DCMA Archives - Humphreys & Associates

Who Owns Subcontractor Management Reserve (MR)?

By Humphreys & Associates / March 2, 2020 / DCMA, EVMS, EVMSIG, Management Reserve (MR)

DCMA, EVMS, EVMSIG, Management Reserve (MR)

Subcontractor, Prime Contractor… Customer?

There has long been discussion regarding who “owns” a subcontractor’s Management Reserve (MR). Some believe that since the entire contract value was awarded by the prime contractor to the subcontractor, the MR belongs to the prime. Unfortunately, they might have been influenced by some of their customers who believe a prime contractor’s MR belongs to the customer – even to an extreme in which the customers interject themselves in the prime contractor’s decision process in using their MR. So contractors might figure that if the customer is doing that to them, they should do the same to their subcontractors.

DCMA Cross Reference Checklist

They may try to justify this by pointing out that in the DCMA Cross Reference Checklist (CRC dated 22 March 2019) Guideline # 14 Sub-question b asks:

“Is major subcontractor Management Reserve (MR) incorporated and traceable to the prime contractor’s EVMS?”

While this might sound to some as though it justifies the argument that the MR belongs to the prime, it really doesn’t. The actual guideline 14 question is simply asking if the contractor implementing EVMS (in this case the subcontractor) simply does or does not “Identify management reserves and undistributed budget.” Since the subcontractor is implementing their management system on their contract with the prime, the only requirement is that the subcontractor identifies a Management Reserve (MR) amount (which could be zero, by the way). If they do, then (strangely) subquestion b puts the onus on the prime contractor to reflect the subcontractor’s MR in their EVM system [i.e., strange because how would a subcontractor demonstrate to a review team that their MR is being reflected in the prime’s EVM System?]. This question would be more appropriate if the subcontractor was also the prime to a lower-tier subcontractor.

Reporting vs. Ownership

The above only addresses the reporting of a subcontractor’s MR, but what does the government documentation actually say about the “ownership” of the subcontractor’s MR?

Note: A point to remember in this entire discussion is that the Guidelines, the EVMIG, the Cross Reference Checklist (CRC), and the EVMSIG were written to apply to any contractor required to implement EVMS on a contract – whether they be a prime contractor to a government customer or a subcontractor to a prime contractor (their “customer”).

EVMSIG Chapter 3 Introduction

The EVMSIG Chapter 3 Introduction (pg. 17) says this about MR:

“An allowance is made for a portion of the CBB to be withheld outside of the PMB as Management Reserve (MR) for internal management control purposes. MR is intended to provide the contractor with a budget to manage risk within the established contract scope (Guideline 14).”

As this introductory paragraph points out, MR is established by the contractor (or the subcontractor) for their internal management control purposes to have budget to manage risk within the contract scope. There is no mention of customer involvement in the decision-making process.

Para 3.9 (Guideline 14), Intent of Guideline

A more definitive statement in the EVMSIG is: “Para 3.9 (Guideline 14), Intent of Guideline” in the second paragraph – bullets and underlines have been added for emphasis:

“MR belongs to the contractor Program Manager, not the Government,…” [ergo, NOT the prime in a prime/ sub relationship]
[It] “provides the contractor with a budget for unplanned activities within the current program scope. MR enables program management to respond to future unforeseen events within the work scope of the program by distributing budget to mitigate program risks.”
“To establish MR, the contractor’s program management sets aside budget based on the program’s risk management process and assessment.”
[MR] “is not a source of funding for additional work scope or the elimination of performance variances.”
“MR is not a contingency fund and may neither be eliminated from contract prices by the customer during subsequent negotiations nor used to absorb the cost of contract changes.” And finally,
“MR belonging to a major subcontractor must be incorporated into the prime contractor’s EVMS with traceability to the subcontractor’s reported MR.”

Subcontractor Reports

This last bullet specifically points out that the MR belongs to the subcontractor, and that it must be reflected in the prime’s EVMS as reported by the subcontractor. Some choose to include a subcontractor’s MR in their own MR value; having it there, however, increases the risk of having the prime think they have more MR to use when, in fact, they do not. The subcontractor’s MR is not the prime’s to use, so the prime would need a very good mechanism in place to keep the two MR amounts separated. This needed segregation becomes more complicated if the prime has more than one subcontractor. Regardless of where the contractor places the subcontractor MR, EVMS requires it to be traceable to the MR value the subcontractor reports.

A Contractor’s Control Mechanism

Management Reserve (MR) is something that is allowed to provide a contractor with flexibility in handling the unknowns on a contract. It doesn’t matter if it is a prime contractor to a government customer or a lower-tier subcontractor to a higher level (or prime) contractor. MR is a contractor’s control mechanism and should not be subjected to any level of customer involvement. The guidelines and implementation/ interpretation documentation try to control improper uses of MR (e.g., covering performance variances, performing out of scope work, etc.), but customers – at all levels – should not interject themselves in a contractor’s decision-making process on the use of MR. Remember also, if customers involve themselves in that process, there is a risk that their perceived “direction” to the contractor could make them complicit in poor MR decisions.

Who Owns Subcontractor Management Reserve (MR)? Read Post »

EVM: Is DCMA A Contractor’s “Friend or Foe?”

By Robert “Too Tall” Kenney / August 15, 2018 / CAP, CAR, DCMA, Defense Contract Management Agency, EAC, EVM, EVM Consulting, EVMS

CAP, CAR, DCMA, Defense Contract Management Agency, EAC, EVM, EVM Consulting, EVMS

Is DCMA A Contractor’s “Friend or Foe?”

I’ll answer this provocative question now. DCMA, local and headquarters, are an EVM contractor’s “friend” with remarkable, but not unlimited, patience. When required, DCMA can become the contractor’s “tough love” friend.

DCMA and the contractor share the same interests – successful contract performance. DCMA is part of a triad that includes the Government’s program team, the contractor’s program team and their DCMA counterparts.

The title “Defense Contract Management Agency” reminds me of “grilled cheese sandwich” – the recipe and the product are in the name – “contract management” leads to well managed contracts.

EAC Vignette – Part One:

Contractor A has learned that their collocated DCMA has concerns about the company’s EAC process and resulting declared EACs. The company has learned that a Level III CAR on GL # 27 is being considered. Contractor A’s senior management decides to replace their EVM Core Leader with “new blood” to improve the company’s “relationship” with DCMA and avoid a Level III CAR.

Contractor A’s new EVM leader meets with her team and with the program managers that have an EVM contractual requirement. Company A’s new EVM leader is told that DCMA’s EAC concerns are a new issue. The company’s new EVM leader asks to meet with her DCMA counterpart to discuss their GL # 27 concerns, and to present a draft of a Corrective Action Plan (CAP).

During the meeting with DCMA’s EVM leader she mentions that the EAC concerns were a surprise to the company. The company’s new EVM leader briefs her draft CAP to her DCMA counterpart.

After the draft CAP has been briefed, the DCMA EVM leader comments, “your draft CAP is a good start. After I have time to fully digest your draft CAP I will send my comments and suggestions. As for being surprised by our EAC concerns, here is a file with 3+ years of letters, emails, meeting minutes from DCMA to your company outlining our continuing and growing concerns with your company’s EAC process.”

EAC Vignette – Part Two:

DCMA issued a Level III Corrective Action Request (CAR) to the contractor and is considering withholdings as an incentive for the company to quickly improve their EAC processes.

As promised, the DCMA EVM leader sent the following note to the company’s new EVM leader:

“I sent your draft GL # 27 CAP to my team for their comments and recommendations. My team’s key recommendations are:

1). Identify the weaknesses in your existing EAC processes. For each weakness, identify a corrective action. As much as possible, “mistake proof” your new processes. You should consider a review of several 100% complete contracts, and “replay” those contracts month-by-month using your new EAC processes to test their effectiveness.

2). As noted in our CAR, the company is required to report progress on the Corrective Action Plan (CAP). You should treat your CAP as a program. At a minimum, you should have an IMS and use appropriate earned value techniques to measure progress.

3). A sister division in your parent corporation, has a very mature and effective EAC process. You should considering asking for their assistance as you develop your CAP and begin its execution.

4). If you have questions as you execute your CAP, please don’t hesitate to contact me. If I don’t know the answer to your question, I’ll find someone that does know the answer and will share it with you.”

Personal Observations:

Based on my 32 years as an employee of defense contractors, and 7 years in earned value consulting, I offer the following:

1). DCMA “local” knows your company much better than you might think.

2). DCMA “headquarters” has knowledge and insight into many companies. From DCMA’s website: “We are the independent eyes and ears of DoD and its partners, delivering actionable acquisition insight from the factory floor to the front line …. around the world.”

3). A CAR from DCMA informs the company of “what” needs corrected but not “how” to correct the issue. That said, DCMA knows what will or will not work. Maintain a dialogue with DCMA.

4). “Compliance” is a lower bound for performance. DCMA will not object if a company decides to improve well beyond mere compliance.

5). Please consider the possibility that what may appear to be a “new” problem for your company, may have already been solved by another company. Find who has already solved your “new” problem. Ask for help.

DCMA will never be a foe. Never.

EVM: Is DCMA A Contractor’s “Friend or Foe?” Read Post »

Formal Reprogramming – What Happened?

By Humphreys & Associates / October 20, 2017 / CPR/IPMR, DCMA, Formal Reprogramming, Internal Operating Budgets (IOBs), IPMR, OBS, OTB, OTS, Over Target Baseline (OTB), Over Target Schedule (OTS), parca, wbs

CPR/IPMR, DCMA, Formal Reprogramming, Internal Operating Budgets (IOBs), IPMR, OBS, OTB, OTS, Over Target Baseline (OTB), Over Target Schedule (OTS), parca, wbs

A long time ago, in a galaxy far, far away….an Over Target Baseline (OTB) – by design – was a rare occurrence (and the OTS concept did not even exist as part of Formal Reprogramming). Formal Reprogramming was a very difficult and cumbersome process that most contractors (and the government) really did not like to consider. The government, in its 1969 Joint Implementation Guide, said:

“Reprogramming should not be done more frequently than annually and preferably no more frequently than once during the life of the contract.”

The Office of the Under Secretary of Defense (OUSD) Acquisition, Analytics and Policy (AAP) – formerly PARCA – , in their latest OTB/OTS guide, states that Formal Reprogramming now has expanded to include an Over Target Schedule (OTS). However, in that guide, it is stated in Paragraph 1.3.8:

“Ideally, formal reprogramming should be done no more than one time during the life of a contract. However, there may be instances where another formal reprogramming is warranted… When formal reprogramming is accomplished in accordance with the procedures in this guide, with a realistic cost and schedule estimate established for the remaining work, it should not be necessary to undergo formal reprogramming again.”

Today, though, whenever contractors incur a significant cost or schedule variance, instead of resolving the variance cause, the first words seem to be: “Let’s do an OTB or OTS.” The lure of “getting rid of cost and schedule variances” seems too good to pass up. Unfortunately, an OTB/OTS implementation has never been an instantaneous process. With AAP’s 12 step OTB/OTS process, it is obvious that the contractor will not be able to start today and incorporate the OTB/OTS in the next Integrated Program Management Data and Analysis Report (IPMDAR) dataset. In fact, AAP’s OTB/ OTS guide states in paragraph 3.8:

“It may be difficult to ascertain the length of time it will take to implement a new baseline based on the scope of the effort. It is not uncommon for the entire process to take up to six months which would be too long of a period without basic cost reporting.”

The last line of the above cited paragraph was referencing the reporting requirements to the customer when an OTB/OTS is being implemented.

The IPMDAR Implementation and Tailoring Guide (5/21/2020) even recognizes the issues with timeliness of implementing an OTB/OTS:

2.3.2.5.5 Formal Reprogramming Timeliness. Formal reprogramming can require more than one month to implement. During formal reprogramming, reporting shall continue, at a minimum, to include ACWP, and the latest reported cumulative BCWS and BCWP will be maintained until the OTB/OTS is implemented.

So why does it take so long to implement the OTB/OTS? Can the contractor just adjust the bottom line variances and move on? Actually no, nothing is really that simple. This is one of the reasons that implementing an OTB and OTS should not be taken lightly. The AAP OTB/OTS Guide addresses adjustments this way:

“3.5.6.2 Adjusting Variances: A key consideration in implementing an OTB is to determine what to do with the variances against the pre-OTB baseline. There are essentially five basic options. This is a far more detailed effort than these simple descriptions imply, as these adjustments have to be made at the detail level (control account or work package).”

When considering the number of control accounts and work packages involved in a major contract, a Formal Reprogramming can become a rather daunting task. The contractor also has to report the effects of the Formal Reprogramming in the IPMDAR Reprogramming Adjustments columns. These adjustment columns appear on both Format 1 and Format 2 of the IPMDAR database, which means the contractor must undertake the assessment for both the contract’s WBS and the OBS – for each WBS element and for each OBS element reported. This can be further complicated if the OTB/OTS exercise were flowed down to subcontractors for a given program. The AAP OTB/ OTS Guide, paragraph 3.8 also states:

“The customer should be cognizant of the prime contractor’s coordination complexities and issues with its subcontractors. The time to implementation may be extended due to accounting calendar month overlaps, compressed reiterations of contractor ETC updates, internal reviews, subcontractor MR strategy negotiations, senior management approvals, etc., all while statusing the normal existing performance within a reporting cycle.”

In the early days, when implementing an OTB with variance adjustments, the company and the customer agreed on a month-end date to make the data adjustments. Then the contractor ran two CPRs or IPMRs (now the IPMDAR): (1) the first report as though no OTB had been implemented [to determine the amount of adjustments to cost variance (CV) and schedule variance (SV) at all the reporting levels] and, (2) the second report [after the OTB implementation had been completed – no matter how long it took] showing the Column 12 adjustments plus whatever BAC changes were being implemented.

Under the current OTB/OTS Guide, it appears as though this process is being done all at once. As stated in the AAP OTB/ OTS Guide paragraph 3.8 above, this implementation could take up to 6 months to complete, so lagging the second report until the OTB/OTS implementation is completed seems logical. The last sentence in paragraph 3.8 also stipulates that regardless of how long implementation takes, the contractor and customer will agree on interim reporting that will be required, further stating that:

“In all cases, at least ACWP should continue to be reported.”

Perhaps this agreement with the customer should also specify the content of the first IPMDAR following OTB/OTS implementation.

All things taken into account, the process of requesting and getting approval for an OTB or OTS can be a long and difficult process, especially if, at the end of it all, the contractor’s request is denied. Even if it were approved and the contractor implements and works to the newly recognized baseline, immediately doing another one is not a pleasant thought – and remember, it was not intended to be pleasant. Reprogramming was always supposed to be a last resort action, when reporting to the current baseline was totally unrealistic.

Now, what about those cases where a contract has one or two elements reporting against totally unrealistic budget (or schedule) baselines? The AAP OTB/ OTS Guide does cover a partial OTB, but reiterates that this is still an OTB because the Total Allocated Budget (TAB) will exceed the Contract Budget Base (CBB). In the early days, however, the government allowed what was called Internal Operating Budgets (IOBs) for lower level elements (control accounts, or specific WBS elements, etc.) that were having problems resulting in an unrealistic baseline for the work remaining. The 1987 Joint Implementation Guide, paragraph 3-3. I (5) described IOBs as follows:

“(5) Internal Operating Budgets. Nothing in the criteria prevents the contractor from establishing an internal operating budget which is less than or more than the total allocated budget. However, there must be controls and procedures to ensure that the performance measurement baseline is not distorted.

(a) Operating budgets are sometimes used to establish internal targets for rework or added in-scope effort which is not significant enough to warrant formal reprogramming. Such budgets do not become a substitute for the [control] account budgets in the performance measurement baseline, but should be visible to all levels of management as appropriate. Control account managers should be able to evaluate performance in terms of both operating budgets and [control] account budgets to meet the requirements of internal management and reporting to the Government.

(b) Establishment and use of operating budgets should be done with caution. Working against one plan and reporting progress against another is undesirable and the operating budget should not differ significantly from the [control] account budget in the performance measurement baseline. Operating budgets are intended to provide targets for specific elements of work where otherwise the targets would be unrealistic. They are not intended to serve as a completely separate work measurement plan for the contract as a whole.”

Current literature no longer specifically addresses Internal Operating Budgets (IOBs), but with the recent trend of contractors jumping to the OTB/OTS conclusion, it might be a better alternative to have individual instances of unrealistic budgets (or schedules) that do not otherwise push the total program to the need for a complete OTB and/or OTS implementation.

These could be good discussion topics for future AAP and DCMA meetings with industry representatives, to determine if there are ways to streamline the process, or at least reduce the amount of requests to implement Formal Reprogramming. Variances are, after all, performance measurement indicators that should not just be routinely and artificially eliminated.

Formal Reprogramming – What Happened? Read Post »

Clarification on the New Department of Defense Earned Value Management System EVMS Thresholds | DOD & DPAP

By Humphreys & Associates / January 12, 2016 / 252.234-7001, 252.234-7002, CLIN, CPR, DCMA, DFARS, DOD, dpap, EVMID, EVMS, FAR, ID, Indefinite Delivery/Indefinite Quantity (ID/IQ), IPMR, IQ, Over Target Baseline (OTB), TAB

252.234-7001, 252.234-7002, CLIN, CPR, DCMA, DFARS, DOD, dpap, EVMID, EVMS, FAR, ID, Indefinite Delivery/Indefinite Quantity (ID/IQ), IPMR, IQ, Over Target Baseline (OTB), TAB

On September 28, 2015, the Defense Procurement and Acquisition Policy Directorate (<abbr=”Defense Procurement and Acquisition Policy Directorate”>DPAP) released a memorandum entitled “Class Deviation – Earned Value Management System Threshold”. In this memo the DoD changed the threshold for <abbr=”Earned Value Management System”>EVMS application to $100 million for compliance with EIA-748 for cost or incentive contracts and subcontracts. That same memorandum stated that no EVMS surveillance activities will be routinely conducted by the Defense Contract Management Agency (<abbr=”Defense Contract Management Agency”>DCMA) on contracts or subcontracts between $20 million to $100 million. As attachments to this memorandum, there was a reissuance of the Notice of Earned Value Management System <abbr=”Department of Defense Federal Acquisition Regulations”>DFARs clause (252.234-7001) and the Earned Value Management Systems DFARs clause (252.234-7002), with both reflecting the new $100 million threshold.In response to this guidance, a series of questions from both contractors and other government personnel were submitted to Shane Olsen of the DCMA EVM Implementation Division (<abbr=”EVM Implementation Division”>EVMID). Below are the salient points from this communication:

There will be no EVMS surveillance of DFARs contracts under $100 million. Contracts without the DFARs clause, such as those under other agencies using the FAR EVM clause, will continue surveillance under their current thresholds.
The $100 million threshold is determined on the larger of the contract’s Ceiling Price or Target Price; as reported on the Integrated Program Management Report (IPMR) or Contract Performance Report (CPR) Format 1.
The threshold is based on the Contract Value including fee (at Price) as noted above. If there is an approved Over Target Baseline (OTB) which increases the Total Allocated Budget (TAB), this cannot push a contract over the threshold.
The new thresholds not only apply to subcontracts, but also Inter-organizational work orders with an EVMS flow-down.
Regardless of the circumstances, the DCMA will not conduct surveillance on contracts less than $100 million. However, if there are Earned Value issues that the buying command or other parties believe need to be reviewed, then the DCMA may conduct a Review for Cause (RFC) of the system against potentially affected guidelines.
The DCMA Operations EVM Implementation Division (EVMID) will not be conducting Compliance Reviews in FY-2016 unless there is an “emergent need”.
If a site is selected for a Compliance Review, only contracts greater than $100 million would be in the initial scope of the Implementation Review (IR). However, if an issue is discovered that requires the team to “open the aperture”, other contracts are not precluded.

The DCMA is still working on a response to the following questions:

How do I handle a contract that is currently below $100 million but has options that, in aggregate, would exceed $100 million?
How is the contract value determined on:
- Indefinite Delivery/Indefinite Quantity (ID/IQ) Contracts
- Non-ID/IQ with Multiple CLIN-Level or Task Order reports?

This blog will be updated and reposted as answers to these questions are given.

Clarification on the New Department of Defense Earned Value Management System EVMS Thresholds | DOD & DPAP Read Post »

Earned Value Management Implementation Guide (EVMIG) Rescinded

By Humphreys & Associates / December 15, 2015 / DCMA, DFARS, DOD, EVM, EVMIG, EVMS, EVMSIG, OSD, parca

DCMA, DFARS, DOD, EVM, EVMIG, EVMS, EVMSIG, OSD, parca

The DoD EVM Implementation Guide (EVMIG, Oct 2006) was rescinded on September 15, 2015 by the Office of Performance Assessments and Root Cause Analysis (PARCA). The EVMIG had provided guidance for understanding Earned Value Management System (EVMS) concepts; detailed procedures for implementing the EIA-748 EVMS Standard, Earned Value Management Systems (EVMS), on government contracts; tailoring guidance for EVMS application and reporting; and post award procedures. Most of the details contained in the EVMIG are also available in other, more recent, publications and the EVMIG is replaced with these other references. EVM System information can be found in the DoD EVM System Interpretation Guide (EVMSIG) which provides overarching DoD interpretation of the 32 EIA-748 EVMS guidelines. Additional information can be found in multiple Defense Contract Management Agency (DCMA) compliance instruction documents.

PARCA identified the following references to replace the contents and guidance found in the EVMIG:

EVM Concepts and Guidelines
EVM Concepts	TBD EVM Analysis Guide Defense Acquisition University (DAU) EVM Community of Practice PARCA EVM Website
EVM System (EVMS) Concepts	EVMSIG DCMA Surveillance Guide

Procedures For Government Use of EVM
Organizational Roles and Responsibilities	TBD EVM Application Guide PARCA EVM Website Defense Acquisition Guide (DAG)
WBS Development and Use	MIL-STD-881C TBD EVM Application Guide
EVM/EVMS Policy and Application	TBD EVM Application Guide PARCA EVM Website
Cost and Schedule Reporting	Integrated Program Management Report (IPMR) Data Item Description (DID) and IPMR Guide TBD EVM Application Guide
EVMS System Compliance	EVMSIG DCMA Surveillance Guide
Integrated Baseline Review (IBR)	Program Manager’s Guide to the Integrated Baseline Review (IBR) TBD EVM Application Guide
Reprogramming	Formal Reprogramming Over Target Baseline (OTB)/Over Target Schedule (OTS) Guide EVMSIG
Training	Defense Acquisition University Website PARCA EVM Website

Earned Value Management Implementation Guide (EVMIG) Rescinded Read Post »

EVMS Variance Analysis — EVMS Analysis and Management Reports

By Humphreys & Associates / April 2, 2015 / DCMA, EVM Analysis, NDIA, VAR, Variance Analysis Report

DCMA, EVM Analysis, NDIA, VAR, Variance Analysis Report

A Variance Analysis Report (VAR) that includes specific information about the cause, impact, and corrective action “provides management with early insight into the extent of problems and allows corrective actions to be implemented in time to affect the future course of the program” [reference: NDIA, IPMD EIA-748 (Revision D) EVMS Intent Guide]. Unfortunately, variance analysis is an easy target for criticism during EVMS reviews. There are many examples of inadequate variance analysis to choose from, but what they all have in common is the lack of specific information on the “why, what, how, when, and who” of any variance. The variance analysis reporting requirements are found in the EIA-748 (Revision D) Guidelines in Section IV., Analysis and Management Reports, Guidelines 22-27.

EIA-748 Guidelines Section IV. Analysis and Management Reports
22	2-4a	Control Account Monthly Summary, Identification of CV and SV
23*	2-4b	Explain Significant Variances \| Earned Value Management
24	2-4c	Identify and Explain Indirect Cost Variances
25	2-4d	Summarize Data Elements and Variances thru WBS/OBS for Management
26*	2-4e	Implement Management Actions as Result of EVM Analysis
27*	2-4f	Revise EAC Based on Performance Data; Calculate VAC

A VAR that includes specific information and data about a problem will allow management to make informed decisions and mitigate project risk. Getting specific about variance analysis reporting includes the following elements.

Overall:

Emphasis on the quantitative, not qualitative
Emphasis on the specific, not the general
Emphasis on significant problems, not all problems
Define abbreviations and acronyms at first use
The Control Account Manager (CAM) is the most knowledgeable person to write the variance analysis report but will need information from the business support team

Cause:

Isolate significant variances
Discuss cost and schedule variances separately
Clearly identify the reason (root cause) for the variance (ties to the corrective action plan)
Clear, concise explanation of the technical reason for the variance
Provide cost element analysis
- Labor – hours, direct rates, skill mix, overtime (rate & volume)
- Material – unplanned requirements, excess quantities, unfavorable prices (price & usage)
- Subcontracts – changing requirements, additional in-scope work, schedule changes
- Other Direct Costs – unanticipated usage, in-house vendor
- Overhead (indirect) – direct base, rate changes
Identify what tasks are behind schedule and why

Impact:

Describe specific cost, schedule, and technical impact on the project
Project future control account performance (continuing problem)
Address effect on immediate tasks, intermediate schedules, critical path, driving paths, risk mitigation tasks
Describe erosion of schedule margin, impacts to contractual milestones or delivery dates, and when the schedule variance will become zero (this may only mean the work getting completed late (BCWP_cum =BCWS_cum); and does not necessarily mean getting “back on schedule”
Describe any impact to other control accounts
Assess the need to revise and provide rationale for the Estimate at Completion (justify ETC realism – CPI to TCPI comparison, impacts of corrective action plan, risk mitigation, open commitments, staffing changes, etc.)
Note: If there is a root cause, there will be an impact. It could be related to cost, schedule, lessons learned to be applied to future activity, an update required to a process to support the corrective action or a re-prioritization of resources to meet a schedule.

Corrective Action Planning:

Describe specific actions being taken, or to be taken, to alleviate or minimize the impact of the problem
Include the individual or organization responsible for the required action
Include schedules for the actions and estimated completion dates (ECD)
If no corrective action is possible, explain why
Include results of corrective action plans in previous VARs.

Ask yourself, is the analyses presented in a manner that is understandable? Does the data support the narrative? Does the variance explanation provide specifics of:

“why” the problem occurred,
“what” is impacted now or in the future,
“how” the corrective action is being taken,
“when” the corrective actions will occur,
“when” the schedule variance will become zero, and/ or the work gets “back on schedule”
“who” is responsible for implementing the corrections?

Remember, a well-developed Variance Analysis Report can reduce the risk of a Corrective Action Request (CAR) during an EVMS review.

EVMS Variance Analysis — EVMS Analysis and Management Reports Read Post »