OMB: Agencies met March cost management deadline

All federal agencies met a recent deadline for starting independent reviews of their plans to implement a financial management tool for information technology projects, an Office of Management and Budget spokesman said Tuesday.

Agencies had until March 31 to begin reviews of their plans to implement earned value management, a technique for tracking a project's progress against its planned performance, cost and schedule. The strategy also requires agencies to evaluate risks that might derail performance plans, and develop risk mitigation strategies.

All agencies reported meeting the deadline, said an OMB official who asked to remain anonymous, though some discovered through the review process that their plans required additional work to ensure achievable goals and a clearly defined performance baseline in the areas targeted by the system under development.

OMB set out goals for earned value management in an August 2005 memorandum, directing managers of all major ongoing IT projects with new development efforts to assess the use of the technique before committing fiscal 2006 funds to the projects. Those evaluations should be completed by someone not directly involved in the project, OMB said, and should verify the reasonableness of cost, schedule and performance baselines.

The March 31 deadline was an aggressive follow-up to a Dec. 31, 2005, deadline for agencies to dust off any earned value management policies on the shelf and implement them for major IT investments. About a third of agencies met that year-end goal, the OMB official said, and another 56 percent met portions of it, while the remaining 12 percent failed to meet the deadline.

Some critics have suggested that OMB has been hasty in pushing the management technique before policies are fully in place to support it.

Trey Hodgkins, director of defense programs for the Information Technology Association of America, was unenthusiastic about the March deadline. "Our concern was that they're putting the cart before the horse," Hodgkins said. He said while the Defense Department has been using earned value management for several years, the strategy is new for many civilian agencies.

Hodgkins pointed to a lack of clear guidance on how non-Defense agencies should implement the technique. "They don't even have a rule yet on the civilian side, and they're pushing all the agencies to implement it," he said.

ITAA provided comments in response to recent requests from both the Defense Acquisition Regulation Council and the Civilian Agency Acquisition Council. The two groups are developing rules on earned value management systems for IT projects. Differences in draft rules proposed by the groups would mean that contractors would have to develop separate competencies to manage defense and non-defense IT projects, ITAA said.

Some of the differences the group cited include the types of projects the rules cover, and a proposed civilian requirement for a pre-award baseline review. "This is a simple matter of preventing a bureaucratic mess before one occurs," said Olga Grkavac, vice president of ITAA.

The association has argued that the defense rules should take precedence because they are older, and that the Defense Contracts Management Agency, which currently certifies earned value management systems for defense contractors, should be accepted as the certifying body for civilian systems as well.

Gerald Zaffos, chairman of the civilian acquisition council, said the civilian and defense groups had worked together to produce rules that were satisfactory to both, but said he cannot provide details before the final rules are fully approved and published. That is expected to happen by July.