Presented to: NDIA By: Keith Kratzert Date: May 3, 2006 Federal Aviation Administration Improving Program Performance at FAA

Presented to: NDIA

By: Keith Kratzert

Date: May 3, 2006

Federal AviationAdministrationImproving Program

Performance at FAA

2 2Federal AviationAdministration

Improving Program Performance at FAAMay 3, 2006

EVM at FAA

• Background

– FAA has used DoD approach (EVM for contractors only) on some programs and decided it’s not sufficient

– Will manage entire program using EVMS in accordance with ANSI/EIA 748

• Manage/measure all resources• Requires changes in behavior by all parties



FAST Home Page: http://fast.faa.gov



EVM Transformation at FAA• Holistic Approach

• Goals – Adopting FAA and industry Program Management

"Best Practices"

– Strengthening and integrating technical, schedule, and cost performance management of programs by implementing earned value management techniques

– Positioning programs to be better able to anticipate, forecast, and communicate future performance based on objective performance metrics and risk assessments as well as proven engineering judgments



EVM Transformation Overview “Flag”



Assessment Themes - Issues

• PM Commitment

• Cross Cutting Themes– Multiple Baselines– Gov’t FTE’s & Effort– Program Support LOE– Choosing the Correct Contract Type– Including Sufficient EVM Language in Contracts– Comprehensive Program-Level WBS

• FAA Best Practices– Performance-based Payments– Mature Estimating Techniques– Alignment of Program WBS with Contract CLINS and OMB 300 Useful

Segments– GCAMS & CCAMS– Program Level EVM Tools Application– Risk Adjusted Schedule & Cost Applications



EVM Transformation OverviewFAA Major Programs - Cost & Schedule Variance

Program Name Color Code - EVMS Quality:

Green: MeetsYellow: Partially MeetsRed: Does Not Meet

Cost Variance %

Sch

edul

e V

aria

nce

%

-5%

-10%

5%

10%

DDDAAA

MMM

Over SpentAhead of Schedule

Under SpentAhead of Schedule

Over SpentBehind Schedule

Under SpentBehind Schedule

-5%-10% 5% 10%

TTT

SSS

>-15%

>15%

EEE

PPPQQQ

RRR

NNN

BBB

LLL

GGG

FFFHHH

III JJJ

KKK

OOO



EVM Council

• Formed as a continuation of the management processes effort

• Co-Chaired by ATO-A and AIO• Membership includes:

– ATO Service Unit representatives– Other Lines of Business implementing EVM– AIO representatives– CFO representatives



EVM Transformation – Goals for 2006

• EVM Council tracking POA&M status – most targets due in 2006 – if achieved, flag will turn to mostly yellow and green.

• FAA to assess its financial processes against the ANSI standard & update its flag

• FAA to issue a Layperson’s guide to EVM • FAA to issue a manager’s guide to using EVM• Technical Training to continue and be supplemented

by awareness training• EVM toolkit to be selected.• Our goal is that 50% of our “EVM” scores on our

exhibit 300s be “4” or “5” and the rest “3”.



EVM Transformation – Goals for 2007

• Full EVM implementation by end of FY 07.• EVM part of Program Managers toolkit.• Full EVM reporting for all major investments.• EVM scores on Exhibit 300s are all “4” or “5”.• Use of EVM makes a major difference in ability of

FAA programs to stay on track and within budget.

• Use of EVM contributes to FAA “NAS Modernization Program” being removed from the GAO High Risk List.



FAA Contractor Meeting Feb 6, 2006Participants

– Lockheed Martin– Raytheon– Harris– Parsons Infrastructure and Technology Group– Northrop Grumman– Mitre– Computer Sciences Corporation– Advanced Management Technology Inc.– BAE Systems



Follow-up Meeting Guidelines

• Attendees requested to return for individual meetings over next three months with EVM team and selected Program Managers and Contracting Officers– Present Management Overview

• Company response to FAA initiative• EVM System acceptance applicability to FAA or Plan to

achieve acceptance (ref. NDIA Systems Acceptance Guide)

• How EVM is used on current FAA contracts• Best practices (e.g., subcontract management)• Improvement opportunities



FAA Contractor Meeting Follow-up

Participants– Lockheed Martin*– Raytheon*– Harris– Parsons Infrastructure and Technology Group*– Northrop Grumman* – Mitre– Computer Sciences Corporation*– Advanced Management Technology Inc.– BAE Systems

* Follow-up meeting already held



FAA Procurement Comments

• Top contractors – suppliers, support contractors, FFRDC

– Purpose – cooperation with industry to achieve mutual success in performing FAA mission

– FAA EVM differs from legacy approach• Program level, not just contractors• Will not change existing contracts



Expectations from Contractors

• Manage using ANSI/EIA 748

– Existing contracts will not be modified to require EVM

– For new contracts, contractors are responsible for• Contract performance (scope, schedule, delivery)

• Excellent management

– Contractors may leverage existing EVM acceptance from other agencies or work with FAA to develop new plan



Summary-FAA EVM Approach Overview

FAA programs are implementing EVM at the program level and requiring contractor EVM reporting in an effective and efficient manner

Prime Contractors Support Contractors

Program Effort

Cost Reimbursable Fixed Price Cost Reimbursable

Fixed Price

Measurable • EVM reporting and certification

• Performance based payments, or • Status reporting and invoices

• EVM reporting and certification, or• Status reporting and invoices(1) (2)

• Performance based payments(1), or • Status reporting and invoices(1) (2)

LOE (1) • Status reporting and invoices

• Status reporting and invoices



1) EVM implemented by the FAA PO2) Includes production and sustaining support, such as, engineering and program management

Documents

Presented to: NDIA By: Keith Kratzert Date: May 3, 2006 Federal Aviation Administration Improving Program Performance at FAA