To: Regional Director, PN, MP, LC, UC, GP
Attention: PN-3700 (Ford), MP-3800 (Ventuleth), LC-3100 (Guilbert), UC-800 (Slater), GP-3700 (Banks), GP-3800 (Worley) Management Services Office Attention: D-7810 (Eckelberg)

From: Karla J. Smiley /s/
Manager, Acquisition and Assistance Management Division

Subject: Electronic Transmittal No. 06-09, Earned Value Management (EVM) for Information Technology Investments

1. Purpose: To transmit the attached memorandum from the Department of the Interior, dated May 25, 2005, which requires Earned Value Management (EVM) to be used by contractors to measure the performance of all new major Information Technology (IT) service contracts that support the major IT projects valued at $1 million or more.

2. Effective date: June 30, 2005.

3. Expiration date: In effect until revised.

4. Background: The Clinger-Cohen Act requires performance, schedule and cost controls for major systems, which the Office of Management and Budget (OMB) implemented in Part 7 of OMB Circular A-11. This guidance calls for all Federal agencies to use EVM to monitor project performance, and to take the necessary corrective actions to mitigate project risk. OMB has established a quarterly project management reporting requirement for rating those projects which require the use of EVM for all major IT projects.

5. Explanation of changes:

1) After June 30, 2005, all new service contracts awarded to support major IT systems that fall under the attached defined criteria, must require contractors to use EVM to measure performance.

2) Attached is the model contract language that shall be included within each new IT service contract covered under the attached specified criteria, and this language should be tailored to each action, as appropriate.

3) Existing contracts for major IT systems and supporting service contracts valued over $1 million must be considered for EVM application. If you feel there is an existing contract which falls into this category, please inform our office by November 30, 2005, although Reclamation’s overall response to date is that no such contracts exist.

6. Action required: Please distribute this ET to your acquisition staff, including sub-buying units, and IT Contracting Officer Representatives.

7. Point-of-contact: Vicki Cook, 303-445-2443.

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