Missile Defense Agency EVM Update

1. Missile Defense AgencyEVM Update Presented to NDIA/PMSC January 29, 2009 Dave Melton

2. CONTRACT PERFORMANCE SUMMARY REPORT JAN 09 Nov-2008 Dollars in millions except where noted Data as of month-end EVM Integration Contract & Baseline Maintenance Earned Value Management (EVM) Data FY 09 / 10 Contract LOE % Budget (of Work VAC: DO's Program / Base % 6 mo CPI 6 mo Remaining and Schedule IBR: Most Recent Target (Overrun) / Contract (CBB) Complete CPI Trend SPI Planned) Budget Impact Risk and Projected Price Underrun ($ / %) Program 1 Dec-08 TBD $4.0B $3.6B 92% 1.04 ? 1.03 ($84) -2% 43% Minimal Yes / / Dec-07 Mar-09 $1.6B $1.4B 78% 0.92 ? 1.01 $0 0% 24% Minimal No / / Program 2 Aug-08 / TBD $656 $571 26% N/A N/A N/A ($12) -2% 18% Minimal No / Program 3 Oct-08 TBD $248 $234 62% 1.09 ? 0.96 ($4) -2% 16% Minimal No / / Program 4 Apr-08 TBD $1.3B $1.1B 82% 1.01 ? 0.92 $0 0% 25% Minimal Yes / / Program 5 Nov-09 Mar-09 $1.3B $1.0B 74% 0.94 ? 0.94 ($1) 0% 69% Minimal Yes / / Program 6 Dec-06 May-09 $16.1B $14.6B 87% 1.00 ? 0.97 ($1.2B) -8% 31% Minimal Yes / / Program 7 Apr-08 Feb-08 $6.3B $5.8B 15% 1.01 ? 0.94 ($11) 0% 31% Minimal Yes / / Program 8 Sep-08 Apr-09 $730 $664 85% 1.04 ? 0.97 $0 0% 54% Minimal Yes / / Program 9 Jul-08 Dec-08 $378 $316 67% / Program 10 0.96 ? 0.93 ($8) -3% 40% Minimal No / Program 11 Oct-06 TBD $1.9B $1.0B 75% 0.39 ? 1.05 ($373) -36% 25% Significant Yes / / Program 12 Oct-08 TBD $1.2B $1.1B 86% 0.94 ? 1.19 ($64) -6% 21% Moderate No / / Program 13 Nov-07 TBD $4.9B $4.7B 91% 0.87 ? 0.97 ($298) -6% 23% Moderate Yes / / Program 14 Aug-07 Mar-09 $117 $101 71% 1.23 ? 0.98 $0 0% 42% Minimal No / / DOB Projected Overrun TOTAL MDA Programs $40.7B $36.2B ($2.1B) / -6% Documentprimarilyreflects prime contractor EVM data and narrative information through month-end Nov 08. Where appropriate, DOBS has provided updated information through 5 Jan 09. * Oct 08 data is reported. Nov data is delayed due to CY08 close out activities

3. Program 10 Details $50M $40M $30M $20M $10M $0M -$10M -$20M -$30M -$40M -$50M Jul-06 Jul-07 Jul-08 Jan-06 Jan-07 Jan-08 Jan-09 Nov-05 Mar-06 Sep-06 Nov-06 Mar-07 Sep-07 Nov-07 Mar-08 Sep-08 Nov-08 Mar-09 May-06 May-07 May-08 May-09 Cum CV Cum SV 10% Threshold MDA DOB VAC Key Cost/Schedule Variance Drivers • Cost: cum CV is -$7.1M. Driven by Hover Test Bed efforts, due to increased procurement costs, costs associated with late drawing release, inadequate subcontractor task planning, and increased program management oversight • Schedule: SV of -$1M is minimal and is due primarily to late delivery of Government Furnished Equipment (GFE) Projected Variance at Completion (VAC) • DOB VAC is -$8.3M. Calculation reflects increased efforts required to meet Hover Test Bed schedule Cost and Schedule Variance Chart Impacts • Hover Test schedule slipped due to Hover Test Vehicle power conditioning unit, Flight Software anomaly, IMU software review and most recent unfavorable weather testing conditions • Potential cost overrun of roughly $11.5M due to increased efforts to meet Hover Test Bed schedule. Path Forward • Hover Test completed XXX 2008 at the National Hover Test Facility • Re-planning program efforts

4. Program 10 EV Budget Integration Chart

5. Current Noteworthy MDA EVM Initiatives • DCMA Support • Overarching Memorandum of Agreement with DCMA • MDA Review of DCMA Report Quality • EVM Health • CPR/CFSR Quality Review • Other Quality Reviews (IMS, Award Fee, Contract Requirements) • IBR Process

6. Current Noteworthy MDA EVM Initiatives • Overarching Memorandum of Agreement with DCMA • DCMA SSOM • LOE Versus Discrete Metrics • CPR/CFSR Reconciliation • IEAC (not metric driven) • IBR Support (Planning, Execution, and Follow-up)

7. Current Noteworthy MDA EVM InitiativesMDA Quality Review of DCMA Reports

8. MDA EVM Process – EVM Health • MDA EVM Health Factors help identify areas for management attention

9. MDA EVM Process – EVM Health

10. MDA EVM Process – EVM Health

11. Program 5 EVM Contract Requirements: GREEN is downgraded to YELLOW. Contractor's CPR and CFSR are not compliance with DIDs. There is no CPR/CFSR reconciliation. Contractor has Y inadequate understanding of EVM contract requirements. Baseline Development / IBR / Baseline Maintenance: An IBR was conducted in Apr 08. Although contractor previously committed to a 6-month rolling wave IBR, the most recent IBR Y focused only on a small piece of the program. Analysis/ Integration: GREEN is downgraded to YELLOW. Insufficient cost/schedule integration. Contractor cannot produce/identify a critical path. Contractor cannot articulate Y estimates to complete, thus EACs are questionable. EV Management Systems: YELLOW is downgraded to RED. DCMA continues to produce Y additional CARs each month against contractor EVMS process. Training: GREEN is downgraded to YELLOW. Training is needed on the following: EVM contract requirements checklist, EVM analysis process particularly aspects of Format 5 Variance Y Analysis requirements, and the planning and scheduling process. MDA EVM Process – EVM Health

12. Current Noteworthy MDA EVM Initiatives • MDA Review of CPR/CFSR Quality • CPR/CFSR thoroughness per DID • Comparison of CPR/CFSR to CDRL Requirements • Management Information Quality • CPR Format 5 Quality • Examples: forward looking analysis, EAC Range (Best, Worst, Most Likely) • CPR Format 4 • Accuracy

13. Current Noteworthy MDA EVM InitiativesMDA Review of CPR/CFSR Quality SUMMARY OF CPR/CFSR REPORT QUALITY REVIEWS CPR CFSR MDA Overall CDRL DID Management Overall CDRL DID Management PROGRAMS Assessment Compliance Compliance Information Assessment Compliance Compliance Information Quality Quality Program 1 Program 2 Program 3 Program 4 Program 5 Program 6 Program 7 Program 8 Program 9 Program 10 Program 11 Program 12