Accession Number:

ADA583583

Title:

Deficient Contractor Business Systems: Applying the Value at Risk (VAR) Model to Earned Value Management Systems

Descriptive Note:

Research paper

Corporate Author:

NAVAL POSTGRADUATE SCHOOL MONTEREY CA

Personal Author(s):

Report Date:

2013-06-01

Pagination or Media Count:

103.0

Abstract:

The focus of our MBA project is in Earned Value Management System EVMS. This MBA project objectively and quantitatively portrays EVMS risk in a way that supports a monetary withhold decision and can withstand push-back to include litigation from the defense contractor. The government is authorized to withhold 5 of progress payments from the contractor to mitigate the risk of significant deficiencies. We evaluated the rank order of severity for 13 EVMS guidelines that the Defense Contract Management Agency DCMA requested we focus on and consider high risk to the government. Results show that the rank order of severity for the 13 EVMS guidelines provides a means for the DCMA to focus their limited resources on the surveillance of high risk guidelines. By gathering EVMS corrective action data, we were able to apply the operational value at risk VaR model in which a monetary risk value was calculated to withhold contractor progress payments. The results suggest that the operational VaR model could be used by DCMA personnel as a defensible risk value model for withholding contractor payments.

Subject Categories:

  • Administration and Management
  • Economics and Cost Analysis

Distribution Statement:

APPROVED FOR PUBLIC RELEASE