Using System Surveillance to Keep the Performance Management Baseline Current

Surveillance is reviewing a contractor’s EVM system as it is applied to one or more programs. Full implementation of EVM includes performing periodic system surveillance reviews to ensure that the EVM system continues to meet the EIA-748 guidelines. Periodic surveillance subjects contractors’ EVM systems to ongoing government oversight. Its purpose is to assess how well a contractor is using its EVM system to manage cost, schedule, and technical performance. For instance, surveillance confirms that the contractor’s EVM system:

  • summarizes timely and reliable cost, schedule, and technical performance information directly from its internal management system;
  • complies with the contractor’s implementation of EIA-748 guidelines;
  • provides timely indications of actual or potential problems by performing spot checks, sample data traces, and random interviews;
  • maintains baseline integrity;
  • depicts actual conditions and trends;
  • provides comprehensive variance analyses at the appropriate levels, including corrections for cost, schedule, technical, and other problem areas;
  • ensures the integrity of subcontractors’ EVM systems;
  • verifies progress in implementing corrective action plans to mitigate EVM system deficiencies; and
  • discusses actions taken to mitigate risk and manage cost and schedule performance.

Effective surveillance ensures that the key elements of the EVM process are maintained over time and on subsequent applications. EVM system surveillance ensures that the contractor is following its own corporate processes and procedures and confirms that they continue to satisfy the EIA-748 guidelines.

OMB has recommended the NDIA surveillance guide we listed in table 20 to assist federal agencies in developing and implementing EVM system surveillance practices, which include:60

  • establishing and maintaining a surveillance organization,
  • defining the review scope and selected projects for surveillance reviews,
  • establishing the program surveillance review team,
  • overseeing surveillance reviews, and
  • learning from results of surveillance reviews.

Establishing a Surveillance Organization

An organization must have designated authority and accountability for EVM system surveillance to assess how well a contractor applies its EVM system relative to the EIA-748 guidelines. Surveillance organizations should be independent of the programs they assess and should have sufficient experience in EVM. These requirements apply to all surveillance organizations, whether internal or external to the agency.

The Defense Contract Management Agency (DCMA), a DOD support agency that provides a range of acquisition management services, monitors contractor performance through data tracking and analysis, onsite surveillance, and tailored support to program managers. DCMA also leads EVM system validation reviews before contract award, supports programs with monthly predictive EVM analysis, and participates in IBRs as requested.

Unlike DOD, however, nonmilitary agencies do not have the equivalent of a DCMA. Agencies may need to hire outside organizations or establish an independent surveillance function, such as an inspector general. Without an independent surveillance function, agencies’ abilities to use EVM as intended may be hampered because there would be no independent supervision of the system. Further, surveillance monitors problems with the performance measurement baseline and EVM data. If these kinds of problems go undetected, EVM data may be distorted and may not be meaningful for decision making.

  1. National Defense industrial Association (NDIA), Integrated Program Management Division (IPMD), Surveillance Guide (Arlington, VA: November 2018).↩︎