A Business Case Analysis (BCA) is a persuasive and compelling argument advocating a course of action to achieve one or more business objectives. A well-constructed business case presents a definite point of view and should prove to the decision-maker that the recommended action is the best option.
A BCA application of Earn Value Management (EVM) in a situation normally excluded from the application. A BCA is conducted to analyze the application of EVM to a contract that would normally be excluded from EVM application per DoD policy, primarily Firm Fixed Price (FFP) contracts or Cost Reimbursable Contracts <$20M in value. Current DoD policy requires that the Milestone Decision Authority (MDA) approve BCAs. [1]
Common Elements
BCAs contain a common set of elements that can be tailored according to the degree of application required for a particular contract. These common elements are: [1]
- Problem definition: includes establishing an objective for the analysis; stating the assumptions which frame the analysis; and, as appropriate, laying out alternative solutions to the problem being analyzed. This should include rationale for:
- selection of the FFP contract type versus selection of a cost type or incentive type contract or
- application of an EVM requirement to a contract <$20M.
- Data collection phase: identifies and obtains the data needed to meet the objective of the analysis (cost, benefits, etc.).
- Evaluation phase: analyzing the data to address the objective of the business case and to develop findings which specifically relate the data to the objective. Both quantitative and qualitative benefits for the proposed solution should be evaluated.
- A report or briefing: presents the conclusions and recommendations of the BCA
BCA Report Format
A report should be written to document the elements described above. The top level decision briefing should contain the following: [1]
- Charter (objectives of the BCA)
- Scope (boundaries of the BCA)
- Assumptions
- Methodology (description of data and analysis process)
- Status quo (description of status quo, i.e., no EVM implementation, and baseline costs)
- Proposed solution (description of EVM implementation, tailoring approach, and costs)
- Summary (comparison of costs, benefits, and potential drawbacks)
- Recommendation
AcqTips:
- The DoD has accepted the ANSI/EIA-748 – American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems as the DoD standard
AcqLinks and References:
Updated: 6/15/2018
