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Part 334--Major System Acquisition

HHS Acquisition Regulation (HHSAR)

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Authority: 5 U.S.C. 301; 40 U.S.C. 121(c)(2).

Subpart 334.2--Earned Value Management System

334.200 Definitions.

As used in this subpart, the following definitions shall apply:

“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. A decision to use EVM at this level requires the prior approval of the cognizant 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:

(1) 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).

(2) 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 there under 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 Project Officer (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.

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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 AP 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 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.

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334.203 Solicitation provisions and contract clauses.

The FAR EVMS solicitation provisions and contract clause shall 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 shall insert the following:

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

(b) The provision in 352.234-2, Notice of Earned Value Management System – Post-Award IBR, in solicitations 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 in 352.234-3, Full Earned Value Management System, in solicitations and contracts, valued at, or greater than, $25 million, when a cost-reimbursement or fixed-price-incentive contract (where the incentive is based on cost) is contemplated, and which require a contractor to use full EVMS. The Contracting Officer shall use the clause with its Alternate I when the contract value is equal to or greater than $10 million, but less than $25 million.

(d) The clause in 352.234-4, Partial Earned Value Management System, in solicitations and contracts, valued at, or greater than, $25 million, when a firm-fixed-price, time-and-materials, labor-hour, or term-form cost-plus-fixed-fee contract is contemplated, and which require a contractor to use partial EVMS. The Contracting Officer shall use the clause with its Alternate I when the contract value, is equal to or greater than $10 million, but less than $25 million.

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Content created by Assist. Sec./Financial Resources - Division of Acquisition