DOD struggles with early warning

The Defense Department hasn't been including in its contracts provisions that alert officials early about problems, according to a memo.

Shay Assad, director of defense procurement, acquisition policy and strategic sourcing at DOD, wrote that auditors and regulators in DOD found contracting officers and program managers weren’t applying the earned value management (EVM) requirements, which measure progress and alert DOD to problems, to contracts, as regulations require.

The contracting officers and program managers failed to include EVM requirements in contracts, and, when they did, they inappropriately modified those requirements, Assad wrote. The officials didn’t follow policies and guidelines and also used contract incentives that countered the EVM objectives, he wrote in a memo issued Aug. 27.

DOD regulations require contracts worth $20 million or more to have mandatory EVM and data- reporting requirements.

“EVM is one of DOD’s and industry’s most useful program management tools, providing early warning of potential contract cost and schedule performance problems,” Assad wrote. “To be effective, EVM must be implemented in a disciplined manner.”

Program mangers are ultimately responsible for ensuring that statements of work and contract data list requirements have EVM provisions, he wrote.

At the same time, contracting officers can improve compliance by working closely with managers and EVM experts throughout the contracting process, he wrote. Contracting officers should consult with experts during source-selection process and collaborate in pre- and post-award conferences, he added.

Later in the acquisition process, the contracting officers need to carry out remedial actions if a contractor fails to comply with the requirements, he wrote.

The officers and program managers “must ensure that the EVM requirements are appropriately identified and incorporated into solicitations and contracts, and that they are executed properly,” he wrote.