1. The Challenges to Acquisition: Earned Value Reporting Requirement on Cost-Type Subcontracts for Flight Hardware and Software Steve Proia Deputy CFO/Deputy Director Business Operations

2. Subcontract Value > $20M • Subcontractor must use a validated Earned Value Management System to generate these reports. • Most of the companies that JPL uses on these Subcontracts have validated (or soon to be validated) systems • JPL assigns an experienced Earned Value analyst to each of these subcontracts to • evaluate the EV reported in depth, and to calculate EACs for the Subcontract. A • formal report containing this information is published each month. Requirement NPR 7120.5d requires Subcontractor Earned Value reporting when the Subcontract value is over $20M. Facts

3. Subcontract Value > $20M Challenge Finding qualified Earned Value (EV) analysts to perform this work. Many applicants are experienced in reporting EV to their customers. Some are experienced in performing cursory analysis of their subcontractor’s EV reports. It is rare to find an applicant that has had experience in evaluating their subcontractors’ EV (in light of their monthly schedule update and the progress they have reported in management reviews) and in developing well-reasoned EACs on the basis of this evaluation.

4. Subcontract Value < $25M Requirement JPL Earned Value Management System description requires that the JPL project establish a consistent approach to providing EV for Subcontracts under $20M, with preference placed on the provision of this EV by the subcontractors themselves. Facts • Many of the companies that JPL uses on these Subcontracts are small (20 to 60 employees) and have little to no experience in reporting EV to their customers, much less using EV internally to manage their efforts. • Analysis of the reported EV and the calculation of EACs for these subcontracts is the responsibility of the JPL Subcontracts Manager, who is often as unfamiliar with EV reporting and analysis as the subcontractor is.

5. Subcontract Value < $20M Challenge • The assessment of the capability of each of these subcontractors to integrate their baseline schedule and costs, and to provide meaningful EV data to JPL. The negotiation of the most efficient system and reporting that the subcontractor can establish in light of their capability. • The infusion of subcontract schedule and cost management knowledge into the Subcontracts Managers’ community at JPL: • How to analyze subcontractor schedules • What is a Baseline Cost Estimate • How to tell to what extent a subcontractor has integrated their resources with their schedule • How to calculate statistical EACs • What information from the subcontractor needs to be provided to the JPL Project Business office, and when. This infusion is a long-term process, and requires that Acquisition provide not only formal training to the Subcontracts Managers, but also a considerable amount of one-on-one guidance and mentoring by experienced EV analysts