HHS-OCIO Policy for PBM-2010-0007
1. Purpose
This Policy, originally issued as a Pilot Policy on November 3, 2009, established Information Technology (IT) Performance Baseline Management (PBM) as the primary Department of Health and Human Services (HHS) Information Technology (IT) Capital Planning and Investment Control (CPIC) methodology for measuring, reporting, and evaluating the performance of all HHS Major and Tactical IT Investments, and of all HHS Supporting IT Investments with budget year costs equal to or greater than $1M. It also prescribed the roles and responsibilities for achieving PBM requirements.
The Policy for IT PBM was issued as a Pilot Policy, pending a review of its impact on the management and operation of the Supporting IT Investments with budget year costs equal to or greater than $1M. After a year of operation under this Pilot Policy, its impact was assessed and this final Policy is being issued.
Prior to the November 3, 2009 issuance of the Pilot Policy, the term earned value management (EVM) was used in HHS CPIC policies and procedures because the primary focus of investment performance management was on cost and schedule reporting, using EVM. However, in the Policy, and now in this 2010 issuance of the permanent policy, the term performance baseline management is used to encompass the employment of performance measurement mechanisms to assess each IT Investment’s progress in achieving benefits and continued viability over the IT Investment’s entire lifecycle. The term performance baseline management is also used to differentiate between the basic requirement for all IT Investments and IT projects to track performance against a defined baseline and the HHS acquisition management requirement in HHS Office of Acquisition Management and Policy (OAMP) – Acquisition Policy Memorandum No. 2008-02, October 1, 2008, which specifies contract-level cost and schedule reporting, including the use of ANSI-compliant Earned Value Management Systems (EVMS) for certain types of contracts meeting established monetary thresholds.
This HHS-OCIO-2010-0007 Policy for IT Performance Baseline Management, dated December 21, 2010, obsoletes and replaces HHS-OCIO-2009-0005 Pilot Policy for IT Performance Baseline Management, dated November 3, 2009; and HHS-OCIO Policy for Information Technology (IT) Earned Value Management (EVM) (HHS-OCIO-2007-0001), dated June 11, 2007.
2. Background
The Clinger-Cohen Act (CCA) of 1996 (Public Law 104-106, formerly known as the Information Technology Management Reform Act of 1996) requires Federal agencies to use a disciplined CPIC process that includes methods to manage and report the performance of the agency’s Information Technology (IT) assets using quantifiable measurements of benefits, risks, and progress, in terms of cost, capability to meet specified requirements, timeliness, and quality. This HHS-Office of the Chief Information Officer (OCIO) IT Policy is based on the legal mandates of the CCA, which requires structured CPIC processes to identify quantifiable measurements for determining the net benefits and risks of IT Investments, and to provide the means for senior management personnel of the executive agency to obtain timely information regarding the progress of an IT Investment, including a system of milestones for measuring progress, on an independently verifiable basis, in terms of cost, capability of the investment to meet specified requirements, timeliness, and quality.
PBM is the activity of tracking performance against a target and identifying opportunities for improvement. The focus of PBM is the future: What does the organization need to be able to do and how can it do things better? Managing performance is about managing for results. Performance-based management at any level in the organization should demonstrate that:
- The organization knows what it is aiming for
- The organization knows what it must do to meet its objectives
- The organization knows how to measure progress toward its objectives
- The organization knows how to detect performance problems and remedy them.
HHS IT PBM methodology provides a consistent and repeatable process for managing, monitoring, and evaluating the performance of IT Investments. This process encompasses the following:
- A standard approach for reporting, monitoring, and evaluating each IT Investment’s performance over its entire life cycle to enable HHS IT Investment business owners, IT management, and IT governance bodies to remain apprised as to whether and how IT Investment initiatives satisfy defined requirements and attain identified results.
- An IT Investment-level performance measurement baseline that comprises the cost, schedule, and scope baselines, developed in accordance with HHS CPIC and EPLC guidance over each investment’s entire lifecycle.
- Outcome- and output-based measurement indicators for tracking and monitoring IT Investment progress and performance in achieving anticipated benefits and supporting HHS mission needs and objectives over each investment’s entire lifecycle.
- Operational analyses to determine the extent to which an IT Investment that is wholly or partially in Steady State (Operations and Maintenance) continues to support mission objectives and deliver anticipated benefits, and whether alternative solutions might provide benefits more efficiently or effectively.
HHS PBM uses EVM techniques and metrics to analyze and report IT Investment and IT project cost and schedule variances. These EVM techniques include reporting planned start date, planned end date, actual start date, actual end date, planned percent complete, actual percent complete, planned cost, and actual cost. However, HHS IT PBM restricts the requirements of an ANSI-compliant Earned Value Management System (EVMS) to a select group of external contracts as determined by HHS OAMP – Acquisition Policy Memorandum No. 2008-02, October 1, 2008, which specifies contract-level cost and schedule reporting, including the use of ANSI-compliant EVMS for certain types of contracts meeting established monetary thresholds. From an IT Investment management standpoint, HHS’ contract-based EVM requirements, as described in HHS OAMP – Acquisition Policy Memorandum No. 2008-02, October 1, 2008, apply to any contracts associated with an IT investment. These contract-based requirements are, therefore, a subset of the Department’s overall IT Investment-based PBM cost, schedule and performance standards. By focusing this Policy on the cost and schedule reporting data which are applicable to all IT projects and IT investments, this Policy implements a robust and repeatable process for performance management at HHS that dissolves the barriers between IT projects, IT investments, and associated contracts of varying size and life cycle stage.
This Policy for IT PBM was developed in response to the October 1, 2008 HHS OAMP acquisition Policy memorandum (2008-02) defining EVM reporting requirements by contract size and type and providing solicitation guidance on the use of pre- and post-award Integrated Baseline Reviews (IBRs). This Policy for IT PBM Policy also clarifies the relationships between IT investments and IT projects and systems, and incorporates the Enterprise Performance Life Cycle (EPLC) framework, which focuses on IT projects, as a key component within the HHS CPIC process. This Policy for IT PBM is validated for effectiveness in accordance with the Federal Chief Information Officer (CIO) Council’s A Framework for Developing Earned Value Management Systems (EVMS) Policy for Information Technology (IT) Projects, Federal CIO Council, December 2005.
This Policy for IT PBM applies to all HHS organizational components (i.e., Operating Divisions [OPDIVs] and the Office of the Secretary [OS] and its Staff Divisions [STAFFDIVs]), and organizations conducting business for and on behalf of the Department. This Policy does not supersede any other applicable law or higher level agency directive, or existing labor management agreement in effect as of the effective date of this Policy.
Department officials shall apply this Policy to contractor personnel, interns, and other non-government employees conducting business for or on behalf of the Department through contractual relationships or memoranda of agreement. The content of and compliance with this Policy shall be incorporated into applicable contract language, as appropriate.
This Policy applies to all HHS Major and Tactical IT investments and their associated IT projects throughout their entire lifecycles, regardless of size, scope, complexity, funding level, or funding source, whether owned and operated by HHS or operated on behalf of HHS. This Policy also applies to all HHS Supporting IT investments with budget year costs equal to or greater than $1M, and their associated IT projects throughout their entire lifecycle, regardless of size, scope, complexity, or funding source, whether owned and operated by HHS or operated on behalf of HHS.
This Policy for IT PBM is issued as a Final Policy (hereinafter referred to as the Policy), obsoleting the Pilot Policy issued November 3, 2009, as referenced in the Purpose Section of this Policy.
All HHS Supporting IT Investments with budget year funding less than $1M are required to track, maintain, and provide the HHS Office of the Chief Information Officer (OCIO) with data needed to generate reports required by oversight agencies such as the Office of Management and Budget (OMB).
This Policy shall be applied and implemented, as appropriate, in conjunction with the HHS CPIC Policy for EPLC, the HHS Policy for Enterprise Architecture (EA), and any Federal Acquisition Regulation (FAR) and HHSAR rules that are promulgated on the subject.
OPDIVs and OS (hereinafter referred to as OPDIVs) shall use this Policy or may create a more restrictive policy, but not one that is less restrictive or less comprehensive than, or not compliant with this Policy.
The HHS Policy for IT PBM provides a Department-wide standard IT investment performance management methodology for ensuring that HHS IT investments meet approved cost, schedule, and performance milestones and successfully achieve specified benefits and outcomes based on HHS business needs and mission requirements throughout the IT investment life cycle. The HHS CIO has established the HHS IT PBM in the paragraphs below for all IT investments.
4.1 IT Investment Principles
4.1.1 IT Investment Characteristics.
4.1.1.1 An IT Investment shall serve as the means through which a discrete and unique set of logically related, business-driven IT products and/or services is delivered.
4.1.1.2 The IT Investment’s justification, cost, schedule, measurement indicators, and other management and technical artifacts shall describe its discrete and unique set of IT products/services.
4.1.1.3 Two or more IT Investments shall not deliver the same discrete and unique set of IT products/services.
4.1.1.4 When two or more IT Investments deliver IT products/services through the same IT system, each IT Investment’s set of IT products/services shall be discrete and unique and clearly distinguishable from the sets of IT products/services provided by the other IT Investments through the IT system.
4.1.2 IT Funding.
4.1.2.1 An IT Investment may be funded by one or more funding sources.
4.1.2.2 A funding source may fund more than one IT Investment.
4.1.2.3 An IT Investment shall be the means through which an IT system, project, or program receives funding.
4.1.2.4 The funds provided through each IT Investment shall be traceable to each associated IT system and/or IT project/program.
4.1.3 IT Investment-to-IT System/IT Project Relationships.
4.1.3.1 One IT Investment shall deliver a unique and discrete set of logically-related, business-driven IT products/services through one or more IT systems and/or IT projects/programs.
4.1.3.2 Multiple IT Investments may each deliver a unique and discrete set of logically-related, business-driven IT products/services through one or more IT systems.
4.1.4 The HHS EPLC framework shall be used as the standard structure for planning, managing and overseeing each HHS IT project over its entire life cycle.
4.1.5 IT Investment Lifecycle and Lifecycle Costs
4.1.5.1 The life cycle of an IT Investment shall be defined as the duration of all activities associated with the investment from its initiation through disposal of its assets.
4.1.5.2 The life cycle costs of an IT Investment shall be defined as all risk-adjusted costs relating to the investment from its initiation through disposal of its assets.
4.1.5.3 Risk-adjusted costs are the IT Investment costs plus the additional costs associated with such risk factors as the IT Investment's technical complexity, the organization’s management capacity, the likelihood of cost overruns, and the consequences of under- or non-performance.
4.2 Cost and Schedule Milestones: The Performance Measurement Baseline
4.2.1 A performance measurement baseline shall be established for each IT Investment.
4.2.2 Each IT Investment’s performance measurement baseline shall be derived from the IT Investment’s scope of work described in a hierarchical Work Breakdown Structure (WBS) in accordance with the HHS Policy for EPLC and EPLC framework guidance.
4.2.3 Each IT Investment performance measurement baseline shall comprise the following:
4.2.3.1 The cost baseline, which defines the approved, projected, time-phased life-cycle costs for acquiring, operating, and disposing of the physical and/or logical IT system(s) or other IT assets represented by the scope baseline.
4.2.3.2 The schedule baseline, which is the approved timeline for acquiring, operating, and disposing of the physical and/or logical IT system(s) or other IT assets.
4.2.3.3 The scope baseline, which represents the approved goals, the approved work to accomplish the goals, and the approved content and configuration of the product(s) of the IT Investment, as developed and described in the IT Investment’s or component IT project’s technical documentation.
4.2.4 When an IT Investment consists of more than one IT project, a customized investment-level management plan, patterned after the EPLC framework, shall be developed to define the lifecycle cost, schedule, and scope baselines, and phases of investment-level activities and reviews that are appropriate to the overall investment and to integrate the cost, schedule, and scope baselines and different lifecycle phases and deployments of the different projects that comprise the IT Investment.
4.2.4.1 The IT Investment shall also include one or more cost and schedule milestones for IT Investment-level tasks/activities.
4.2.4.2 Full life-cycle cost and schedule information shall be captured at the IT project level and rolled up to the parent IT Investment level to express an investment-level view that integrates the status of the subordinate IT projects and to generate HHS IT PBM reports and other reports required by oversight agencies such as the Office of Management and Budget.
4.2.5 The performance measurement baseline shall be integrated such that the time-phased cost baseline is consistent with the schedule baseline, and the costs are related to acquiring, operating, and disposing of the physical and/or logical system(s) or other IT assets represented by the scope baseline.
4.2.6 The official performance measurement baseline for any IT Investment or IT project shall be the latest documented baseline approved by the IT governance board or designated governance body, along with any approved changes to cost, schedule, or scope.
4.2.7 The cost, schedule, and scope baselines represented in the performance measurement baseline shall be fully risk-adjusted and integrated with the risk management process.
4.2.8 The IT Investment manager shall only change the established baseline with the approval of the IT governance board.
4.2.9 The IT Investment manager shall report, monitor and, as needed, implement actions to correct variances from established IT Investment baselines to reduce the risk of cost overruns, schedule delays, and uncontrolled changes in scope.
4.2.9.1 Cost and schedule milestone data for all IT Investments shall be reported each month in the HHS Portfolio Management Tool (PMT).
4.2.9.1.1 The cost and schedule milestone data shall be reported in the PMT on the 13th day of each month; if the 13th day of the month falls on a weekend or holiday, the monthly data are due in the PMT on the next business day.
4.2.9.1.2 The monthly report shall cover the IT Investment’s cumulative performance as of the end of the preceding month.
4.2.9.1.3 Cost and schedule milestone data collected shall include Planned Start Date, Planned End Date, Actual Start Date, Actual End Date, Planned Percent Complete, Actual Percent Complete, Planned Cost, Actual Cost, and other data elements specified by the HHS CIO.
4.2.9.1.4 Calculations of Planned Value (PV), Earned Value (EV), Cost Variance (CV), Schedule Variance (SV), and Estimate to Completion (ETC) shall be used to assess IT Investment performance against the approved performance measurement baseline.
4.2.9.2 If the IT Investment’s total cost or schedule variance is equal to or greater than +/- 10%, or the cost or schedule variance of the Development/Modernization/Enhancement (DME) portion of the IT Investment is equal to or greater than +/- 10%, the IT Investment manager shall complete and submit a Corrective Action Plan (CAP) to HHS OCIO via the HHS PMT.
4.2.9.3 The CAP must be approved by the IT governance board, or the designated governance representative or body, prior to implementation of the CAP.
4.2.10 The IT governance board shall approve or disapprove proposed changes to the established IT Investment performance measurement baseline.
4.2.10.1 Each IT Investment manager seeking an approval to change the established IT Investment baseline shall submit a Baseline Change Request via the PMT.
4.2.10.2 A record of baseline change decisions and the associated proposed baselines shall be maintained by the IT governance board and in the PMT and used to assess IT Investment performance as part of the annual CPIC IT Investment selection process when IT Investments are considered for inclusion in IT Investment portfolios.
4.2.11 An IT Investment Integrated Baseline Review (I3BR) shall be conducted to assess the IT Investment’s performance measurement baseline at the conclusion of the EPLC Planning Phase for each IT project comprising the IT Investment, or prior to approving a Baseline Change Request (BCR) for the IT Investment or for an IT project comprising the IT Investment.
4.2.11.1 For IT Investments consisting of multiple IT projects, the IT Investment manager shall develop an IT Investment performance measurement baseline that reflects the interdependencies and integration of the constituent IT projects, particularly with respect to cost, schedule, scope and risk.
4.2.11.2 The IT Investment manager, assisted by associated integrated IT project team(s), shall lead the I3BR.
4.2.11.3 The IT governance board, or designated governance authority, shall formally validate the technical approach of the IT Investment baseline and assess the reasonableness of the associated resource budgets, schedules, identified risks and risk management processes.
4.2.11.4 The IT governance board, or designated governance authority, shall formally approve, with or without conditions, or disapprove the IT Investment performance measurement baseline.
4.3 IT Investment Performance Measurement Indicators
4.3.1 Measurement indicators and progress in achieving targets shall be documented for each IT Investment in the HHS PMT to assess the extent to which the IT products/services delivered by the IT Investment are achieving or continue to achieve anticipated benefits and perform effectively and efficiently.
4.3.1.1 Measurement indicators shall align with HHS Strategic Goals, mission objectives, program performance targets, and map to the Federal Enterprise Architecture (FEA) Performance Reference Model (PRM).
4.3.1.2 Measurement indicators shall be outcome-based or, if appropriate, output-based measures of the internal and external benefits the IT Investment is expected to deliver.
4.3.1.3 Measurement indicators shall be quantifiable and specific, measurable, achievable, realistic, and time-constrained.
4.3.1.4 Baselines and fiscal year targets shall be established for all measurement indicators.
4.3.2 Actual results shall be reported at least annually via the HHS PMT; however, the IT governance board or designated approving authority shall determine whether actual results will be reported more frequently.
4.4 Operational Analyses
4.4.1 The IT Investment manager shall conduct an annual operational analysis (OA) for each Steady State IT Investment or for each Steady State portion of a Mixed Life Cycle IT Investment to assess the extent to which the IT Investment or operational portion of the IT investment continues to deliver anticipated benefits effectively and efficiently.
4.4.1.1 An annual OA shall be conducted for each of the IT Investment’s Steady State IT projects.
4.4.1.2 When an IT Investment includes multiple Steady State IT projects, the IT Investment’s OA shall comprise summaries of the processes used and results of the annual OAs conducted for the IT Investment’s Steady State IT projects.
4.4.1.3 When an IT Investment includes only one Steady State IT project, the annual OA conducted for the Steady State project shall serve as the OA for the IT Investment.
4.4.2 Costs and schedule to conduct the OA shall be included in the IT Investment’s performance measurement baseline captured in the PMT.
5.1 HHS Chief Information Officer (CIO)
The HHS CIO oversees and advises the HHS Secretary of other HHS senior executives about the Department's use of IT to improve program performance and to manage risk. Under the leadership of the CIO, the Office of the Chief Information Officer (OCIO) leads the Department’s information technology capital planning and investment control, enterprise architecture, information systems, electronic government, and information resources management programs in collaboration with all organizational components of the Department. The HHS CIO chairs the HHS Information Technology Investment Review Board (ITIRB), the Departmental IT governance board.
The HHS CIO is responsible for:
5.1.1 Providing the PMT suite to enable effective and efficient cost, schedule, and performance data collection, reporting, and analysis; and
5.1.2 Ensuring that each OPDIV adopts CPIC policies and procedures that comply with this Policy and with legislation, regulations, and other guidance in Section 6 Applicable Laws and Guidance.
5.2 OPDIV Chief Information Officers (CIOs)
HHS OPDIV CIOs advise their respective executive management on the strategic direction and management of their organizations’ IT programs. The CIOs and their staffs provide leadership for the implementation of technology to create the information foundation for the efficient and effective operation and management of their respective organizations. The HHS OPDIV CIOs are responsible within their respective organizations for IT long-term strategic planning, IT architecture management, IT budget review, IT performance and results-based management, and IT capital planning and investment control.
Within their respective organizations, the OPDIV CIOs are responsible for:
5.2.1 Overseeing the development, implementation, and management of OPDIV PBM policy, procedures, and processes that comply with this Policy and with legislation, regulations, and other guidance in Section 6 Applicable Laws and Guidance.
5.3 HHS IT Capital Planning Officer
The HHS IT Capital Planning Officer coordinates HHS CPIC processes and provides the HHS CIO with IT governance support. The HHS IT Capital Planning Officer ensures that the appropriate rigor for PBM is fully integrated into Department processes; require PBM processes are implemented for IT Investments and IT projects; and, that PBM information is used effectively.
The HHS IT Capital Planning Officer is responsible for the following:
5.3.1 Requesting and receiving documentation from OPDIVs regarding compliance with this Policy.
5.3.2 Developing and maintaining PBM guidance and procedures.
5.3.3 Facilitating the resolution of issues that arise in complying with this Policy for IT PBM.
5.4 OPDIV IT CPIC Staff
As directed by their respective CIOs, the OPDIV IT CPIC Staff coordinate their organization’s CPIC processes. The OPDIV IT CPIC Staff ensure that the appropriate rigor for PBM is fully integrated into their organization’s processes, that required PBM processes are implemented for IT Investments and IT projects, and that PBM information is used effectively.
The OPDIV IT CPIC Staff are responsible within their respective organizations for:
5.4.1 Overseeing implementation of the Policy for IT PBM and coordinating the resolution of issues that arise in complying with this Policy for IT PBM and any companion guidance.
5.4.2 Coordinating the collection of their organization’s IT Investment information to support Departmental IT Investment PBM reporting requirements.
5.4.3 Providing guidance to their IT Investment managers and IT project managers regarding Policy for IT PBM , procedures, and issues.
5.5 Business Owner
The Business Owner is the organizational executive who is the primary IT Investment customer, advocates for an IT Investment, and serves as the primary point of contact to the CIO and the IT governance board (or designated governance body).
The Business Owner is responsible for the following:
5.5.1 Identifying the business needs and performance measures to be satisfied by an IT Investment.
5.5.2 Obtaining funding for the IT Investment and monitoring IT Investment expenditures.
5.5.3 Approving the initial and subsequent changes to the IT Investment’s cost and schedule milestones.
5.5.4 Taking appropriate action to address persistent IT Investment performance issues, including decisions, made collaboratively with the organization’s CIO, IT governance board, and Contracting Officer, to discontinue non-performing IT Investments.
5.5.5 Validating that the IT Investment initially meets and continues to meet business needs and requirements.
5.6 IT Investment Manager
The IT Investment manager is accountable to the Business Owner for the IT Investment’s performance in meeting business requirements efficiently and cost effectively, and to the IT governance board or designated governance body for meeting IT Investment management requirements.
When the IT Investment consists of a single IT project, the IT Investment Manager may serve as the IT Project Manager and the Project/Investment Manager is then directly responsible to the Business Owner and the IT governance board (or designated governance body) for the performance of the project/investment.
When the IT Investment is divided into multiple related IT projects, IT Project Managers are assigned to the individual IT projects and they are responsible to the IT Investment Manager for all aspects of their projects. The IT Investment Manager is, in turn, responsible to the organization’s IT governance board for planning and executing the overall IT Investment to achieve approved cost, schedule, and scope baselines and performance targets.
The IT Investment Manager is responsible for the following:
5.6.1 Consulting and coordinating with the Contracting Officer and Contracting Officer’s Technical Representative to ensure that the appropriate cost, schedule, and performance tracking and reporting requirements and infrastructure, which conform to the requirements of this Policy, are included in the contract and associated acquisition documents, along with the other contract-level EVM requirements specified in HHS OAMP – Acquisition Policy Memorandum No. 2008-02.
5.6.2 Establishing the integrated performance measurement baseline that includes all IT project-level costs and schedule milestones, the dependencies between and among IT projects, and costs and schedule milestones for IT Investment-level tasks.
5.6.3 Developing Measurement Indicators and associated data collection methods to measure the extent to which the IT Investment delivers benefits efficiently and effectively.
5.6.4 Collecting, analyzing, and reporting IT Investment cost and schedule milestone data and performance to the organization’s IT governance board and preparing Corrective Action Plans when a cost or schedule variance exceeds established thresholds, justifications of a cost or schedule zero variance and Baseline Change Requests in accordance with HHS Policy for IT PBM and procedures.
5.6.5 Conducting annual Operational Analyses (OAs) for Steady State IT Investments and the Steady State portions of Mixed Life Cycle IT Investments, and reporting OA results to the IT Governance Board and, where appropriate, to OMB.
5.7 IT Project Manager
The IT Project Manager reports to the IT Investment manager and manages cost, schedule, and performance of the IT project and reports to the IT Investment Manager. The IT Project Manager is responsible for:
5.7.1 Developing and maintaining the IT project performance measurement baseline in accordance with HHS Policy for IT PBM and EPLC Policies.
5.7.2 Collecting, analyzing, and reporting IT project cost, schedule, and performance data to the IT Investment Manager.
5.7.3 Submitting IT project Corrective Action Plans when a cost or schedule variance exceeds established thresholds, justifications of a cost or schedule zero variance, and Baseline Change Requests in accordance with HHS Policy for IT PBM and procedures to the IT Investment Manager.
5.7.4 As directed by the IT Investment Manager, conducting and reporting the results of annual Operational Analyses of Steady State IT projects.
5.8 IT CPIC Governance Board
The HHS and OPDIV IT CPIC Governance Boards (or OPDIV-equivalent IT governance bodies) recommend the selection of IT Investments proposed for funding to their respective organization’s senior executives; monitor their IT Investments’ performance; analyze and evaluate IT Investment decisions; and review the use of performance metrics to evaluate their IT Investments for initial and continued funding.
The IT CPIC Governance Board is responsible for:
5.8.1 Approving and evaluating IT Investment performance measurement baselines, monitoring periodic reporting data, and authorizing and approving Corrective Action Plans and Baseline Change Requests
5.8.2 Assessing IT Investment performance in effectively and efficiently achieving specified outcomes and benefits as measured by the IT Investment’s Measurement Indicators
5.8.3 Reviewing and approving annual Operational Analyses to assess the performance of Steady State IT Investments and the Steady State portions of Mixed Life Cycle IT Investments.
5.8.4 Making formal written recommendations to the business owner and funding authority to discontinue IT Investments with persistent and irreparable performance issues.
5.9 Contracting Officer/Contracting Officer’s Technical Representative
The Contracting Officer and Contracting Officer’s Technical Representative ensure that all contracts associated with an IT Investment comply with all pertinent rules, policies, and procedures of the Federal Acquisition Regulation (FAR) and HHS Acquisition Regulation (HHSAR), and incorporate the content and compliance with this Policy into applicable contract language, as appropriate.
Applicable laws and guidance include, but are not limited to, the following:
- American National Standards Institute/Electronic Industries Alliance (ANSI/EIA) Standard 748Chief Financial Officers Act of 1990 (Public Law 101-576)
- E-Government Act of 2002 (Public Law 107-347)
- Federal Information Security Management Act (FISMA) of 2002 (Public Law 107-347)
- Federal Managers Financial Integrity Act of 1982 (Public Law 97-255)
- Federal Financial Management Improvement Act of 1996 (Public Law 104-208)
- Federal Acquisition Streamlining Act of 1994 (Public Law 103–355)
- Government Performance and Results Act (GPRA) of 1993 (Public Law 103–62)
- Information Technology Management Reform Act of 1996 (Division E of Public Law 104–106) and Federal Acquisition Reform Act of 1996 (Division D of Public Law 104–106), together known as the Clinger-Cohen Act
- Paperwork Reduction Act of 1995 (Public Law 104-13)
- Government Accountability Office (GAO) Information Technology Investment Management: A Framework for Assessing and Improving Process Maturity, GAO-04-394G, March 2004
- GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs, GAO-09-3SP, March 2, 2009
- GAO Assessing Risks and Returns: A Guide for Evaluating Federal Agencies' IT Investment Decision-making, AIMD-10.1.13, February 3, 1997
- HHS Acquisition Regulation, December 20, 2006
- HHS OAMP – Acquisition Policy Memorandum No. 2008-02, October 1, 2008
- HHS-OCIO IT Policy for Enterprise Architecture, August 7, 2008
- HHS-OCIO Policy for IT Capital Planning and Investment Control, December 30, 2005 [currently under revision].
- HHS-OCIO Procedures for IT Capital Planning and Investment Control, December 30, 2005.
- HHS-OCIO Policy for IT Enterprise Performance Life Cycle (EPLC), October 6, 2008
- HHS-OCIO Enterprise Performance Life Cycle Framework Overview Document, October 1, 2008
- HHS Information Resources Management (IRM) Policy for Conducting Information Technology Alternatives Analysis, February 14, 2003
- OMB Circular A-11, Part 7 Planning, Budgeting, Acquisition and Management of Capital Assets
- OMB Circular A-11, Part 7 Supplement, Capital Programming Guide (June 2006)
- OMB Circular A-76, Performance of Commercial Activities (05/29/2003) including changes made by OMB Memorandum M-07-02 (10/31/2006) and a technical correction made by OMB Memorandum M-03-20 (08/15/2003)
- OMB Circular A-94, Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs (Revised 12/12/2008)
- OMB Circular A-127, Financial Management Systems
- OMB Circular A-130, Management of Federal Information Resources
- OMB Memorandum 97-02 Funding Information Systems Investments, October 25, 1996
- OMB Memorandum M-04-24, Expanded Electronic Government (E-Gov) Presidents Management Agenda (PMA) Scorecard Cost, Schedule, and Performance Standard for Success, August, 2004
- OMB Memorandum 05-23, Improving Information Technology (IT) Project Planning and Execution, August 5, 2005..
The effective date of this Policy is the date the Policy is approved.
This Policy will not be implemented in any recognized bargaining unit until the union has been provided notice of the proposed changes and given an opportunity to fully exercise its representational rights.
The HHS policies contained in this issuance shall be exercised in accordance with Public Law 93-638, the Indian Self-Determination and Education Assistance Act, as amended, and the Secretary’s policy statement dated August 7, 1997, as amended, titled “Department Policy on Consultation with American Indian/Alaska Native Tribes and Indian Organizations.” It is HHS policy to consult with Indian people to the greatest practicable extent and to the extent permitted by law before taking actions that affect these governments and people; to assess the impact of the Department’s plans, IT Investments and projects, programs and activities on tribal and other available resources; and to remove any procedural impediments to working directly with tribal governments or Indian people.
___ _____/s/_______________________ December 22, 2010_
Michael W. Carleton
HHS Chief Information Officer DATE
Glossary
Table 1 – Definitions of Terms
| Term | Definition |
| Contracting Officer (CO) | A Government employee with the warranted authority to enter into, administer, and terminate contracts. The warranted individual, or designated and authorized representative, who ensures that all contracts associated with an IT Investment comply with the Federal Acquisition Regulation (FAR) and Department acquisition policies and procedures. |
| Contracting Officer’s Technical Representative | A Government employee who is designated, in writing, by Contracting Officer (CO) to assist in the technical monitoring or administration of a contract. The COTR functions as the "eyes and ears" of the CO, monitoring technical performance and reporting any potential or actual problems to the CO. It is imperative that the COTR stay in close communication with the CO, relaying any information that may affect contractual commitments and requirements. The COTR does not have the authority to make commitments including, but not limited to, awarding contracts or making changes that affect price, quality, quantity, or other terms and conditions of the contract. |
| Information Technology (IT) | Any equipment or interconnected system or subsystem of equipment used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. This includes equipment used by the executive agency directly or used by a contractor under a contract with the executive agency that (i) requires the use of such equipment, or (ii) requires the use, to a significant extent, of such equipment in the performance of a service or the furnishing of a product. The term includes computer, ancillary equipment, software, firmware, and similar procedures, services (including support services), web sites, subscriptions to electronic services and products, and related resources. |
| IT Investment | The expenditure of resources on selected information technology or IT-related initiatives with the expectation that the benefits from the expenditure will exceed the value of the resources expended (GAO-04-394G, IT Investment Management, A Framework for Assessing and Improving Process Maturity, March 2004, v.1.1). The acquisition of an IT asset and the management of that asset through its life cycle after the initial acquisition. |
| IT Project | A temporary planned endeavor funded by an approved information technology investment; thus achieving a specific goal and creating a unique product, service, or result. A project has a defined start and end point with specific objectives that, when attained, signify completion. |
| IT System | A discrete set of information resources organized for the collection, processing, maintenance, transmission, and dissemination of information, in accordance with defined procedures, whether automated or manual to support HHS’ or OPDIV’s [including OS’] mission. An interconnected set of information resources under the same direct management control, which shares common functionality. A system normally includes hardware, software, information, data, applications, communications, and people. Refers to a set of information resources under the same management control that share common functionality and require the same level of security controls. Includes automated information system (AIS) applications, enclaves, outsourced IT-based processes, and platform IT interconnections. |
| Life Cycle | The duration of all activities associated with the investment from its initiation through disposal of its assets. |
| Life Cycle Costs | All initial costs, plus the periodic or continuing costs of operation and maintenance (including staffing costs), and any costs of decommissioning or disposal. |
| Major IT Investment | An IT Investment that meets at least one of the criteria listed below:
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| Operational Analysis | An Operational Analysis (OA) evaluates IT Investment performance, user satisfaction with the IT Investment, the IT Investment’s adaptability to changing business needs, and new technologies that might improve the IT Investment. The OA review is diagnostic in nature and can lead to the initiation of development or maintenance activities. Any major IT Investment modifications needed after the IT Investment has been implemented follow the EPLC framework life cycle process from planning through implementation. The OA ultimately determines whether the IT Investment should continue, or be modified or terminated. |
| Performance Measurement Baseline | A primary tool to measure IT Investment, IT project, or IT contract performance and identifying risk. The baseline identifies the work that will be accomplished, and defines the cost and schedule to accomplish that work. The Performance Measurement Baseline, which consists of the cost, schedule, and scope baseline, is derived from the scope of work described in a hierarchical Work Breakdown Structure (WBS) – which, in turn, decomposes the entire project into a logical structure of tasks and activities tied to deliverables and to assigned responsibilities – and the associated WBS dictionary. The Performance Measurement Baseline comprises:
The Performance Measurement Baseline is integrated where the time-phased cost baseline is consistent with the schedule baseline, and the costs are related to acquiring, operating, and disposing of the physical and/or logical IT asset represented by the scope baseline. |
| Supporting IT Investment | An IT Investment that is not designated as Major or Tactical and meets at least one of the following criteria: (1) Has total planned development, operating, or maintenance costs of less than $3 million in the budget year; (2) Has been designated by the HHS CIO as a Supporting IT Investment. |
| Tactical IT Investment | An IT Investment that is not designated as Major and meets at least one of the following criteria: (1) Has total planned development, operating, or maintenance costs of $3 million or more in the budget year; (2) Is designated by the HHS CIO as significant to the HHS mission or to the administration of HHS programs, finances, property or other resources. |
Table 2 – List of Acronyms
| Acronym | Term |
| AIMD | GAO’s Accounting and Information Management Division |
| BCR | Baseline Change Request |
| CAP | Corrective Action Plan |
| CCA | Clinger-Cohen Act of 1996 |
| CIO | Chief Information Officer |
| CPIC | Capital Planning and Investment Control |
| CV | Cost Variance |
| EA | Enterprise Architecture |
| EPLC | Enterprise Performance Life Cycle |
| ETC | Estimate to Complete |
| EV | Earned Value |
| EVM | Earned Value Management |
| EVMS | Earned Value Management System |
| FAR | Federal Acquisition Regulation |
| FEA | Federal Enterprise Architecture |
| FISMA | Federal Information Security Management Act of 2002 |
| GAO | Government Accountability Office |
| GPRA | Government Performance and Results Act of 1993 |
| HHS | Health and Human Services, Department of |
| HHSAR | HHS Acquisition Regulation |
| I3BR | IT Investment Integrated Baseline Review |
| IBR | Integrated Baseline Review |
| IRM | Information Resource Management or Information Resources Management |
| IT | Information Technology |
| ITIRB | Information Technology Investment Review Board |
| OA | Operational Analysis |
| OAMP | Office of Acquisition Management and Policy |
| OCIO | Office of the Chief Information Officer |
| OMB | Office of Management and Budget |
| OPDIV | Operating Division |
| OS | Office of the Secretary |
| PBM | Performance Baseline Management |
| PMT | Portfolio Management Tool |
| PV | Planned Value |
| STAFFDIV | Staff Division |
| SV | Schedule Variance |
| WBS | Work Breakdown Structure |