Inside this

issue:

From the CEVM 1

Integrated ProgramManagement (IPM)Training

2

Acquisition PolicyUpdate

3

EVM Training:Performance AnalysisUsing EVM Techniques

4

In the Spotlight:

Space and Naval WarfareSystems Command(SPAWAR)

5

Supplier Management:A Changing Landscape

6-7

New Acquisition

Leadership8

Calendar 8

Farewell:

Lynne Sia-Bates9

Crossword Puzzle 9

Department of the Navy (DON)

Earned Value Management (EVM)

Quarterly Newsletter

December 2017

The Naval Center for Earned Value Management (CEVM) created "The Baseline" in order to raise

EVM awareness throughout the Department of the Navy (DON) with the ultimate goal of better

informing you, our stakeholders.

The core mission of the CEVM is to implement EVM and other practices more effectively and

consistently across all DON acquisition programs. A widely used program management

methodology, EVM integrates the cost, schedule, and technical baselines. The underlying principle

of EVM is a common sense approach to managing complex problems.

The cornerstone of EVM is Budgeted Cost for Work Performed (BCWP). BCWP assesses the amount

of work performed during a given period. This metric is the foundation upon which Program

Managers (PMs) can base effective program management decisions. PMs can assess real-time

program progress with regards to both budget and schedule. This oversight enables PMs to

proactively make course corrections. BCWP is the only metric within the DON that gives PMs such

reliable performance assessments.

However, the level of rigor in BCWP and EVM at large is not suitable for all projects. For example,

the work may be Level of Effort (LOE), or the nature of the work may be such that it is simply not

practicable to discretely schedule and measure. The application requirements for EVM are very

simple within the Department of Defense; EVM is required for cost reimbursement or incentive

contracts greater than $20M and 18 months in duration. Waivers may be granted as an exception

if the program management plan is commensurate to the complexity of the work and associated

risk.

In order to succeed in projects of nearly any size, PMs must be able to organize the work,

determine who is performing the work, ensure resources are available when they need to be,

properly allocate budget, collect costs, analyze project status, forecast completion dates and final

costs, and control changes. This and much more is what EVM brings to the PM.

From the Center for

Earned Value Management (CEVM)

Integrated Program

Management (IPM) Training

Since its inception in 2012, the Integrated Program Management (IPM) Branch at Marine Corps Systems Command (MCSC) has

collaborated closely with the IPM Division at Naval Air Systems Command (NAVAIR). One of the first tasks of the IPM Branch was to

improve the use of Integrated Master Schedules (IMS) at MCSC. In order to accomplish that task, MCSC needed to develop training

for its workforce. Fortunately, NAVAIR had already developed an effective curriculum for training not only its schedulers but also

members of the Program Management (PM) Competency, who should be the primary users of the IMS.

Since 2013, the IPM Branch has provided formal training in the proper use of IMS as a fundamental project management tool.

Modeled after a similar course at NAVAIR, the training was tailored to meet the specific needs of MCSC. While NAVAIR is mostly

focused on Acquisition Category (ACAT) I programs, most MCSC programs are ACAT III or lower. However, MCSC does support

several ACAT I programs at Program Executive Office (PEO) Land Systems (LS) and PEO Enterprise Information Systems (EIS).

Given the limited size and resources of the IPM Branch, initially the training focused on those program offices most in need of

scheduling support or those programs that had Earned Value Management (EVM) requirements. Over time the course has evolved.

Since the beginning of Fiscal Year 2016, Defense Acquisition University’s “EVM-263 – Principles of Schedule Management” has

been a requirement for PM Level 3 Certification. After a period of research and some adjustments to the course, MCSC determined

that its IMS 101 course meets the fulfillment requirements of EVM 263. Subsequently, since December 2015 MCSC has regularly

provided IMS 101 classes. Acquisition Professionals that need the training for PM certification have priority, but MCSC trains all

competencies. Due to the high demand for EVM 263, classes at Fort Belvoir are over capacity, and MCSC has provided the

required training for members of the PM Competency to achieve Level 3 within the prescribed time limits.

Members of the IPM Branch teach the class in its entirety, and the feedback has been overwhelmingly positive. The instructors are

also full-time schedulers and IPM analysts that provide analytical and/or scheduling support to multiple program offices. Real

world examples of when the IMS is most useful serve to greatly enhance the training. The IPM Branch has also provided classes to

program office leadership. This allows for the full understanding of how to best use IMS as a project management tool and also

allows the leadership to provide its guidance and expectations regarding topics like statusing and baseline control processes,

which vary by PM office.

In addition to IMS 101, the IPM Branch has also developed a follow-on two-day IMS 201 class, which takes the concepts taught in

IMS 101 and implements them with hands-on training in Microsoft Project.

Written By: Douglas Dudgeon

December 2017 Page 2

Hierarchical decomposition of the IMP/IMS Structure, connecting the work and outcomes of a project.

In accordance with Change 1 of the Department of Defense Instruction (DoDI) 5000.02, dated 26 January 2017, a new process

has been incorporated for making determinations of Earned Value Management (EVM) applicability.

“For [Acquisition Category] ACAT ID and IAM programs, [Office of the Secretary of Defense] OSD [Under Secretary of Defense

for Acquisition, Technology, and Logistics] USD(AT&L) Performance Assessment and Root Cause Analyses (PARCA), in

coordination with the [Component Acquisition Executive] CAE or designee, will review proposed contract work scope for EVM

applicability and provide a recommendation to the [Defense Acquisition Executive/Milestone Decision Authority] DAE/MDA for

a determination of EVM applicability. For all other ACAT levels, the CAE, or designee, will review and determine EVM

applicability. If EVM is determined to apply, then threshold application in this table is utilized or a waiver from the CAE is

required. If, based on the nature of the work, EVM is determined not to apply, then EVM is not placed on contract.”

This change incorporates a recommendation from Better Buying Power (BBP) 3.0; the “Eliminating Requirements Imposed on

Industry Where Costs Exceed Benefits” study finds that EVM reporting is often required on inappropriate contract types. The

specific recommendation is that the Department of Defense (DoD) should amend its EVM policies to clarify that EVM reporting

is required above the regulatory dollar threshold on cost reimbursement or incentive contracts that have discrete,

schedulable, and measurable work scope. The change to the DoDI 5000.02 initiates a process that allows for assessment of

work scope to be included with contract type, contract dollar value, and contract period of performance when determining

application of EVM on the contract. The figure below shows the two-step EVM Application Process.

As a result of this change, the Department of Navy (DON) programs for which USD(AT&L) is the MDA may get applicability

determinations of the work scope on proposed contracts. OSD USD(AT&L) Performance Assessments and Root Cause Analyses

(PARCA) provides the recommendation of EVM applicability, in coordination with the CEVM, to the MDA.

If the determination is that EVM does not apply for a particular contract, then EVM is not required to be placed on that

contract, and no additional waivers to the DoDI 5000.02 or deviations to the Defense Federal Regulation Supplement (DFARS)

are required. For programs for which the MDA is not USD AT&L, the CAE or designee reviews and determines EVM

applicability. Within the DON, the CAE has delegated this authority to the Deputy Assistant Secretary of the Navy - Acquisition

and Procurement (DASN AP). Additionally, DASN AP issued a class deviation (#15-C-913) for Level of Effort contracts and

efforts that grants a waiver of the application of EVM to cost and/or incentive type Level of Effort (LOE) contracts and Contract

Line Item Numbers (CLINs). This class deviation was incorporated into the Navy and Marine Corps Acquisition Regulation

Supplement (NMCARS) during change 13-07.

The overall goal of these policies is to ensure that EVM is applied on cost reimbursement or incentive contracts greater than

$20M, longer than 18 months in duration, and with discrete, schedulable, and measurable work scope. If you have any

questions about how to apply EVM to your contracts, please contact the Center for EVM (CEVM), System Command (SYSCOM),

Direct Reporting Program Manager (DRPM), or another organizational EVM focal point.

Acquisition Policy Update

Page 3December 2017

Written By: David Tervonen

EVM Training:

Performance Analysis

Using EVM Techniques

Page 4December 2017

Written By: Marianne Andreazza

Earned Value Management (EVM) 201 not being a requirement for the Business—Financial Management (BUS-FM) Defense

Acquisition Workforce Improvement Act (DAWIA) curriculum has shifted the focus within the Business Financial Manager (BFM)

community away from performance analysis concepts. BFMs are the single-point analysts working with the Program Managers

(PMs) on programs where EVM is not required. Based on leadership’s assessment of knowledge gaps in the BFM workforce,

Space and Naval Warfare Systems Command (SPAWAR) developed “Performance Analysis using EVM Techniques,” which it has

included in its BFM Learning & Development Program.

While not limited to EVM principles, the course also includes understanding the programmatic options when analysts identify

likely budget shortfalls. Notably, the cornerstone of this class is learning about the Contract Funds Status Report (CFSR) and

its usefulness in financial and EVM environments.

EVM analysts should evaluate CFSR data in Request for Proposal (RFP) formulation, Integrated Baseline Review (IBR)

preparation, and program execution.

RFP Formulation

The vendor’s expenditure profile in the RFP response is not the same as the funding required to initiate and execute a

contract. This is especially true when the contract contains significant material and/or subcontracts. In the cost

evaluation, it is necessary to ask for a CFSR in the solicitation response if the time phasing of the RFP response fits within

the Program Management Office (PMO) budget. Expenditure profiles typically vary from funding need.

IBR Preparation

Preparation for an IBR often focuses on vendor IBR artifacts. One of the measures of an “executable” Performance

Measurement Baseline (PMB) is an assessment of the PMB as compared to the PMO budget. After negotiations, and in the

budgeting process which results in the PMB, the vendor makes adjustments that will ultimately change the expenditure

and funding profile in the RFP response. In order to know the program can execute the IBR baseline within the PMO

budget, it is critical to ask for an updated CFSR as an IBR artifact to analyze the data in it.

Program Execution

The EVM analyst must ensure the most likely Estimate at Completion (EAC) is used to report funding requirements.

Analysts must not assume the vendor is using the same data set for preparation of both Contract Data Requirements

Lists (CDRLs). Additionally, with the IPMR at vendor cost and the CFSR at vendor fee, the EACs used on both reports

should be synonymous. A CFSR is an auditable submittal. Due to being a formal statement of funds required, a CFSR can

help guard against de-obligation actions. Despite billings to the government made at negotiated billing rates and

financial forecasts submitted using Forward Pricing Rates, actuals paid and drawn from the Treasury are not a snapshot

of vendor funding needs. With the exception of the Limitation of Funds letter received when the vendor has exhausted

75% of the funding, the CFSR is the only CDRL with an auditable snapshot of funds required when no other ad hoc

information is requested from the vendor.

After completing this four-hour learning module, students understand the importance of putting a CFSR on contract only

when appropriate, including the CFSR requirement in the RFP solicitation for submission in the RFP response and again as an

IBR artifact, and comprehending how the data makes them more effective in their day-to-day performance. Understanding the

CFSR data and its overall usefulness ensures more value to the program offices supported.

At the most basic level, it is difficult to categorize the main output of Space and Naval Warfare Systems Command (SPAWAR).

Naval Sea Systems Command (NAVSEA) builds ships, Naval Air Systems Command (NAVAIR) builds aircraft, and Marine Corps

Systems Command (MARCORSYSCOM) builds armored vehicles and ground tactical weapons. But the output generated by

SPAWAR encompasses Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance

(C4ISR); Enterprise Information Systems (EIS); Space Systems; and Cyber Security. Accordingly, numerous SPAWAR programs

directly aid warfighters. Some notable SPAWAR programs include:

Consolidated Afloat Networks and Enterprise Services (CANES): CANES, the Navy's next generation tactical afloat

network, represents a new business model for delivering capability to the fleet. CANES consolidates five legacy Command,

Control, Communications, Computers, and Intelligence (C4I) networks into one, enhancing operational effectiveness while

providing better quality of life for deployed Sailors through reduced operations and sustainment workloads as a result of

common and modernized equipment, training, and logistics.

Global Positioning, Navigation and Timing System (GPNTS): GPNTS provides the Navy a Global Positioning System (GPS)

-based positioning, navigation, and timing capability. The United States (US) government created and maintains the GPS,

which is freely accessible to anyone with a GPS receiver.

Mobile User Objective System (MUOS): Although the Air Force oversees most DoD space systems, the Navy is

responsible for all DoD Ultra high frequency (UHF) narrowband satellite communications. As the only radio frequency that

can penetrate jungle foliage, inclement weather, and urban terrain, the UHF spectrum is the military’s communications

workhorse. MUOS adapts a commercial third generation Wideband Code Division Multiple Access (CDMA) cellular phone

network architecture, combining it with geosynchronous satellites to provide a new and more capable UHF system. MUOS

includes a satellite constellation of four operational satellites with one on-orbit spare, a ground control and network

management system, and a new waveform for user terminals. The ground system includes the transport, network

management, satellite control, and associated infrastructure to fly the satellites and manage users’ communications.

Next Generation Enterprise Networks (NGEN): NGEN is the follow-on procurement of information technology (IT)

services for the Navy and Marine Corps Intranet (NMCI). NGEN consists of 34 services with over 700K users and 2.5K sites.

Navy Enterprise Resource Planning (ERP): Navy ERP is the Department of the Navy (DON) financial system of record.

Using sophisticated business management software, Navy ERP streamlines the Navy’s business operations, specifically

financial and supply chain management. This enables the DON to be diligent stewards of taxpayer dollars while

supporting the Navy’s mission.

The aforementioned examples are just a few of the systems that SPAWAR either develops or procures. C4I, business systems,

and satellites are all part of the SPAWAR mission, tied together by cyber security. Cyber security refers to the body of

technologies, processes, and practices designed to protect networks, devices, programs, and data from attack, damage, or

unauthorized access.

Over the last decade, information has emerged as a 5th warfighting domain, joining land, sea, air, and space as a critical,

contested battlespace. Given the Navy’s critical systems are vulnerable to cyber-attack and the Navy, SPAWAR has been tasked

with the development of standards, architectures, and infrastructure, along with tactical and business applications, to enable

our sea and shore platforms and installations to operate effectively and efficiently in cyberspace.

As the IT and Information Authority for the Navy, SPAWAR is positioning the Navy to respond to the quickly changing cyber

threat environment, providing cyber technical leadership, and enabling the delivery of advanced modern IT and cyber

capabilities to transform what it means to operate and maneuver within the cyber domain. Every system is developed with

cyber situational awareness. Accordingly, the SPAWAR vision today is to rapidly deliver cyber warfighting capability from

seabed to space.

SPAWAR Code 16130 is the subject matter expert for the implementation and utilization of Earned Value Management (EVM).

Its mission is to establish SPAWAR’s EVM policies, procedures, and roles and responsibilities in order to implement EVM

appropriately and consistently across SPAWAR acquisition programs in accordance with DoD policies and guidelines and aid

Program Management Offices (PMOs) to deliver SPAWAR acquisition programs at the desired cost, schedule, and technical

performance levels to perform its mission.

In the Spotlight: Space and Naval

Warfare Systems Command (SPAWAR)

Page 5December 2017

Written By: Debra McGinnis

Outsourcing

Recently prime contractors have shifted effort, knowledge, data, labor, costs, risks and opportunities to their supplier

networks. Twenty years ago, on average, Naval Air Systems Command (NAVAIR) prime contractors were making about 60% of

the aircraft and buying (subcontracting) about 40%. Now they are “system solution” providers, making approximately 20% and

buying approximately 80%. This change has resulted in “outsourcing” as a foundational strategic component of the business

model used by NAVAIR’s supply base. A supplier’s outsourcing activity is dependent on its overall business strategy and the

industry’s technical capabilities. Increased levels of outsourcing have been widely adopted as a method of reducing

investment costs, distributing the associated risks, increasing return on invested capital, and leveraging sub-tier supplier

capabilities, which have in-turn expanded to accommodate the increased levels of outsourcing.

A substantial consolidation of defense contractors occurred during the 1990s. For example, in 1994, Northrop Aircraft

bought Grumman Aerospace, creating Northrop Grumman. McDonnell Douglas merged with Boeing in 1997. In 1995, Martin

Marietta merged with Lockheed Corporation, forming Lockheed Martin. This heavy consolidation coincided with a period of

prime contractors strategically increasing the degree and complexity of effort that was outsourced, effectively transitioning

them from airframe/platform centric providers to the system solution providers of today. Ongoing budget reductions,

perceptions of declining defense procurement demand, and uncertain prospects for new major programs re-enforce the

contractors’ strategy of improving efficiency and reducing investment risk exposure through such changes as:

Moving product or process from make to buy

Changing, consolidating, or adding suppliers

Adjusting the products or processes a supplier provides

Expanding the scope of what is outsourced to include

sourcing technical design, buying systems, etc.

These changes have significantly impacted program cost and

schedule performance, requiring additional consideration when

assessing the program plan and associated program execution

risks.

Leveraging Earned Value Management (EVM) to

Assess Associated Risks

EVM provides a number of tools that help government and

industry Program Managers (PMs) assess cost, schedule and

technical progress. EVM includes several tools, specifically the

Integrated Baseline Review (IBR) and the Schedule Risk Assessment

(SRA).

Required by Department of Defense (DoD) policy when EVM is determined to be applicable on a contract, IBRs are reviews of

contractors’ Performance Measurement Baselines (PMBs). SRAs utilize statistical techniques to identify technical,

programmatic, and schedule risks in a program and quantify the impact of those risks on the program’s schedule. IBR and

SRA assessment criteria, process steps, and questionnaires should include specific measures to access the impact of company

supplier sourcing and management strategies.

Page 6December 2017

Supplier Management:

A Changing LandscapeWritten By: Eileen Lang

(continued on Page 7)

Additionally, it is important to correctly establish acquisition reporting requirements in order to receive the information

needed to effectively manage EVM work flow (such as Integrated Program Management Reports (IMPRs) and Integrated Master

Schedules (IMS)). The requirements may be tailored based on program risk and the specific needs of the PM. Incorporating

requirements and changes after contract award is typically more challenging and expensive as contractors resist scope

growth and typically advocate scaling back requirements as much as possible.

The NAVAIR Cost Estimating and Analysis Department has incorporated steps within its IBR and SRA processes to address

supplier sourcing and management risks.

The following table of “Sample Areas of Interest” provides examples of areas to focus attention to properly determine the

impact and risks along with ensuring the prime contractors are managing programs effectively:

Supplier Management:

A Changing Landscape cont.

Page 7December 2017

(continued from Page 6)

Page 8December 2017

New Acquisition Leadership

Assistant Secretary of the Navy for

Research, Development, and Acquisition (ASN(RDA))

Secretary of the Navy Richard V. Spencer swore in the Honorable James

Geurts on December 5th, 2017 as the new Assistant Secretary of the

Navy for Research, Development, and Acquisition.

Mr. Geurts previously served as the Acquisition Executive, U.S. Special

Operations Command, at MacDill AFB, FL, where he was responsible

for all special operations forces acquisition, technology and

logistics. He has over 30 years of extensive joint acquisition

experience and served in all levels of acquisition leadership positions

including Acquisition Executive, PEO and Program Manager of Major

Defense Acquisition Programs.

Under Secretary of Defense (AT&L)

Senate Confirmed in August 2017, the Honorable Ellen M. Lord

currently serves as the Under Secretary of Defense for Acquisition,

Technology and Logistics (AT&L). In this capacity, she is responsible to

the Secretary of Defense for all matters pertaining to acquisition;

research and engineering; developmental testing; contract

administration; logistics and materiel readiness; installations and

environment; operational energy; chemical, biological, and nuclear

weapons; the acquisition workforce; and the defense industrial base.

January February MarchSu M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

1 2 3 4 5 6 1 2 3 1 2 3

7 8 9 10 11 12 13 4 5 6 7 8 9 10 4 5 6 7 8 9 10

14 15 16 17 18 19 20 11 12 13 14 15 16 17 11 12 13 14 15 16 17

21 22 23 24 25 26 27 18 19 20 21 22 23 24 18 19 20 21 22 23 24

28 29 30 31 25 26 27 28 25 26 27 28 29 30 31

Calendar

EVM Events

25 Jan NAVSEA EVM for PMs Training

January Anticipated release of the updated DoD EVMSIG

7-8 Feb National Defense Industrial Association (NDIA) Integrated ProgramManagement Division (IPMD) Meeting

Federal Holidays

1 Jan New Year’s Day

15 Jan Birthday of Martin Luther King, Jr.

19 Feb Washington’s Birthday

Page 9December 2017

This publication was created by the Naval Center for Earned Value Management (CEVM) with contributions from the Systems

Commands. Please contact us at 703-695-0510 for any questions on the content of this publication. For more information

on EVM within the Department of the Navy: http://www.secnav.navy.mil/rda/OneSource/Pages/CEVM/CEVM.aspx

After 35 years of dedicated service, Mrs. Lynne Sia-Bates retires in

March 2018. Lynne’s hard work, commitment, and dedication are

worthy of admiration.

Lynne provided Integrated Program/Project Management (IPM)

support, specializing in Earned Value Management (EVM) to the U.S.

Navy, Department of Energy, and Department of Education. She

worked in the areas of EVM implementation, oversight of contractor

reporting and implementation, and training; Integrated Baseline

Review (IBR) facilitation; Earned Value Management System (EVMS)

certification and surveillance, and IPM policy and programmatic

guidance. Her contributions will be valued and remembered.

In retirement, Lynne plans to travel and volunteer at the United Service

Organizations (USO) and the Wolf Trap animal rescue.

On behalf of everyone in the EVM community, we will miss Lynne

dearly and wish her the best of luck. Fair winds and following seas,

shipmate!

Farewell: Lynne Sia-BatesWritten By: Thea Kelleher

Crossword PuzzleDown

1 An event-driven plan that documents thesignificant accomplishments necessary tocomplete the work and ties eachaccomplishment to a key program event

3 A logical aggregation of future work within acontrol account that cannot yet be planned indetail at the work package or task level

4 Estimate of costs to complete all work from apoint in time to the end of the program

Across

2 Budget associated with specific work scope orcontract changes that have not been distributedto a control account or summary level planningpackage

5 A process that uses statistical techniques toidentify technical, programmatic, and schedulerisks in a program and quantifies the impact ofthose risks on the program's schedule

6 Natural subdivision of control accounts. A task/activity or grouping of work. The point at whichwork is planned, progress is measured, andearned value is computed

7 An interdisciplinary field of engineering thatfocuses on how to design and manage complexengineering systems over their life cycles