Sign In
  • Question

    Can the PMB be changed before the contracting action occurs?


    The following response is based solely on the question and background information provided. As we do not have all of the facts particular to your contract, program, and situation, we highly recommend you consult your Contracting Officer and Legal Office for guidance.
    I will refer you to the DoD Earned Value Management Implementation Guide, Part 2 Section 5, Other Post Award Activities, dated October 2006. 
    Part 2, Section 5, Paragraph 1, Overview, states:  This section contains guidance for the PMO and CMO in performing the additional activities for effective EVM after contract award and the IBR.  These tasks include maintaining a healthy baseline, approval of the OTB and/or OTS, assessing EVM for award fee contracts, analysis of performance data, and training.
    Part 2, Section 5, Paragraph 5.2, Government Review and Approval, states: Once it receives written approval for an OTB, the contractor can create a budget baseline in excess of the CBB.  If approval is received for an OTS, the contractor can replan remaining work to a realistic schedule that extends beyond the contract milestones.  This allows the contractor to provide its managers with realistic budgets and schedules for accomplishing the remaining work. 
    The contractor initiates the process by submitting an OTB/OTS request to the PM detailing its implementation plan.  (Refer to paragraph for essential elements of an OTB/OTS request.)  To expedite the return to a
    realistic baseline, the PM promptly reviews and negotiates changes, if necessary, to the contractor's request, within 30 days.  The contract's CPR Data Item Description (DID) requires Government approval and specifies automatic approval if the Government fails to respond within 30 days.  If the request is not approved within 30 days, the PM should provide specific reasons as to why it was denied and what is required to obtain approval.  If the request is approved, the contracting officer promptly sends written approval to the contractor to proceed.  The contractor may not implement an OTB/OTS without this written approval. 
    Because OTB budgets represent performance budgets only and are implemented solely for planning, controlling, and measuring performance on already authorized work, a contract modification is not needed.  The OTB budget does not impact the negotiated value of the contract.  For incentive type contracts with a ceiling, the Government's cost liability is still capped at the ceiling value.  For cost reimbursement contracts, however, the Government cost liability continues to increase as actual costs accrue on the contract.
    Since an OTS involves replanning the schedule milestones that exceed the contractual milestones or delivery dates, the PCO should formally recognize the new schedule milestones in the contract and seek consideration for the changes.
    Based on the DoD EVM Implementation Guide, the Government needs to provide written approval to the contractor for an Over Target Baseline adjustment before the contractor can create a baseline change in excess of the Contract
    Budget Base (CBB).  This written approval does not need to be a written modification to the contract since the contractor is readjusting the baseline to provide for future reasonable metrics and no money is being added to the contract.  However, the Government must provide a written modification for an Over Target Schedule to provide for a revised contractual milestone or delivery date since a term/condition of the contract would be changed.
    Further suggest you check with your Agency regulation/guidance, along with your legal counsel, to ensure your agency does not have any additional requirements concerning a Performance Measurement Baseline (PMB) change.

    Open full Question Details