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TITLE III--ADDITIONAL ACQUISITION PROVISIONS

Section 302

House Conference Report 111-124

SEC. 302. EARNED VALUE MANAGEMENT.

    (a) Modification of Elements in Report on Implementation- Subsection (a) of section 887 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110-417; 122 Stat. 4562) is amended by striking paragraph (7) and inserting the following new paragraphs:

      `(7) A discussion of the methodology used to establish appropriate baselines for earned value management at the award of a contract or commencement of a program, whichever is earlier.

      `(8) A discussion of the manner in which the Department ensures that personnel responsible for administering and overseeing earned value management systems have the training and qualifications needed to perform that responsibility.

      `(9) A discussion of mechanisms to ensure that contractors establish and use approved earned value management systems, including mechanisms such as the consideration of the quality of contractor earned value management performance in past performance evaluations.

      `(10) Recommendations for improving earned value management and its implementation within the Department, including--

        `(A) a discussion of the merits of possible alternatives; and

        `(B) a plan for implementing any improvements the Secretary determines to be appropriate.'.

    (b) Modification of Report Date- Subsection (b) of such section is amended by striking `270 days after the date of the enactment of this Act' and inserting `October 14, 2009'.

Earned value management (sec. 302)

The Senate bill contained a provision (sec. 207) that would require the Under Secretary of Defense for Acquisition, Technology, and Logistics to review and improve guidance governing the implementation of Earned Value Management (EVM) systems for Department of Defense (DOD) contracts.

The House amendment contained no similar provision.

The House recedes with an amendment that would incorporate the requirements of the Senate provision into section 887 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110-417), which requires the Secretary of Defense to identify and address shortcomings in EVM systems for DOD contracts.

Senator Murray's statement on her Amendment 1045 that became Section 207, S. 454

Congressional Record, Senate, May 6, 2009, Consideration of S. 454, the Weapon Systems Acquisition Reform Act of 2009, P. S5216

Mr. President, this amendment, which I am offering along with my distinguished colleague, Senator MCCASKILL, who has brought great auditing skills to this body, would help to ensure that the Department is supplying certain critical principles consistently and reliably to all projects that use a specific management tool that is known as EVM, earned value management. The Department currently requires EVM tracking for all contracts that exceed $20 million. This provides important visibility into the scope, schedule, and cost in a single integrated system. When properly applied, this system can provide an early warning of performance problems. The Government Accountability Office has observed, however, that contractor reporting on EVM often lacks consistency, leading to inaccurate data and faulty application of this metric. In other words, this is a garbage-in/garbage- out problem that we need to correct.

To address this challenge, our amendment would provide enforcement mechanisms to ensure that contractors establish and use approved EVM systems, and we would require the Department of Defense to consider the quality of the contractorís EVM systems and reporting in the past performance evaluation for a contract. When a contractor is bidding, the contracting official looks at any past performance. With improved data quality, both the Government and the contractor will be able to improve program oversight, leading to better acquisition outcomes.

This is so important. Some of the provisions that are particularly important in the Levin-McCain bill would increase transparency and oversight so that if an acquisition process is going in the wrong direction, we know about it and are able to take action. We are able to decide whether the Nunn- McCurdy breaches, for example, warrant halting the project. We are improving the cost estimate system for weapons acquisition projects. We have a lot of reforms. This would increase our transparency, our ability to flag problems.

I believe this amendment Senator MCCASKILL and I offer would help to strengthen the Departmentís acquisition planning, increase and improve program oversight, and help to prevent contracting waste, fraud, and mismanagement.

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