PGI 234.201 - Part52

This PGI section supplements: DFARS 234.201 · FAR 34.201

The corresponding FAR Part 34 and DFARS Part 234 have been overhauled under the RFO. PGI replacement text is provided in the RFO deviation attachment. View FAR Part 34

Current Content

(1) DoD applies the earned value management system requirement as follows:

(i) For cost or incentive contracts and subcontracts valued at $20,000,000 or more, the earned value management system shall comply with the guidelines in the American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems (ANSI/EIA-748).

(ii) For cost or incentive contracts and subcontracts valued at $50,000,000 or more, the contractor shall have an earned value management system that has been determined by the cognizant Federal agency to be in compliance with the guidelines in ANSI/EIA-748.

(iii) For cost or incentive contracts and subcontracts valued at less than $20,000,000—

(A) The application of earned value management is optional and is a risk-based decision;

(B) A decision to apply earned value management shall be documented in the contract file; and

(iv) For firm-fixed-price contracts and subcontracts of any dollar value—

(A) The application of earned value management is discouraged; and

(B) Follow the procedures at PGI 234.201 (1)(iv) for obtaining a waiver before applying earned value management.

(2) When an offeror proposes a plan for compliance with the earned value management system guidelines in ANSI/EIA-748, follow the review procedures at PGI 234.201 (2).

(3) The Defense Contract Management Agency is responsible for determining earned value management system compliance when DoD is the cognizant Federal agency.

(4) See PGI 234.201 (3) for additional guidance on earned value management.

(5) The cognizant contracting officer, in consultation with the functional specialist and auditor, shall—

(i) Determine the acceptability of the contractor‘s earned value management system and approve or disapprove the system; and

(ii) Pursue correction of any weaknesses or deficiencies.

(6) In evaluating the acceptability of a contractor’s earned value management system, the contracting officer, in consultation with the functional specialist and auditor, shall determine whether the contractor’s earned value management system complies with the system criteria for an acceptable earned value management system as prescribed in the clause at 252.234-7002 , Earned Value Management System.

(7) Disposition of findings—

(i) Reporting of findings. The functional specialist or auditor shall document findings and recommendations in a report to the contracting officer. If the functional specialist or auditor identifies any material weakness in the contractor’s earned value management system, the report shall describe the weaknesses or deficiencies in sufficient detail to allow the contracting officer to understand the weaknesses or deficiencies.

(ii) Initial determination.

(A) The contracting officer shall review all findings and recommendations and, if there are no material weaknesses, shall promptly notify the contractor, in writing, that the contractor’s earned value management system is acceptable and approved; or

(B) If the contracting officer finds that there are one or more material weaknesses due to the contractor’s failure to meet one or more of the earned value management system criteria in the clause at 252.234-7002, the contracting officer shall—

(1) Promptly make an initial written determination of any material weaknesses and notify the contractor, in writing, providing a description of each material weakness in sufficient detail to allow the contractor to understand the weaknesses (see PGI 234.201(7)(ii));

(2) Request the contractor to respond, in writing, to the initial determination within 30 days; and

(3) Evaluate the contractor’s response to the initial determination, in consultation with the auditor or functional specialist, and make a final determination.

(iii) Final determination.

(A) The contracting officer shall make a final determination and notify the contractor, in writing, that—

(1) The contractor’s earned value management system is acceptable and approved, and no material weaknesses remain; or

(2) Material weaknesses remain. The notice shall identify any remaining material weaknesses and indicate the adequacy of any proposed or completed corrective action. The contracting officer shall—

(i) Request that the contractor, within 45 days of receipt of the final determination, either correct the deficiencies or submit an acceptable corrective action plan showing milestones and actions to eliminate the weaknesses;

(ii) Disapprove the system in accordance with the clause at 252.234-7002 when initial validation is not successfully completed within the timeframe approved by the contracting officer, or the contracting officer determines that the existing earned value management system contains one or more material weaknesses in high-risk guidelines in ANSI/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 ANSI/EIA-748 standards, the contracting officer shall use discretion to disapprove the system based on input received from functional specialists and the auditor; and

(iii) Withhold payments in accordance with the clause at 252.242-7005 , Contractor Business Systems, if the clause is included in the contract.

(B) Follow the procedures relating to monitoring a contractor’s corrective action and the correction of material weaknesses at PGI 234.201(7)(iii).

(8) System approval. The contracting officer shall promptly approve a previously disapproved earned value management system and notify the contractor when the contracting officer determines that there are no remaining material weaknesses.

(9) Contracting officer notifications. The cognizant contracting officer shall promptly distribute copies of a determination to approve a system, disapprove a system and withhold payments, or approve a previously disapproved system and release withheld payments to the auditor; payment office; affected contracting officers at the buying activities; and cognizant contracting officers in contract administration activities.

Change History

Detected	Type	Summary
detected 2026-04-17	[PGI] PGI_MODIFIED	PGI 234.201 updated: 27 lines added, 15 lines removed
View diff --- previous +++ current @@ -1,16 +1,27 @@ -(1)(iii) When the program manager decides to implement earned value management on contracts and subcontracts valued at less than $20,000,000, a cost-benefit analysis shall be conducted and the results documented in the contract file. Considerations for determining the effectiveness of applying earned value management in these situations and guidance for tailoring reporting can be found in-- -(1) The Integrated Program Management Data Analysis Report (IPMDAR) Implementation & Tailoring Guide; and -(2) The DoD Earned Value Management Implementation Guide . -(iv) In extraordinary cases where cost/schedule visibility is required and cannot be obtained using other means, the program manager shall request a waiver for individual contracts from the Milestone Decision Authority. In these cases, the program manager will conduct a business case analysis that includes rationale as to why a cost or fixed-price incentive contract was not an appropriate contracting vehicle. Considerations for determining the effectiveness of applying earned value management in these situations and guidance for tailoring reporting can be found in-- -(1) DoD Instruction 5000.85, paragraph 3C.3.c.(3); and -(2) The DoD Earned Value Management Implementation Guide . -(2) The procuring contracting officer shall obtain the assistance of the administrative contracting officer in determining the adequacy of an earned value management system (EVMS) plan that an offeror proposes for compliance with ANSI/EIA-748, under the provision at DFARS 252.234-7001, Notice of Earned Value Management System. The Government will review and approve the offeror's EVMS plan before contract award. Instructions for performing EVMS plan reviews can be found at https://www.dcma.mil/HQ/EVMS/. -(4) Additional guidance on earned value management can be found in-- (A) The Guidebook for Earned Value Management System (EVMS) System-Level Surveillance at https://www.dcma.mil/HQ/EVMS/; (B) The Guidebook for Earned Value Management System - Program Analysis; and (C) The Program Managers' Guide to the Integrated Baseline Review Process (the IBR Guide) . -(7) Disposition of findings. -(ii) Initial determination. (B)(1) Within 30 days of receiving the report, if the contracting officer makes a determination that there is a material weakness, the contracting officer should provide an initial determination of material weaknesses and a copy of the report to the contractor and require the contractor to submit a written response. -(3) Evaluation of contractor's response. Within 30 days of receiving the contractor's response, the contracting officer, in consultation with the auditor or cognizant functional specialist, should evaluate the contractor's response and make a final determination. -(iii) Fina l determination. (B)(1) Monitoring contractors' corrective action. The contracting officer and cognizant functional specialist or auditor shall monitor the contractor's progress in correcting material weaknesses and deficiencies. If the contractor fails to make adequate progress, the contracting officer shall take whatever action is necessary to ensure that the contractor corrects the weaknesses and deficiencies. Actions the contracting officer may take include: withdraw or withhold approval of the system; bringing the issue to the attention of higher level management , as applicable; recommending non-award of potential contracts; and for material weaknesses, implementing or increasing the withholding in accordance with 252.242-7005, Contractor Business Systems. -(2) Correction of material weaknesses. -(i) When the contractor notifies the contracting officer that the contractor has corrected the material weaknesses, the contracting officer shall request the cognizant functional specialist or auditor to review the correction to determine if the weaknesses and deficiencies have been resolved. -(ii) The contracting officer shall determine if the contractor has corrected the weaknesses and deficiencies. -(iii) If the contracting officer determines the contractor has corrected the weaknesses and deficiencies, send the contracting officer's notification to the cognizant functional specialist; auditor; payment office; appropriate action officers responsible for reporting past performance at the requiring activities; and each contracting and contract administration office having substantial business with the contractor as applicable.+(1) DoD applies the earned value management system requirement as follows: +(i) For cost or incentive contracts and subcontracts valued at $20,000,000 or more, the earned value management system shall comply with the guidelines in the American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems (ANSI/EIA-748). +(ii) For cost or incentive contracts and subcontracts valued at $50,000,000 or more, the contractor shall have an earned value management system that has been determined by the cognizant Federal agency to be in compliance with the guidelines in ANSI/EIA-748. +(iii) For cost or incentive contracts and subcontracts valued at less than $20,000,000-- (A) The application of earned value management is optional and is a risk-based decision; (B) A decision to apply earned value management shall be documented in the contract file; and (C) Follow the procedures at PGI 234.201 (1)(iii) for conducting a cost-benefit analysis. +(iv) For firm-fixed-price contracts and subcontracts of any dollar value-- (A) The application of earned value management is discouraged; and (B) Follow the procedures at PGI 234.201 (1)(iv) for obtaining a waiver before applying earned value management. +(2) When an offeror proposes a plan for compliance with the earned value management system guidelines in ANSI/EIA-748, follow the review procedures at PGI 234.201 (2). +(3) The Defense Contract Management Agency is responsible for determining earned value management system compliance when DoD is the cognizant Federal agency. +(4) See PGI 234.201 +(3) for additional guidance on earned value management. +(5) The cognizant contracting officer, in consultation with the functional specialist and auditor, shall-- +(i) Determine the acceptability of the contractor's earned value management system and approve or disapprove the system; and +(ii) Pursue correction of any weaknesses or deficiencies. +(6) In evaluating the acceptability of a contractor's earned value management system, the contracting officer, in consultation with the functional specialist and auditor, shall determine whether the contractor's earned value management system complies with the system criteria for an acceptable earned value management system as prescribed in the clause at 252.234-7002, Earned Value Management System. +(7) Disposition of findings-- +(i) Reporting of findings. The functional specialist or auditor shall document findings and recommendations in a report to the contracting officer. If the functional specialist or auditor identifies any material weakness in the contractor's earned value management system, the report shall describe the weaknesses or deficiencies in sufficient detail to allow the contracting officer to understand the weaknesses or deficiencies. +(ii) Initial determination. (A) The contracting officer shall review all findings and recommendations and, if there are no material weaknesses, shall promptly notify the contractor, in writing, that the contractor's earned value management system is acceptable and approved; or (B) If the contracting officer finds that there are one or more material weaknesses due to the contractor's failure to meet one or more of the earned value management system criteria in the clause at 252.234-7002, the contracting officer shall-- +(1) Promptly make an initial written determination of any material weaknesses and notify the contractor, in writing, providing a description of each material weakness in sufficient detail to allow the contractor to understand the weaknesses (see PGI 234.201(7)(ii)); +(2) Request the contractor to respond, in writing, to the initial determination within 30 days; and +(3) Evaluate the contractor's response to the initial determination, in consultation with the auditor or functional specialist, and make a final determination. +(iii) Final determination. (A) The contracting officer shall make a final determination and notify the contractor, in writing, that-- +(1) The contractor's earned value management system is acceptable and approved, and no material weaknesses remain; or +(2) Material weaknesses remain. The notice shall identify any remaining material weaknesses and indicate the adequacy of any proposed or completed corrective action. The contracting officer shall-- +(i) Request that the contractor, within 45 days of receipt of the final determination, either correct the deficiencies or submit an acceptable corrective action plan showing milestones and actions to eliminate the weaknesses; +(ii) Disapprove the system in accordance with the clause at 252.234-7002 when initial validation is not successfully completed within the timeframe approved by the contracting officer, or the contracting officer determines that the existing earned value management system contains one or more material weaknesses in high-risk guidelines in ANSI/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 ANSI/EIA-748 standards, the contracting officer shall use discretion to disapprove the system based on input received from functional specialists and the auditor; and +(iii) Withhold payments in accordance with the clause at 252.242-7005 , Contractor Business Systems, if the clause is included in the contract. (B) Follow the procedures relating to monitoring a contractor's corrective action and the correction of material weaknesses at PGI 234.201(7)(iii). +(8) System approval. The contracting officer shall promptly approve a previously disapproved earned value management system and notify the contractor when the contracting officer determines that there are no remaining material weaknesses. +(9) Contracting officer notifications. The cognizant contracting officer shall promptly distribute copies of a determination to approve a system, disapprove a system and withhold payments, or approve a previously disapproved system and release withheld payments to the auditor; payment office; affected contracting officers at the buying activities; and cognizant contracting officers in contract administration activities.

Detected

Type

Summary

detected 2026-04-17

[PGI] PGI_MODIFIED

PGI 234.201 updated: 27 lines added, 15 lines removed

View diff

--- previous
+++ current
@@ -1,16 +1,27 @@
-(1)(iii) When the program manager decides to implement earned value management on contracts and subcontracts valued at less than $20,000,000, a cost-benefit analysis shall be conducted and the results documented in the contract file. Considerations for determining the effectiveness of applying earned value management in these situations and guidance for tailoring reporting can be found in--
-(1) The Integrated Program Management Data Analysis Report (IPMDAR) Implementation & Tailoring Guide; and
-(2) The DoD Earned Value Management Implementation Guide .
-(iv) In extraordinary cases where cost/schedule visibility is required and cannot be obtained using other means, the program manager shall request a waiver for individual contracts from the Milestone Decision Authority. In these cases, the program manager will conduct a business case analysis that includes rationale as to why a cost or fixed-price incentive contract was not an appropriate contracting vehicle. Considerations for determining the effectiveness of applying earned value management in these situations and guidance for tailoring reporting can be found in--
-(1) DoD Instruction 5000.85, paragraph 3C.3.c.(3); and
-(2) The DoD Earned Value Management Implementation Guide .
-(2) The procuring contracting officer shall obtain the assistance of the administrative contracting officer in determining the adequacy of an earned value management system (EVMS) plan that an offeror proposes for compliance with ANSI/EIA-748, under the provision at DFARS 252.234-7001, Notice of Earned Value Management System. The Government will review and approve the offeror's EVMS plan before contract award. Instructions for performing EVMS plan reviews can be found at https://www.dcma.mil/HQ/EVMS/.
-(4) Additional guidance on earned value management can be found in-- (A) The Guidebook for Earned Value Management System (EVMS) System-Level Surveillance at https://www.dcma.mil/HQ/EVMS/; (B) The Guidebook for Earned Value Management System - Program Analysis; and (C) The Program Managers' Guide to the Integrated Baseline Review Process (the IBR Guide) .
-(7) Disposition of findings.
-(ii) Initial determination. (B)(1) Within 30 days of receiving the report, if the contracting officer makes a determination that there is a material weakness, the contracting officer should provide an initial determination of material weaknesses and a copy of the report to the contractor and require the contractor to submit a written response.
-(3) Evaluation of contractor's response. Within 30 days of receiving the contractor's response, the contracting officer, in consultation with the auditor or cognizant functional specialist, should evaluate the contractor's response and make a final determination.
-(iii) Fina l determination. (B)(1) Monitoring contractors' corrective action. The contracting officer and cognizant functional specialist or auditor shall monitor the contractor's progress in correcting material weaknesses and deficiencies. If the contractor fails to make adequate progress, the contracting officer shall take whatever action is necessary to ensure that the contractor corrects the weaknesses and deficiencies. Actions the contracting officer may take include: withdraw or withhold approval of the system; bringing the issue to the attention of higher level management , as applicable; recommending non-award of potential contracts; and for material weaknesses, implementing or increasing the withholding in accordance with 252.242-7005, Contractor Business Systems.
-(2) Correction of material weaknesses.
-(i) When the contractor notifies the contracting officer that the contractor has corrected the material weaknesses, the contracting officer shall request the cognizant functional specialist or auditor to review the correction to determine if the weaknesses and deficiencies have been resolved.
-(ii) The contracting officer shall determine if the contractor has corrected the weaknesses and deficiencies.
-(iii) If the contracting officer determines the contractor has corrected the weaknesses and deficiencies, send the contracting officer's notification to the cognizant functional specialist; auditor; payment office; appropriate action officers responsible for reporting past performance at the requiring activities; and each contracting and contract administration office having substantial business with the contractor as applicable.+(1) DoD applies the earned value management system requirement as follows:
+(i) For cost or incentive contracts and subcontracts valued at $20,000,000 or more, the earned value management system shall comply with the guidelines in the American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems (ANSI/EIA-748).
+(ii) For cost or incentive contracts and subcontracts valued at $50,000,000 or more, the contractor shall have an earned value management system that has been determined by the cognizant Federal agency to be in compliance with the guidelines in ANSI/EIA-748.
+(iii) For cost or incentive contracts and subcontracts valued at less than $20,000,000-- (A) The application of earned value management is optional and is a risk-based decision; (B) A decision to apply earned value management shall be documented in the contract file; and (C) Follow the procedures at PGI 234.201 (1)(iii) for conducting a cost-benefit analysis.
+(iv) For firm-fixed-price contracts and subcontracts of any dollar value-- (A) The application of earned value management is discouraged; and (B) Follow the procedures at PGI 234.201 (1)(iv) for obtaining a waiver before applying earned value management.
+(2) When an offeror proposes a plan for compliance with the earned value management system guidelines in ANSI/EIA-748, follow the review procedures at PGI 234.201 (2).
+(3) The Defense Contract Management Agency is responsible for determining earned value management system compliance when DoD is the cognizant Federal agency.
+(4) See PGI 234.201
+(3) for additional guidance on earned value management.
+(5) The cognizant contracting officer, in consultation with the functional specialist and auditor, shall--
+(i) Determine the acceptability of the contractor's earned value management system and approve or disapprove the system; and
+(ii) Pursue correction of any weaknesses or deficiencies.
+(6) In evaluating the acceptability of a contractor's earned value management system, the contracting officer, in consultation with the functional specialist and auditor, shall determine whether the contractor's earned value management system complies with the system criteria for an acceptable earned value management system as prescribed in the clause at 252.234-7002, Earned Value Management System.
+(7) Disposition of findings--
+(i) Reporting of findings. The functional specialist or auditor shall document findings and recommendations in a report to the contracting officer. If the functional specialist or auditor identifies any material weakness in the contractor's earned value management system, the report shall describe the weaknesses or deficiencies in sufficient detail to allow the contracting officer to understand the weaknesses or deficiencies.
+(ii) Initial determination. (A) The contracting officer shall review all findings and recommendations and, if there are no material weaknesses, shall promptly notify the contractor, in writing, that the contractor's earned value management system is acceptable and approved; or (B) If the contracting officer finds that there are one or more material weaknesses due to the contractor's failure to meet one or more of the earned value management system criteria in the clause at 252.234-7002, the contracting officer shall--
+(1) Promptly make an initial written determination of any material weaknesses and notify the contractor, in writing, providing a description of each material weakness in sufficient detail to allow the contractor to understand the weaknesses (see PGI 234.201(7)(ii));
+(2) Request the contractor to respond, in writing, to the initial determination within 30 days; and
+(3) Evaluate the contractor's response to the initial determination, in consultation with the auditor or functional specialist, and make a final determination.
+(iii) Final determination. (A) The contracting officer shall make a final determination and notify the contractor, in writing, that--
+(1) The contractor's earned value management system is acceptable and approved, and no material weaknesses remain; or
+(2) Material weaknesses remain. The notice shall identify any remaining material weaknesses and indicate the adequacy of any proposed or completed corrective action. The contracting officer shall--
+(i) Request that the contractor, within 45 days of receipt of the final determination, either correct the deficiencies or submit an acceptable corrective action plan showing milestones and actions to eliminate the weaknesses;
+(ii) Disapprove the system in accordance with the clause at 252.234-7002 when initial validation is not successfully completed within the timeframe approved by the contracting officer, or the contracting officer determines that the existing earned value management system contains one or more material weaknesses in high-risk guidelines in ANSI/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 ANSI/EIA-748 standards, the contracting officer shall use discretion to disapprove the system based on input received from functional specialists and the auditor; and
+(iii) Withhold payments in accordance with the clause at 252.242-7005 , Contractor Business Systems, if the clause is included in the contract. (B) Follow the procedures relating to monitoring a contractor's corrective action and the correction of material weaknesses at PGI 234.201(7)(iii).
+(8) System approval. The contracting officer shall promptly approve a previously disapproved earned value management system and notify the contractor when the contracting officer determines that there are no remaining material weaknesses.
+(9) Contracting officer notifications. The cognizant contracting officer shall promptly distribute copies of a determination to approve a system, disapprove a system and withhold payments, or approve a previously disapproved system and release withheld payments to the auditor; payment office; affected contracting officers at the buying activities; and cognizant contracting officers in contract administration activities.

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PGI 234.201: Policy.

Current Content

Change History