2014 Workshop Integration Training

Basic Schedule Analysis (INT 01)

Justin HornbackProgram Manager, Reed Integration
Jim People – Director of Risk Management, Amgen, Inc.

Examination of Program performance continues to identify the development and monitoring of program schedules as a weakness in programs that do not meet technical, cost, and schedule goals. The GAO Schedule Assessment guides states that “A well-planned schedule is a fundamental management tool that can help government programs use public funds effectively by specifying when work will be performed in the future and measuring performance against an approved plan.” This workshop presentation will cover scheduling basics, desired attributes of a valid program schedules, and basic schedule analysis techniques important to programmatic and cost estimator analysts. Schedule analysis tools and techniques will include, but are not limited to, three point estimates and schedule risk analysis.

Keywords: scheduling, best practices, risk analysis, techniques and tools

Advanced Schedule Analysis (INT 02)

David Hulett – Hulett & Associates, LLC

Project scheduling is a discipline that can be taught and learned. Unfortunately many people are pressed into service as schedulers without having been drilled in the discipline and without being mentored by good schedulers. This session benefits from the presenter’s many experiences reviewing schedules against scheduling best practices to produce good CPM schedules that will survive the “shaking up” that goes on during a Monte Carlo simulation of a schedule risk analysis. In essence, this session is about real schedules on real projects, the issues that arise and why they cause the schedule to be less than useful as a tool of project management.

This presentation will start by describing what is meant by “dynamic scheduling,” the distinction between seeing a schedule as a tool versus schedule as a picture of the project in the moment. In summary, dates are outputs of the scheduling exercise, not inputs.

Special topics include the use of lags and leads, hammocking, dangling activities, 3-point estimates and out-of-sequence statusing.

Then, the Government Accountability Office (GAO) is producing a 10-point Scheduling Best Practice guide that has already been used to review many government program schedules at the request of the US Congress. These points are discussed in summary, with some of the issues we have seen as we apply them to various government programs.

Keywords: Scheduling, Best Practices, GAO

Schedule Risk Analysis (INT 03)

David Hulett – Hulett & Associates, LLC

Project scheduling is only the start of understanding when your project will finish and what might cause it to overrun its schedule date. A good-quality project schedule is required so that the Monte Carlo simulation – an industry best practice for analyzing schedule (and cost) risk – will produce correct finish dates and critical paths on every iteration.

However, schedule durations are not known with certainty and must be represented as uncertain events. The traditional way to represent schedule duration uncertainty is to apply a 3-point estimate (min, most likely and max) directly to the activity durations. This workshop shows how uncertain durations down a path lead to results (histograms and cumulative distributions) that allow the user to determine how much overrun there might be at different target levels of certainty (percentiles). Then, a 3-path schedule is used to introduce the “merge bias,” the extra risk that can arise at points where parallel paths converge in the schedule – this will never help you and might delay the project beyond the risk of the merging paths individually. We also describe what paths might ultimately delay the project, given duration risk, and find that the ultimate delaying path may not be the “critical path” of the deterministic schedule.

The workshop discusses the implications of failing a test or other discontinuous events – it is called existence risk or “probabilistic branching,” often resulting in a bi-modal result distribution. We introduce correlation between activity durations, which traditionally is applied through the simulation software by estimating correlation coefficients between activities’ uncertain durations.

Finally, we introduce the more modern Risk Driver method of driving the Monte Carlo simulations using the risks usually found in the Risk Register for the program. In this method, found in some software products, the root causes of duration uncertainty are recognized as the risk themselves. These risks are characterized by their probability of occurring and impact in ranges on activity durations if they occur. A risk can be assigned to several activities and some activities’ durations may be influenced by multiple risks. Correlations between activities are developed during simulation if a risk affects two activities, as it occurs on real projects and we never get an inconsistent correlation matrix. Starting from the risks we can prioritize the risks that really matter through the structure of the schedule used to manage the project, for effective risk mitigation.

Keywords: Schedule Risk, Risk Analysis, Monte Carlo Simulation, Uncertainty, Risks

Integrated Cost/Schedule Risk Analysis (INT 04)

Eric Druker – Senior Associate, Booz Allen Hamilton
David Hulett – Hulett & Associates, LLC

Recognizing the need to ensure results from cost and schedule risk analyses are compatible, agencies, such as NASA, have recently implemented policy requiring the integration of these two, formerly separate, practices. This training course will provide analysts an overview on how they can integrate their cost estimates, schedules, and risk register into a single cohesive model that can then be analyzed to predict future cost and schedule growth and identify their sources so that mitigative actions can be taken. A live demonstration of an integrated cost/schedule risk analysis (ICSRA) tool, Polaris, will be conducted in class so that analysts can familiarize themselves with how an ICSRA model works.

Keywords: Cost, Schedule, Risk, Awesomeness

Contracts Risk (INT 05)

Peter Braxton – Senior Cost Analyst and Technical Officer, Technomics, Inc.
James Linick – Lead Cost Analyst, Missile Defense Agency

We continue to operate in a challenging acquisition environment, in which cost overruns make headlines and wreak havoc on program stability. This session will present cost estimating and risk analysis as tools to aid in facing contract management challenges. A brief depiction of historical data showing pervasive cost growth will be followed by a compilation of common reasons for cost growth. FAR contract types will be discussed from a cost estimator’s perspective, as a means of establishing a mapping from final contract cost to final price to the government and an associated return on sales (ROS) for the contractor, and a convincing case made that incentives and risk are of vital importance across all contract types. The role of cost estimating and risk analysis in proposal development, proposal evaluation, and contract negotiations will be highlighted. Discussion of basis of estimate (BOE) documentation will include cost estimating methodologies and their proper application; the essential elements and qualities of a good BOE; and criteria and guidelines for grading BOEs. Lessons learned will be presented based on the instructors’ extensive experience conducting independent proposal reviews, with topics including BOE format, BOE technical evaluation, subcontractor BOEs, forward pricing rate agreements (FPRAs), and the Pension Protection Act. Finally, the session will demonstrate use of the Contract Incentive Impact Tool (CIIT) to conduct dynamic sensitivity analysis on the effect of contract type and geometry on the competing goals of ROS (above contractor’s hurdle rate) and price (below government’s associate budget), given underlying uncertainty assumptions.

This session is adapted from “Cost Estimating and Risk Analysis as Tools for Contract Management,” twice presented at the Government Contract Management Conference (GCMC), sponsored by sister society National Contract Management Association (NCMA). It also draws from “Analysis of Large O&S Proposals: Lessons Learned,” presented at ICEAA 2013.

Keywords: Contract Management, Risk, Contract Type, Fee, Profit, Margin, ROS, BOE, FPRA, PPA, CIIT, Subcontract, Budget, Evaluation, Assessment, Independent, NCMA

Source Selection (INT 06)

Marie Colitti – Cost SME, NSWC Dahlgren Division
Christina Brims – Representative, HQ AF Space Command, Air Force Cost Analysis Agency

In today’s tightly controlled acquisition process, Government program offices are forced to dedicate significant resources to source selections in support of major acquisitions to ensure a best value decision, This brief focuses the competitive source selection process from a cost evaluation perspective; governing regulations, the process, the RFP, the evaluation and after the evaluation. The briefing’s purpose is to explain the competitive source selection process and give insight into the evaluation of a cost proposal.

Keywords: Source Selection, Proposal Evaluation, Acquisition, Best Value Decision

Integrated Baseline Review (IBR) (INT 07)

Tim Fritz – Earned Value Management Consultant, AzTech International, LLC
Luis Contreras – President, AzTech International, LLC

The subtitle to this IBR Training is: Exploding the IBR Big Bang Theory. Most agencies and programs think of the IBR as a big event six months after contract award. In this training brief, we will define the IBR and show the latest thinking on more streamlined and collaborative IBRs that are a process—not merely an event. We will cover IBR basics such as preparing for and conducting IBR data calls and data traces. Then we will address more advanced topics such as what makes a solid Integrated Master Schedule (IMS) and how it is foundational to a successful IBR. We will also address the Schedule Risk Assessment (SRA) process and talk about dialing the results into the Performance Measurement Baseline (PMB). Throughout this training, we will address processes, forms, and methods used by major government agencies/services and industry, including the GAO, Navy/NAVAIR, Air Force, and NDIA. This training is intended for all levels of the project team from beginners to advanced practitioners.

Keywords: Integrated Baseline Review, IBR, EVMS, Schedule, Cost, Integrated Master Schedule, IMS

Advanced EVM (INT 08)

Luis Contreras – President, AzTech International, LLC
Tim Fritz – Earned Value Management Consultant, AzTech International, LLC

Breathing Life into Earned Value Metrics

Earned Value skeptics consider EV a rear-view mirror that merely reports on past performance—and a month late to boot! In this session, we will discuss advanced metrics and show how EV concepts and metrics can be used to assess past performance, understand current and recent performance, and—most importantly—to better predict future performance and to mitigate schedule delays and overruns.

This session builds upon the concepts introduced in CEB 12, Earned Value Management (EVM) Basic Concepts. This workshop is intended for individuals who possess a working knowledge and practical field experience in EVM and assumes experience with the basic calculations of variances and applying the various performance indices. The session focuses on the performance measurement data elements; an in-depth analysis of EVM data; and how, why, and when the various performance management formulae are used. Visual displays will illustrate the data as a source of information that serves as an early indicator for decision-makers to determine if a particular effort is headed for success or failure.

Keywords: Earned Value, EVM, Risk, CPI, SPI

Cost Management (INT 10)

Tom Dauber – Principal, Booz Allen Hamilton
John Deem – Principal Value Engineer, Lockheed Martin Aeronautics Company

This session provides an introduction to cost management as well as the tools and techniques currently in use by leading edge organizations, both government and industry, and the role of cost estimating and analysis. This session covers aspects of the Core Knowledge section of Module 16 Cost Management of CEBoK© specifically an Introduction to Cost Management and the related discipline of Cost As an Independent Variable (CAIV). Total Ownership Cost (TOC), Target Costing, and Activity Based Costing (ABC) will be covered in INT 11-Target Costing. Cost management generally takes a holistic approach, incorporating cost considerations into the overall management approach, so that together with other measures of performance, they will help lead to decisions that providing optimal value to the organization and its customers, be they shareholders, consumers, or warfighters.

Keywords: Cost as an Independent Variable (CAIV), Should Cost, Target Costing, Cost/Performance Trades, Performance Estimating Relationships (PER)

Target Costing Implementation (INT 11)

John Deem – Principal Value Engineer, Lockheed Martin Aeronautics Company
Tom Dauber – Principal, Booz Allen Hamilton

Target Cost Management Implementation provides the foundational body of knowledge relevant to cost estimators and analysts preparing for assignments to support the affordability, value engineering and cost management mission. It includes initiatives and methods used by industry to incorporate cost considerations into enterprise cost management efforts by supporting decisions that provide optimal value to the enterprise.

Target Cost Management Implementation is based on Module 16 Cost Management of CEBoK covering the essence of Reducing Total Ownership Costs, Target Costing and Activity-Based Cost analysis.

Keywords: Target Cost, Affordability, Value Engineering, Cost Management, Reducing Total Ownership Cost, (R-TOC), Activity-Based Cost (ABC)

Cost Estimating in PMBoK vs. CEBoK (INT 13)

Kevin Cincotta – Technical Director, ICF International
Ashlin Smith – Cost/Acquisition Analyst, Technomics, Inc.

The Project Management Body of Knowledge (PMBoK) and Cost Estimating Body of Knowledge (CEBoK) each give guidance on effective cost estimating for successful project execution. While there is a good deal of overlap between the two curricula, there are also significant differences. More importantly, in many instances, the same terms are used to mean different things. Mastering cost estimating as it exists in both curricula requires you to remember everything you learned as you study these bodies of knowledge. And then forget it.

Keywords: PMBoK, CEBoK, Project Management, Cost Estimating, Integration