Overview

• Magnitude of subcontract dollars.
• Risk factors in subcontracting.
• Problems inherent with subcontract control.
• Performance measurement – the benefits.

Introduction to the Earned Value Concept

• Problems with comparing plan versus actual to ascertain performance.
• Earned Value - An essential parameter.
• The Brick Wall - An illustrative example of Earned Value methods.

Earned Value Management Systems Flowdown

• Establishing flowdown requirements.
• Flowdown of Earned Value Management Systems Guidelines (EVMSG).
• Flowdown of modified EVMSG.
• Tailoring flowdown requirements.
• Evaluating subcontractor's proposal response.
• Sample System Implementation Plan.

Flowdown Requirements Case Study #1

An exercise to determine which requirements to flow down from prime contractor to appropriate subcontractors.

Organization

• The Work Breakdown Structure (WBS).
• Integrating subcontracted effort into the prime contract WBS.
• The subcontract management team.
• Control Accounts for subcontracted effort.
• Work Authorization for subcontracted effort.

Subcontract Planning

• Establishing the Baseline - A three-stage iterative process.
• Scheduling subcontract effort - The importance of prime and subcontract schedule integration.
• Budget planning for subcontractor effort.
• Planning subcontractor fee in prime Control Accounts.
• Prime contractor planning of subcontracts without EVMSG requirements.
• Establishment of Budgeted Cost for Work Scheduled (BCWS) for the different contract types.

Control Account Planning Case Study #2 (CPR) and #3 (FFP)

A detailed exercise in Control Account planning which involves using subcontractor source data to plan prime's subcontract Control Accounts.  Several planning techniques will be reviewed and used for planning.

Baseline Maintenance

• How the prime contractor handles change to the subcontract baseline.
• How different types of changes affect baseline maintenance.
• Challenges to the Prime and the Subcontractor's baseline management.

Determining Earned Value for Subcontract Control Accounts

• Methods used for subcontracts with Contract Performance Report (CPR) and/or the Integrated Program Management Report (IPMR).
• Methods used for subcontracts without CPR and/or IPMR.

Earned Value – Case Study #4 and #5

Two detailed exercises in Earned Value determination using the solutions from case studies #2 and #3.

Accounting Considerations

• Cost segregation requirements.
• Linking prime contractor cost accumulation systems.
• Accumulating Actual Cost of Work Performed (ACWP) into the Earned Value Management System.
• Subcontractor's material performance measurement.

Analysis of Subcontractor Performance Data

• Determining cost variances, schedule variances and variances at completion.
• Determining how significant variances affect subcontract performance measurement.
• Typical variance analysis thresholds at the prime Control Account level.
• Prime contractor's variance analysis process.
• Estimates-At-Completion (EACs).
• Validating the subcontractor's EAC.
• Using performance indices and trend analysis.