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United States

Department of

Agriculture

 

 

Office of the

Chief Information Officer

 

DR 3130-006 Version 2  

 

 

 

 

 

 

 

 

INFORMATION TECHNOLOGY EARNED VALUE MANAGEMENT


 

 

 

 

EARNED VALUE MANAGEMENT TABLE OF CONTENTS

 

1.      PURPOSE                                                                                                                 1

2.      BACKGROUND                                                                                                      1

3.      AUTHORITY                                                                                                            2

4.      REFERENCES                                                                                                          2

5.      SPECIAL INSTRUCTIONS/CANCELLATIONS                                                   2

6.      SCOPE                                                                                                                      2

7.      POLICY                                                                                                                    3

8.      AGENCY IMPLEMENTATION                                                                              3

9.      OVERSIGHT, MONITORING AND REVIEW                                                        4

10.  RESPONSIBILITIES                                                                                                4

11.  DOCUMENTATION                                                                                                6

12.  ABBREVIATIONS                                                                                                   6

13.  DEFINITIONS                                                                                                          6

 

 

 

 

 

U.S. Department of Agriculture

Washington, D.C.

 

 

DEPARTMENTAL REGULATION

 

    NUMBER:

3130-006

 

 

 SUBJECT: Information Technology Earned Value Management 

 

 

DATE:   May 1, 2008

 

OPI:  Office of the Chief Information Officer

 

 

1.      PURPOSE

 

This regulation defines the policies and responsibilities, for using and reporting Earned Value Management (EVM) for major USDA information technology (IT) investments.  It also defines responsibilities of personnel in various Departmental positions with respect to EVM implementation, application, and maintenance.    

 

 

2.   BACKGROUND

 

EVM is a project management methodology integrating scope, schedule, and resources, and objectively measuring project performance and progress.  The practice has steadily gained popularity throughout the world because of the improvements in project planning and execution realized by enterprises that have implemented EVM over the last four decades.  The following is a list of some of the relevant legislation, policy and standards related to the use of EVM:

   

a.       Title V of the Federal Acquisition Streamlining Act of 1994 (FASA) requires agency heads to approve or define the cost, performance and schedule goals for major acquisitions to achieve, on average, 90% of the cost, performance and schedule goals established.

 

b.      The Clinger-Cohen Act of 1996 requires the establishment of processes to analyze, track and evaluate the risks and results of all major capital investments for information systems for the life of the system.

 

c.       Office of Management and Budget (OMB) Circular A-11, Part 7, Planning, Budgeting, Acquisition and Management of Capital Assets, and the supplement to Part 7, the Capital Programming Guide, were written to meet the statutory requirements of FASA and the Clinger-Cohen Act.

 

d.      OMB Circular A-11, Part 7, requires use of an Earned Value Management System (EVMS) that meets the American National Standards Institute (ANSI)/Electronics Industries Alliance (EIA) Standard 748 “for both Government and contractors costs, for those parts of the total investment requiring development efforts (e.g., prototypes and testing in the planning phase and development efforts in the acquisition phase)” and requires that agencies “show how close the investment is to meeting the approved cost, schedule and performance goals.” 

 

 

3.   AUTHORITY

 

This regulation is published in accordance with the authority vested in the Secretary of Agriculture under 44 U.S.C. 2104 and 3101; and 44 U.S.C. 3501-3548; and delegated to the Chief Information Officer (7 CFR 2.37).  

 

 

4.   REFERENCES 

 

OMB Circular A-11, Section 53

OMB Circular A-11, Section 300

Federal Acquisition Streamlining Act of 1994

Clinger-Cohen Act of 1996

OMB Capital Programming Guide, Version 2.0, June 2006

USDA Capital Planning and Investment Control Guide

American National Standards Institute (ANSI)/Electronic Industries Alliance (EIA) Standard, Earned Value Management Systems (ANSI/EIA-748-A), Approved  2002

 

 

5.   SPECIAL INSTRUCTIONS/CANCELLATIONS

 

This Departmental Regulation supersedes Departmental Regulation 3130-006,  Information Technology Earned Value Management, dated December 21, 2005

 

 

6.   SCOPE

 

This regulation establishes the USDA EVM policy for major IT investments.  The thresholds that determine applicability of this policy apply only to the development, modernization, or enhancement (D/M/E) expenditures of a major IT investment. 

 

Each USDA mission area, agency, and staff office is obligated to meet the requirements of this policy.  Each mission area, agency, and staff office is authorized to develop and implement more specific policies and procedures or affect lower thresholds as long as they are consistent with this Departmental Regulation.


 

 

7.   POLICY

 

a.       Compliance with the ANSI/EIA-748-A EVM Standard is required for:

 

(1)    All new major IT investments for which agencies are planning to spend D/M/E dollars for application development over the agency-defined life cycle. 

(2)    All major IT investments that are currently in process and are budgeted for D/M/E spending during the remainder of the life cycle.

 

b.      All major IT investments that have planned budgets in D/M/E must provide to OCIO a written certification that the EVM system being used is in full compliance with the ANSI/EIA-748-A EVM Standard.

 

c.       The D/M/E planned costs for the investment includes both contracted and in-house work.  Data collected from each contracted and in-house element of the project will be combined to measure and report an investment’s performance.

 

 

8.   AGENCY IMPLEMENTATION

 

a.      Each USDA mission area, agency, and staff office shall:

 

(1)   Develop long-range plans for systems and procedures to enable full                                                                                                                                                                                                                                                                                                                                                          compliance with the EVM guidelines for IT investments.

 

(2)   Certify the EVM process used by the investment is in full compliance with the ANSI/EIA-748-A EVM Standard.  The agency, or an independent body for the agency will perform EVM process certification. 

 

(3)   Establish documented policies and procedures for project performance measurement for all investments managed by that office as directed in the USDA Capital Planning and Investment Control (CPIC) Guide based on the following criteria:

 

(a)  For investments that are purely steady-state, complete an operational analysis.

 

(b)  For Non-major investments, with D/M/E, require some form of project performance-based management that provides for project plans, schedules, and budgets and the measurement of the execution against those plans, schedules, and budgets will be required.

 

(4)   For major IT investments with D/M/E, provide planned value, earned value, and actual cost performance information on a monthly basis to USDA, OCIO by updating the current USDA EVM enterprise repository.

 

 

9.   OVERSIGHT, MONITORING AND REVIEW

 

OCIO will maintain oversight and final approval authority for all monitoring and review activities, and each agency shall be responsible for performing the following monitoring and activities on its investments.

 

a.       Integrated Baseline Reviews (IBRs):  All major IT investments with D/M/E will require the use of EVM (see section 7).  Agencies will conduct an IBR in accordance with the Federal Acquisition Regulation and/or ANSI/EIA-748-A EVM Standard .  A copy of the IBR report will be sent to OCIO when completed. 

 

a.       Ongoing monitoring will be conducted by the agency to verify the functioning of approved systems, the validity of cost data, and actual progress of the investment(s). 

 

b.      Monthly monitoring of EVM data reported by the agencies.

 

 

10.    RESPONSIBILITIES

 

           a.    Secretary of Agriculture 

 

As required by the Federal Acquisition Streamlining Act of 1994, the Secretary of Agriculture is vested with the authority and obligation to make continuation decisions for all IT investments that exceed the 10% variance threshold for meeting cost, schedule and performance goals of a major IT investment as established by OMB.

 

b.   USDA Chief Information Officer (CIO)

 

The Secretary of Agriculture has delegated to the USDA CIO oversight responsibility and authority for the Department-wide management of IT investments.  The CIO will:

     

(1) Administer the Departmental IT EVM Program and coordinate the activities of the Office of the Secretary and all subordinate organizations;

 

(2) Monitor EVM of investments as defined in Section 7 on a monthly basis;

 

(3) Place on an EVM watch list all major IT investments that are more than 10% over cost or behind schedule for a month, and prepare an investment review for each investment based on the agency-submitted corrective action plan;

 

 (4) Prepare a recommendation to the Secretary of Agriculture for continuation or cancellation for all investments that are more than 10% over cost or behind schedule for three consecutive months;

 

(5) Review Departmental IT EVM reporting and record keeping requirements, including those contained in Departmental Regulations, the CPIC Guide, and other directives written to meet external requirements, to ensure that they impose the minimum burden upon the Department and program agencies and staff offices, have practical utility for the Department and program agencies and staff offices, and still meet all internal and external requirements; and

 

 (6) Act as the USDA liaison with OMB with regard to implementation and execution of EVM for major IT investments at USDA.  Among the duties inherent in this responsibility are the receipt of materials and information from OMB, distribution of OMB materials and information to USDA organizations, submission of EVM data and materials to OMB, and communication with OMB to clarify EVM issues identified by USDA.

 

 c.  Agency Heads

 

The head of each agency is responsible for ensuring IT investments support agency programs and that they are managed efficiently.  Agency Heads ensure that the organization complies with section 7 of this directive.  Agency executives will submit corrective action plans to the USDA CIO for investments that are on the EVM watch list (see section 10.b (3) above).

 

 d.  Agency Program/Investment Managers and CIOs 

 

Agency Program/Investment Managers and CIOs are responsible for supporting and ensuring that IT investments as managed efficiently.  Agency Program/Investment Managers and CIOs must comply with section 7 of this directive with the following considerations:

 

(1)   Program/Investment Managers have the primary responsibility for program/investment management, including the application of ANSI/EIA‑748‑A to contracts, when applicable, through the contracting officer, and on in-house efforts that comprise a significant portion of the investment.  The program/investment manager will establish and maintain a performance measurement baseline (PMB) for the total investment and notify the agency and USDA CIOs,  by way of a corrective action plan, when significant changes to the PMB are required.  A significant change is any change that results in a change in total investment cost or schedule performance of more than plus or minus 5%, or that results in a scope change that impacts the functionality of the system. 

 

(2)   The program/investment manager prepares a corrective action plan for an investment when needed (see section 10.b (3) above).

 

(3)   Agency CIOs are responsible for ensuring that program/investment managers have adequate support for the planning, development, and execution of IT investment projects and for maintaining sufficient documentation to support Exhibit 300 program management information used in the submittal of budget requests.

 

 

11.   DOCUMENTATION

 

Each USDA mission area, agency, and staff office shall create and maintain proper and adequate documentation of the policies, decisions, and procedures for the implementation of EVM for the Department to ensure practical and consistent application of EVM requirements to USDA IT investments.  Regardless of media, official records shall be developed and maintained in accordance with DR 3080-001, Records Management.

 

 

12.   ABBREVIATIONS

 

  D/M/E      - Development, Modernization or Enhancement

  EVM        - Earned Value Management

  EVMS     - Earned Value Management System

  IBR          - Integrated Baseline Review

  LOE         - Level of Effort

  PMB        - Performance Measurement Baseline

  WBS        - Work Breakdown Structure

 

 

13.  DEFINITIONS

 

  1. Agency Head:  Person designated in charge of a USDA agency; i.e. Agency Administrator, Chief, or Office Director.

 

  1. ANSI/EIA‑748‑A:  American National Standards Institute (ANSI)/Electronic

Industries Alliance (EIA) Standard, Earned Value Management Systems (ANSI/EIA-748-A), Approved January 2002

 

  1. Certification of Earned Value Management System:  Each USDA Agency Head with responsibility for a major IT investment(s) will provide written certificate to OCIO that the agency has an EVM system that complies with ANSI/EIA-748-A.

 

d.      Corrective Action Plan: A document in which the agency describes what steps will be taken to bring the cost and schedule performance of an investment back to within a 10% variance of the established parameters.

 

  1. Development, modernization, or enhancement (D/M/E):  Cost for new investments, and changes or modifications to existing systems that improve capability or performance, changes mandated by the Congress or agency leadership, personnel costs for project (investment) management, and direct support. 

 

  1. Earned Value (EV):  The value of completed work expressed in terms of the approved budget assigned to that work for a schedule activity or work breakdown structure component.  Also referred to as the budgeted cost of work performed  (BCWP)

 

  1. Earned Value Management (EVM):  A management methodology for integrating scope, schedule, and resources for objectively measuring project performance and progress. Performance is measured by determining the budgeted cost of work performed (i.e. earned value) and comparing it to the actual cost of work performed  (i.e. actual cost). Progress is measured by comparing the earned value to the planned value. 

 

h.       EVM enterprise repository:  The electronic tool(s) USDA uses to calculate and report on IT investment EVM performance metrics. 

 

  1. EVM System (EVMS):  The set of policies, practices, tools, outputs, and personnel resources that together meet the requirements defined in ANSI/EIA-748-A.

 

j.        EVM Watch List:  A list of investments that are more than 10% over cost or behind schedule for a given month.  These investments will receive a higher level of scrutiny from OCIO and require corrective action plans.

 

  1. General support system:  An interconnected set of information resources under the same direct management control that shares common functionality.  Such a system can be, for example, a local area network (LAN) including smart terminals that supports a branch office, an agency-wide backbone, a communications network, a departmental data processing center including its operating system and utilities, a tactical radio network, or a shared information processing service organization.  Normally, the purpose of a general support system is to provide processing or communications support.

 

l.         Information system:  A discrete set of information technology, data, and related resources, such as personnel, hardware, software, and associated technology services organized for the collection, processing, maintenance, use, sharing, dissemination or disposition of information.  A system must have logical boundaries around a set of processes, communications, storage and must:

 

(1) be under the same direct management control;

 

(2) have the same function or mission objective;

 

(3) have essentially the same operating characteristics and security needs; and

 

(4) reside in the same general operating environment.  

 

  1. Integrated Baseline Review (IBR): A review jointly conducted by the customer and the supplier Program Managers and selected staffs to effectively assess the PMB to ensure understanding of the scope of the IT investment, and to better understand inherent risks. Generally conducted at the control account level, the review will examine the scope statement for the control account, the resources assigned, and the schedule parameters to ensure realistic planning and to identify risk.

 

n.       Major application:  A use of information and information technology to satisfy a specific set of user requirements that requires special management attention to security due to the risk and magnitude of harm resulting from the loss, misuse or unauthorized access to or modification of the information in the application.  All applications require some level of security, and adequate security for most of them should be provided by security of the general support systems in which they operate.  However, certain applications, because of the nature of the information in them, require special management oversight and should be treated as “major”. Agencies are expected to exercise management judgment in determining which of their applications are major.

 

  1. Major Information Technology Investment:  A program, investment or application that requires the submission of an OMB Exhibit 300, or a combination of programs, applications and/or investments that has been designated by OCIO to be major because of risk, external interest, or other factors used by OCIO for determination.  The criteria for defining major investments are outlined in the USDA CPIC Guide to Information Technology.

 

  1. Operational Analysis Review:  The comparison of the performance of an IT asset or system to an established baseline (see Appendix D-Operational Analysis Review, USDA CPIC Guide to Information Technology for more information).

 

  1. Performance Measurement Baseline (PMB):  The time-phased budget plan against which project performance is measured.  It is the schedule for expenditure of the resources allocated to accomplish program scope and schedule objectives. (ANSI/EIA‑748‑A)

 

  1. Program:  A combination of projects with one common set of objectives.

 

  1. Project:  An effort of finite duration and scope with cost/budget limitations.

 

  1. Product Performance Measurement:  A pre-defined practice that measures the effectiveness and efficiencies gained through the capability/product produced by the program or investment and defined within the context of Appendix G -Performance Measurement, USDA CPIC Guide to Information Technology.

 

  1. Project Performance Measurement:  A pre-defined practice that measures the progress and performance of an investment or program against a performance measurement baseline (PMB) and defined in an official document defined generically as a System Description.

 

  1. Work Breakdown Structure (WBS):  A product-oriented hierarchical structure that defines the work to be accomplished in the project.

 

  1. WBS Dictionary:  A companion document to the WBS that describes the scope for each and every WBS element.  The WBS Dictionary covers the entire scope of the project including management and support activities performed as part of the project.

 

 

                                                                -End-