Project Performance & Risk Management

1. Project Performance & Risk Management Aesook Byon, Deputy Project Director NSLS-II Project Advisory Committee Meeting December 10 – 11, 2009

2. Outline Baseline Cost, Schedule & Funding Profile Near Term Planning 2009 Progress since CD-3 Approval Cost & Schedule Performance Contingency Risks & EAC Look Ahead Contingency Spent Plan → Steve’s Talk Conclusions

3. Project Funding Full funding provided in FY09 Stimulus bill provided $150M additional funding (ARRA fund) in April ‘09 TPC remains same ($912M) but profile changed FY10 budget includes $141M as planned → Eliminated future funding profile related risks OLD NEW

4. Funding and Obligations – Aug 2008

5. Funding and Obligations – Apr 2009

6. Funding and Cost Profile Burdened & Escalated ($M) Aggressive management was required especially for FY09 and FY10 (* Assumes each year spending be at the level to meet 95% probability) Eliminated funding profile related risks. Emphasis: Safety & Schedule!!

7. Near Term Planning – summer ‘09 • Detail Plan as far out in time as possible (not just FY10) • Our best knowledge to complete the project ($, duration, links) • All omissions & errors corrected • Schedule accelerated • Ring Building, LOB, Booster, scrf cavity, Insertion Devices • Technically limited schedule rather than funding limited • Critical path, schedule float, & spending profile updated • Separated out material procurements and contracted work • Actual contract schedules can be easily incorporated • For more accurate EVMS tracking • Resource load activities for accurate time-phasing of the plan • Define detailed activities in short duration 1-2 months for EV.

8. Schedule Float & Critical Path Critical Path until Sep 2009 • Ring Building /Booster  Storage Ring Commissioning • Ring Building design and procurement: Completed ahead of schedule • Ring Building Construction and Booster Design & Procurement until February 2012 • Booster installation and commissioning until September 2013 • Storage ring commissioning from October 2013 until project completion Early Project Completion, June 2014 • 159 days “built-in” schedule float prior to early completion date: mostly due to limited funding profile in pre-ARRA CD-4, Start of Operations, June 2015 • 12 months after the early project completion date

9. Critical Path – June 2009 Schedule float

10. Updated Schedule Critical Path • Ring Building /Booster  Storage Ring Commissioning • Ring Building Construction and Booster Design & Procurement until February 2012 • Booster installation and commissioning until September 2013 • Storage ring commissioning from October 2013 until project completion • Booster no longer on Critical Path (~30 days of float from critical path) Early Project Completion, June 2014 (Lv 1 Milestone) • Embedded schedule float all pushed out to after early project completion • Projected early completion day is now Feb 2014 • However, kept the Level-1 milestone date and built-in schedule float CD-4, Start of Operations, June 2015 • 16 months after the projected early completion date April

11. Critical Path - Oct 2009 No longer on Critical Path Schedule float moved to end

12. Schedule

13. Cost Profile • More demands on available fund in FY10 & FY11 • But profile still manageable

14. Procurement Performance Award Date Cost Description Baseline Actual Estimated Actual Commissioning Aug 08 Oct 08 $830K $301K Site prep Nov 08 Nov 08 $657K $501K APS Welding Jan 09 Feb 09 $1.7M $1.7M Ring Building Feb 09 Feb 09 $167M $173M 8 Unit SubstationApr 09 Apr 09 $3.0M $3.2M Switch Gear May 09 Apr 09 $445K $342K Transformers May 09 May 09 $1.1M $0.7M Substation Exp Jul 09 Jul 09 $1.8M $1.1M Chilled Water Plant May 09 Jul 09 $8.4M $8.3M Chilled Water Piping Jun 09 Aug 09 $1.0M $1.4M Magnets Aug 09 Oct 09 $18M $17.4M Total $203.9M $207.9M (102%) Total w/o Ring Building $ 36.9M$ 34.9M ( 95%) Upcoming major items: LINAC ($9.4M), Booster ($14.7M), LOBs ($40~80M) Excellent Performance Records so far

15. Cost Baseline Contingency utilization is $38.5M over 48 months (~$800K/month)

16. Major Change Requests Contingency spent frugally & wisely

17. Contingency Tracking To-Date Contingency as a % of Remaining Work

18. Risk Management Steps Identify potential vulnerabilities/risks Determine their likelihood of occurring Assess their impact on the project technical, cost, and schedule baselines Determine activities that would reduce/mitigate the risk Consolidated risk entries to manageable numbers Execute a plan to accomplish these risk-reducing activities Risk reporting/tracking

19. Risk Management Steps Bottom up Risk Analysis produced 407 Risk Register Entries Mixture of risks (can be mitigated) and uncertainties (things beyond our control) Repetition and redundancy (e.g. higher than usual inflation and exchange rate, out-year funding uncertainties, challenges in staffing) Tightened and Reduced Risk Register Entries Separated out cost uncertainties including out-year funding, inflation, exchange rate Removed risks of others not performing, e.g., someone else delivers late or doesn’t meet spec” Eliminated weak statements, e.g., “design carefully,” “work carefully,” “pay attention” Categories: risks (& single vendor) uncertainties exchange rate, material cost motherhood statement, wish list, error by others retired, redundant

20. Bottom Up Risk Analysis – Oct 2007

21. Composition of Bottom Up Risk Entries Risks (& single vendor) 35 + 3 9% Uncertainties 116 29% Exchange rate, material cost 14+15 7% Motherhood statement, wish list, & error by others 149+5+40 48% Retired, redundant 12+18 7% Tightened to 46 Risk Register Entries in summer of 2008 Have been tracked and updated

22. Risk Update

23. Risk Categorization Matrix (Risk Rating)

24. Risk CFD-02 Was the single biggest cost risk for project

25. Risk CFD-02 - continue

26. Risk CFD-01 Used to be >$16M in early 2008

27. Risk CFD-01 - continue

28. Risk Update • Major Risks Retired • Ring Building contract: single biggest risk (from $20~80M risk item to $0) • FY09 continuing resolution • FY10 funding uncertainty • Elimination or significant revision of DOE order “Safety of Accelerator Facilities” • Accelerator Controls System procurement • Major Risks with Significantly Reduced Ratings • Changes to Conventional Facilities requirements (from $16M to $2M) • Directed funding profile change • Unexpected ESH issues (design) • Unexpected difficulties with dynamic aperture • Linac turn key procurement • Storage Ring power supply design

29. Summary of Risks

30. Estimate at Completion (EAC) General Principles Aggressively pursue accurate EAC information as a management tool Monthly management assessment Annual comprehensive assessment Estimates that are good projections (~50%<probability<~90%) but still can be managed to affect the actual outcome can continue to be tracked in the EAC Probability<~50% tracked and managed as Risks Changes in estimates (both high and low) that are very certain to become reality and have potentially project-wide consequences: we address in a baseline change (sometimes using contingency) Managing to the baseline Contingency is not a routine solution

31. Overall Performance On Schedule and On Budget Excellent cost & procurement performance to date Sound cost baseline with healthy remaining contingency Technically limited schedule with projected early completion date advancing by 4 months (16 months of schedule float) Negative schedule variances in specific areas: well understood and actively managed Risks and EAC well understood, tracked and managed A number of major risks (technical, cost & schedule) retired or reduced ratings No more issues with planned schedule vs anticipated funding profile.