Overview
FAR Subpart 34.2 prescribes the policies and procedures for the use of an Earned Value Management System (EVMS) on major federal acquisitions, primarily those involving significant development efforts. It establishes the requirement for contractors to use management systems that integrate cost, schedule, and technical performance to provide early warning of potential program risks.
Key Rules
- Mandatory for Major Acquisitions: An EVMS is required for major acquisitions for development in accordance with OMB Circular A-11; however, agencies may also require it for other acquisitions per their specific procedures.
- Compliance Standard: Systems must comply with the Electronic Industries Alliance Standard 748 (EIA-748).
- Non-Compliance is Not Disqualifying: An offeror cannot be eliminated from competition solely because they do not currently have a compliant EVMS, provided they submit a comprehensive plan to achieve compliance.
- Subcontractor Flow-down: EVMS requirements apply to subcontractors under the same rules and thresholds that apply to the prime contractor.
- Reporting Requirements: At a minimum, Contracting Officers must require monthly EVMS reports for any contract where the system is mandated.
- Integrated Baseline Review (IBR): A joint Government-Contractor assessment (IBR) is mandatory whenever an EVMS is required to verify the realism of the Performance Measurement Baseline (PMB).
Responsibilities
- Contracting Officers (CO):
- Determines the adequacy of proposed EVMS plans prior to contract award.
- Inserts appropriate provisions and clauses (FAR 52.234-2, 52.234-3, or 52.234-4) based on whether an IBR is required pre-award or post-award.
- Ensures monthly reporting requirements are established in the contract.
- Offerors / Contractors:
- Must propose a compliant system or a plan to reach compliance.
- Conduct a joint IBR with the Government to analyze technical, schedule, and cost risks.
- Apply EVMS requirements to qualifying subcontractors.
- Submit required monthly performance data.
- The Government (Program Management/Technical Team):
- Conducts the IBR to verify technical content, resource availability, and the realism of budgets and schedules.
Practical Implications
- High Administrative Burden: Implementing an EIA-748 compliant system is a significant undertaking. For contractors without an existing approved system, the "comprehensive plan for compliance" requires substantial internal infrastructure for data tracking and management.
- Enhanced Risk Transparency: The IBR process forces a "meeting of the minds" early in the contract life cycle. By analyzing the Performance Measurement Baseline (PMB) together, the Government and contractor can identify if a project is under-resourced or if the schedule is overly optimistic before significant funds are spent.
- Subcontractor Oversight: Prime contractors must act as the primary monitors for their subcontractors’ EVMS compliance, which increases the prime's management overhead on large development programs.
- Post-Award Adjustments: Because the IBR focuses on the "realism" of the plan, it often leads to baseline adjustments shortly after contract award, reflecting a more accurate (and often more expensive or time-consuming) reality of the project scope.