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
- Agency
Head: Person designated in
charge of a USDA agency; i.e. Agency Administrator, Chief, or Office
Director.
- 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
- 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.
- 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.
- 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)
- 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.
- 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.
- 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.
- 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.
- 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.
- 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).
- 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)
- Program: A combination of projects with one
common set of objectives.
- Project: An effort of finite duration and scope
with cost/budget limitations.
- 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.
- 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.
- Work
Breakdown Structure (WBS): A
product-oriented hierarchical structure that defines the work to be
accomplished in the project.
- 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-