252.234-7999

EARNED VALUE MANAGEMENT SYSTEM (FEB 2026) (DEVIATION 2026-O0011)

(a) Definitions. As used in this clause—

Acceptable earned value management system means an earned value management
system that generally complies with the system criteria in paragraph (b) of this clause.

Earned value management system means a system that complies with the earned value
management system guidelines in Electronic Industries Alliance Standard 748, Earned
Value Management Systems (EIA-748).

Material weakness means a deficiency or combination of deficiencies in the internal
control over information in contractor business systems, such that there is a reasonable
possibility that a material misstatement of such information will not be prevented, or
detected and corrected, on a timely basis. A reasonable possibility exists when the
likelihood of an event occurring is—

(1) Probable; or

(2) More than remote but less than likely (section 806 of Pub. L. 116-283).

(b) System criteria. In the performance of this contract, the Contractor shall use—

(1) An Earned Value Management System (EVMS) that complies with the
EVMS guidelines in the American National Standards Institute/Electronic Industries
Alliance Standard 748, Earned Value Management Systems (EIA-748); and

(2) Management procedures that provide for generation of timely, reliable, and
verifiable information for the Contract Performance Report (CPR) and the Integrated
Master Schedule (IMS) required by the CPR and IMS data items of this contract.

(c) If this contract has a value of $100 million or more, the Contractor shall use an
EVMS that has been determined to be acceptable by the Cognizant Federal Agency
(CFA). If, at the time of award, the Contractor's EVMS has not been determined by the
CFA to be in compliance with the EVMS guidelines as stated in paragraph (b)(1) of this
clause, the Contractor shall apply its current system to the contract and shall take
necessary actions to meet the milestones in the Contractor's EVMS plan.

(d) If this contract has a value of less than $100 million, the Government will not
make a formal determination that the Contractor's EVMS complies with the EVMS
guidelines in EIA-748 with respect to the contract. The use of the Contractor's EVMS
for this contract does not imply a Government determination of the Contractor's
compliance with the EVMS guidelines in EIA-748 for application to future contracts.
The Government will allow the use of a Contractor's EVMS that has been formally
reviewed and determined by the CFA to be in compliance with the EVMS guidelines in
EIA-748.

(e) The Contractor shall submit notification of any proposed substantive changes to
the EVMS procedures and the impact of those changes to the CFA. If this contract has a
value of $100 million or more, unless a waiver is granted by the CFA, any EVMS
changes proposed by the Contractor require approval of the CFA prior to
implementation. The CFA will advise the Contractor of the acceptability of such
changes as soon as practicable (generally within 30 calendar days) after receipt of the
Contractor's notice of proposed changes. If the CFA waives the advance approval
requirements, the Contractor shall disclose EVMS changes to the CFA at least 14
calendar days prior to the effective date of implementation.

(f) The Government will schedule integrated baseline reviews as early as practicable,
and the review process will be conducted not later than 180 calendar days after—

(1) Contract award;

(2) The exercise of significant contract options; and

(3) The incorporation of major modifications.

During such reviews, the Government and the Contractor will jointly assess the
Contractor's baseline to be used for performance measurement to ensure complete
coverage of the statement of work, logical scheduling of the work activities, adequate
resourcing, and identification of inherent risks.

(g) The Contractor shall provide access to all pertinent records and data requested
by the Contracting Officer or duly authorized representative as necessary to permit
Government surveillance to ensure that the EVMS complies, and continues to comply,
with the performance criteria referenced in paragraph (b) of this clause.

(h) When indicated by contract performance, the Contractor shall submit a request
for approval to initiate an over-target baseline or over-target schedule to the
Contracting Officer. The request shall include a top-level projection of cost and/or
schedule growth, a determination of whether or not performance variances will be
retained, and a schedule of implementation for the rebaselining. The Government will
acknowledge receipt of the request in a timely manner (generally within 30 calendar
days).

(i) Material weaknesses. (1) The Contracting Officer will provide an initial
determination to the Contractor, in writing, of any material weaknesses. The initial
determination will describe the underlying deficiency in sufficient detail to allow the
Contractor to understand the weakness or deficiency.

(2) The Contractor shall respond within 30 days to a written initial
determination from the Contracting Officer that identifies material weaknesses in the
Contractor's EVMS. If the Contractor disagrees with the initial determination, the
Contractor shall state, in writing, its rationale for disagreeing.

(3) The Contracting Officer will evaluate the Contractor's response and notify
the Contractor, in writing, of the Contracting Officer's final determination concerning—

(i) Remaining material weaknesses;

(ii) The adequacy of any proposed or completed corrective action;

(iii) System noncompliance, when the Contractor's existing EVMS fails to
comply with the earned value management system guidelines in the EIA-748; and

(iv) System disapproval, if initial EVMS validation is not successfully
completed within the timeframe approved by the Contracting Officer, or if the
Contracting Officer determines that the Contractor's earned value management system
contains one or more material weaknesses in high-risk guidelines in EIA-748 standards
(guidelines 1, 3, 6, 7, 8, 9, 10, 12, 16, 21, 23, 26, 27, 28, 30, or 32). When the Contracting
Officer determines that the existing earned value management system contains one or
more material weaknesses in one or more of the remaining 16 guidelines in EIA-748
standards, the Contracting Officer will use discretion to disapprove the system based on
input received from functional specialists and the auditor.

(4) If the Contractor receives the Contracting Officer's final determination of
material weaknesses, the Contractor shall, within 45 days of receipt of the final
determination, either correct the material weaknesses or submit an acceptable
corrective action plan showing milestones and actions to eliminate the material
weaknesses.

(j) Withholding payments. If the Contracting Officer makes a final determination to
disapprove the Contractor's EVMS, and the contract includes the clause at 252.242-
7005, Contractor Business Systems, the Contracting Officer will withhold payments in
accordance with that clause.

(k) Subcontracts. With the exception of paragraphs (i) and (j) of this clause, the
Contractor shall require its subcontractors to comply with EVMS requirements as
follows:

(1) For subcontracts valued at $100 million or more that are not primarily for
software, the following subcontractors shall comply with the requirements of this
clause:

Contracting Officer to insert names of subcontractors (or subcontracted effort if
subcontractors have not been selected) designated for application of the EVMS
requirements of this clause.

(2) For subcontracts valued at less than $100 million or more that are not
primarily for software, the following subcontractors shall comply with the requirements
of this clause, excluding the requirements of paragraph (c) of this clause:

Contracting Officer to insert names of subcontractors (or subcontracted effort if
subcontractors have not been selected) designated for application of the EVMS
requirements of this clause.

(End of clause)