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					                                                                       ENGINEERING DEVELOPMENTS:
                                                                       Cost, Risk Analysis & Design Development to
ENGINEERING DEVELOPMENTS:


                                                                       Improve the Quality of Decision Making
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                              Kim Callan,    National Cost Center (NWW)



                                                                                  Scott Nicholson       HQ USACE



                                                                                    Dave Pezza,       HQ USACE
                                                                       ENGINEERING DEVELOPMENTS:
                                                                       Cost, Risk Analysis & Design Development to
ENGINEERING DEVELOPMENTS:


                                                                       Improve the Quality of Decision Making
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                         COST, SCHEDULE and PROJECT RISK:

                                                                              Initiatives and Requirements
                                                                              Purpose of Cost Engineering
                                                                                Improvement Strategies
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development




                                                                       To improve the overall quality of Civil Works
                             Planning CoP Conference – May 08




                                                                         baseline cost estimate to insure that it
                                                                         accurately reflects the project cost, scope and
                                                                         schedule as proposed in the feasibility report
                                                                         and/or authorizing document.
                                                                       HQ PDT: External Factors Identified that
                                                                       Impact the Accuracy of CW Total Project Cost
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08



                                                                                                           Factors Identified:

                                                                             Changes in project scope and real estate foot-print.
                                                                              •      Corrective Action: Work with Real Estate PDT representative to develop policy.
                                                                                     Use Risk Analysis to identify uncertainties & develop contingency for unknown
                                                                             Lack of quality and quantity of data being provided at the feasibility level.
                                                                              •      Corrective Action: Risk Analysis for contingency development

                                                                             Delay of critical components of engineering analysis until PED.
                                                                              •      Corrective Action: Work with E&C PDT representatives to develop policy. Use
                                                                                     Risk Analysis to develop contingency for unknown

                                                                                 Inadequate ITR – Lack of funding and time.
                                                                              •      Corrective Action: Issue policy letter to reinforce regulations.

                                                                                 Updating vs. Indexing of Construction and Real Estate estimates.
                                                                              •      Corrective Action: Being discussed. Revised regulation for consistency.
                                                                                   Planning Memo 19-Sep-2007
                                                                                 Initiatives to Improve Accuracy
ENGINEERING DEVELOPMENTS:



                                                                       
                            Cost, Risk Analysis & Design Development



                                                                           Initiatives to Improve Accuracy of Total Project Costs in Civil Works
                             Planning CoP Conference – May 08


                                                                           Feasibility Studies Requiring Congressional Authorization (CECW-CP
                                                                           Memo 19-Sep-2007)
                                                                             PCX ITR of all cost Estimates

                                                                             Formal Cost risk analysis for projects>$40M: Risk Informed Decision
                                                                              Making using Crystal Ball

                                                                             Project Delivery Teams uses project risk management principles and
                                                                              methods from the Project Management Institute’s Project Management
                                                                              Body of Knowledge in developing a project risk management plan that
                                                                              includes a risk analysis and risk response plan to support the cost risk
                                                                              analysis.
                                                                             Development of this plan is supported by our Project Management
                                                                              Business Processes (PMBP) # 8405 under Project Management Plan
                                                                              (PMP) requirements.

                                                                             Together the project risk management plan along with the cost risk
                                                                              analysis will produce a defensible assessment of the level of cost to
                                                                              budget such that this cost has an acceptable probability of not being
                                                                              exceeded
                                                                       HQ Perspective – ’09 Budget Testimony
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                       FY 2009 Civil Works Budget Testimony:
                             Planning CoP Conference – May 08




                                                                        Highlighted the Cost Engineering
                                                                         improvements the Corps has recently
                                                                         implemented

                                                                        Purpose: effort to improve the quality of our
                                                                         project management business process in
                                                                         support of our Civil Works customers and
                                                                         partners.
                                                                           Implementation Actions:
                                                                       Tactical (Short Term)
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                           Update the “Civil Works Cost Engineering” regulations, ER 1110-2-1302. (Aug 07)
                             Planning CoP Conference – May 08



                                                                            and Develop a new “how-to” cost Engineering Manual for estimating Civil Works
                                                                            Projects. (Nov 07)
                                                                           Working through the National Planning Centers of Expertise, require all districts to
                                                                            use the Walla Walla Cost Center to perform cost engineering ITR’s on larger, highly
                                                                            complex and politically sensitive projects. (Jun 07)
                                                                           Re-evaluate current guidance on contingency development for Recon and
                                                                            Feasibility level estimates. (Completed) Develop new guidance on the use cost risk
                                                                            analysis programs for preparing contingencies on Civil Works Projects. (Jul 07)
                                                                           Develop a centralized historical cost database for Civil Works. Promote consistency
                                                                            and sharing of cost information. (Jun 08)

                                                                       Strategic (Long Term)
                                                                           PDT Team to develop a strategic plan to improve the accuracy of Civil Works
                                                                            Budget Cost Submittals.
                                                                           Will focus on key drivers and business processes for developing reliable and
                                                                            accurate cost and schedule products.
                                                                           Drivers such as scope development, risk assessment, acquisition strategies, as well
                                                                            as estimate development will be reviewed to identify improvements across the
                                                                            Corps.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   GAO Perspective: Cost Guide

                                                                        New Budgetary Demands and Demographics
                             Planning CoP Conference – May 08




                                                                           These trends will place serious budgetary pressures on
                                                                            federal discretionary spending, as well as on other federal
                                                                            policies and programs, in the coming years.
                                                                        Resources will become scarce, competition for
                                                                         them will increase.
                                                                        Imperative, therefore, that government acquisition
                                                                         programs deliver as promised, not only
                                                                           Because of their value to their users
                                                                           Because every dollar spent on one program will mean
                                                                            one less available dollar to fund other efforts.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   GAO Perspective: Cost Guide (cont’d)

                                                                        GAO Cost Guide will serve as a guiding
                             Planning CoP Conference – May 08



                                                                         principle for all GAO auditors to evaluate the
                                                                         economy, efficiency, and effectiveness of
                                                                         government programs:

                                                                         GAO developed the Cost Guide in order to establish a
                                                                          consistent methodology, based on best practices, to be
                                                                          used across the federal government for developing and
                                                                          managing its program cost estimates.
                                                                         Agencies are at risk of experiencing cost overruns, missed
                                                                          deadlines, and performance shortfalls--all recurring
                                                                          problems that our program assessments too often reveal.
                                                                         Cost increases often mean that the government cannot
                                                                          fund as many programs as intended or deliver them when
                                                                          promised.
                                                                       CW Next Steps:
ENGINEERING DEVELOPMENTS:



                                                                       Planning Process Improvements:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08



                                                                         WRDA 2007 Sec 2034
                                                                           Planning Process Improvements: shall adopt a risk
                                                                            analysis approach project cost estimates
                                                                           Issue procedures for risk analysis for cost estimating
                                                                           Submit a report with any recommended amendment to
                                                                            sec 902 WRDA 86

                                                                       PMBP Process Improvements:
                                                                         Project Risk Management
                                                                             Project Risk Management Implementation Support -
                                                                             Establish Web based training
                                                                             Develop Case Studies for lessons learned
                                                                             Develop a Practitioners Manual
ENGINEERING DEVELOPMENTS:
                                                                       Summary

                                                                         Engineering CoP & Planning CoP & Project
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                         Management CoP are working collaboratively on
                                                                         practices to improve our project cost estimates and
                                                                         the quality of our PMBP:

                                                                        Identify Implementation Problems

                                                                        Provide more Consistent Guidance

                                                                        Additional Training

                                                                        Technical Resources
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Implementation Accomplishments

                                                                       Quantitative:
                             Planning CoP Conference – May 08



                                                                          The Walla Walla DX has received over calls from the majority of districts to either
                                                                           coordinate the ITR on their cost estimate or conduct a Cost Risk Analysis.
                                                                          Over 100 ITR's projects have been either scheduled or completed.
                                                                          Established standardized cost engineering ITR quality metric checklist.
                                                                             Approximately 80 % of projects have required some modification based on ITR
                                                                              reviewer comments.
                                                                          The center has utilized senior personnel (RTS) from various districts across the country.
                                                                          Provided several Cost Risk Analysis Training workshops to over 200 cost professionals
                                                                          Provided CRA guidance manual on the Cost and Schedule Risk Analysis Process
                                                                          Cost Regulation has been updated (ER 1110-2-1302)
                                                                          Cost “How to” engineering technical letter is 90% complete (ETL 1110-2-573,
                                                                           Engineering and Design Construction Cost Estimating Guide for Civil Works)
                                                                          Negotiated a corporate license agreement with The Oracle Company to use their cost
                                                                           risk software.
                                                                          Increased the number of certified Tri-service cost professionals by 37%.

                                                                       Qualitative:
                                                                        Have improve the communication between the PDT members
                                                                        Have provided consistent guidance and technical support for all areas of cost.
                                                                       .
                                                                       References and Resources
ENGINEERING DEVELOPMENTS:



                                                                         Prospect courses
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08


                                                                              COST RISK ANALYSIS BASIC
                                                                              RISK ANALYSIS-FLOOD DAMAGE REDUC PROJCT
                                                                         PMI website
                                                                            http://www.pmi.org/Resources/Pages/Default.aspx
                                                                         Defense Acquisition University's Risk Management CoP
                                                                          website
                                                                            https://acc.dau.mil/CommunityBrowser.aspx?id=17607
                                                                         Tools
                                                                            http://www.decisioneering.com/ Crystal Ball site
                                                                         References
                                                                            Project Management Body Of Knowledge®
                                                                            Project & Program Risk Management, R.M. Wideman, PMI,
                                                                             1992
                                                                            Risk and Decision Analysis in Projects, J. Schuyler, PMI 2001
                                                                            Risk Management Guide for DOD Acquisition, 2003
                                                                       ENGINEERING DEVELOPMENTS:
                                                                       Cost, Risk Analysis & Design Development to
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                       Improve the Quality of Decision Making
                             Planning CoP Conference – May 08




                                                                          Cost and Schedule Risk Analysis
                                                                                        Process &

                                                                                 ITR Lessons Learned
ENGINEERING DEVELOPMENTS:
Cost, Risk Analysis & Design Development
 Planning CoP Conference – May 08
                                                                   TOPICS




        ITR Lessons Learned
                                Cost and Schedule Risk Analysis
                           U.S. ARMY CORPS OF
                           ENGINEERS
Walla Walla District
                           WALLA WALLA DISTRICT
        KIM CALLAN, P.E. C.C.E
 CHIEF, NATIONAL CIVIL WORKS COST
              CENTER

                                       WORK: (509) 527-7511

                       kim.c.callan@nww01.usace.army.mil
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Risk Methodology (PMI)
                             Planning CoP Conference – May 08




                                                                          Risk Identification
                                                                          Risk Analysis and Quantification
                                                                          Risk Response/Mitigation Plan
                                                                          Risk Monitoring and Control
ENGINEERING DEVELOPMENTS:
Cost, Risk Analysis & Design Development
 Planning CoP Conference – May 08




        Projects
      Construction
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Corps Products

                                                                          Mission Statements:
                             Planning CoP Conference – May 08




                                                                           Innovative Engineered Solutions

                                                                           Provide Quality Products

                                                                           Fair and Reasonable Costs

                                                                           Within Scheduled Time
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Corps Objective

                                                                        Provide Management and Congress
                             Planning CoP Conference – May 08




                                                                         accurate cost estimates and construction
                                                                         schedules, based on the scope of the
                                                                         project.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                                                                       Cost and Schedule Risk Analysis


                                                                        Identify, mitigate and account for elements
                             Planning CoP Conference – May 08




                                                                         that could potentially cause a variance
                                                                         from estimated project cost and schedule.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Risk Methodology        (PMI)
                             Planning CoP Conference – May 08




                                                                        Project Delivery Team (within PMP)


                                                                        Risk Identification
                                                                        Risk Analysis and Quantification
                                                                        Risk Response/Mitigation Plan
                                                                        Risk Monitoring and Control
Cost and Schedule
Risk Analysis Process




               August 2007
Risk Analysis
Procedure                                    Begin                               Obtain
                                                                                                                   District
                                                                                                                  Access to
                                                                                                                                                 Coordinate with
                                                                                                                                               other District or the
                                          Risk Analysis                       Risk Analysis                                             No
                                                                                                                 Crystal Ball                    Walla Walla Cx
                                                                             Model Template
                                                                                                                  Software                         for Support 3
                        0                                                                     1                                   2




                                                                                                                                      Yes

                                  Complete                                                                 PDT to identify
                                                                      PDT Meeting to                                                            Development
   Customize                    Risk Register                                                                 Risk Items
                                                                       Brainstorm                                                                   of the
   Risk Model                  Documentation                                                                (Likelihood &
                                                                        Risk Items                                                              Risk Register
                                (ref template)                                                                 Impact)
                8                                 7                                     6                                     5                               4




                                  Cost Engineer                         Cost Engineer                       Cost Engineer
    Market Analysis *          transfers the “Most                   transfers the “High                 transfers the “Low
           by                                                                                                                                  Run Risk
                                  Likely” Cost &                       Values” Cost &                      Values” Cost &
     Cost Engineer                                                                                                                              Model
                                  Schedule Data                         Schedule Data                      Schedule Data
                    9          to Cost Risk Model10
                                                                     to Cost Risk Model11                to Cost Risk Model12                               13




                                                                                                  Fail



                                                                                                  Sanity Check
                    Identifies Monetary
                                                           Identifies Key                           based on                             Generate
                        & Schedule                                                  Pass
                                                            Risk Drivers                           Sensitivity                          Risk Report
                     Impact of Drivers
                                                                                                    Analysis
                                     17                                     16                                   15                                   14




                               Incorporate Risk Reduction Measures



                                                                                                                          Complete
                                            Present to PM                         Define Resulting
                                                                                                                      Total Project Cost
        Project Cost with                    for potential                       Contingency Level
                                                                                                                        Summary w/
        Confidence Levels                   Risk Reduction                           based on
                                                                                                                      Contingency and
                                                Efforts                          Confidence Level
                        18                                    19                                   20                    Escalation 21
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Risk Methodology        (PMI)
                             Planning CoP Conference – May 08




                                                                        Project Delivery Team (within PMP)


                                                                        Risk Identification
                                                                        Risk Analysis and Quantification
                                                                        Risk Response/Mitigation Plan
                                                                        Risk Monitoring and Control
                                                                         Begin Cost and Schedule Risk Analysis
                                                                                        (CSRA)
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                       Project Manager shall establish a
                             Planning CoP Conference – May 08




                                                                           Risk Analysis Member/Facilitator
                                                                           Provide Funding
                                                                           Delivery Schedule.

                                                                       CSRA’s vary in complexity, with costs ranging from $10,000 -
                                                                         $15,000 on smaller defined projects, to well over $100,000 for
                                                                         large complex projects that require intensive market surveys and
                                                                         cost and schedule analysis.
                                                                       District Access to Risk Analysis Software
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                        Corps CSRA standard software is Crystal Ball
                             Planning CoP Conference – May 08




                                                                         Software.

                                                                        District (Cost Engineering) has access to
                                                                         software.

                                                                        If district does not have expertise, then the district
                                                                         must team with fellow districts which have
                                                                         software and expertise.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Risk Methodology        (PMI)
                             Planning CoP Conference – May 08




                                                                        Project Delivery Team (within PMP)


                                                                        Risk Identification
                                                                        Risk Analysis and Quantification
                                                                        Risk Response/Mitigation Plan
                                                                        Risk Monitoring and Control
                                                                       Development of the Risk Register
                                                                       (Process Box 4)
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                        The Risk Register is a structured approach
                                                                         to communicate potential risk of the
                                                                         program or project and to assign risk
                                                                         potentials.

                                                                        Potential risk are elements that could
                                                                         cause variance to the “Most Likely” cost
                                                                         and/or schedule.
                                                                       Risk Terms
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                       “Most Likely” Cost Estimate and Schedule
                             Planning CoP Conference – May 08




                                                                          Is the term used to define the cost estimate and
                                                                           schedule developed which is based on the
                                                                           scope of project, technical data and
                                                                           assumptions.

                                                                          The estimate contains no contingencies or
                                                                           escalation.
                                                                         PDT to Identify Risk Items
                                                                       PDT Meets to discuss project.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                            Cost Engineer explains
                             Planning CoP Conference – May 08


                                                                                                                                                                                       Risk Register
                                                                             the Basis of the                                                                                          Risk Level

                                                                             Government Estimate




                                                                                                                        Likelihood of Occurrence
                                                                                                                                                        Very
                                                                                                                                                                   Low           Moderate        High            High             High


                                                                             (“Most Likely Cost”).
                                                                                                                                                       Likely

                                                                                                                                                       Likely      Low           Moderate        High            High             High


                                                                                                                                                      Unlikely     Low             Low        Moderate        Moderate            High



                                                                            The PDT brainstorms
                                                                                                                                                       Very
                                                                                                                                                                   Low             Low           Low             Low              High
                                                                                                                                                      Unlikely




                                                                             potential risk elements.
                                                                                                                                                                 Negligible      Marginal     Significant       Critical          Crisis

                                                                                                                                                                    Impact or Consequence of Occurrence



                                                                                                                                                                                                              Risk

                                                                            The PDT then assigns         Risk No.
                                                                                                                     Bidding Climate – Saturated
                                                                                                                                                   Risk Event            Likelihood          Impact           Level                                  Notes



                                                                             the “Likelihood” of
                                                                                                                                                                                                                              $3 Billion construction will be going on in downtown
                                                                                                             1       Local Market                                             LIKELY        MARGINAL        MODERATE                    Pittsburgh over the next 5 years.


                                                                                                             2       Volatile Real Estate Values
                                                                             occurrence.
                                                                                                                                                                          UNLIKELY          NEGLIGIBLE         LOW                   Little to no Real Estate to be purchased

                                                                                                                                                                                                                           Scope is well defined, There is minimal likelihood of scope
                                                                                                                                                                                                                           increase or changes from the current documents used for
                                                                                                             3       Scope Definition                                     UNLIKELY          NEGLIGIBLE         LOW                            estimate development

                                                                                                                                                                                                                           Scope is well defined, There is minimal likelihood of scope


                                                                            The PDT assigns the
                                                                                                                                                                                                                           increase or changes from the current documents used for
                                                                                                             4       Scope Growth / Reduction                                 LIKELY        NEGLIGIBLE         LOW                            estimate development




                                                                             “Impact” level if
                                                                                                                                                                                                                              Work will be done on the river, unpredictable, scour
                                                                                                             5       Weather                                                  LIKELY        MARGINAL        MODERATE                     protection is more vulnerable

                                                                                                                                                                                                                           There are tight delivery windows that will require mitigation

                                                                             occurrence does                 6       Schedule Constraints                                     LIKELY        SIGNIFICANT        HIGH                              efforts if not met.

                                                                                                                                                                                                                              $3 Billion construction will be going on in downtown

                                                                             happen.                         7       Labor Availability/Pricing

                                                                                                                     Equipment
                                                                                                                                                                              LIKELY        MARGINAL        MODERATE                    Pittsburgh over the next 5 years.



                                                                                                             8       Availability/Pricing                                 UNLIKELY          NEGLIGIBLE         LOW       Fuel prices will impact equipment operating costs
                                                                                                                                                                                                                     Fuel prices will impact delivery of materials and the cost of



                                                                            Based on the previous
                                                                                                                                                                                                                      petroleum based materials, steel market still potentially
                                                                                                             9       Material Availability/Pricing                            LIKELY        SIGNIFICANT     MODERATE                            volatile

                                                                                                                                                                                                                               $2.65 per gallon was used in the Oct 06 MCACES,


                                                                             input, risk level events       10       Fuel Prices
                                                                                                                     Potential savings due to
                                                                                                                     innovation, streamlining,
                                                                                                                                                                         VERY LIKELY        SIGNIFICANT        HIGH         increases will effect equipment and delivery or materials




                                                                             are identified for further     11       and gains in efficiency                              UNLIKELY          NEGLIGIBLE         LOW
                                                                                                                                                                                                                           Value Engineering has already been incorporated into the
                                                                                                                                                                                                                                                   project

                                                                                                                                                                                                                           The estimate was based on full and open competition, with

                                                                             action.                        12       Acquisition Plan                                         LIKELY        SIGNIFICANT        HIGH
                                                                                                                                                                                                                            minimal tiering of contractor subs. The Acq Plan has not
                                                                                                                                                                                                                            been finalized, therefore there is a potential for additional
                                                                                                                                                                                                                                              tiering of the contracts
                                                                                    Risk Register
                                                                                     Risk Level




               Likelihood of Occurrence
                                                Very
                                                            Low              Moderate               High         High               High
                                               Likely

                                               Likely       Low              Moderate               High         High               High


                                              Unlikely      Low                    Low            Moderate     Moderate             High

                                                Very        Low                    Low               Low          Low               High
                                              Unlikely

                                                         Negligible           Marginal         Significant      Critical            Crisis

                                                             Impact or Consequence of Occurrence



                                                                                                                Risk
Risk No.                                  Risk Event                  Likelihood             Impact            Level                                          Notes
           Bidding Climate – Saturated                                                                                          $3 Billion construction will be going on in downtown
    1      Local Market                                                  LIKELY             MARGINAL         MODERATE                        Pittsburgh over the next 5 years.


    2      Volatile Real Estate Values                                 UNLIKELY            NEGLIGIBLE           LOW                     Little to no Real Estate to be purchased

                                                                                                                           Scope is well defined, There is minimal likelihood of scope
                                                                                                                           increase or changes from the current documents used for
    3      Scope Definition                                            UNLIKELY            NEGLIGIBLE           LOW                                estimate development
                                                                                                                           Scope is well defined, There is minimal likelihood of scope
                                                                                                                           increase or changes from the current documents used for
    4      Scope Growth / Reduction                                      LIKELY            NEGLIGIBLE           LOW                                estimate development

                                                                                                                                Work will be done on the river, unpredictable, scour
    5      Weather                                                       LIKELY             MARGINAL         MODERATE                          protection is more vulnerable

                                                                                                                           There are tight delivery windows that will require mitigation
    6      Schedule Constraints                                          LIKELY             SIGNIFICANT         HIGH                                   efforts if not met.

                                                                                                                                $3 Billion construction will be going on in downtown
    7      Labor Availability/Pricing                                    LIKELY             MARGINAL         MODERATE                        Pittsburgh over the next 5 years.

           Equipment
    8      Availability/Pricing                                        UNLIKELY            NEGLIGIBLE           LOW              Fuel prices will impact equipment operating costs
                                                                                                                           Fuel prices will impact delivery of materials and the cost of
                                                                                                                             petroleum based materials, steel market still potentially
    9      Material Availability/Pricing                                 LIKELY             SIGNIFICANT      MODERATE                                          volatile

                                                                                                                                $2.65 per gallon was used in the Oct 06 MCACES,
    10     Fuel Prices                                            VERY LIKELY               SIGNIFICANT         HIGH        increases will effect equipment and delivery or materials

           Potential savings due to
           innovation, streamlining,                                                                                       Value Engineering has already been incorporated into the
    11     and gains in efficiency                                     UNLIKELY            NEGLIGIBLE           LOW                                        project

                                                                                                                           The estimate was based on full and open competition, with
                                                                                                                            minimal tiering of contractor subs. The Acq Plan has not
                                                                                                                            been finalized, therefore there is a potential for additional
    12     Acquisition Plan                                              LIKELY             SIGNIFICANT         HIGH                                tiering of the contracts
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Risk Methodology        (PMI)
                             Planning CoP Conference – May 08




                                                                        Project Delivery Team (within PMP)


                                                                        Risk Identification
                                                                        Risk Analysis and Quantification
                                                                        Risk Response/Mitigation Plan
                                                                        Risk Monitoring and Control
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Market Analysis by Cost Engineer


                                                                        Local Economy effect on Project
                             Planning CoP Conference – May 08




                                                                          Materials
                                                                          Labor Availability
                                                                          Equipment Availability
                                                                          Fuel
                                                                          Available Contractors
                                                                       Cost Risk Model
                                                                                Risk Analysis
                                                                                                                                                 MAIN CHANNEL GATES, APRON AND SCOUR
ENGINEERING DEVELOPMENTS:


                                                                                Sample Project
                                                                                                                                                             PROTECTION
                                                                                                                                                                                                                                                                                                     Backup for MCACES Changes
                            Cost, Risk Analysis & Design Development



                                                                                                                  Differences from Most Likely     0%           87%             100%                153%                           Qty's                                             Labor                                          Equip                                         Materials                                Scope Change Variance
                             Planning CoP Conference – May 08


                                                                                                                                                   0         43,597,298       50,308,069          76,794,427     109,602          109,602           120,812        15,491,987     16,214,657       17,013,397   8,036,960       15,001,890       22,699,971    23,356,577       25,068,371        26,960,354        (300,000)       0              260,000

                                                                         Ref # Project Description                                                 Min       Low (20%)        Most Likely         High (80%) Max Low (20%)       Most Likely       High (80%)      Low (20%)      Most Likely      High (80%)   Low (20%)       Most Likely      High (80%)    Low (20%)        Most Likely       High (80%)        Low (20%)   Most Likely       High (80%)

                                                                              1 Demolition of Existing Gates                                             $      1,215,803 $        1,312,374 $       1,415,477               1                 1                1 $   907,142 $        966,675 $      1,032,474 $   457,908 $       492,444 $         530,616 $        -    $            -    $                -                $       -

                                                                              2 Concrete Pier Repairs                                                    $        736,835 $          757,654 $        761,713                1                 1                1 $   464,825 $        462,687 $       460,323 $    192,429 $       195,462 $         198,815 $     29,313 $          29,935 $          30,622                  $       -

                                                                              3 Metals                                                                   $        371,201 $          375,411 $        488,384                1                 1                1 $   101,867 $        100,893 $        99,817 $    23,623 $          24,779 $         26,056 $    245,414 $         253,396 $         262,219                  $       -

                                                                              4 Machinery Houses                                                         $      2,731,159 $        2,758,834 $       2,967,275               1                 1                1 $   928,135 $        923,818 $       919,046 $    396,429 $       404,936 $         414,339 $ 1,376,517 $        1,437,120 $        1,504,102                 $       -

                                                                              5 Vertical Lift Gates                                                      $      7,620,202 $        7,743,899 $       8,139,560               7                 7                7 $ 4,545,869 $      4,761,581 $      5,000,000 $   378,822 $       377,101 $         375,199 $ 2,695,511 $        2,964,582 $        3,261,977                 $       -

                                                                              6 Install Gates                                                            $      1,583,483 $        1,597,189 $       1,605,256               7                 7                7 $   730,189 $        763,349 $       800,000 $    594,322 $      1,066,966 $       1,589,362 $     2,025 $           2,019 $           2,013                  $       -

                                                                              7 Furnish & Install Machinery                                              $     10,299,060 $       10,757,752 $ 14,250,120                    8                 8                8 $ 1,038,266 $        935,401 $       821,708 $    252,684 $      5,951,466 $     12,250,120 $ 8,987,115 $       10,019,172 $      11,159,867                  $       -

                                                                              8 Electrical                                                               $      1,654,423 $        3,679,586 $       4,527,996               1                 1                1 $ 1,500,000 $      1,605,773 $      1,722,681 $   104,907 $       106,006 $         107,220 $ 1,765,856 $        1,822,304 $        1,884,694                 $       -

                                                                              9 APRON - Underwater Excavation                                            $        342,850 $          483,272 $        599,252          4,155               4,155         4,155 $      163,548 $        188,095 $       215,226 $    263,510 $       311,948 $         365,485 $        -    $            -    $                -                $       -

                                                                             10 APRON - Exporatory Pile Driving                                          $         79,324 $            80,029 $        80,382                8                 8                8 $    27,524 $         28,700 $        30,000 $    31,279 $          31,580 $         31,913 $      9,757 $           9,756 $           9,754                  $       -

                                                                             11 APRON - Sheetpiling                                                      $      1,192,550 $        1,216,457 $       1,303,549        23,640           23,640           23,640 $      372,594 $        373,737 $       375,000 $    344,379 $       351,656 $         359,698 $    476,968 $         523,448 $         574,821                  $       -

                                                                             12 APRON PROTECTION, PLACE FILL                                             $         53,515 $            53,961 $        68,008          1,335               1,335         1,735 $       13,677 $         14,372 $        15,140 $    22,989 $          24,348 $         25,849 $     17,390 $          21,964 $          27,019                  $       -

                                                                             13 APRON PROTECTION, PRECAST CONCRETE CAP                                   $      2,015,666 $        2,018,551 $       2,438,322               1                 1                1 $   703,673 $        721,540 $       741,288 $    286,313 $       304,259 $         324,094 $    523,088 $         622,016 $         731,358                  $       -

                                                                             14 APRON PROTECTION, TREMIE CONCRETE                                        $        818,559 $          824,986 $       1,028,568             960              960          1,250 $       51,817 $         54,688 $        57,862 $    82,341 $          79,321 $         75,984 $    686,142 $         782,147 $         888,258                  $       -

                                                                             15 APRON PROTECTION, INFILL GROUT                                           $         83,110 $            83,776 $       102,004              205              205               265 $    13,208 $         13,865 $        14,592 $    17,073 $          18,065 $         19,161 $     47,141 $          54,098 $          61,787                  $       -

                                                                             16 APRON PROTECTION, GROUT-FILLED BAGS                                      $        626,199 $          626,601 $        632,988              600              600               600 $   227,192 $        226,159 $       225,018 $    204,167 $       208,454 $         213,192 $    194,527 $         194,499 $         194,467                  $       -

                                                                             17 SCOUR PROTECTION, UNDERWATER EXCAVATION                                  $      3,312,060 $        3,750,842 $       4,797,704        53,200           53,200           63,660 $ 1,064,107 $         1,248,265 $      1,451,807 $ 1,699,429 $      2,138,573 $       2,623,943 $       -    $            -    $                -                $       -

                                                                             18 SCOUR PROTECTION, PLACE BEDDING MATERIAL                                 $        766,022 $          873,278 $        940,992          6,600               6,600         6,600 $      224,517 $        234,852 $       246,275 $    385,217 $       406,376 $         429,763 $    265,036 $         264,997 $         264,953                  $       -

                                                                             19 SCOUR PROTECTION, PLACEMENT OF GROUT FILLED BAGS                         $      8,198,314 $        8,854,708 $       9,290,269        12,400           12,400           12,400 $ 1,814,392 $         1,993,294 $      2,191,028 $ 1,539,140 $      1,737,481 $       1,956,700 $ 5,074,724 $       5,073,978 $        5,073,154 $     (300,000) $       -

                                                                             20 SCOUR PROTECTION, SHEET PILE TRANSITIONS WALL                            $        251,173 $          253,618 $        271,564                2                 2                2 $    76,414 $         76,067 $        75,684 $    80,268 $          82,199 $         84,333 $     97,028 $         103,925 $         111,549                  $       -

                                                                             21 ABUTMENT WALL, UNDERWATER EXCAVATION                                     $         29,349 $            30,400 $        30,664              260              260               260 $     5,641 $          5,805 $          5,986 $   23,708 $          24,169 $         24,679 $        -    $            -    $                -                $       -

                                                                             22 ABUTMENT WALL, PIPE PILES                                                $      1,602,143 $        1,638,505 $       1,651,229             759              759               759 $   341,546 $        339,994 $       338,279 $    550,002 $       557,298 $         565,363 $    616,379 $         634,379 $         654,273                  $       -

                                                                             23 ABUTMENT WALL, STEEL SHEET PILING PZC-18                                 $        180,755 $          184,577 $        233,163          3,506               3,506         3,506 $       51,181 $         50,949 $        50,692 $    48,362 $          48,848 $         49,386 $     81,213 $          89,228 $          98,086                  $       -     $        35,000

                                                                             24 ABUTMENT WALL, PLACE FILL                                                $         59,044 $            59,528 $       134,626              985              985               985 $    12,068 $         12,013 $        11,953 $    21,592 $          21,645 $         21,703 $     25,980 $          25,976 $          25,972                  $       -     $        75,000

                                                                             25 ABUTMENT WALL, CAST-IN-PLACE SLAB                                        $        120,035 $          121,057 $        271,496              185              185               185 $    54,791 $         54,542 $        54,267 $     3,782 $           4,176 $          4,612 $     58,647 $          58,638 $          58,629                  $       -     $      150,000

                                                                             26 ABUTMENT WALL, DRAIN HOLES                                               $         34,214 $            34,501 $        34,782                4                 4                4 $    15,367 $         15,297 $        15,220 $    18,328 $          18,341 $         18,356 $       501 $              501 $             500                  $       -

                                                                             27 ABUTMENT WALL, GROUTED 5-6 RIPRAP                                        $        135,655 $          136,723 $        136,664              770              770               770 $    42,437 $         42,244 $        42,031 $    13,957 $          13,992 $         14,030 $     80,305 $          80,293 $          80,280                  $       -




                                                                        Complete High & Low Values for Model
                                                                       Schedule Risk Analysis
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08



                                                                         A schedule risk analysis uses statistical
                                                                          techniques to predict the level of
                                                                          confidence in meeting a program’s
                                                                          completion date. This analysis focuses
                                                                          not only on critical path activities but also
                                                                          on activities near the critical path, since
                                                                          they can potentially affect program status.
ENGINEERING DEVELOPMENTS:
                                                                       Schedule Risk Analysis
                                                                       1.   Does the schedule reflect        7. How were resource estimates
                            Cost, Risk Analysis & Design Development



                                                                            all work to be completed?
                             Planning CoP Conference – May 08


                                                                                                                developed for each activity
                                                                       2.   Are the project critical dates      and will the resources be
                                                                            used to plan the schedule?          available when needed?
                                                                       3.   Are the activities               8. How accurate is the critical
                                                                            sequenced logically?                path and was it developed with
                                                                       4.   Are activity                        scheduling software?
                                                                            interdependencies                9. How reasonable are float
                                                                            identified and logical?
                                                                                                                estimates?
                                                                       5.   If there are constraints,
                                                                            lags, and lead times, what       10. Can the schedule determine
                                                                            documentation is available           current status and provide
                                                                            to justify the amounts?              reasonable completion date
                                                                       6.   How realistic are the                forecasts?
                                                                            schedule activity duration       11. What level of confidence is
                                                                            estimates?                           associated with the program
                                                                                                                 schedule completion date?
ENGINEERING DEVELOPMENTS:
    Cost, Risk Analysis & Design Development
     Planning CoP Conference – May 08




                                Run Model
                             Cost and Schedule




Report Outputs
Sensitivity (Tornado) Report
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Risk Methodology        (PMI)
                             Planning CoP Conference – May 08




                                                                        Project Delivery Team (within PMP)


                                                                        Risk Identification
                                                                        Risk Analysis and Quantification
                                                                        Risk Response/Mitigation Plan
                                                                        Risk Monitoring and Control
                                                                       Risk Response/Mitigation Efforts
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                        Risk Analysis identifies potential items
                             Planning CoP Conference – May 08




                                                                         which have the highest impact to the
                                                                         project.
                                                                        Risk Mitigation efforts can be used to help
                                                                         reduce future potential impacts.
                                                                        Rerun of risk model may be required as
                                                                         risk mitigation efforts are acted upon.
                                                                       Present to PM for
                                                                       Potential Management Options
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                        Recommended Project
                             Planning CoP Conference – May 08



                                                                         contingency and
                                                                         corresponding confidence
                                                                         levels are presented to the
                                                                         PM.

                                                                        PM and District
                                                                         Management will decide
                                                                         what confidence level
                                                                         would be acceptable for the
                                                                         project.
Present to PM for Potential Management Risk
                                                                       Complete Total Project Cost
                                                                                                                                                                               Effective Price Level:                       15-Jan-01
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development


                                                                                                       WBS                                         Civil Works                                                               COST                        CNTG                          CNTG                         TOTAL
                                                                                                      NUMBER                            Feature & Sub-Feature Description                                                     ($K)                        ($K)                          (%)                          ($K)
                             Planning CoP Conference – May 08



                                                                                                             06                                                  50,308,069 13,342,103
                                                                                                                                                    Fish and Wildlife Facilities                                                                                                        27%                        63,650,172
                                                                                                                                                                 __________ __________                                                                                                                          ____________
                                                                                                                                   CONSTRUCTION ESTIMATE TOTALS: 50,308,069 13,342,103                                                                                                                             63,650,172




                                                                          PROJECT: Example Project, XXXXX                                                                                                                                              DISTRICT:      Walla Walla                                PREPARED:                16-Aug-07
                                                                         LOCATION: West Coast                                                                                                                                                              POC:       Coug Smith, Chief, Cost Engineering

                                                                         This Estimate reflects the scope and schedule in feasibility report;            Enter the report or document this estimate is based upon.


                                                                                                               Estimate Prepared:      14-Aug-07                                                                      Program Year (Budget EC):         2007
                                                                                                             Effective Price Level:    15-Jan-01                                                                       Effective Price Level Date: 1 OCT 07                          TOTAL PROJECT COST ESTIMATE
                                                                                                                                                                                                                                                                      Spent Thru:
                                                                          WBS                         Civil Works                       COST                CNTG          CNTG            TOTAL             ESC         COST             CNTG           TOTAL                          ESC       COST             CNTG                    FULL
                                                                         NUMBER            Feature & Sub-Feature Description             ($K)                ($K)          (%)             ($K)             (%)          ($K)             ($K)           ($K)             ($K)         (%)        ($K)             ($K)                   ($K)

                                                                             06             Fish and Wildlife Facilities 50,308,069 13,342,103                             27%            63,650,172       3.2%        51,917,847 13,769,029 65,686,876                      -        10.8%    55,741,819   14,783,177     70,524,996
                                                                                                                         __________ __________                                         ____________                  ____________ __________ __________               __________              ___________ ____________ ______________
                                                                                         CONSTRUCTION ESTIMATE TOTALS: 50,308,069 13,342,103                                              63,650,172                   51,917,847 13,769,029 65,686,876                        0               55,741,819   14,783,177     70,524,996

                                                                             01        LANDS AND DAMAGES                                        -                -               -                -                             -             -             -                    -                     -                  -        -

                                                                             21        RECONNAISSANCE STUDIES                                                                                                                                                            100,000                                                           100,000

                                                                             22        FEASIBILITY STUDIES                                          50               13          26%                  63                            52            13            65               -                         52                 14                 66

                                                                             30        PLANNING, ENGINEERING & DESIGN                 13,331,639          3,332,910              25%      16,664,549                   13,758,231        3,439,556 17,197,787                    -             14,306,681         3,576,672              17,883,353

                                                                             31        CONSTRUCTION MANAGEMENT              7,294,670   1,823,668         25%     9,118,338                                             7,528,088   1,882,022 9,410,110                      -                  8,082,564    2,020,642     10,103,206
                                                                                                                           __________ __________ ____________ ____________                                           ____________ __________ __________               __________              ___________ ____________ ______________
                                                                                                      PROJECT COST TOTALS: 70,934,428 18,498,694          26%    89,433,122                                            73,204,218 19,090,620 92,294,838                  100,000               78,131,116   20,380,505    98,611,621

                                                                                                                                      CHIEF, COST ENGINEERING
                                                                                                                                                                                                                                                                         ESTIMATED FEDERAL COST:                                       98,611,621
                                                                                                                                      Project Management, {Enter PM Name}                                                                                            ESTIMATED NON-FEDERAL COST:                                              -

                                                                                                                                      CHIEF, REAL ESTATE                                                                                                        ESTIMATED TOTAL PROJECT COST:                                          98,611,621

                                                                                                                                      CHIEF, PLANNING

                                                                                                                                      CHIEF, ENGINEERING

                                                                                                                                      CHIEF, OPERATIONS

                                                                                                                                      CHIEF, CONSTRUCTION

                                                                                                                                      CHIEF, CONTRACTING

                                                                                                                                      CHIEF, PM-PB

                                                                                                                                      CHIEF, DPM
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Risk Methodology        (PMI)
                             Planning CoP Conference – May 08




                                                                        Project Delivery Team (within PMP)


                                                                        Risk Identification
                                                                        Risk Analysis and Quantification
                                                                        Risk Response/Mitigation Plan
                                                                        Risk Monitoring and Control
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Examples

                                                                        Corps Projects
                             Planning CoP Conference – May 08




                                                                          (Baltimore, Chicago, Pittsburg, Portland, New
                                                                           Orleans, Galveston)
                                                                            • Communication
                                                                            • Revisions to “Most Likely”
                                                                            • Risk Identification
                                                                            • Both for Planning and Mitigation focus

                                                                        Other Agencies
                                                                          BOR, DOE ($K - $B)
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Summary
                             Planning CoP Conference – May 08




                                                                       Risk Analysis (Cost & Schedule) :
                                                                        Provides a communication tool to highlight potential risk
                                                                         items.
                                                                        Provides ability to develop more accurate cost and
                                                                         schedule information.
                                                                        Highlights critical areas for risk mitigation efforts or to be
                                                                         included with project contingency development.
                                                                        Is required per guidance for all decision documents over
                                                                         $40M.
The Issue
Programming Estimates set Baseline or Budget




$


     FY05       FY06       FY07       FY08
         Top Problem Areas for Baseline Estimates



Definition and Packaging of Product
Clear Scope of Work

Accurate Contingency Levels

Defined Acquisition Strategy
Accurate Quantities

Estimate Details
Other
                                                                            Civil Works Cost Engineering
                                                                                    ITR Product
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                        Certification
                                                                           What is certified?
                                                                             • Total Project Costs inflated through the Project
                                                                               Schedule




                                                                          Who certifies?
                                                                              Walla Walla District, Corps Civil Works
                                                                               Cost Engineering Center of Expertise
                                                                                   Civil Works Cost Engineering
                                                                                         ITR CHECKLIST
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                       1.    Basic Information – Scope

                                                                       2.    Project Description, Construction Cost Estimate Project Notes
                                                                       3.    General Estimate Layout – Title Structure (WBS)
                                                                       4.    Construction Estimate Details
                                                                       5.    Construction Cost Summary, Markups

                                                                       6.    Risk Analysis & Contingency (cost & schedule)

                                                                       7.    Total Project Cost in Current Dollars
                                                                       8.    Schedules, Construction and Project
                                                                       9.    Total Project Cost Inflated to Project Schedule

                                                                       10.   Federal and non-Federal Costs
                                                                                 Civil Works Cost Engineering
                                                                                  ITR Definitions PROJECT
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                        Total Project Cost Estimates include:
                                                                              all Federal and non-Federal costs for lands and damages,
                                                                              all construction features,
                                                                              planning, engineering and design,
                                                                              supervision and administration, and
                                                                              contingencies and escalation associated with each of these
                                                                               activities through project completion.



                                                                        Project Schedule
                                                                           Begins on the date the Feasibility Report is submitted for approval.
                                                                           Ends at the completion of all construction activities and construction
                                                                            close-out.
                                                                               Civil Works Cost Engineering
                                                                              Documents Provided for the ITR
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                        Complete Draft Feasibility Report that includes:
                                                                           Comparative Construction Cost Estimates used to compare the
                                                                            alternative plans
                                                                           Recommended Plan Construction Cost Estimate (summary)
                                                                           Construction Contract Schedule(s)
                                                                           Project Schedule
                                                                           Total Project Cost Summaries


                                                                        Detailed Construction Cost Estimate:
                                                                           Prepared in MII (MCACES software)
                                                                           Construction Activities, contract Award through contract completion
                                                                         Civil Works Cost Engineering ITR
                                                                        Total Project Cost Summary (TPCS)
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                             TPC at                                    TPC escalated to
                                                                        Preparation Date                                Program Year
                                                                       (Price Level Date of                         (Price Level of Program
                                                                           Preparation)                                      Year)
                                                                                                                 Typically October Timeframe



                                                                                              TPC Inflated to
                                                                                              Project Schedule
                                                                                           (Escalated Through
                                                                                              Construction)
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Cost & Schedule ITR’s
                             Planning CoP Conference – May 08




                                                                        Cost, Schedule & Risk ITR Checklist
                                                                          In accordance with regulations

                                                                        Use of Regional Senior Level Cost
                                                                         Engineering Folks for ITR’s

                                                                        Walla Walla Cost Cx is lead
ENGINEERING DEVELOPMENTS:
Cost, Risk Analysis & Design Development
 Planning CoP Conference – May 08




                        Completed 25 to date
                                                                                                  Major Accomplishments


                                                 Over 100 ea cost ITR’s scheduled since Jun 07
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Challenges…
                             Planning CoP Conference – May 08




                                                                        Definition of Product to be reviewed
                                                                        Unclear Scope
                                                                        Scheduling & Funding of product development.
                                                                        Scheduling and Funding of ITR review
                                                                        Total Project Cost Summary Sheets
                                                                        Communication Issues
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   The Good…..
                             Planning CoP Conference – May 08




                                                                        Majority of Folks have accepted this effort as support
                                                                         in producing better products.
                                                                        Communication between PDT and Cost is improving.
                                                                        Regional resources are being used.
                                                                        Getting back to the basic development requirements.
Questions?
                                                                       ENGINEERING DEVELOPMENTS:
                                                                       Cost, Risk Analysis & Design Development to
ENGINEERING DEVELOPMENTS:



                                                                       Improve the Quality of Decision Making
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                           Engineering Responsibilities,
                                                                           Requirements, and Procedures
                                                                                 during Planning
                                                                       ER 1110-2-1150, Engineering and Design
                                                                       for Civil Works
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                        Purpose - Defines engineering
                             Planning CoP Conference – May 08




                                                                         responsibilities, requirements, and
                                                                         procedures during the planning design,
                                                                         construction, and operations phases of civil
                                                                         works per ER 1105-2-100, Guidelines for
                                                                         Conducting Civil Works Studies

                                                                        Focus - Decision Type Documents such as
                                                                         feasibility, reevaluation, and dam safety
                                                                         and modification reports with EISs
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Drivers for Change

                                                                        ER 1110-2-1302, Engineering and Design
                             Planning CoP Conference – May 08




                                                                         Civil Works Cost Engineering,
                                                                         Classifications of Civil Works Cost
                                                                         Estimates

                                                                        WRDA 2007, Section 2035, Safety
                                                                         Assurance Review
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Update to ER 1110-2-1150

                                                                        General update to 31 Aug 1999 edition
                             Planning CoP Conference – May 08




                                                                        Paragraph 13. Engineering During
                                                                         Feasibility Phase

                                                                        Provide a definition of a level or effort
                                                                         comparable to the Class 3 Cost Estimate

                                                                        Requirements for safety assurance review
                                                                       ER 1110-2-1302, Engineering and Design
                                                                       Civil Works Cost Engineering
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development



                                                                        Sec. 14, Classification of Civil Works
                             Planning CoP Conference – May 08




                                                                         Estimates – categorizes Pre-Authorization
                                                                         Phase Feasibility Reports as Class 3.
                                                                        A Class 3 is based upon 10% to 40% of
                                                                         complete project definition. Sufficient
                                                                         design must be performed to define the
                                                                         level of risk with associated contingencies
                                                                         and to ensure reasonable costs.
                                                                       Class 3 Cost Estimate –
                                                                       Typical areas of weakness in
ENGINEERING DEVELOPMENTS:



                                                                       ER 1110-2-1150
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                        In-Kind-Services inadequately scoped, do not
                                                                         meet USACE standards, particularly geotechnical
                                                                         investigations and lab testing
                                                                        Incomplete surveying and mapping for utility
                                                                         relocations and real estate needs
                                                                        Incomplete HTRW investigations, lack full type,
                                                                         extent, and impact
                                                                        Development of design insufficient for concept
                                                                        Indentify of borrow and disposal sites incomplete
                                                                       WRDA 2007, Section 2035 Safety
                                                                       Assurance Review (SAR)
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                         The Chief of Engineers shall ensure that
                                                                         the design and construction activities for
                                                                         hurricane and storm damage reduction and
                                                                         flood damage reduction projects are
                                                                         reviewed by independent experts under
                                                                         this section if the Chief of Engineers
                                                                         determines that a review by independent
                                                                         experts is necessary to assure public
                                                                         health, safety, and welfare.
                                                                       Triggers
                                                                         (1) Where failure of the project will pose a
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development




                                                                         significant threat to human life; or
                             Planning CoP Conference – May 08




                                                                         (2) Cases where information is based on
                                                                         novel methods, present complex
                                                                         challenges for interpretations, contains
                                                                         precedent-setting methods or models, or
                                                                         presents conclusions that are likely to
                                                                         change prevailing practices;
                                                                         (3) The project involves the use of
                                                                         innovative materials or techniques; or
                                                                         (4) The project design lacks redundancy,
                                                                         resiliency, or robustness; or
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   Triggers (Cont.)

                                                                         (5) The project has unique construction
                             Planning CoP Conference – May 08




                                                                         sequencing or
                                                                         (6) Project has a reduced or overlapping
                                                                         design construction schedule; or
                                                                         (7) Directed by the Chief of Engineers.
                                                                       Update to ER 1110-2-1150 to support
                                                                       SAR
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08




                                                                        Focus of SAR for Decision Type Documents:
                                                                             the quality of the surveys and investigations,
                                                                             the models used to assess hazards,
                                                                             the level of uncertainty in assessments, and
                                                                             whether the quality and quantity of engineering are sufficient
                                                                              to insure public welfare, safety, and health.
                                                                        The peer review team shall advise as to whether the
                                                                         level of engineering adequately addresses the
                                                                         degree of uncertainty pertaining to potential
                                                                         consequences associated with the loss of life.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   PED and Construction Phases

                                                                         During the PED and Construction phases
                             Planning CoP Conference – May 08




                                                                         the peer review shall focus on whether the
                                                                         assumptions made for hazards remain
                                                                         valid as additional knowledge is gained and
                                                                         the state-of-the-art evolves.

                                                                       In addition, the peer review team shall advise
                                                                         whether project features adequately
                                                                         address redundancy, robustness, and
                                                                         resiliency; and findings during construction
                                                                         reflect the assumptions made during
                                                                         design.
ENGINEERING DEVELOPMENTS:
                                                                       Definitions

                                                                        Redundancy - The use of multiple lines of defense that
                            Cost, Risk Analysis & Design Development
                             Planning CoP Conference – May 08



                                                                        are linked to potential failure modes. The most
                                                                        vulnerable failure modes need the greatest
                                                                        redundancy.

                                                                        Resilience - The use of enhancements to improve the
                                                                        ability of the system to sustain loads greater than the
                                                                        design load to achieve gradual failure modes over
                                                                        some duration rather than sudden failure modes.

                                                                        Robustness - The use of more conservative
                                                                        assumptions to increase capacity to compensate for
                                                                        greater degrees of uncertainty and risk.
ENGINEERING DEVELOPMENTS:
                            Cost, Risk Analysis & Design Development   O&M Manuals

                                                                         For O&M manuals, the peer review shall
                             Planning CoP Conference – May 08




                                                                         advise
                                                                        whether the requirements adequately
                                                                         maintain the conditions assumed during
                                                                         design and validated during construction,
                                                                         and
                                                                        that project monitoring will adequately
                                                                         reveal any deviations from assumptions
                                                                         made for performance.

				
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