4 Questions for Navigating Earned Value Management Requirements for BARDA Contracts

November 2016

By Dave Scott

Picture this scenario: Company X is an established bio-pharmaceutical organization working with a group of scientists to develop a medical countermeasure for a newly recognized virus growing in prevalence worldwide. Currently, they are screening new technologies that could help fight off the virus infection.

Company X is not familiar with the government contracting landscape and is interested in partnering with the Biomedical Advanced Research and Development Authority (BARDA), which operates within the Office of the Assistant Secretary for Preparedness and Response in the U.S. Department of Health and Human Services (HHS). BARDA provides funding for the development and manufacture of vaccines, drugs and diagnostic tools for public health and medical emergencies.

Company X is considering submitting a proposal for a BARDA contract, but the management team is hesitant to take on the financial compliance and project controls requirements, including implementation of an Earned Value Management System (EVMS). They’re unsure of the return on investment in addressing the complex requirements.

A thorough consideration of the following questions will help them evaluate their readiness to move into the BARDA contracting space and identify the benefits they can derive from implementing a BARDA-compliant EVMS.

1. What is an EVMS, and why is it useful?

An EVMS is composed of people, processes, policies and tools that comprise an overall business system for planning and controlling a project’s scope, cost and schedule. EVM helps contractors analyze past project performance to better plan and control future project deliverables. In addition, BARDA research and development contracts over $25 million in total lifecycle value (including options) require contract performance reporting based on EVM.

The EVMS design incorporates the BARDA contractor’s current project management and scheduling capabilities, as well as the organization’s finance and accounting systems and processes. The EVMS may be implemented in a traditional “in-house” fashion. They would need to license the EVM software, configure the system and hire and train personnel. Alternatively, they may consider a fully outsourced EVMS solution.

2. What are the BARDA EVM requirements?

Federal Acquisition Regulations (FAR) and HHS Acquisition Regulations (HHSAR) requirements for EVM were developed principally for construction or information technology (IT) projects. However, BARDA has developed tailored EVM language and guidelines known as the BARDA Seven Principles of EVM.

These principles allow flexibility in an EVMS structure, but still meet the spirit of the EIA-748 EVMS standard, which is stipulated by FAR and HHSAR. They add discipline in implementation and operations and provide the same reporting data outlined by the Office of Management and Budget (OMB).

3. What are some challenges in implementing an EVMS?

Implementing a BARDA-compliant EVMS is often challenging for a number of reasons, including:
  • Familiarizing management and project teams with EVM as a project management discipline
  • Licensing EVM software, maintaining the IT infrastructure and training personnel
  • Transforming a proposal into a project plan, schedule and accurate time-phased performance measurement budget
  • Developing BARDA EVM artifacts and EVMS process flow documentation
  • Reporting direct and indirect costs at the element of cost and work package levels
  • Integrating monthly subcontractor project status and cost data into the EVMS
  • Objectively statusing project performance, managing baseline changes and management reserve
  • Performance measurement baseline reviews and contract performance reporting

Internal EVMS implementations may take between six months to a year to complete. However, Company X will be required to begin submitting monthly EVM reports within 120 days of contract award.

4. What value might organizations derive from outsourcing their EVMS implementation?

While internal EVMS implementations may expose a company to risk, another option is an outsourced EVMS solution.

An outsourced EVMS can offer the following benefits:
  • Lower cost of compliance
  • A rapid response to meet the BARDA EVM reporting requirements
  • Knowledgeable EVM professionals with BARDA experience, enabling them to focus on successfully executing their project
  • Improved project performance as a result of disciplined project scheduling and cost management
  • A BARDA-trusted approach for forecasting future funding requirements and supporting contract modifications

Company X considered these questions and their options. They successfully proposed and were awarded a BARDA contract with a lifecycle value of over $100 million. As a result of the many potential benefits, they chose to outsource their EVMS implementation, which resulted in strong customer satisfaction and the award of additional contract options.

Dave Scott is a managing director with BDO’s Government Contracts and Grants Advisory Services practice, and may be reached at dmscott@bdo.com

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