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IMMEDIATE RELEASE

Release No: 678-96
December 18, 1996

DEPARTMENT OF DEFENSE ADOPTS INDUSTRY GUIDELINES FOR EARNED VALUE MANAGEMENT SYSTEMS

Under Secretary of Defense for Acquisition and Technology Paul G. Kaminski announced that he has accepted recently published industry guidelines for earned value management systems (EVMS) as replacements for the Department of Defense Cost/Schedule Control Systems Criteria (C/SCSC). The DoD had required its contractors to comply with C/SCSC for nearly thirty years. In recent years, EVMS principles have been adopted increasingly by commercial industry in the United States and by government and industry in Australia, Canada, Sweden, and the United Kingdom.

The EVMS guidelines were issued by the Aerospace Industries Association, American Shipbuilders Association, Electronic Industries Association, National Security Industrial Association, and Shipbuilders Council of America. By accepting the industry guidelines as a substitute for C/SCSC, DoD is encouraging industry to develop a widely accepted industry or international standard that obviates the need for DoD to maintain its own requirements. David Drabkin, Assistant Deputy Under Secretary of Defense for Acquisition Reform (Acquisition Process and Policies), said "It has been our vision of acquisition reform from the very beginning to adopt, where practicable, commercial practices in lieu of government unique practices. Clearly, EVMS offers an opportunity to become more commercial like in one of our most unique government practices."

Gary Christle, Deputy Director for Performance Management, whose office worked with industry to reconcile government and commercial management practices, added, "Our evaluation of the EVMS guidelines shows that the basic principles underlying government and industry project management are the same. By asserting ownership of those principles, industry has made it possible for DoD to reduce significantly the detailed reviews that were previously required on every major new contract, as well as contractors' internal reporting and documentation requirements. In the future, we can rely more on our contractors to maintain management control systems that protect the public interest."

New contracts awarded by DoD will cite the EVMS guidelines. Contractors that are operating management control systems previously accepted as compliant with C/SCSC will be encouraged to submit changes through the "block change" procedures to change all existing contracts within their facilities to a single EVMS business process. A block change is an acquisition reform initiative that involves the consolidation or elimination of multiple processes, specifications and standards in all contracts on a facility-wide basis, rather than a contract-by-contract basis.

In accepting the EVMS guidelines, Kaminski said "The change from C/SCSC to EVMS marks a major shift in responsibility from government to industry and support the 'insight, not oversight' philosophy underlying DoD acquisition reform initiatives." The shift in responsibility will benefit industry by permitting more efficient, single internal processes that meet all program management needs, and will benefit the government by improving contract administration while at the same time reducing oversight, with savings for the taxpayer.

Further information on earned value management systems may be obtained from http://www.acq.osd.mil/pm.

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