FAR 52.234-2, FAR 52.234-3 & FAR 52.234-4
Many organizations that have not implemented an Earned Value Management System (EVMS) before, typically need some education on the basics of what’s involved in an EVMS. The Federal Acquisition Regulations (FARs) mandated by the government can often appear confusing, resulting in attempts to fulfill these requirements without external help and using tools like Excel. Please note this blog is by no means intended to be all encompassing. Here we introduce the FAR requirements that the government mandates, explain what they mean and outline some of the activities that that are typically undertaken.
There are 3 key phases of the ANSI-748 Earned Value Management (EVM) Certification Review Process with which companies are asked to comply:
- FAR 52.234-2 – Pre-Award IBR
- FAR 52.234-3 – Post-Award IBR
- FAR 52.234-4 – Certification Preparation/Review Period
FAR 52.234-2 Pre-Award IBR
This is the phase where an organization’s internal cost, schedule, technical and risk management processes and procedures are evaluated to determine compliance with ANSI-748’s 32 Guidelines. Typically during this phase, EVM basic training would be delivered, initial Control Account Manager (CAM), Functional Management and Executive Management EVM interviews would be conducted and a comprehensive EVM Implementation/Certification schedule would be developed for submittal to the Customer.
Normally in these types of implementations of an EVMS, this would involve establishing expectations, performing an EVM Gap Analysis, conducting initial Control Account Manager (CAM), Functional and Executive Management interviews and basic EVM training.
FAR 52.234-3 Post-Award IBR
This phase encompasses the initial implementation of an ANSI-748 EVM compliant integrated system and its associated documentation. Ordinarily this will cover a 3 to 6 month period where the Client establishes their Performance Measurement Baseline (PMB) that will be used for budgeting and to determine the performance metrics to be used throughout the life-cycle of the contract’s performance. This is in conjunction with the Program’s Integrated Master Schedule (IMS). At the conclusion of this phase the Customer will review the Client’s documentation and their monthly performance contractual submittals to assure that the cost, schedule, technical and risk baseline agrees with the contractual Statement of Work (SOW).
Your organization will need to define and establish the Work Breakdown Structure (WBS), WBS Dictionary, Integrated Master Schedule (IMS), Responsibility Assignment Matrix (RAM), Budget Assignment for Labor, Material ODC and Subcontractors, Logical Network and Performance Measurement Baseline (PMB). In addition, the creation of processes and procedures to include the Earned Value Management System Description (EVMSD) need to be prepared as well as establishing the Cost Collection Numbers (CCNs) that will be required in order to properly accumulate actual costs. All necessary integration will need to be performed to tie cost, schedule, technical, risk, material and subcontractor systems together in order to satisfy the monthly Customer status reporting requirements.
FAR 52.234-4 Certification Review Preparation/Performance Period
This is the next critical element of the ANSI-748 EVM Certification process. This encompasses ongoing efforts demonstrating that your organization can reliably and consistently prepare and submit the cost, schedule and technical performance contractual baselines, reports and the associated Budget Log information. This period will run for approximately 9-12 months depending on issues encountered during performance. You should be effectively generating monthly contractual cost, schedule and technical performance reports as well as maintaining accurate and reconcilable Budget Logs, IMS and Risk Registers.
During this period the DCMA will be conducting 3-5 periodic Progress Assessment Visits (PARs) to evaluate your teams ability to satisfy the Guidelines associated with the following ANSI-748 EVM Guidelines:
- Planning & Budgeting
- Managerial Analysis
- Baseline Maintenance
- Material & Subcontractor Management (not a formal series of guidelines, but more an application of all to this key area)
Hopefully this gives you some insight into what the three Federal Acquisition Regulations related to an Earned Value Management System mean. If you are implementing an EVMS for the first time, it is strongly recommended that you get outside help. One thing is for sure, those DCMA audits are no fun so you want to make sure you get this right first time around!