NSFs Guidelines for Planning and Managing the MREFC Account

1
NSFs Guidelines for Planning and Managing the
MREFC Account

• Patti McNamara
• Large Facility Office
• Office of Budget, Finance Award Management
• National Science Foundation

2
Outline

• MREFC Account
• Large Facility Manual
• Defines Pre-construction Planning Process
• Current projects in MREFC construction
• Final Comments

3
Major Research Equipment and Facility
Construction (MREFC)

• Established in FY 1995 as a capital asset account
  to fund big ticket items
• avoids distorting the base program funding in the
  Research Related Activities (RRA) Account
• funding restricted to construction, acquisition
  commissioning of capital assets
• no funding for pre-construction planning,
  operations maintenance, research utilization,
  education outreach activities
• Projects with construction costs exceeding 10 of
  the annual budget of a particular directorate
• Example Mathematical Physical Sciences 2009
  Budget Request 1.40 Billion

4
MREFC Account Features

• Provides No Year money for
• Construction, Acquisition, Commissioning
• No Year ? available until expended without fiscal
  year limitation
• An administrative challenge - technical evolution
  of project must be synchronized with
• Technical evolution of project from an idea to an
  executable design
• Selection, prioritization, and approval by NSF as
  a construction project
• Planning and budgeting maturity, to ensure that
  resources requested match scope

5
Process defined for pre-construction planning in
Large Facility Manual

• Outlines a formal process for planning and
  developing large facilities that coordinates
  development of scope, budget, prioritization
  against competing opportunities, and NSF role for
  oversight.
• Attempts to implement the best features of
  processes used by other agencies - yet preserves
  NSFs ability to respond flexibly to community
  needs and initiatives.
• Large Facility Manual http//www.nsf.gov/pubs/2007
  /nsf0738/nsf0738.pdf

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NSFs approach to Facilities

• NSF is reactive to the research communities is
  not mission oriented
• Initiative for new projects originate within the
  community
• Community also drives and shapes projects
  development
• Facility priorities established annually by NSF
  and National Science Board (NSB)
• NSB provides direction on the fraction of annual
  NSF budget that will go toward facility support

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MREFC Review Process

• Pre-construction planning proceeds through a
  sequential process of community development and
  NSF oversight and review
• Science goals
• What science goals are the proponents trying to
  achieve by advocating this new facility?
• Conceptual Design Stage
• Description of functional requirements, top-down
  parametric cost estimates, rules of thumb for
  risk and schedule estimation, first estimates of
  operations
• Preliminary Design Stage (or Readiness Stage)
• Site-dependent description of all major
  functional elements, bottom-up cost estimates,
  algorithmic risk assessment, schedule derived
  from Project Mgt Control System, partnerships,
  refined ops est.
• Final Design Stage (or Board Approved Stage)
• Interconnections and fit-ups of functional
  elements, refined cost estimates based
  substantially on vendor quotes, construction team
  substantially in place

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NSF pre-construction planning process
Operations Review
Science Review
CDR
PDR
FDR
Conceptual Design
Preliminary Design
Final Design
Renewal Review, etc.
Construction
Operations
RRA
RRA
RRA
RRA
MREFC
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Example timeline
Calendar year

• Fall 2009 PDR
• Winter NSF assessment
• March or May 2010 NSB approval
• September submission of FY12 budget
• Fall OMB negotiations
• Feb 2011 submit FY12 Budg. Req. to Congress
  
• Spring 2011 appropriations hearings
• Oct 11 (or later) FY12 appropriation
• NSB approval to obligate MREFC funds
• Construction funding begins in FY12

2009
2010
2011
FY 2012
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Conceptual Design Stage
Readiness Stage
Board Approved Stage
Construction
Concept development Expend approximately 1/3 of
total pre-construction planning budget Develop
construction budget based on conceptual
design Develop budget requirements for advanced
planning Estimate ops
Preliminary design Expend approx 1/3 of total
pre-construction planning budget Construction
estimate based on prelim design Update ops
estimate
Final design over 2 years Expend approx 1/3
of total pre-construction planning
budget Construction-ready budget contingency
estimates
Expenditure of budget and contingency per
baseline Refine ops budget
Budget evolution
MREFC
Funded by RRA or EHR
Preliminary Design Develop site-specific
preliminary design, environmental impacts Develop
enabling technology Bottoms-up cost and
contingency estimates, updated risk
analysis Develop preliminary operations cost
estimate Develop Project Management Control
System Update of Project Execution Plan
Final Design Development of final
construction-ready design and Project Execution
Plan Industrialize key technologies Refine
bottoms-up cost and contingency
estimates Finalize Risk Assessment and
Mitigation, and Management Plan Complete
recruitment of key staff
Conceptual design Formulation of science
questions Requirements definition,
prioritization, and review Identify critical
enabling technologies and high risk
items Development of conceptual design Top down
parametric cost and contingency
estimates Formulate initial risk
assessment Initial proposal submission to
NSF Initial draft of Project Execution Plan
Construction per baseline
Project evolution
Proponents development strategy defined in
Project Development Plan
Described by Project Execution Plan
NSF oversight defined in Internal Management
Plan, updated by development phase
NSF Director approves Internal Management
Plan Formulate/approve Project Development Plan
budget include in NSF Facilities
Plan Preliminary design review and integrated
baseline review Evaluate ops projections Evaluat
e forward design costs and schedules Forecast
interagency and international decision
milestones NSF approves submission to NSB
Merit review, apply 1st and 2nd ranking
criteria MREFC Panel briefings Forward estimates
of Preliminary Design costs and
schedules Establishment of interim review
schedules and competition milestones Forecast
international and interagency participation and
constraints Initial consideration of NSF risks
and opportunities Conceptual design review
Apply 3rd ranking criteria NSB
prioritization OMB/Congress budget negotiations
based on Prelim design budget Semi-annual
reassessment of baseline and projected ops budget
for projects not started construction Finalization
of interagency and international requirements
Final design review, fix baseline Congress
appropriates MREFC funds NSB approves
obligation Periodic external review during
construction Review of project reporting Site
visit and assessment
Oversight evolution
MREFC Panel recommends and NSF Director approves
advance to Readiness
NSF approves submission to NSB
Congress appropriates funds
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Project Off Ramps

• CDR, PDR, and FDR have off-ramps ? no guarantee
  that projects that start the process will
  eventually receive construction funds!
• Competing opportunities
• NSF selection and prioritization is a progressive
  evaluation of importance relative to competing
  opportunities for resources
• Division, Directorate, NSF, and national
  importance
• Operating cost projections
• A major consideration in taking on new major
  facility projects
• Risk-adjusted construction cost projections
• Changes in the underlying assumptions that are
  the basis for the risk-adjusted cost
• Timescales, technical developments, partnership
  commitments, site factors, etc.

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MREFC FundingOngoing FY08 Starts FY09
Request
M
FY08 Start AdvLIGO
Ongoing (ALMA, IceCube, etc.)
FY09 Request ATST design
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FY 09 Budget Requested New Language to MREFC
Process

• No cost overrun policy requires that the cost
  estimate developed at Preliminary Design have
  adequate contingency to cover all foreseeable
  risks, and any cost increases not covered by
  contingency be accommodated by scope reduction
  (endorsed by NSF Director)
• MREFC funds may be used for design activities,
  subject to approval of NSF Director and NSB
  (needs Congressional approval)

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Final Comments

• The project baseline defined at Preliminary
  Design Review will be used as the basis for the
  NSF budget request to Congress for MREFC
  construction funds
• NSF and DUSEL need to understand all of the cost
  drivers by PDR so that there is a firm
  risk-adjusted budget and a sound management plan
  for project execution