EVM Issues From the Eyes

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• EVM Issues From the Eyes
• of an OMB Examiner

November 6, 2006 Meredith Romley David Muzio
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Exhibit 300s and EVMS

• EVM is a vital element in capital planning and an
  Exhibit 300 however, you cannot just look at EVM
  data to get a sense if the program is on track
  and well-justified.
• Agencies that have effective capital programs
  often use Exhibit 300s as a driver in their
  capital programs.
• Exhibit 300s are not a paper exercise. For new
  and existing programs, it is the one document to
  justify a programs existence (new or steady
  state).
• OMB often reviews EVM data to ensure oversight
  after funds are appropriated.

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The Elements of an Exhibit 300 Examiners Care
About the Most

• Summary Justification
• Summary of Spending
• Acquisition/Contract Strategy
• Performance Measures
• Security Privacy
• Enterprise Architecture
• Alternatives Analysis
• Risk Management
• Cost, Schedule and Performance

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Part I, Section A Overview

• Summary and justification for the investment
• Take this section seriously.
• Be very clear what performance gap you propose to
  close. Make a case.
• Tie the performance gap to your mission.
• Include specific performance information to make
  your case.
• State how the investment will reduce costs and
  improve efficiency and effectiveness.

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Section B Summary of Spending

• Include total, risk adjusted life cycle costs for
  the investment.
• Use common sense
• If the justification indicates the lifecycle is
  20 years, dont show costs for the first 8.
• Shifting from acquisition to OM should be
  gradual.
• FTE costs should be consistent with similar
  agency acquisitions.

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Section C Acquisition/Contract Strategy

• Must outline each acquisition vehicle and provide
  data on each, including date of award, start/end
  date, performance based, competitively awarded,
  EVMS, security and privacy.
• Should demonstrate that the strategy mitigates
  risk to the Government to the maximum extent.
• If EVMS is not used, you must clearly explain
  why.
• Red flags are TM, single award ID/IQ with
  unpriced follow-on Task Orders, and No EVMS.
• Total value of contracts must match Summary of
  Spending chart.

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Section D Performance Information

• Must articulate quantifiable performance measures
  and demonstrate how they are linked to the
  agencys strategic goals.
• Must identify the performance gap you need close
  by year. The baseline should be included as that
  is your gap. For example, for a new aviation
  screening system Decrease passenger screening
  time by 20/year. Baseline in 2006 is 8 minutes.
  2007 target is 6 min 40 sec.
• Many goals are often presented in the
  justification section.

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Section E Security and Privacy

• Easy test
• For a system already deployed, are all systems
  CAed? Is there a PIA and SORN?
• For systems under development, are appropriate
  resources (people and dollars) included to ensure
  security and privacy compliance? What are your
  plans to be compliant?

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Section F Enterprise Architecture

• Another Easy Test
• Is the investment part of the EAs target
  architecture?

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Part II, Section A Alternatives Analysis

• Should demonstrate that three new options were
  evaluated, and status quo was reengineered.
• Status quo and the option chosen is insufficient.
• Must demonstrate that the agency conducted a
  rigorous alternatives analysis.

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Section B Risk Management

• A risk management plan is required and must be
  performed at the initial concept.
• Must include mandatory risk elements and
  demonstrate active management of the risk
  throughout the life-cycle of the investment.
• Life cycle costs must be risk adjusted.
• Although OMB does not require agencies to submit
  a risk management plans anymore, if the data are
  questionable, we will ask for it.

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Section C Cost and Schedule Performance

• Must use an ANSI/EIA Standard EVM System.
• Must include all indictors PV, EV, AC, SPI, CPI
  SV, CV.
• CPI and SPI should not equal 1. This is a red
  flag.
• Compare OMB approved baseline and actual outcomes
  for phase/segment/module by milestone.
• Show real milestones that make sense to decision-
  makers. Dont show 300 line items, pick the
  major critical milestones.
• The agency might have a new baseline, but it
  cannot be depicted in an Exhibit 300 until OMB
  approves it.

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Section C Cost and Schedule Performance (cont.)

• Analyze cost and schedule variances of 10 or
  more.
• Must include corrective actions to explain
  problems. Be honest, clear and specific.
• Include a new EAC. This is used to determine if
  program should continue programs are shut down.
  

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Part III, Steady State Investments

• Most concerned about the risk management plan and
  operational analysis
• When was the risk management plan developed? It
  is effective in mitigating risk?
• When was an operational analysis conducted? Are
  you meeting your planned goals on schedule and
  within cost?
• OMB often seeks EVM data on a quarterly basis for
  critical programs.

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• Questions?