a.  Earned Value Management Systems (EVMS)

The following comments were submitted concerning Earned Value Management Systems (EVMS):

Comment: Some respondents expressed concern over disapproval of EVM systems if the system is not validated within 16 months since DCMA is not currently able to meet this timeline.

Response: The rule requires contracting officers to determine the acceptability of the contractor's earned value management system in consultation with the functional specialist and auditor. Contracting officers are expected to consider all facts at their disposal when making such determinations. However, circumstances outside of a contractor's control may inhibit the initial validation of a contractor's EVMS. Therefore, 234.201(7)(iii)(A)(2)(ii) has been revised to state that the system will be disapproved "when initial validation is not successfully completed within the timeframe approved by the contracting officer * * *"

Comment: Conditions for disapproval of an EVM system are inconsistent where the definition of an acceptable EVMS means that the system generally complies with system criteria while the identification of a single deficiency can make a system unacceptable. Furthermore, while some respondents expressed concern that EVM system deficiencies are related to ill-defined contractual requirements, other respondents indicated that criteria for disapproval of an EVM system are too strict and should be more subjective.

Response: The rule requires contracting officers to determine the acceptability of the contractor's earned value management system in consultation with the functional specialist and auditor. Contracting officers are expected to consider all facts at their disposal when making such determinations. Section 893 of the FY11 NDAA requires systems to be disapproved when there is a shortcoming in the system that affects materially the ability of DoD officials to rely on information produced by the system for management purposes. This interim rule is consistent with this requirement. In the case of EVM systems, this means the system has one or more significant deficiencies due to the contractor's failure to comply with the system criteria in the clause at 252.234-7002, Earned Value Management System. Since a system will only be disapproved when a significant deficiency exists, a system with deficiencies that do not materially affect the Government's ability to rely on information produced by the system is considered an acceptable system in accordance with the definition at 252.234-7002. Therefore, this rule is not inconsistent with the definition of an acceptable EVMS.