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    I am looking for written documentation that clearly states that even thought EVM is not required on a FFP contract/CLIN, if the contractor adds the FFP value to the Performance Measurement Baseline in the CPR then the contractor must now automatically be bound to conforming to the 32 Guidelines in EVM Industry Standard EIA-748. Everything that I have found such as pages 13 - 15 of the DOD Earned Value Management Implementation Guide, Oct 2006 says nothing about the automatic enforcement of the 32 Guidelines if the contractor adds the FFP value to the PMB. The EVM Implementation Guide actually says that in order to have the contractor conform to the 32 Guidelines the must be an MDA waiver in place or at the very least the EVM reporting requirements should be negotiated before applying EVM requirements. I need to know if there is another source I need to look at that actually clearly dictates the automatic application of EVM EIA-748 32 Guideline compliance on a FFP contract CLIN if the value of the FFP CLIN is added to the PMB. I need this info ASAP on Thursday 2 Jun 2011. You are my last hope. I will be in a DUA class starting next week for 2 weeks and need this answer before I go. If you cannot get it to me by then, I will have to see it when I return. Thanks.


    Answer

    Your question essentially is….”How to treat a FFP CLIN on a Cost (EV) contract?”  From your lead sentence….“Question: I am looking for written documentation that clearly states that even thought EVM is not required on a FFP contract/CLIN, if the contractor adds the FFP value to the Performance Measurement Baseline in the CPR then the contractor must now automatically be bound to conforming to the 32 Guidelines in EVM Industry Standard EIA-748.”
     
     From your description of the issue, the PMO directed the contractor to include the FFP effort in the CPR for tracking total value of the contract/program. Right?  I can see some issues with what your customer is doing and I can of offer a sensible way to achieve the same result.
     
    First, let’s logically assess the situation. Does it make sense to incorporate a FFP CLIN with cost CLINs in a CPR? It does if you are going to apply EVM and ANSI standards. If not, then not so much! Why?  The CPR is reporting at cost while the FFP is essentially price data (it includes profit).  Where then does the FFP CLIN belong to be reported? It should be in the CFSR report along with the price level data from the cost CLINS (plus profit/fee).  The CFSR sums all CLINs (at price) up to the total program. More than sufficient to meet the PMO tracking requirements since the format is by WBS/YR APPN/APPN/CLIN.
     
    Another (and a more important) reason  it does not belong in the PMB is that by putting the FFP in the total BAC it clearly distorts the EV performance metrics!  The percent spent, percent complete, and percent scheduled would all be incorrect and misleading. 
     
    So, unless the intent is to apply EV to the FFP effort, there is no need for it to be in the CPR. Conversely, reporting the FFP effort in the CPR does NOT automatically impose the EVM contract clause. The Contract will have to specify the requirement in the CLIN SOW and reference to the DFAR clauses (supported by the MDA waiver).
     
    Unfortunately, there is  no “written” policy, regulation, or guidance document that exists to address your “automatic” interpretation/situation exactly. Simple common sense must prevail!

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