Why Real-Time Labor Visibility Is the Key to Keeping Defense Programs on Schedule

Defense programs don't often slip due to one spectacular failure, but rather because the program manager learns of a ten-day slip in a task on the critical path only after the buffer has been consumed. The root cause is more likely to be mundane: the labor data is too late to make a difference.

The lag nobody budgets for

Most contractors use timesheets that are completed at the end of the week. Workers enter their hours on Friday and they are generally approved the following Monday or Tuesday. This process repeats across the organization and the hours eventually make their way into the billing or accounting system, and from there into your program financials and earned value reports. All in all, the data is likely two or more weeks old before it's accessible to the program team.

Those weeks of delay can hurt. If you needed those three extra engineers at the beginning of the week but the problem doesn't show up on your reports until next week, it's probably too late. That work is now delayed, the downstream work that depends on it is delayed, and the fix is going to be exponentially more expensive than if you'd identified the overrun days earlier. Labor hours are just one part of that equation, but it's a prime example of how small problems turn into program delays and cost overruns.

Real-time visibility changes what's possible

When labor data is captured as it happens rather than days later, program management isn't reacting to the past. A manager can look at Tuesday morning and see that the critical path is short two people, and reallocate hours that same day, before the shortfall becomes a slip. Over-burn on a task appears before it becomes unplanned overtime, which is where budgets blow quietly past their estimates. Subs and DCMA get reports that mirror current conditions on the floor, not what they were two Fridays ago.

Contractors ready to close this gap can take a look at AutoTime's solutions, built around the kind of real-time labor tracking that keeps EVM data honest and audit trails defensible. It closes the exact gap that turns small staffing problems into program-level schedule overruns.

Why EVM can lie to you

Earned Value Management is designed to identify this issue early on. Schedule Performance Index and Cost Performance Index are specifically designed to provide a program manager with a heads-up about this instead of learning it in the painful after-action report. But EVM is only as timely as the labor building your actuals beneath it.

If the CPI and SPI you are using are built on two-week-old timesheet data, you aren't managing anything in real time. You're managing a photograph of the program from two weeks ago. And program managers rely on that green status. DCMA reviews it. Primes report it upward. Nobody's really making stuff up but everyone is operating off a sheet of paper that was old news when somebody finally read it.

It's a compliance problem too

This goes beyond being a mere scheduling concern. In fact, DFARS 252.242-7005 mandates that contractors accurately track labor hours, and DCAA (Defense Contract Audit Agency) requires contemporaneous timekeeping - in other words, these are entries recorded at the time the work was performed, and not reconstructed from memory days later. A timesheet recording hours on Friday for work performed Monday through Thursday is considered a reconstructed record and is exactly the type of situation that invites audit scrutiny.

Labor distribution, the process of assigning hours worked to the appropriate contract and cost pool, relies on this timely information as well. If you're working on a cost-plus contract (which still accounts for the lion's share of defense contracting), and your labor has been misallocated, clocking that labor to the wrong contract doesn't merely give inaccurate schedule statistics to your PM. It results in a disallowed cost. And that DCAA assessment about timekeeping can be just the trigger needed to unlock all those disallowances - or, in the worst case, a stop-work order if a contractor has to shut down while they straighten up their records. The audit trail requirement paints the schedule problem in a different light, but they're the same problem.

Don't stop at your own workforce

Prime contractors are increasingly holding suppliers accountable for schedule risk. If you don't have real-time visibility into your subcontractors' labor hours, you're not alone. Many commercial applications and large government contractors monitor their own employees largely in real time. However, the best prime contractor labor visibility in the world won't protect you if you're highly reliant on a supplier who fills out timesheets at the end of the week and pushes them during the following pay period.

Ask yourself this question if you're a prime with great labor visibility systems in place: while I know where all my own employees are at the moment, how do I know what's going on with hundreds of my suppliers' workers at any given time? You almost definitely don't, and that's where the risk comes in.

If a subcontractor is doing a good job, but they are not tracking their workforce in real time, you may look bad through no fault of your own. Worse, that fact may not come to light until you're called on the carpet over a schedule slip on your program.

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