Some initial thoughts on issues relating to Large Facilities

1
Some initial thoughts on issues relating to Large
Facilities

• Mark Coles
• DRAFT
• To review with Tom Cooley

2
High and low level issues

• Strategic issues maybe use a future revision of
  the facilities guide as a lever to address these
  policy issues
• Funding for initial planning and technology
  development
• Parallel development of a user community
• Narrow definition of scope
• Life cycle cost accounting
• Tactical issues
• Building relationships with the IG and the Hill
• Project management planning and execution with
  projects now underway or just starting
• Facilities guide outreach and enhancement to add
  additional topics
• Procurement strategy and assistance

3
How do large projects receive funding prior to
approval?

• Some large projects require significant resources
  early in their development to support
• Enabling technical development
• accurate bottoms-up cost and contingency
  estimates
• WBS dictionary and resource loaded schedule
• Development of mature procurement strategy and
  specification
• Pre-award funding for technical development can
  be substantial (tens of millions of ), and
  should not tax the base program. Examples of
  programs that have benefited from
  pre-construction awards for significant technical
  development are
• LIGO (support for 40 meter interferometer on
  Caltech campus),
• Ice Cube (AMANDA, and further back DUMAND),
• Ice Cube received specific Congressional funding
  for phase 1, which was not requested by the NSF
• ALMA (32 million for competitive engineering
  design of antennae).

4
MRE StrategyDevelopment of a user community

• How does the user community get developed and
  funded?
• LIGO may have been unique since there was no
  previous broad experimental community. Many
  experimentalists came from other fields, and some
  had not previously had NSF support.
• Need to have early and sustained participation
  of broader community. Where does funding come
  from to support this, since otherwise there are
  potentially program breaks if community has to
  wait until operation to propose?
• MRE relationship to base budget,
• facilities often enable small researchers to do
  research at the facility

5
The colors of money

• Narrowly defined scopes for individual budgets
  can hamper a project by not permitting
  flexibility to respond to new technical
  developments or other opportunities.
• Examples
• grid computing at LHC
• Participation of community in installation and
  commissioning of a facility
• EPSCOR funding (NEES)
• A central feature of successfully reviewed MRE
  projects is the potential for outreach and
  broader societal impacts, yet this is not an
  allowed expense for MRE budget.
• Is there an opportunity to address these issues?

6
Life Cycle Costs

• How should full life cycle costs be presented?
• Successful projects will have significant cost
  growth as user community utilizes and adds scope
  to initial project.
• This should be represented as success.
• Cost accounting needs to distinguish this from
  cost and schedule overruns with respect to
  initial scope.
• Development of formal, visible process for
  project scope, schedule and budget modification
  within NSF maybe this already exists?
• Full cost accounting should tell an accurate
  story of the project. A stock prospectus provides
  accounting information from which an investor can
  infer the status of the company and where it is
  headed. Life cycle costs should allow one to
  accurately identify successful projects and
  distinguish them from projects that are merely
  expensive.

7
Cost reporting

• Need a transparent and systematic process within
  NSF to track changes to scope, baseline budgets,
  reportable milestones, etc.
• How should upgrades be accounted for?
• Should operations labor be included in upgrade
  cost accounting?
• Defined process for reporting, addressing, and
  mitigating cost escalation when a project gets
  outside the budget envelope. add to guide?
• Commissioning and initial operation should be
  included as part of MRE since they are often part
  of the validation of the facility. Since real
  boundaries may not be clear, imposing accounting
  boundaries is artificial. Can this be changed?

8
Future Costs

• Can a liens list be created and managed within
  the NSF to anticipate and support full life cycle
  costs for each project?
• This would be a current list of possible future
  expenditures, such as maintenance,contingency
  repairs and spares, upgrades, possible scope
  expansions, etc.
• Done at project level in LIGO, maybe helpful to
  know at NSF level

9
Tactical Issues

• Facilities Guide revision after some initial
  period to include policy issues
• Seed money to develop project before it goes
  forward phase 1 funding.
• Funds for development of user community. When an
  MRE project enables a community, a lot of small
  research grants will utilize the facility and
  increase proposal demand on the base program
• Greater guidance on mitigation options when
  projects do go off track
• Coaching within NSF and outreach to research
  community will be needed to help projects develop
  reasonable WBS and resource loaded schedules and
  procurement strategies, and to use them to manage
  what they do.

10
Development of cooperative agreements

• Work with awardee to develop
• Scope
• WBS requirements
• Staffing plan
• Integrated resource loaded schedule and major
  milestones
• Reporting strategies to NSF
• What is reported
• Reporting periods
• Review schedule for major procurements, design,
  demonstration, and construction,

11
Project Management Strategies

• Should minimize risk include in Facilities
  guide some how-to and follow up with on-site
  coaching on additional topics
• Structure projects so that there is a tiering of
  authority with a central management. A single
  awardee holds financial and managerial authority
  over subawardees, and holds project contingency
  at the highest level
• Examples
• LIGO has Caltech as awardee and MIT as subaward
  worked well
• NEES 18 awards(!), one critical award to system
  integrator has encountered some problems
• Earthscope 4 awards, plus USGS (unbudgeted)
• Not simple when foreign or external agency
  participation
• Provide coaching to project where appropriate

12
Procurement Strategy

• Work with awardee to develop procurement
  strategy, schedule, cost and schedule contingency
  estimates.
• Tiering of subcontracts to maximize FFP use with
  well defined deliverables.
• Minimize subcontractor couplings (GFE, schedule
  linkage) to avoid interference.
• Limit in-house work to areas where scope and
  uncertainty are within capabilities of performing
  organization
• Major procurements require timely evaluation and
  approval at NSF
• LIGO received excellent assistance from Dave
  Berley plus Aaron Asrael, Jesse Laskin, Karen
  Sandberg, Carol Langguth. Who are the present
  equivalents?
• Assemble an A Team of equivalent personnel to
  provide rapid project response? (Maybe already
  exists, but need to get to know these staff and
  process for working together.)

13
Contracting

• Specific provisions for contracting in LIGO went
  well beyond standard provisions required in OMB.
  These were negotiated by Aaron Asrael and Ed
  Jasnow and cooperative agreement was amended
  appropriately
• Monthly cost/schedule reporting, formal reviews,
  CDRLs, etc.

14
Other items addressed in LIGO that might be
discussed in contracting part of Facilities Guide

• Establishment of cash-neutral payment milestones
  in contract schedule of values
• Minimize Level of Effort contracts and time and
  materials contracts
• Construct a resource loaded schedule that allows
  one to extract estimates of cost impact for
  material and labor rate variances, and schedule
  slip, d/dX
• How to construct set of project milestones that
  is sensible tells an accurate story of the
  development plan and minimizes false alarms.
• Develop a project QA strategy that includes
  witnessing key subcontract activities, material
  acceptance testing,
• Subcontractor development, submittal, and
  acceptance of a subcontractor QA plan
• Transition plans for going from
  construction/commissioning to operation.

15
More guide topics

• Define when and how external Technical Review
  Boards should be created by awardee to develop
  and update plans, specifications, award
  contracts, etc.
• Same for Contract Review Boards
• Define when a field manager is required to
  oversee various activities such as construction
  management
• Define relations between contractor and next
  lower tier
• Materials receiving and qualification
• Travelers and other in-process documentation
• Policy on drawing and specification release,
  control, and revision

16
WBS Development

• Guide should address
• Methodology for development of WBS
• Methodology for development of contingency.
• A clear definition of what is meant by
  contingency
• work detail that is more effective to address
  through field changes or in process changes than
  it is to design in advance.
• Average uncertainties in cost estimating
• Guidelines for estimating contingency
• Define how contingency should be held within a
  project at the top level and not distributed
  over the WBS elements.

17
Guide Enhancements

• Coach project management to set up
• CCB process within project that is transparent to
  all interested parties
• Monthly (when appropriate) cost/schedule
  reporting within project and disseminated within
  NSF
• Document Control Center that seamlessly links
  project documentation and NSF documentation
  electronically
• Use Cooperative Agreement as framework to
  introduce these commitments within each MRE
  program

18
Additional ideas for additions to the Facilities
Guide

• How a project gets started and how the NSF wants
  to work with the community in the early phase of
  development
• Elaboration on the Internal Management Plan - How
  a project is managed inside the NSF scope
  additions, EHR involvement, interdivisional
  interactions, what the program officer does, PO
  oversight within the NSF, etc.
• NSF expectations for how project should be
  managed during construction
• Guidelines for development of a cooperative
  agreement reporting, procurement guidelines and
  approvals, definition and visibility of
  milestones, etc.
• How is overall procurement strategy developed and
  reviewed?
• QA, safety, elaboration on property management
• How to handle overruns and deficiencies
• Guidance structuring reviews during various
  phases of project life composition of review
  board, financial, technical, management reviews

19
More ideas

• Preparation for operation
• Within NSF advance budget planning, impact on
  user community
• By performing org
• Operational readiness review (include safety)
• Acceptance test
• Pre-ops
• Thoughtful choice of milestones to identify key
  activities
• Operations
• What NSF expects of the performing org to begin
  ops
• Budget and staffing exercises
• There is no operational contingency, yet major
  repairs are a fact of life and appropriate
  management reserve needs to be held somewhere,
  even though this is a hot button issue with IG
• What happens within NSF to enable a community
  through operation of a facility
• Termination process lots to cover here just
  one page in guide

20
Relationships

• Build a constructive relationship with Cheh Kim
  and others on the Hill
• Gary Sanders impression that there is an
  opportunity to build on the very positive view
  Kim has of Tom and BFA
• A heads up where appropriate, to let Cheh know
  what activities are going on with respect to MRE
  would be very helpful, according to Gary
• Be open and transparent to OIG
• Develop visible management information system of
  tracking cost, scope, and schedule to allow rapid
  and easily obtained assessments of project
  status, funds expended, etc.
• Proactive interactions?

21
Existing issues

• NEES is in trouble NCSA is under-performing and
  scope/schedule/deliverables are not defined. If I
  were PO Id ask for an audit before continuing.
• Earthscope project management looks troublesome
  since structure replicates deficiencies of NEES
• Michigan State Superconducting Cyclotron ops
  budget is way out of line (40), and on-site
  review provided little information to
  substantiate why they need more money.
• What should be my involvement in these issues?

22
New programs I need to become familiar with

• Not yet met with
• Underground Lab
• Oceans
• Antarctic
• Observe Lehman review at DOE
• Get to know Jim Yeck - Observe DOE LHC monthly
  review at FNAL
• ALMA visit prior to construction start

23
Budget planning

• How does budget process work for this position?
• FTEs
• Travel money
• Supplies
• Office space, etc.
• Do I need to develop a plan for next FY?