What is Earned Value Management Contract Flow Down?

One of changes from ANSI 748 A to ANSI 748 B is a new emphasis on the need for Earned Value Management requirements for Flow Down to subcontractors.  While the requirement is there, no prescription regarding tools or techniques to accomplish this is outlined.

DoD and NASA have had this requirement in place for a number of years.  While the Prime contractors understand EVM, they often struggle with applying EVM Flow Down to their subcontractors. The subcontractors themselves often aren’t able to meet the EVM requirements without significant help.

In some cases, organizations simply don’t want to engage in EVM.  Yes, they know it is in their contract, yes they signed up to it, but they are hoping if enough time passes, that it will simply go away.

For those of you who have worked in these situations you can imagine how frustrating this can be. Some of the most challenging work we have found is dealing with subcontractors that are part of Universities or pure Research organizations.

The people who work in these organizations signed up to do research not to deal with Federal reporting requirements. The cultural hurdles to adopting EVM here can be considerable.  In these situation, strong facilitation skills, patience and clearly communicated contractual requirements are needed.

We are currently engaged with three main types of clients and organizations:

Federal Agencies

We are working with Agencies to establish policies and guidelines for their internal programs and contractors.  This includes guidelines for EVM Flow Down.

In some cases we have developed infrastructures that allow smaller contractors to report their EV data directly to the Agency and simplify the reporting process.

An unexpected challenge is getting contracts clearly written to require the use of EVM on programs.  Trying to get EVM data from a Supplier when it is not clearly stated in a contract can become a very painful task.

Prime Contractors or other Contractors with Subcontractors

We have several projects with contractors whose main challenges are:

• The same issues mentioned above in getting clearly written contracts and setting expectations up front regarding the need for EV management and reporting.
• Getting different stakeholders across the Client to really buy into the need for EVM from their subs.  This happens even when the commitment to EVM is clearly stated and required for the program.
• Helping our Clients explain this to their subcontractors and convincing them that EVM requirements must be met.
• Outlining an infrastructure or the data requirements needed to support EVM contractual requirements.

Subcontractors

The most common challenge for smaller subcontractors is implementing a system that does not overwhelm their current capabilities.  Many of these organizations are dealing with their first real EVM requirements; they simply do not have the background in Scheduling, Control Account Management and other basic Project Management abilities that are required for EVM.

In these situations we look at ways to implement Project Management / EVM in iterations that build on existing practices and do not completely outstrip an organization’s ability to bring in new capabilities. 

For help with solving your EVM reporting and compliance issues with your Subcontractors or Customers, talk to a Pinnacle professional today! Give Us a Call or