Overview
FAR 52.234 contains provisions and clauses related to Major System Acquisition, specifically addressing the testing of industrial resources developed under the Defense Production Act and the mandatory implementation of Earned Value Management Systems (EVMS).
Key Rules
- Industrial Resources (Title III, DPA): Contractors must refer any requests for testing and qualifying Title III industrial resources to the Contracting Officer. If directed to perform testing, the contractor is entitled to an equitable adjustment for costs, and the clause must be flowed down to all subcontracts.
- EVMS Compliance: Contractors are required to use an Earned Value Management System that complies with the Electronic Industries Alliance Standard 748 (EIA-748).
- Pre-award and Post-award Requirements:
- If a system is not already compliant, offerors must submit a comprehensive plan and milestones for achieving compliance.
- The government will conduct an Integrated Baseline Review (IBR) either before award (52.234-2) or after award (52.234-3/4) to assess technical, schedule, and cost risks.
- System Maintenance and Changes: Contractors must provide the government access to records for ongoing surveillance and must obtain approval from the Cognizant Federal Agency prior to implementing any changes to a previously approved EVMS.
- Subcontractor Oversight: Prime contractors are responsible for identifying major subcontractors and ensuring they comply with EVMS requirements as specified in the contract.
Practical Implications
- Operational Burden: Contractors bidding on major systems must possess (or be prepared to build) highly sophisticated project management and accounting systems that integrate technical performance with cost and schedule data.
- Joint Risk Management: The IBR process forces a collaborative deep dive into the project's baseline, ensuring that both the government and the contractor have a mutual understanding of the project's inherent risks and resource requirements before or shortly after performance begins.