3 Questions Surrounding the DCMAs New Automated and Risk-Based EVMS Surveillance

Posted by Megan Cacioppo on October 10, 2017

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The Defense Contract Management Agency (DCMA) Earned Value Management (EVM) System (EVMS) surveillance process is transitioning from regularly scheduled and planned on-site surveillance to an automated, data-driven surveillance process utilizing over 130 test metrics to identify potential compliance issues. The DCMA is currently piloting the risk-based surveillance process and plans to roll it out in 2018. DOD Contractors who will be impacted by this process should consider the following questions:

1. Will the new DCMA EVMS surveillance process apply to my organization?

  • The new surveillance will apply if you have contract(s) that incorporate an EVM reporting requirement stipulated by reference to Defense Federal Acquisitions Regulations Supplement (DFARS) 252.234-7001, Notice of Earned Value Management System, and the total lifecycle value is greater than $100 million. The regulation requires the contractor to implement an EVMS that is compliant with the Electronic Industries Alliance (EIA) –748 standard, and the Office of Secretary of Defense EVMS Interpretation Guide (EVMSIG). However, the Government Program Office or the DCMA may also determine there is cause to conduct surveillance on your contract if it’s under the $100 million threshold. 
  • If you don’t currently have an EVM reporting requirement on any contracts, the process does not apply. However, this is something that should be considered if you are considering bidding on a contract with this requirement.

2. How will my organization be impacted if it does apply?

  • Most organizations still rely on tools like Microsoft Word and Excel. Disparate scheduling and EVM systems, as well as informal processes, increase the chances your organization may be impacted. 
  • The electronic format required for compliance is extensive and requires the integration of information from financial, scheduling and EVM systems. The data submitted will be at the Work Package level, which is more detailed than most current reporting requirements. 
  • The DCMA Earned Value Analysis System (EVAS) may trigger on-site surveillance. Surveillance may result in corrective action requests (CARs), for which your organization will be required to demonstrate compliance over at least a three-month reporting cycle.

3. What does my organization need to do to prepare for the new EVMS surveillance process?

  • Review current EVMS tools to identify sources of data and recommend enhancements, coding changes or new tools to address the EVAS reporting requirements. 
  • Identify potential EVMS compliance risks and enhance or develop processes to address these risks. 
  • Update EVMS description documentation, operating instrucitons, and provide training on new tools and processes. 
  • As recommended by DCMA, use the EVAS metrics for internal analysis before submitting your data to the government.

Preparing for the new DCMA EVMS Surveillance process will pay dividends for your organization by ensuring you may avoid future time consuming and costly DCMA on-site surveillance. To learn more, check out our recent webcast, Preparing for the New Risk-Based EVMS Surveillance: The Time is Now.

Dave Scott is a Managing Director in BDO’s Project Controls and Program Optimization practice, and may be reached at dmscott@bdo.com.


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