the plan. Funds control deals with ensuring that the maximum amount of work can be accomplished with the annual funds provided and includes expenditure tracking to ensure the authority to expend has not been exceeded and thereby prevent an anti-deficiency act violation. (3) Performance measurement baseline (PMB) serves as the plan against which performance is measured. It is the summation of the time-phased budgets for all control accounts (CAs), planning packages (PPs),

15 V-2 DOE G DRAFT XX-XX-08 applicable indirect budgets and any undistributed budget (UB). For traditional design/construction projects, at CD-2, the PMB is required to encompass the entire project scope of work. For environmental management cleanup projects (especially long term projects), at CD-2/3, the PMB is for the EM/OECM agreed upon baseline period (for either the contract, a near term baseline, or the life cycle baseline period). Contractors must not zero out past variances within the PMB in order to use the PMB as the tool for managing funds. In other words (a) (b) (c) historical performance against the plan must not be erased, integrity of the PMB must be maintained, and separate means must be employed for funds control. A fully implemented EVMS is concerned with the total project scope, the associated planned budget and schedule, and the resultant PMB that is used for purposes of measuring progress for the total project and is not focused on the management and control of an annual funding plan. c. Management Reserve (MR). Contractors should be encouraged to establish a challenging PMB. However, it must be understood that the greater extent to which this is done, the more likely there will be risk events within the contractor s defined scope of work. A proper balance of challenge versus risks and managing them can be the key to project success. Many of these risk events will happen and the contractor should be allowed to have a budget reserve that he can then use to better plan future work. This type of budget reserve is usually developed from a Monte Carlo type simulation of the potential variability of these risks. For cost risks, this simulation typically addresses the variability in construction units (e.g., cubic yards of concrete), variability in unit man-hour estimates for both construction and other significant labor cost elements, and in general the potential variability of all significant cost elements. Management reserve should not be used to budget newly directed work scope and if done so will in most (if not all) cases represent a violation of ANSI/EIA Standard 748-A. The PMB, plus the contractor management reserve, is often referred to as the contractor base budget, or for incentive contracts may be referred to as the target cost. d. DOE Contingency. In establishing a total project cost, DOE also needs to account for the fact that achieving the required program mission may necessitate a change in project scope. Examples are increasing the design throughput of a production or processing facility or safety or security requirements from those that existed at the time of contract award. Such changes would most often arise from a DOE-directed change or could sometimes result from a contractor-initiated baseline change proposal. Significant changes could arise in the funding profile from which the contractor was directed established the baseline. For projects in which there are significant hotel loads (i.e., significant efforts are required to keep a project infrastructure in place), changes to funding profile are likely to result in

16 V-3 DRAFT XX-XX-08 increases in these costs due to a stretch-out of the schedule. In order to promote a win/win culture between DOE and the contractor, it is important to account for these technical and programmatic risks by establishing a DOE contingency, which would then be used for providing additional budget for these types of events. e. Change Control. Several important standards are often violated. (1) Many of the corrective action requests (CARs) issued during reviews of a contractor EVMS have been in area of change control and in large part relate to maintenance of the PMB and to how management reserve and DOE contingency (paragraphs 2c and 2d above) are used in support of PMB maintenance. It is important for the change control process to provide visibility as to the type of change (e.g., scope increase, versus a contractor initiated re-plan of future work) and that budget has been taken from the appropriate account (i.e., DOE contingency, or contractor management reserve). This is essential in order to ensure the total project scope, cost, and schedule are indeed being managed by DOE and the contractor. (2) ANSI/EIA Standard 748-A requires that work be performed against a planned budget. Therefore, if there were a large proposed scope change for which a significant amount of time is required prior to DOE approval, mechanisms should exist to provide a not to exceed budget while contract negotiations continue to resolve the final outcome. For this type of change, the budget should come from DOE contingency. (3) Although the issue of budget control (i.e., which is a part of baseline change control) and funds control are often inter-related, the contractor system descriptions and implementing procedures oftentimes use the terms interchangeably, when in fact they are two separate (although many times highly inter-related) processes. (4) When describing a baseline change, the total project cost and schedule impacts need to be addressed [and not just the cost and schedule impacts to the annual work plan, or the current project phase (e.g., design phase)]; i.e., the total project cost and schedule impacts [up through CD-4 (commence operations)] need to be addressed. f. Estimate at Completion (EAC). Whereas the PMB is important to measure a contractor s performance against a plan, EAC is necessary to understand what actual total funding may be required to complete the project. Although most contractors have a process for identifying the development of trends and for revising specific control account EAC to address individual issues, oftentimes there is no defined frequency for the development of a revised bottoms-up EAC. Although real time updates of EAC at an individual control account level are important, individual changes are often non-linear (i.e., their algebraic sum may not reflect the total impact), and to better understand the EAC, a bottoms-up EAC

17 V-4 DOE G DRAFT XX-XX-08 should be required on some defined frequency. An annual update is usually adequate and even this may sometimes warrant a waiver if indeed a critical decision review and associated bottoms-up estimate to complete may be scheduled for the relatively near term. g. Work Authorization Process. Usually the contract (or project execution plan) captures the total scope of work, cost and schedule. The flow-down of this process culminates with an internal contractor work authorization process wherein the scope, cost and schedule of each individual control account sums to the total scope, cost and schedule of the PMB. Further, this process recorded in an authorizing document from the contractor s line management (e.g., the project manager) to each control account manager. Oftentimes, what is documented is an annual work plan and not the total project plan. h. Accruals. Methods for planning and taking credit for actual work performed and for booking an estimate of actual costs (pending receipt of an invoice) need to be synchronized. Also, disciplined methods for reversing accruals (upon receipt of the invoice) need to be implemented. If they are not, then significant variances will develop that may or may not represent real variances. Additionally, it can lead to a significant waste of personnel resources to explain the apparent variances. i. Earned Value Techniques. Wherever practicable, objective measures (rather than management judgment) should be used to take credit for work performed. Caution should be exercised when there is a high level of effort (LOE) in that for this method the work performed always equals what was planned and by itself it never generates a schedule variance. Further guidance regarding acceptable earned value measurement techniques can be found in ANSI/EIA Standard 748-A. j. Over-Reliance on Cumulative SPI. In addition to the potential masking of schedule problems encountered for projects with high level of effort, cumulative schedule performance index does not analyze what is happening on the project critical path and does not reflect whether the critical path work is or is not being accomplished. In analyzing data, therefore, it is important for both the FPD and contractor to analyze more than just the cumulative indices. For example, understanding exactly what work is on the critical path, and then assessing the schedule performance index for each of these work elements would be more meaningful.

18 DRAFT XX-XX-08 VI-1 SECTION VI REFERENCES (Relating to EVMS) ANSI/EIA Standard 748-A, Earned Value Management Systems Provides the 32 guidelines. NDIA ANSI/EIA Standard 748-A, Earned Value Management Systems Intent Guide Promotes a clearer understanding of the Standard. NDIA, Program Management Systems Subcommittee, Surveillance Guide Guides the implementation of EVMS surveillance. Government Performance and Results Act of 1993 Mandates the use of performance metrics. Federal Acquisition Streamlining Act of 1994 Requires agency heads to achieve, on average, 90% of the cost and schedule goals established for major and non-major acquisition programs without reducing the performance or capabilities. Clinger-Cohen Act of 1996 Requires establishment of the processes for executive agencies to analyze, track, and evaluate the risks and results of major investments in IT and requires reporting on the net program performance benefits. OMB Circular A-11, Part 7, Planning, Budgeting, Acquisition and Management of Capital Asset Outlines a systematic process for program management, which includes integration of program scope, schedule, and cost objective; requires use of earned value techniques for performance measurement during execution of the program; specifically identifies ANSI/EIA Standard 748-A. OMB Memorandum M-04-24, Expanded Electronic Government (E-Gov) President s Management Agenda (PMA) Scorecard Cost, Schedule and Performance Standards for Success FAR Subpart 34.2, Earned Value Management Systems Intent Guide Describes the EVMS requirements, solicitation provisions and contract clauses on major acquisitions for development. DOE O 413.3A, Program and Project Management for the Acquisition of Capital Assets, dated DOE G Series Related DOE O 413.3A guides. POINTS OF CONTACT: DOE Lead: EFCOG Lead: NNSA: EM: SC: Brian Kong, OECM John Post Cliff Holman Lenny Mucciaro Tom Brown Others: Don Grace, GMS Lynne Sia-Bates, Tecolote Ken Dziedzick Steve Einan

19 DRAFT XX-XX-08 Appendix A A-1 (and A-2) APPENDIX A DOE EVMS GOLD CARD

20 Appendix B DRAFT XX-XX-08 B-1 APPENDIX B CONTRACT PERFORMANCE REPORTS (CPR) AND QUICK LOOK CHECKLIST Although not required by DOE, OMB has approved the following CPR Formats 1-5 to provide critical information required from contractors about their performance in an organized, easy to understand, format. CPRs are used to confirm, quantify and track known or emerging contract problems; to determine the contractor s ability to achieve the PMB objectives; and assist in decision-making. CPRs are provided monthly unless otherwise stated in the contract. Also unless otherwise provided in the contract, data reported in the CPR will pertain to all authorized contract work, including both priced and unpriced efforts. 1. APPLICABLE FORMS: Fillable DD Forms listed below and included at the end of this Appendix are available online and can be used to submit required data. Format 1 Work Breakdown Structure DD Form 2734/1 Format 2 Organizational Categories DD Form 2734/2 Format 3 Baseline DD Form 2734/3 Format 4 Staffing DD Form 2734/4 Format 5 Explanations and Problem Analyses DD Form 2734/5 a. The five formats containing data for measuring contractors' cost and schedule performance on contracts have the following attributes: Format 1 provides data to measure cost and schedule performance by productoriented work breakdown structure (WBS) elements, the hardware, software, and services the Government is buying. Format 2 provides the same data by the contractor's organization [functional or integrated product team (IPT) structure]. Format 3 provides the budget baseline plan against which performance is measured. Format 4 provides staffing forecasts for correlation with the budget plan and cost estimates. Format 5 is a narrative report used to explain significant cost and schedule variances and other identified contract problems and topics. b. The CPR data should be used to: (1) Integrate cost and schedule performance data with technical performance measures,

21 Appendix B DOE G B-2 DRAFT XX-XX-08 (2) Identify the magnitude and impact of actual and potential problem areas causing significant cost and schedule variances, and (3) Provide valid, timely program status information to higher management. c. CPRs are management reports that provide timely, reliable summary-level data with which to assess current and projected contract performance. The CPR's primary value to the Government is its ability to reflect current contract status and reasonably project future program performance. It is important that the CPR be as accurate as possible so it may be used for its intended purpose, which is to facilitate informed, timely decisions. The CPR data must accurately reflect how work is being planned, performed, and measured and must be consistent with the actual contract status. d. Regarding completion of the data blocks in CPR formats 1-5, many of the blocks are self-explanatory. Example descriptions of some that many not be so clear are provided below, and detailed instructions for completing the data blocks can be obtained by connecting to the web addresss and entering the document ID number DI-MGMT-81466A. Phase: Refers to current phase of project (e.g., design, construction, commissioning). Share Ratio: Refers to contracts wherein there is a sharing of costs, or cost savings, for completion of the project above, or below, a contractually established target cost. As an example, if for every dollar that the project is completed less than the target cost the DOE retains 80 cents and the contractor s fee is increased by 20 cents, then the share ratio would be 80/20. Cost of Money: Refers to interest costs incurred by the contractor when he is financing facility capital assets (e.g., the building, equipment procurements, etc). This usually is not done for DOE projects (and is usually not applicable). Organizational Categories (Format 2): Simply refers to the organizational categories that reflect the contractor s internal management. A certified EVMS requires reporting by both the work breakdown structure (WBS), and organizational breakdown structure (OBS), and this is referring to the OBS. 2. EVM QUICK-LOOK CHECKLIST a. Format 1 Check Summary information for correctness, i.e., contract number/type, program name, report period, and signature. Verify negotiated cost tracks to the latest definitized contractual actions. REMEMBER: Cost does not include fee. Ensure that the estimated cost of

22 Appendix B DRAFT XX-XX-08 B-3 authorized unpriced work reflects contractual actions in-progress and not definitized, e.g., change orders, NTEs, supplemental agreements, letter contracts. Check and verify the following : - Fixed Fee should reconcile to the fixed fee definitized on contract, - Award Fee Pool should reconcile to the total definitized award fee negotiated on contract, - Award Fee earned should reflect the fee the contractor earned to date. Crosscheck with the contract., - Award Fee available should reflect the award fee pool less award fee earned less unearned award fee. Check and verify that the: Negotiated Price = Negotiated cost + Fixed fee + Award fee earned + Award fee available. Estimated Price = Negotiated price + Estimated cost of authorized unpriced work Assess changes to the Undistributed Budget (UDB): Any UDBs should be explained in Format 3, and efforts should be made to distribute all UDBs well ahead of the planned execution of the work. Look for significant changes in the management reserve (MR) budget. Significant changes in budget should be identified in Format 3 and explained in Format 5. Any entry in the management reserve EAC represents MR usage. b. Format 3 Check and verify header information. Cross-check with Format 1. Note changes to PMB since the last report. Reconcile the end of month PMB (BCWS) to the BCWS total line of the Format 1. c. Format 4 Check accuracy of headcount data with control account managers (CAMs)/IPT leads. Note changes in headcount since the last report. Look for major changes, i.e., significant shifts in time-phasing of planned staffing (rule of thumb >10%) in projected headcount. Reconcile the headcount with Format 3 data. Check for explanation in the Format 5 narrative.

23 Appendix B DOE G B-4 DRAFT XX-XX-08 d. Format 5 Check to ensure that the contractor s rankings of the critical risk items are identified. Verify that the narrative includes a problem statement, corrective action, and recovery plan that are consistent with control account managers (CAMs)/IPT leads assessments. e. Specific Analysis: Since the narrative analysis (Format 5) only addresses the top critical risk areas of the program, more detailed analysis should be performed on WBS elements affecting significant 1 * cost/schedule variances to date. f. Variance Analysis: Understand and explore root causes for the variances. Results of external independent reviews should have validated the BCWP at the critical decision points. (1) Possible Causes for Variances Cost Variance Schedule Variance Rate changes (labor, overhead, G&A, COM) Lagging payments Vendor discounts or price increases Quantity discounts Material cost changes Requirement Changes Poor baseline schedule (does it reflect reality?) Subcontractor/vendor can t deliver when needed More/less effort than planned Insufficient resources (staffing) Labor disputes/work stoppage Resource availability (is it there when I need it?) Requirement changes (2) Efficiency Indicators CPI: (cost performance index for efficiency) = BCWP/ACWP Indicates how much effort you are getting for every dollar spent. Am I getting the best bang for the buck? You can assess current or cumulative month data. 1 Significant = Analyst judgment (rule of thumb >10%)

24 Appendix B DRAFT XX-XX-08 B-5 SPI: (Schedule Performance Index for Efficiency) = BCWP/BCWS Indicates how much work you have accomplished against the planned work. How am I doing against my plan? Current or cumulative month data can be assessed. Work remaining (WR)= BAC - BCWP cum Budget remaining (BR)= BAC - ACWP cum }Reference the Gold Card. Estimated cost to complete (ECTC)= EAC -ACWP cum TCPI: (to complete performance index) Computes an index of work remaining (WR) relative to either The budget remaining; i.e., TCPI BAC = WR/BR, or The work remaining to the cost remaining; i.e., TCPI EAC = WR/ECTC Further, for the TCPI BAC it indicates the level of efficiency that must be maintained for the cost at completion to equal the budget at completion (BAC). For example, a TCPI BAC < 1 means that one could work less efficiently than planned and still complete the project within the the budget at completion. Conversely, a TCPI BAC > 1.0 means that one must work more efficiently than planned to complete the project within the BAC. Similarly, a TCPI EAC < 1 means that one could work less efficiently than planned and still complete the project within the estimate at completion (EAC). Conversely, a TCPI EAC > 1.0 means that one must work more efficiently than planned to complete the project within the EAC. In either case, a TCPI significantly greater than, or significantly less than, 1.0 warrants further analysis. The CPR is just one tool for managing the program, and thoughtful analysis, interaction and discussions are necessary to support its being a meaningful reporting tool, and to support effective project management.

25 Appendix B DOE G B-6 DRAFT XX-XX-08

26 Appendix B DRAFT XX-XX-08 B-7

27 Appendix B DOE G B-8 DRAFT XX-XX-08

28 Appendix B DRAFT XX-XX-08 B-9

29 Appendix B DOE G B-10 DRAFT XX-XX-08

30 DRAFT XX-XX-08 Appendix C C-1 (and C-2) APPENDIX C SCHEDULE METRICS Schedule Evaluation Legend: <=5% 6% to 20% >20% Project: AAA Date: 10/6/2006 Score General Total Tasks (Less Summary and Milestones) 742 Tasks Completed 161 Incomplete Tasks 581 Percentage of Tasks Completed 22% Precedence Logic Metric (Ensure network requirements met) Task w/ no Predecessor/Successor Logic 352 Percent w/o/logic 47% Goal 5% Constraint Metric (Ensures work flows with progress completed) Tasks w/ a Constraint 63 Percent w/ Constraints 8% Goal 5% Float Metric (Ensures adequate resources from one task to next) Tasks w/ Float >60 days 47 Percent Float > 60 Days 6% Goal 5% Duration Metric (Smaller tasks ensures better measure metrics) Tasks w/ Remaining Duration > 60 days 13 Percent Remaining Duration > 60 days 2% Goal 5% Hit/Miss Ratio (Ensure baseline plan being achieved) Total Tasks Thru 10/31/ Task Missing Base Dates 6 Percent Missing Base Date 4% Goal 5%

31 DRAFT XX-XX-08 Appendix D D-1 (and D-2) APPENDIX D TYPICAL REVIEW DOCUMENTATION Typical Documents To Be Provided Approximately 45 Days Prior To The Readiness Assessment: - 32 guidelines cross referenced to EVMS description (compliance map) - Dollarized responsibility assignment matrix (Dollarized RAM) - System Description or EV procedures/regulations Typical Documents To Be Provided Approximately 60 Days Prior To The On-Site Certification Review: - Contract and changes/modifications - Bill of materials - Data item descriptions (DID) - Material requirement reports - Cost performance reports (CPR) - Overhead budget policies and procedures - Contract data requirements list (CDRL) - Contract funds status report (CFSR) - Control account manager notebooks - Organizational chart and organizational breakdown structure - Contract work breakdown structure (CWBS) - CWBS dictionary - Control account plans (specify) - Program schedules - Variance analysis reports (specify) - Variance analysis corrective action log - Management reserve log - Undistributed budget log - Baseline change log - Estimates at completion procedures and supporting document - Indirect cost pool listing - Charge number structure explanation - Rate tables, rationale for projected rates - Accounting manual - Disclosure statement - Copies of any DCAA, IG or other audit reports - List of subcontractors - Subcontractor scope of work - Subcontractor program schedule - Subcontractor control account plans - Subcontractor EAC procedures and supporting document - Other supplier internal EV reports - Cost accounting standards disclosure statement

32 Appendix E DRAFT XX-XX-08 E-1 APPENDIX E EVMS CERTIFICATION REVIEWS STRATEGIC PLANNING Background: This appendix and Appendix F, EVMS Certification Review Detailed Planning and Execution, complement the Section 3 discussions, Certification of a contractor s EVMS. Strategic Planning Schedule Milestones: Within the context of this guide, strategic planning encompasses the processes by which (a) OECM works with the PSO/NNSA points of contact, the independent review contractor, and the technical consultant to develop EVMS Certification Review Schedule Milestones for the major milestones listed below, and (b) OECM works with the CFO EVMS point of contact to obtain OMB concurrence of the EVMS Certification Review FY goals. The end result of this process is displayed in Table E.1 to this appendix, and as can be seen therein, it captures planned timeframes (initially by month, with a firm date being established as the milestone nears) for the conduct of all of the following certification process major milestones: Planning/Readiness Assessment Meeting: This is usually a one-day meeting that has typically been conducted by a technical consultant to OECM. The primary objective of the meeting is to assess whether the tentatively planned date for executing the on-site review should be maintained, or whether additional actions on the part of the contractor warrant action prior to committing to a date for the review. This is important to ensure sufficient readiness of the contractor such that an additional week-long on-site review will not be necessary and thus better ensure effective use of limited department resources. On-Site Review: There are many actions required to ensure a successful on-site review effort and these are addressed in more detail in Appendix F, Detailed Planning and Execution. followup Assessment of Corrective Action Plan Implementation: Appendix F provides an expected timetable for the contractor s development of an acceptable correction plan, and then the independent review contractor s assessment of the CAP and its implementation. The review director (provided by the independent review contractor) has the lead responsibility for final determinations of non-compliances that are to be documented in the form of corrective actions request, and assessment of the acceptability and implementation of the contractor s corrective action plan. Independent Review Contractor Issuance of a Recommendation for Certification to OECM. This usually follows within roughly one week of a determination that the contractor s CAP has been successfully implemented and is supported by a justifying report to OECM. OECM then prepares a certification letter from DOE to the contractor that is then approved and forwarded by the DOE Office of Management. Conduct Surveillance: Surveillances are addressed in Section IV of this guide, and this milestone within this table refers only to those surveillances that are to be led by OECM.

33 Appendix E DOE G E-2 DRAFT XX-XX-08 Strategic Planning Roles and Responsibilities: Table E.2 identifies the organizations and primary roles and responsibilities related to the development and maintenance of the EVMS certification review milestone schedule depicted in Table E-1.

34 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Goals October November December January February March April May June July August September A. Conduct Readiness Assessment Fluor 12/4 PNNL 12/5 CH2M-Hill 3/30 B. Conduct Review BSC Oct 30 BNI (WTP) Pantex Dec 11 Y12 1/22 Fluor 3/26 C. Conduct Followup D. Issue Certification MRI The above schedule is generally developed on a FY basis, and the initial schedule is formulated by the end of the 3Q for the next FY. WCH 5/14 PNNL 5/7-11 CH2M-Hill 5/14 BNI WTP BSA 6/12 LPP 8/29 JSA CWI PNNL CH2M-Hill BWXT Y12 PNNL CH2M-Hill WCH 7/30 BNI WTP UDS 8/27-29 CWI BNI WTP BWXT Y12 CWI Follow-ups not yet scheduled for: FY08 Schedule of EVMS Reviews Pre FY 08 Reviews: DCS, & UDS FY 08 Reviews: BSA & LPP Qtr 1 Qtr 2 Qtr 3 Qtr 4 Goals October November December January February March April May June July August September A. Conduct Readiness Assessment B. Conduct Review BSA 10/1-5 C. Conduct Followup D. Issue Certification E. Conduct Surveillance SNJV WCH BWXT Y-12, CWI Parsons SRS BSC SLAC - ten WCH FY07 Schedule of EVMS Reviews JSA 12/3-7 Pantex Fluor NSTec Las Vegas Parsons, SRS, 1/22-25 BSA Pantex DCS LPP (Ohio); Feb 4 Fluor Hanf NSTec Las Vegas PRS Fermi Lab PRS LANL-New Con LANS Fermi Lab LLNL New Con JSA NSTec Fermi Lab PRS Bechtel Jacobs Co BJC Parsons JSA All indicated FY 07 Milestones are Complete Sandia NSTec DOE G Appendix E DRAFT XX-XX-08 F-3

35 Table E-2, Strategic Planning of EVMS Certification Reviews; Organizational Roles and Responsibilities Orgn/Position Roles and Responsibilities DOE-OECM; 1. Develop the EVMS Certification Review Schedule Milestones, Table E-1. First draft for coming FY is to be EVMS Lead complete by end of 3Q of current FY. This is done by working closely with PSO /NNSA points of contact to understand contractors requiring a review and the review priority, assuring with independent review contractor and technical consultant that the schedule is achievable, and working with the CFO to obtain OMB concurrence with the review goals. 2. Provide oversight of all review efforts to ensure that schedules are maintained or revised (as may be necessary). PSO /NNSA; EVMS Points of Contact Independent Review Contractor; Review Director Technical Consultant; Review Chief CFO; EVMS POC DOE-Site: FPD 3. Provide quarterly status update reports to the CFO (for submission to OMB). 1. Understand which of their projects are approaching CD-2 and which contractors need to be certified, and communicate certification needs to DOE-OECM EVMS lead. 2. Ensure that federal project directors concur with the proposed review schedules and they in turn work with their contractors to ensure they are scheduling their resources to support the review efforts. 1. Review proposed milestone schedule and communicate (in light of resource availability and contract funding) whether the schedules can be met or need to be modified. 2. As agreed to schedule milestones are approached, work with review chief and others to complete detailed schedule and execution activities (Note: Review director is lead for all milestone activities except the planning/readiness assessment meeting; ref: App F for expanded discussion of detailed review planning and execution). 1. Establish DOE and contractor points of contact, and work with contractor point of contact to further plan and execute the planning /readiness assessment meeting, and communicate results to OECM and review director. 2. Function as review chief during on-site reviews, and support OECM and review director in their pursuit of meeting the other EVMS certification review schedule milestones. 1. Work with OECM EVMS lead and OMB to establish mutually agreeable EVMS certification review goals. 2. Receive quarterly status report updates from OECM EVMS lead and provide to OMB. 1. Works with PSO/NNSA points of contact to ensure their EVMS certification review needs are addressed in the EVMS certification review strategic planning process. 2. From on-going surveillance results, determine and communicate via PSO/NNSA points of contact needs for OECM led surveillances. Appendix E DOE G E-4 DRAFT XX-XX-08

36 Appendix F DRAFT XX-XX-08 F-1 APPENDIX F EVMS CERTIFICATION REVIEWS DETAILED PLANNING AND EXECUTION Over-all Milestone Planning and Execution: Figure F-1 provides a graphic representation of the schedule milestones displayed in Table E-2, plus additional activities that occur between completion of the on-site review and the conduct of the followup assessment to ensure CAP implementation. The typical timing of these milestones and associated activities (as they relate to each other) is as follows: 1. Planning/Readiness Assessment Meeting: Planned and executed by the review chief, this is to be conducted per the strategic planning milestone date established by the DOE- OECM EVMS lead (Table E-2), and should be two or more months prior to the date established for the on-site review. 2. On-Site Review: Conducted two or more months following completion of a successful planning/readiness assessment meeting, the on-site review generally lasts for a week and concludes with the review director providing the contractor hard copies of Corrective Action Requests, plus Continuous Improvement Opportunities, where the CARs require the contractor to respond with a Corrective Action Plan. The more detailed activities that then occur are as follows: Contractor submittal of CAPs: This is expected to occur within 30 days of completing the on-site review. Review director assessment of the acceptability of CAPs: This is expected to occur within 30 days of CAP submittal, and this effort is supported by the OECM EVMS lead, the review chief, and (as may be directed by the review director) the functional leads for the subject areas wherein each of the CARs occurred. Contractor reports CAP implemented: Following notification that the CAP is acceptable, the contractor completes implementation of the CAP and then notifies the review director. The amount of time required for this step is not fixed due to the varying complexity of the CARs and associated CAPs, but in most cases this usually occurs within two months of the CAP having been accepted. 3. followup Review to Validate CAP Implementation: The time required for this step can also vary; e.g., the corrective action may result in changes to reporting procedures and two months of reporting data may be required to properly validate CAP implementation. In most cases, this step can be completed within two months of the contractor having reported that the CAP has been implemented. 4. CAP Implementation Verified, Recommendation Made to Certify Contractor, and Certification Letter Sent to Contractor: Upon verification that the CAP has been implemented, it normally takes two to four weeks for the independent review contractor to complete its report to support its recommendation to certify the contractor. Within one

37 Appendix F DOE G F-2 DRAFT XX-XX-08 week of this, OECM drafts and forwards a certification letter for issuance to the contractor by the Office of Management, and the letter is issued to the contractor. 5. OECM Led Surveillances: As is noted in Section IV, Surveillances, most surveillances are expected to be led by the contractor, the DOE Site Office, or the cognizant DOE PSO/NNSA Office. If, however, any of these organizations requests, or if OECM believes it to be warranted, an OECM led surveillance may be scheduled, and this is represented graphically in Step 5 of Figure F-1. EVMS Certification Process Chart 1.Readiness Assessment 2. EVMS On- Site Review CAR Issuance CAP Proposal CAP Acceptance 3. Follow Up Review Implementation Reported CAP Implementation 4. Certification 5. Surveillance Complaint or Finding 9 Figure F-1, EVMS Schedule Milestones Graphic Representation The most complex area is the detailed planning and execution of the on-site review. This area has not yet been addressed to any level of detail in this Guide and is addressed below. 6. Detailed Planning and Execution of Onsite Reviews: This discussion focuses on the following: Organization and composition of a typical EVMS certification review team. Functioning of the team immediately prior to, during, and following the on-site review. Staffing of the team and team member roles and responsibilities.

38 Appendix F DRAFT XX-XX-08 F-3 EVMS Certification Review Team: A typical EVMS certification review team is shown in Table F-1. Table F-1; Typical EVMS Certification Review Team OECM Over-Sight: OECM EVMS Lead Review Director: Independent EVMS Review Contractor Review Chief: Technical Consultant Functional Team Interview Team No. Areas Members Acctg EVMS Contractor X A Organization Other X Other X B C D Analysis & Management Reports Planning & Budgeting Accounting Revisions Same as above EVMS Contractor Other Other Acctg Oversight Org Acctg Oversight Org Acctg Oversight Org EVMS Contractor Other Other X X X X X X X X X The functional areas shown Table F-1 represent the five process groupings into which the 32 ANSI/EIS Standard 748-A Guidelines are categorized. Functional area leads are designated by the bold text, and all but accounting come from the independent review contractor organization. Each of the functional team members is also assigned to an interview team, wherein the interview teams are constructed to have representation from all but the accounting team. The accounting team also conducts interviews, and although it is assigned to a few of the interviews conducted by the other three interview teams, in large part it conducts its interviews of accounting personnel separate from the other three interview teams. In addition to the interviews of the contractor personnel conducted by the three indicated interview teams and accounting team, the OECM EVMS lead, review director, and review chief conduct interviews of contractor senior management personnel.

39 Appendix F DOE G F-4 DRAFT XX-XX-08 Functioning of the Review Team: In general, the review team plans and executes its work prior to, during, and following the on-site review, as follows: - Prior to arriving on-site, team members review contractor EVMS documentation that is supplied by the review director to assess compliance of the EVMS processes and procedures with ANSI/EIS Standard 748-A. - During the on-site review, review team members conduct interviews and data traces to determine if personnel are doing business consistent with their EVMS procedures. Also, at the end of each day the entire team assembles to discuss potential problem issues. Further, the OECM EVMS lead, review director, and review chief meet at the end of each day of interviews with the contractor in order to ensure that there are no misunderstandings in what the review team believes it is observing and to ensure there are no surprises at the end of the week when the review director presents CARs to the contractor. - Following the on-site review and acceptance of a contractor CAP, the review chief and necessary functional leads respond to direction from the review director to assess the acceptability of the contractor CAP, and to support further reviews to ensure CAP implementation. During all of the above activities, the OECM EVMS lead provides DOE oversight. Technical accountability (e.g., determining which issues represent non-compliances with ANSI/EIS Standard 748-A) rests with the review director. Although final authority rests with this position, in most cases consensus is obtained from the entire review team as to which issues represent non-compliances. Staffing of the Review Team and Roles and Responsibilities: To ensure consistent interpretation of the ANSI guidelines, the OECM EVMS lead, the review director, and the review chief are generally the same people. The review director and the functional leads for all areas except accounting are from the independent contractor organization. The technical consultant to OECM functions as the review chief. The accounting team is comprised primarily (and most times exclusively) of personnel from the organization that has accounting over-sight responsibility for the contractor being reviewed. This is usually DCAA, or a DOE field services office (e.g., Albuquerque Service Center). To the extent that it is possible, the remaining positions should be filled by qualified personnel to include contracted personnel and DOE personnel but on an exception basis may be filled by other personnel. For example, these other personnel sometimes are contractor personnel who support other projects that are within the purview of the same PSO/NNSA office that is being reviewed (but are not assigned to projects that are the subject of the planned review). Potentially beneficial results, and potentially conflicting

40 Appendix F DRAFT XX-XX-08 F-5 results, can result from the determination of the review team members, and the review director has the authority to accept or not accept the proposed review team members. In cases of disputes, OECM may need to resolve the issue with the affected PSO/NNSA Office. Staffing of the review team should be identified by roughly one month prior to the start of the on-site review and consistent with the above guidelines is the responsibility of the following organizations/personnel: The independent review contractor (for the positions of review director, and the three functional leads for functional Teams A, B, and D shown in Table F-1). The technical consultant (for the position of review chief). The review director (to establish contact with, and obtain the commitment of, the required Accounting personnel), and The cognizant DOE PSO/NNSA EVMS point of contact for the balance of the positions, when appropriate. To summarize plus expand on the above discussions, Table F-2 describes the EVMS review team member roles and responsibilities.

41 Organization/ Team Position OECM/ EVMS Lead Independent Contractor/ Review Director Technical Consultant / Review Chief Independent Contractor/ Functional Leads DOE/Other Support Team Members, As Appropriate All Team Members Table F-2; EVMS Certification Review Team Member Roles and Responsibilities Review Team Roles and Responsibilities 1. Provides OECM over-sight to ensure effective planning and execution of review. 2. Ensures required contracts and contract funding are in place to provide necessary contractor support. 3. Works with review director and PSO /NNSA points of contact to ensure all review team positions staffed. 1. Establishes final review agenda with contractor point of contact, and makes review team member assignments. 2. Obtains contractor EVMS documentation and provides to review team members roughly 30 days prior to review. 3. Makes final determination as to which issues represent findings (i.e, CARs), and at end of review week provides contractors with completed CARs and CIOs. 4. Interfaces with contractor to obtain, review /approve, and verify implementation of an acceptable CAP. 1. In preparation for the review, providing the review director a written summary of the planning /readiness assessment meeting, to include areas warranting further review and possible improvement, and number of interviews required (which impacts necessary number of review team members). 2. Assists all team members in their performance of their jobs (e.g., writing CARs, CIOs, etc). 3. Assisting the review director as may be directed (e.g., drafting more complex CARs, and collecting and reviewing /editing CARs and CIOs; also, assessing CAP acceptability and implementation). 1. Provide direction and guidance to review team members regarding conduct of interviews, writing of CARs and CIOs, and writing of guideline writeups and functional area summaries. 2. Review /approval of all documents relating to their functional area. 3. In also functioning as interview team leads, working with their assigned interview team members to plan and direct the conduct of the interviews. 1. During and following review, assisting functional leads as directed by them; e.g., summarizing daily issues, and drafting CARs, CIOs, Guideline Writeups, and Functional Summaries. 1. Prior to review, review and assessment of contractor documentation for compliance with ANS Standard748-A. Appendix F DOE G F-6 DRAFT XX-XX-08

42 DRAFT XX-XX-08 Appendix G G-1 (and G-2) APPENDIX G ACRONYMS ACWP ANSI BAC BCWP BCWS BR CA CAM CAP CAR CD CDRL CFCR CFO CIO CPI CWBS CPR DID DCAA DOE EAC ECTC EIA EIR EM EV EVM EVMS FAR FPD actual cost of work performed American National Standards Institute budget at completion budgeted cost of work performed budgeted cost of work scheduled budget remaining control account control account manager corrective action plan corrective action request critical decision contract data requirements list contract funds status report Chief Financial Officer continuous improvement opportunity cost performance index contract work breakdown structure contract performance report data item description defense contract audit agency department of energy estimate at completion estimated cost to complete electronic industries alliance external independent review environmental management earned value earned value management earned value management system federal acquisition regulation federal project director FY GAO HQ IPT IT LOE M&O MR NDIA NNSA NTE OECM OMB PEP PMB PMA PP PSO Q RA RAM RFP SOW TCPI UDB WBS WR fiscal year Government Accountability Office Headquarters integrated project team information technology level of effort maintenance and operation management reserve National Defense Industrial Association National Nuclear Security Administration not-to-exceed Office of Engineering, Construction and Management Office of Management and Budget project execution plan Performance Measurement Baseline President s Management Agenda planning package program Secretarial Office quarter readiness assessment responsibility assignment matrix request for proposal statement of work to complete performance index undistributed budget work breakdown structure work remaining