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HHSAR Changes, Interim HHSAR Guidance - Earned Value ManagementPast Performance Information

Attachment to APM 2008-02  

a)  Add a new subpart at HHSAR 334.2, as follows:

Part 334—Major System Acquisition
[Subpart 334.2—Earned Value Management System

334.200 Definitions.

As used in this subpart

“Full EVMS” means tracking and reporting of both the cost and schedule aspects of a contract using the principles and guidelines described in ANSI/EIA Standard-748, Earned Value Management Systems (using the version of the Standard that is in effect at the time of the solicitation).

“Partial EVMS” means tracking and reporting of only the schedule aspects of a contract using the principles and guidelines described in ANSI/EIA Standard-748, Earned Value Management Systems (using the version of the Standard that is in effect at the time of the solicitation).

334.201   Policy.

 (a)   For acquisitions for development designated as major in accordance with both OMB Circular A-11 and HHS policy on major acquisitions; for acquisitions that involve substantial development, modification or enhancement; or for acquisitions that involve significant upgrade of operational or steady state systems or programs, use of an Earned Value Management System (EVMS) is required as follows:

  1. For individual cost-reimbursement or fixed-price-incentive contracts (with incentive based on cost) valued at $10 million to $25 million, including options, full EVMS (as defined in 334.200) is required and the contractor’s EVMS shall comply with the guidelines in ANSI/EIA Standard-748.
  2. For individual firm-fixed-price, term form (level-of-effort) of any type, time-and-materials, or labor-hour contracts valued at $10 million to $25 million, including options, partial EVMS (as defined in 334.200) is required and the contractor’s EVMS shall comply with the guidelines in ANSI/EIA Standard-748.
  3. For individual cost-reimbursement or fixed-price-incentive contracts (with incentive based on cost) valued at more than $25 million, including options, full EVMS (as defined in 334.200) is required and the contractor’s EVMS must be formally validated and accepted by the Government (i.e., the contractor’s Cognizant Federal Agency (CFA), as defined in FAR 2.101 and described in FAR 42.003).
  4. For individual firm-fixed-price, term form (level-of-effort) of any type, time-and-materials, or labor-hour contracts valued at more than $25 million, including options, partial EVMS (as defined in 334.200) is required and the contractor’s EVMS must be formally validated and accepted by the Government (i.e., the contractor’s CFA).
  5. For individual contracts of any type valued at less than $10 million, including options, full or partial EVM application, as appropriate to the contract type involved, is optional. The recommendation to use EVM should be based upon a risk analysis by the program manager/Project Officer (PO). A decision to use EVM at this level requires the prior approval of the cognizant Head of the Contracting Activity (HCA).

(b)   EVM is not required, but may be applied with prior written approval of the HCA, on contracts of any dollar amount meeting either of the following criteria:

(i)    The acquisition is for non-developmental support services (e.g., program office support, Independent Verification & Validation services), steady state operations, basic and applied research, and routine services (e.g., building maintenance, help-desk services, landscaping services); or

(ii)    The contract is for a commercial item(s) under FAR Part 12.

(c)   When full EVM is required on a prime contract, it applies to subcontracts issued thereunder if those subcontracts have a value and are of a type and subject matter that would have required the use of full EVM had they been prime contracts.  However, if the prime contract requires the use of only partial EVM, any subcontracts to which EVM is made applicable, because of dollar value, contract type or subject matter, shall require only partial EVM.

(d)   When offerors are required to provide an EVMS plan as part of their proposals, the contracting officer shall request the assistance of the PO (and/or an appropriate HHS-designated third party) in determining the adequacy of such proposed EVMS plans.

(e)   The selection or use of a particular contract type, if done only or primarily to avoid the application of full EVM to the acquisition, is prohibited.

334.202   Integrated Baseline Reviews (IBRs).

(a)   An IBR normally should be conducted as a post-award activity.  A pre-award IBR may be conducted only if:

  1. The acquisition plan contains documentation that demonstrates the need and rationale for a pre-award IBR, including an assessment of the impact on the source selection schedule and the expected benefits;
  2. The use of a pre-award IBR is approved in writing by the cognizant HCA prior to the issuance of the solicitation;
  3. The source selection plan specifically addresses how the results of a pre-award IBR will be used during source selection, including any weight to be given to it in source evaluation, and that same or similar rationale is clearly set forth in the solicitation; and,
  4. Specific arrangements are made, and budget authority is provided, to compensate all offerors who prepare for or participate in a pre-award IBR; and the solicitation informs prospective offerors of the means for and conditions of such compensation.

334.203   Solicitation provisions and contract clauses.

The FAR EVMS solicitation provisions and contract clause will not be used in HHS contracts.  See 334.203-70 for the HHS solicitation provisions and contract clauses.

334.203-70   HHS solicitation provisions and contract clauses.

As provided in 334.201(a) and 334.202, the Contracting Officer (CO) shall insert –

(a)   The provision at 352.234-1, Notice of Earned Value Management System—Pre-Award IBR, in solicitations for contracts that will require the contractor to use an Earned Value Management System (EVMS), whether full or partial, when the Government requires an Integrated Baseline Review (IBR) prior to award.

(b)   The provision at 352.234-2, Notice of Earned Value Management System—Post-Award IBR, in solicitations for contracts that will require the contractor to use an EVMS, whether full or partial, when the Government requires an IBR after contract award.

(c)   The clause at 352.234-3, Full Earned Value Management System, in solicitations and contracts that will: be either cost-reimbursement or fixed-price-incentive (where the incentive is based on cost), have an expected value, including options, equal to or greater than $25 million, and require a contractor to use full EVMS. The CO shall use the clause with its Alternate I when the contract value, including options, is equal to or greater than $10 million but less than $25 million.

(d)   The clause at 352.234-4, Partial Earned Value Management System, in solicitations and contracts that will be firm-fixed-price, time-and-materials, labor-hour, or term form; have an expected value, including options, equal to or greater than $25 million; and require a contractor to use partial EVMS.  The CO shall use the clause with its Alternate I when the contract value, including options, is equal to or greater than $10 million but less than $25 million.]

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b)     Add sections 352.234-1, 352.234-2, and 352.234-3 to read as follows:

[352.234-1 Notice of Earned Value Management System – Pre-Award IBR.

As prescribed in 334.203-70(a), use the following provision:

NOTICE OF EARNED VALUE MANAGEMENT SYSTEM – PRE-AWARD IBR (OCT 2008)

  1. The offeror shall provide documentation that its proposed Earned Value Management System (EVMS) complies with the EVMS guidelines in ANSI/EIA Standard-748 (current version at time of solicitation).
  2. If the offeror proposes to use a system that currently does not meet the requirements of paragraph (a) of this provision, the offeror shall submit a comprehensive plan for compliance with the guidelines.
    1. The plan shall –
  3. Describe the EVMS the offeror intends to use in performance of the contract;
  4. Distinguish between the offeror’s existing management system and modifications proposed to meet the guidelines;
  5. Describe the management system and its application in terms of the EVMS guidelines;
  6. Describe the proposed procedure for application of the EVMS requirements to subcontractors;
  7. Provide documentation describing the process and results, including Government participation if applicable, of any third-party evaluation or self-evaluation of the system’s compliance with the EVMS guidelines;
  8. Provide a schedule of events leading up to formal validation and Government acceptance of the offeror’s EVMS, if the value of the offeror’s proposal, including options, is $25 million or more.
    1. The offeror shall provide information and assistance, as required by the Contracting Officer, to support review of the plan.
      1. The Contracting Officer will review the offeror’s EVMS implementation plan prior to contract award.
      2. The offeror’s EVMS plan must provide milestones indicating when the offeror anticipates that the EVMS will be compliant with the ANSI/EIS Standard-748 guidelines.
  9. The offeror shall identify in its offer the subcontractors, or subcontracted effort if subcontractors have not been identified, to which the requirements of EVMS will be applied. Prior to contract award, the offeror and HHS shall agree on the subcontractors, or subcontracted effort, subject to the EVMS requirement.
  10. HHS will conduct an Integrated Baseline Review (IBR) prior to contract award.  The offeror shall be compensated as set forth elsewhere in this solicitation for its preparation for and participation in the IBR.

(End of provision)

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352.234-2         Notice of Earned Value Management System – Post-Award IBR.

As prescribed in 334.203-70(b), use the following provision:

NOTICE OF EARNED VALUE MANAGEMENT SYSTEM – POST-AWARD IBR (OCT 2008)

(a)   The offeror shall provide documentation that its proposed Earned Value Management System (EVMS) complies with the EVMS guidelines in ANSI/EIA Standard-748 (current version in effect at time of solicitation).

(b)   If the offeror proposes to use a system that currently does not meet the requirements of paragraph (a) of this provision, the offeror shall submit a comprehensive plan for compliance with the guidelines.

    1. The plan shall –
  1. Describe the EVMS the offeror intends to use in performance of the contract;

(ii)    Distinguish between the offeror’s existing management system and modifications proposed to meet the guidelines;

(iii)   Describe the management system and its application in terms of the EVMS guidelines;

(iv)   Describe the proposed procedure for application of the EVMS requirements to subcontractors;

(v)   Provide documentation describing the process and results, including Government participation if applicable, of any third-party evaluation or self-evaluation of the system’s compliance with the EVMS guidelines;

(vi)   Provide a schedule of events leading up to formal validation and Government acceptance of the offeror’s EVMS, if the value of the offeror’s proposal, including options, is $25 million or more.

    1. The offeror shall provide information and assistance, as required by the Contracting Officer, to support review of the plan.
      1. The Contracting Officer will review the offeror’s EVMS implementation plan prior to contract award.
        1. The offeror’s EVMS plan must provide milestones indicating when the offeror anticipates that the EVM system will be compliant with the ANSI/EIA Standard-748 guidelines.
      2. (c)   The offeror shall identify in its offer the subcontractors, or subcontracted effort if subcontractors have not been identified, to which the requirements of EVMS will be applied. Prior to contract award, the offeror and HHS shall agree on the subcontractors, or subcontracted effort, subject to the EVMS requirement.

        (End of provision)

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        352.234-3   Full Earned Value Management System.

        As prescribed in 334.302-70(c), insert the following clause:

        FULL EARNED VALUE MANAGEMENT SYSTEM (OCT 2008)

    2. The Contractor shall use an Earned Value Management System (EVMS) that has been validated and accepted by the Cognizant Federal Agency (CFA) as being compliant with the guidelines in ANSI/EIA Standard-748 (current version at the time of award) to manage this contract.  If the Contractor’s current EVMS has not been validated and accepted by the CFA at the time of award, see paragraph (b) of this clause.  The Contractor shall submit EVM reports in accordance with the requirements of this contract.
    3. If, at the time of award, the Contractor’s EVM system has not been validated and accepted by the CFA as complying with EVMS guidelines in ANSI/EIA Standard-748 (current version at time of award), the Contractor shall–
  1. Apply the current system to the contract; and
  2. Take necessary and timely actions to meet the milestones in the Contractor’s EVMS plan approved by the Contracting Officer.
    1. HHS requires the Contractor to obtain validation and acceptance of its EVM system by the CFA during the base period of performance of this contract.  The Contracting Officer or designee will conduct a Compliance Review to assess the Contractor’s compliance with its approved plan.  If the Contractor does not follow the approved implementation schedule or correct all resulting system deficiencies noted during the Compliance Review within a reasonable time, the Contracting Officer may take remedial action, which may include, but is not limited to, suspension of or reduction in progress payments, or a reduction in fee.
    2. HHS will conduct an Integrated Baseline Review (IBR).  If a pre-award IBR has not been conducted, a post-award IBR will be conducted by HHS as early as practicable, but no later than ninety (90) days after contract award.  The Contracting Officer may also require an IBR as part of the exercise of an option or the incorporation of a major modification.
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    1. Unless a waiver is granted by the CFA, Contractor-proposed EVMS changes require approval of the CFA prior to implementation. The CFA will advise the Contractor of the acceptability of such changes within 30 calendar days after receipt of the notice of proposed changes from the Contractor.  If the advance approval requirements are waived by the CFA, the Contractor shall disclose EVMS changes to the CFA at least 14 calendar days prior to the effective date of implementation.
    2. The Contractor shall provide access to all pertinent records and data requested by the Contracting Officer or a duly authorized representative as necessary to permit Government surveillance to ensure that the EVMS conforms, and continues to conform, with the requirements referenced in paragraph (a) of this clause.
    3. The Contractor shall require the subcontractors specified below to comply with the requirements of the clause: (Insert list of applicable subcontractors.)

    (End of clause)

    (Alternate I)  (OCT 2008)

    As prescribed in 334.203-70(c), substitute the following paragraphs (a), (b), and (c) for paragraphs (a), (b), and (c) of the basic clause and delete paragraph (e) of the basic clause:

    (a)  The Contractor shall use an Earned Value Management System (EVMS) that is compliant with the guidelines in ANSI/EIA Standard-748 (current version at the time of award) to manage this contract.  If the Contractor’s current EVMS is not compliant at the time of award, see paragraph (b) of this clause.  The Contractor shall submit EVM reports in accordance with the requirements of this contract.

    (b)   If, at the time of award, the Contractor’s EVM system is not in compliance with the EVMS guidelines in ANSI/EIA Standard-748 (current version at time of award), the Contractor shall-

    1. Apply the current system to the contract; and
    2. Take necessary and timely actions to meet the milestones in the Contractor’s EVMS plan approved by the Contracting Officer.

    (c)   HHS will not formally validate or accept the Contractor’s EVMS with respect to this contract. The use of the Contractor’s EVMS for this contract does not imply HHS acceptance of the Contractor’s EVMS for application to future contracts.  The Contracting Officer or designee will conduct a Compliance Review to assess the Contractor’s compliance with its approved plan.  If the Contractor does not follow the approved implementation schedule or correct all resulting system deficiencies noted during the Compliance Review within a reasonable time, the Contracting Officer may take remedial action that may include, but is not limited to, suspension of or reduction in progress payments, or a reduction in fee.

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    352.234-4   Partial Earned Value Management System.

    As prescribed in 334.203-70(d), insert the following clause:

    PARTIAL EARNED VALUE MANAGEMENT SYSTEM (OCT 2008)

  4. The Contractor shall use an Earned Value Management System (EVMS) that has been validated and accepted by the Cognizant Federal Agency (CFA) as being compliant with the schedule-related guidelines in ANSI/EIA Standard-748 (current version at the time of award) to manage this contract.  If the Contractor’s current EVMS has not been validated and accepted by the CFA at the time of award, see paragraph (b) of this clause.  The Contractor shall submit EVM reports in accordance with the requirements of this contract.
  5. If, at the time of award, the Contractor’s EVM system has not been validated and accepted by the CFA as complying with the schedule-related EVMS guidelines in ANSI/EIA Standard-748 (current version at time of award), the Contractor shall–

(1)   Apply the current system to the contract; and

(2)   Take necessary and timely actions to meet the milestones in the Contractor’s EVMS plan approved by the Contracting Officer.

  1. HHS requires the Contractor to obtain validation and acceptance of the schedule-related portions of its EVM system by the CFA during the base period of performance of this contract.  The Contracting Officer or designee will conduct a Compliance Review to assess the Contractor’s compliance with its approved plan.  If the Contractor does not follow the approved implementation schedule or correct all resulting system deficiencies noted during the Compliance Review within a reasonable time, the Contracting Officer may take remedial action, which may include, but is not limited to, suspension of or reduction in progress payments, or a reduction in fee.
  2. HHS will conduct an Integrated Baseline Review (IBR).  If a pre-award IBR has not been conducted, a post-award IBR will be conducted by HHS as early as practicable, but no later than ninety (90) days after contract award.  The Contracting Officer may also require an IBR as part of the exercise of an option or the incorporation of a major modification.
  3. Unless a waiver is granted by the CFA, Contractor-proposed EVMS changes require approval of the CFA prior to implementation.  The CFA will advise the Contractor of the acceptability of such changes within 30 calendar days after receipt of the notice of proposed changes from the Contractor.  If the advance approval requirements are waived by the CFA, the Contractor shall disclose EVMS changes to the CFA at least 14 calendar days prior to the effective date of implementation.
  4. The Contractor shall provide access to all pertinent records and data requested by the Contracting Officer or a duly authorized representative as necessary to permit Government surveillance to ensure that the EVMS conforms, and continues to conform, with the requirements referenced in paragraph (a) of this clause.
  5. The Contractor shall require the subcontractors specified below to comply with the requirements of the clause: (Insert list of applicable subcontractors.)

 

(End of clause)

(Alternate I)  (OCT 2008)

As prescribed in 334.203-70(d), substitute the following paragraphs (a), (b), and (c) for paragraphs (a), (b), and (c) of the basic clause and delete paragraph (e) of the basic clause:

(a)   The Contractor shall use an Earned Value Management System (EVMS) that is compliant with the schedule-related guidelines in ANSI/EIA Standard-748 (current version at the time of award) to manage this contract.  If the Contractor’s current EVMS is not compliant at the time of award, see paragraph (b) of this clause.  The Contractor shall submit EVM reports in accordance with the requirements of this contract.

(b)   If, at the time of award, the Contractor’s schedule-related EVM system is not in compliance with the schedule-related EVMS guidelines in ANSI/EIA Standard-748 (current version at time of award), or the Contractor does not have an existing schedule control system that is compliant with such guidelines, the Contractor shall –

  1. Apply the current system to the contract; and
  2. Take necessary and timely actions to meet the milestones in the Contractor’s EVMS plan approved by the Contracting Officer.

(c)   HHS will not formally validate or accept the Contractor’s schedule-related EVMS with respect to this contract.  The use of the Contractor’s EVMS for this contract does not imply HHS acceptance of the Contractor’s EVMS for application to future contracts.  The Contracting Officer or designee will conduct a Compliance Review to assess the Contractor’s compliance with its approved plan.  If the Contractor does not follow the approved implementation schedule or correct all resulting system deficiencies noted during the Compliance Review within a reasonable time, the Contracting Officer may take remedial action, that may include, but is not limited to, suspension of or reduction in progress payments, or a reduction in fee.

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APM 2008-01 Interim HHSAR Guidance - Earned Value Management

Acquisition Policy Memoranda (APM)