# PGI 234.201 Policy.

(1)(iii) When the program manager decides to implement earned value management on contracts and subcontracts valued at less than $20,000,000, a cost-benefit analysis shall be conducted and the results documented in the contract file. Considerations for determining the effectiveness of applying earned value management in these situations and guidance for tailoring reporting can be found in—

(1) The Defense Acquisition Guidebook, Chapter 11, Section 11.3, at https://akss.dau.mil/dag/DoD5000.asp?view=document; and

(2) The DoD Earned Value Management Implementation Guide at https://acc.dau.mil/CommunityBrowser.aspx?id=19557.

(iv) In extraordinary cases where cost/schedule visibility is required and cannot be obtained using other means, the program manager shall request a waiver for individual contracts from the Milestone Decision Authority. In these cases, the program manager will conduct a business case analysis that includes rationale as to why a cost or fixed-price incentive contract was not an appropriate contracting vehicle. Considerations for determining the effectiveness of applying earned value management in these situations and guidance for tailoring reporting can be found in—

(1) The Defense Acquisition Guidebook, Chapter 11, Section 11.3, at https://akss.dau.mil/dag/DoD5000.asp?view=document; and

(2) The DoD Earned Value Management Implementation Guide at https://acc.dau.mil/CommunityBrowser.aspx?id=19557.

(2) The procuring contracting officer shall obtain the assistance of the administrative contracting officer in determining the adequacy of an earned value management system (EVMS) plan that an offeror proposes for compliance with ANSI/EIA-748, under the provision at DFARS 252.234-7001, Notice of Earned Value Management System. The Government will review and approve the offeror’s EVMS plan before contract award. Instructions for performing EVMS plan reviews can be found at http://guidebook.dcma.mil/39/instructions.htm.

(4) Additional guidance on earned value management can be found in—

(A) The Guidebook for Earned Value Management System (EVMS) System-Level Surveillance at http://guidebook.dcma.mil/79/instructions.htm;

(B) The Guidebook for Earned Value Management System - Program Analysis at http://guidebook.dcma.mil/248/guidebook_process.htm; and

(C) The Program Managers’ Guide to the Integrated Baseline Review Process (the IBR Guide) at http://www.acq.osd.mil/pm/currentpolicy/currentpolicy.html.

(7) Disposition of findings.

(ii) Initial determination.

(B)(1) Within 30 days of receiving the report, if the contracting officer makes a determination that there is a material weakness, the contracting officer should provide an initial determination of material weaknesses and a copy of the report to the contractor and require the contractor to submit a written response.

(3) Evaluation of contractor's response. Within 30 days of receiving the contractor’s response, the contracting officer, in consultation with the auditor or cognizant functional specialist, should evaluate the contractor’s response and make a final determination.

(iii) Final d etermination.

(B)(1) Monitoring contractors’ corrective action. The contracting officer and cognizant functional specialist or auditor shall monitor the contractor's progress in correcting material weaknesses and deficiencies. If the contractor fails to make adequate progress, the contracting officer shall take whatever action is necessary to ensure that the contractor corrects the weaknesses and deficiencies. Actions the contracting officer may take include: withdraw or withhold approval of the system; bringing the issue to the attention of higher level managementhttp://www.acq.osd.mil/dpap/dars/dfars/html/current/252242.htm#252.242-7005 , as applicable; recommending non-award of potential contracts; and for material weaknesses, implementing or increasing the withholding in accordance with 252.242-7005, Contractor Business Systems.

(2) Correction of material weaknesses.

(i) When the contractor notifies the contracting officer that the contractor has corrected the material weaknesses, the contracting officer shall request the cognizant functional specialist or auditor to review the correction to determine if the weaknesses and deficiencies have been resolved.

(ii) The contracting officer shall determine if the contractor has corrected the weaknesses and deficiencies.

(iii) If the contracting officer determines the contractor has corrected the weaknesses and deficiencies, send the contracting officer's notification to the cognizant functional specialist; auditor; payment office; appropriate action officers responsible for reporting past performance at the requiring activities; and each contracting and contract administration office having substantial business with the contractor as applicable.