SMALLTOFEDS By Ken larson
“Astute contractors conduct contract baseline management through sound technical, cost and schedule definition and control via an iterative process with the government. The Earned Value Management technique can be utilized from the smallest of projects to large-scale systems programs. It is well worth learning and practicing.”
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“Baseline Management in Government Contracting
It is in the long term interests of astute contractors to assist in contract baseline management. The only way to achieve such an objective is through sound technical, cost and schedule definition and control via an iterative process with the government.
f you are selling a straight commercial product off the shelf, the problem of baseline management is minimal, assuming your product meets the specifications required and you deliver on time. Is it during development programs for new products or service contracts involving labor supplied to the government that lack of definition and poor communication are high risks. The initial benchmark for managing this risk is in the government solicitation and statement of work.
Part 1, Section C, is where the technical specifications and statement of work are located in the solicitation and will reside in your negotiated contract.Without a well written Statement of Work (SOW) and associated supplies and services specifications there is unacceptable risk in the future contract and is it exceptionally high risk to bid or contract the job. Both the contractor and the government must come to an understanding regarding the scope of effort to be performed. That understanding is conveyed in the SOW and confirmed in the specifications referenced therein.
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EARNED VALUE MANAGEMENT SYSTEMS (EVMS)
Plan to measure your “Bang for the Buck”. Establish tangible tasks in the form of a plan. Set milestones for them in time at a budget value for each milestone tied out to the total budget. The milestones should be things you can look at and say, “That’s done”. Status your plan regularly. When milestones are completed, credit the budget value as earned. Tasks may cost more than their budgets to complete. That is cost variance for completed tasks. If milestones are not completed by their scheduled date do not credit their budget value as earned. Behind schedule tasks are thus contributing to a cumulative budgeted schedule variance in time.
Prudently used this approach gives insight into the dynamics of physical accomplishment driving project status as opposed to plan versus actual cost tracking which tells you only that you are spending money.
Many companies recognize the benefits of Baseline Managment and EVMS project management and apply them without being required to do so by contract. They produce excellent results.“
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