CFAC Review

1. CFAC Review Martin Fallier Director, Conventional Facilities Conventional Facilities Value and Risk Management May 8, 2008

2. Outline • CF Value Management • VE to date • Plans for T-II VE • Recommended Approach • CF Risk Management • Risk Registry for CD-2 • Comments from CD-2 • Revised Risk Registry • Risk Assessment

3. Value Engineering • Extensive VE performed during Preliminary Design • Identified and implemented 13 items prior to formal VE review • Resulted in cost reduction of $ 9.0 M • Performed formal VE review facilitated by VE expert • Identified 48 possible items for consideration • Evaluated 22 items worthy of further study • Incorporated 9 items in current baseline worth $ 11.4M • Identified 13 items worth up to $ 19.5 M for additional study and possible future implementation • Additional formal VE review planned during detailed design

4. Output From Formal VE Process

5. Plans for T-II Formal VE Review VE study led by certified VE Expert provided by Design Phase CM to produce VE report based on 60% T-II design Review team will consist of: NSLS II CF staff and interface managers for ASD & XFD Design A/E architects and engineers DOE observers CM estimators, construction experts PE engineers Will produce brainstorm list of VE opportunities Evaluate selected opportunities, provide data & recommendations NSLS II review and selection of recommended opportunities

6. Issues with T-II Formal VE Review Next submittal is now 50% package instead of 60% Since design time is limited, focus of VE needs to be on specs, material and equipment selection rather than major building or system changes that could delay design Propose to use similar VE approach as before Does committee have any experience or recommendations on what works best in this situation? Should we wait to 80% for formal VE?

7. Risk Management During T-I developed detailed risk registry for CF See Handout CF Risks reviewed at CD-2 was found credible however EIR had issues with elements of overall Risk Mgt program Risk model basis for allocating risk not substantiated Method of application of Monte Carlo Analysis not optimal Number and level of detail of risks too large to be effectively managed Risk Management Program being implemented Assessment by consultant underway for continuing improvement Goal is to have more streamlined usable system in place to effectively assess, update and present risk status, and manage risk

8. Risk Assessment System • Risk assessment is built into the cost estimating process • Cost Estimate Database contains fields for inputting risk assessment for each WBS activity • Assessment includes and considers: • Risk types - Technical, Cost or Schedule, unknown unknowns, management adjustment • Likelihood of occurrence – unlikely, likely, very likely • Likely causes and expected consequence – marginal, significant, critical • Mitigating actions that can/should be taken • Whether activity in question is critical path or not • The technical and estimate basis level of confidence

9. Risk Assessment System Output • Output is calculated by the model based on the previous factors • Contingency value % and $ • Risk categorization based on RMP criteria – Hi, Med, Low • Mitigation plan where applicable • Risk registry indicates all system input and output • Available on web and as a handout • Following tables summarize results

10. Conventional FacilitiesTotal Estimated Cost ($ x 1000) WBS Dictionary: All phases of design, construction, and commissioning of the conventional facilities including the buildings, sitework, building services and utilities required to support installation and operation of the accelerator and experimental facilities.

11. Conventional Facilities Engineering & DesignTotal Estimated Cost ($ x 1000) WBS Dictionary:Execution of engineering and design of NSLS-II buildings, utilities, and improvements to land by developing design requirements, preparing design drawings and specifications for construction contracts, and providing engineering support during the construction phase, to assure proper execution of the design and complete as-built documentation.

12. Conventional Facilities ConstructionTotal Estimated Cost ($ x 1000) WBS Dictionary:Construction of all NSLS-II buildings, utilities, and improvements to land, performed by multiple contractors and managed with the assistance of a Construction Management firm.

13. Risk Mitigation Plans • Technical Risk Mitigation Plans • Identified designated interface managers for CFD, ASD, XFD to assure technical integration of requirements between divisions • Facility design includes flexible and adaptable approach that is tolerant of change where possible • Design or construction of an item is deferred where possible to be tolerant of potential technical change • LOB interior design has flexible layout for labs and offices • LOB construction is deferred to start in FY12 when specific beamline User requirements are better understood

14. Risk Mitigation Plans cont’d • Cost Risk Mitigation Plans • Perform active interface management with technical groups to reduce liklihood of changes • Interface managers assigned • Seek independent estimate and market analysis for estimate confirmation and/or adjustment • CM Design Phase services in progress • Use reasonable schedule duration for construction to reduce cost sensitivity of delays • CF schedule has substantial float even though it’s critical path • Perform contractor outreach to encourage large pool of competitive contractors • In advanced procurement plan for FY08 • Reduce exposure to differing conditions by thorough and early evaluation/confirmation of site conditions • Design process and Site Prep contract planned

15. Risk Mitigation Plans cont’d • Schedule Risk Mitigation Plans • Use reasonable schedule durations to reduce cost sensitivity of delays in design, procurement, construction • CF schedule has substantial float even though it’s critical path • Perform active interface management with technical groups to reduce liklihood of delays due to changes • Interface managers assigned • Reduce delays due to differing conditions by thorough and early evaluation/confirmation of site and utility conditions • Design process and Site Prep contract planned • Reduce potential delays due to safety incidents by implementing a “best in class” construction safety program • Construction safety plan in development • Early procurement of critical items identified in schedule

16. Current Risk Assessment • 1.5.2.2 – Title II CF Engineering & Design – • Risks -Changes in requirements delay design and result in A/E change orders • Allocation 20%, Current projected cost impact ~13% • 1.5.3 – CF Construction – overall allocation 30% • Risks - Changes in design requirements affect cost • Allocation 8%, current cost impact ~ 5% • Risks – Changes in material market availability/price • Allocation 4% , current cost impact ~4%

17. Risk Management Summary • Performed risk assessment for CD-2 • Identified, planned and actively implementing risk mitigation strategies • CF is active participant in risk management meetings • Improved method of presenting, assessing and tracking risk status under development project-wide • Design phase risks are tracking below predicted values • Construction phase risks are tracking at or slightly below predicted values but higher than we’d like.