What process would I need to follow to rebaseline a system that is post-FD?
Re-baselining a program is not a simple matter. Normally, a re-baseline occurs after a program breaches a cost threshold outlined within the current Acquisition Program Baseline (APB). This is a formal document/database which captures the PM’s agreement with the MDA as to what the program will perform to, both technically and financially.
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It seems from your scenario that while “costs” have gone up for work that “should” be accomplished, this work is in fact NOT being accomplished, because it isn’t funded. That’s not quite the same thing as an official “cost breach”. The govt. PM has to believe that the program is so far off track that there needs to be an official re-designation of what the costs will be for the remaining work. Normally we see this on contracts that are cost-reimbursable-type contracts, and not very often on Fixed-price-type (although it does happen).
The basic process should go like this: 1) the PM notifies the PEO and the MDA that a cost breach has (or will) occur, and recommends a course of action to evaluate the future costs. 2) the government and the contractor go thru a detailed re-calculation/re-assessment of the remaining work and agree on what the costs will be. 3) once finalized, the PM submits an updated APB with the new cost estimates, and the MDA signs it.
That’s the overly simplified process, and each service will have a different set of processes to go thru in order to make that happen… and, there can be a fair amount of politics which go with all this. The first step is for the PM to understand what is driving the cost problem, the next step is for the PM to discuss the course of action with his/her chain of command.