Via reference to specific FAR and DFAR citeations, please explain the process for a Contracting Officer to alter any FAR or DFARS clause language, but in particular, the DFARS 252-234-7002, EVMS.
Your question has two very distinct parts to it: 1.) Should the Earned Value Management (EVM) DFARs clauses be altered at all, and 2.) What is the process for altering a DFARS clause?
As to the question of whether the EVM DFARS clauses should be altered, the Department of Defense (DoD) implementation policy can be found in DoD Instruction 5000.02, Enclosure 4, Table 5. Table 5 is very clear about what is required to undertake EVM given various contracting criteria such as contract type and contract value. Nowhere in Table 5 is there any indication that waivers (other than to use EVM on a Firm Fixed Price Contract) are allowed. Although, there are comments that show that tailoring of the Data Item Descriptions (DIDs) is recommended in some instances.
Next we should go to the Defense Contract Management Agency’s (DCMA) Earned Value Management Guide (EVMIG) to see if there is any guidance that could be of help. EVMIG Part 2, Section 2, Paragraph 22.214.171.124 Exclusion Waivers says, “Exclusion waivers of the mandatory reporting thresholds need to be approved by the MDA. Normally the selection of contract type should adequately reflect program risk, and as a result, waivers should not be required. However, in some cases, the contract type may meet the criteria for EVM and IMS reporting, but the PM may determine that the contract should be exempt. One example might be the award of a “fixed price incentive – successive target” contract in a mature, full rate production environment which establishes an overall price ceiling and gives the contractor some degree of cost responsibility in the interval before a firm arrangement can be negotiated. The PM evaluates the risk in the contract effort and makes a recommendation to the MDA for waiver based on the risk assessment.” So we find that while EVM waivers should not be required (due to selection of the appropriate contract type), there are rare instances where they can be requested and must be approved by the Milestone Decision Authority (MDA).
However, the EVMIG does address, in depth, how the DIDs can be altered to best serve the needs of the Program Office in using EVM as an integrated program management tool. EVMIG 126.96.36.199.1 Reporting Requirements states that, “Sufficient latitude exists within this framework to tailor reporting to the needs of most programs.” Specifically, such areas as, Format 1 Reporting Levels, Selection of Formats, Reporting Frequencies, Designation of Time Periods for CPR Formats 3 & 4, and Variance Reporting Thresholds are addressed in EVMIG 188.8.131.52.3 Specific Tailoring Guidance for the CPR. Thus, it is evident that alteration of the EVM DFARS clauses is allowed (and in some cases, even recommended) in relation to providing the Program Office with information that it will need to maximize the benefits of using EVM.
As to the question of the process for altering a DFARS clause, the DFARS in Subpart 201.4 outlines the process for requesting and receiving approval for both individual deviations and class deviations to DFARS clauses.
Suggestion: Read DoD Instruction 5000.02 Enclosure 4, Table 5 for a better understanding of the DoD EVM Implementation Policy. In addition, read DCMA’s EVMIG, paying particularly close attention to Part 2, Section 2.
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