Performance-Based Earned Value


The National Defense Authorization Act for FY 2017 (NDAA)

NDAA includes Section 861, Project Management. It adds additional functions to the Office of Management and Budget (OMB) Deputy Director for Management. The new requirements include Program and Project Management. 


Sec. 881 Excerpts:

‘‘(A) adopt governmentwide standards, policies, and guidelines for program and project management for

 executive agencies;

‘‘(B) oversee implementation of program and project management for the standards, policies, and guidelines

 established under subparagraph (A);

‘‘(C) chair the Program Management Policy Council established under section 1126(b);

‘‘(D) establish standards and policies for executive agencies, consistent with widely accepted standards for

program and project management planning and delivery;

‘‘(E) engage with the private sector to identify best practices in program and project management that would

improve Federal program and project management;


‘‘(H) establish a 5-year strategic plan for program and project management.


Project Management Body of Knowledge®


The Project Management Institute (PMI) Project Management Body of Knowledge® (PMBOK® Guide) is an ANSI standard (ANSI/PMI 99-001-2013). PMBOK® Guide should be considered to comply with the objectives of the NDAA and to replace ANSI-748, the Earned Value Management System (EVMS) Standard. A rationale to discard EVMS was provided in my article in Defense AT&L, “Earned Value Management Acquisition Reform” (Nov.-Dec. 2010).  It is recommended that DoD consider the article when developing the required standards, policies, and guidelines. PMBOK® Guide is used by project management practitioners world-wide and  will provide program and project management transparency.


Pertinent excerpts from PMBOK® Guide are at the tab, "PMBOK Excerpts." 


Excerpts from the article and a link to it follow:


1. In 2009, DoD reported that EVM, based on the EVMS Standard, no longer serves its intended purpose.


2. Sen. Susan Collins stated that the GAO observed that contractor EVM reporting lacks consistency and leads to inaccurate data and faulty application of the EVM metric. “In other words, garbage in, garbage out.” Collins concluded that, “With improved EVM data quality, both the government and the contractor will be able to improve program oversight, leading to better acquisition outcomes.”

3. The time has come to ask whether DoD and other federal agencies should continue to rely on ANSI-748 or should adopt the best practices of commercial companies that use EVM voluntarily, not because of a contractual mandate.

4. Project management standards and best practices that are used by commercial companies should be considered for acquisition reform.

5. Commercial information technology companies in India and South Korea use EVM processes and best practices based primarily on the PMBOK® Guide and its focus on the technical baseline and Technical Performance Measures (TPM). (See article, Performance-based EV in Commercial IT Projects, at tab "Articles and Tutorial"   

6. PMBOK® Guide practices include:

  1. Differentiating the product scope from the project (work) scope
  2. Establishing a requirements baseline
  3. Use of TPM to assess planned vs. actual technical performance.

    Finally,

    7. EVM data…will be reliable and accurate only if the right base measures of technical performance are selected and progress is objectively assessed.

    8. If you are measuring the wrong things or not measuring the right way, then EVM may be more costly to administer and may provide less management value.