Pre-construction planning at NSF by lonyoo

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									  Setting Priorities for Large Research Facility
                    Projects –
The National Academies Recommendations and
              the NSB/NSF Report

                           Mark Coles
             Deputy Director, Large Facility Projects
       Office of Budget, Finance and Award Management
                     Introduction

• National Academies study ―Setting Priorities for Large
  Research Facility Projects‖ (Brinkman report) makes
  specific recommendations for prioritizing, planning,
  and overseeing the construction and operation of
  large facilities supported by NSF
• The report cites the need to make greater resources
  available for pre-award planning of a project’s
  workscope
• Implement rigorous post-award oversight through
  periodic external review


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    Summary of the NAS Study Recommendations

•    Development of a 10-20 year facility roadmap
•    Three levels of criteria for ranking:
      – Scientific and technical merit
      – Agency Strategic Criteria
      – National Criteria
•    New starts ranked in annual budget request using clear rationale based
     on roadmap
•    Enhanced project pre-approval planning and budgeting
•    Greater independent oversight and review needed
•    Review effectiveness of Deputy Director for Large Facilities in two years
•    OSTP should coordinates roadmaps across agencies
•    NSF Leadership and NSB should pay careful attention to
     implementation of proposed reforms
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                            NSF/NSB Actions

•   NSF undertook a detailed analysis of the NAS report recommendations
•   Formal report prepared after broadly canvassing NSF for input
•   Committee formed under direction of Joe Bordogna:
     –   John Hunt (chair) – Senior Advisor, Director’s Office
     –   Wayne van Citters – AST Division Director, MPS
     –   Rich Behnke – Section Head, ATM/GEO
     –   Priscilla Nelson – Senior Staff Associate, Director’s Office
     –   Mark Coles – Large Facilities Deputy Director, BFA
     –   Patricia Crumley (secretary) – Program Analyst, Budget Division, BFA
•   NSF Assistant Directors and Director reviewed
•   Further NSB input and revision resulted in final version – on NSB web
    site (October 2004 Summary Report):
http://www.nsf.gov/nsb/meetings/2004/1004/summary_report_1004_updt.pdf

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        Main features of NSB/NSF Report

• NSF is developing a facility ―roadmap‖
• Embraces NAS recommendations for greater clarity
  and transparency to selection and prioritization
  process
• NSF will take steps to enhance the robustness of the
  pre-construction project development process to
  improve cost projections for facilities recommended
  for construction



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                              NSF Roadmap

•   NSF is now developing a Facility Plan (the ―roadmap‖)
     – Report of projects in construction and various stages of development
     – Includes detailed discussion of the development plans and criteria for
       projects in advanced stage of pre-construction development
     – Discussion of the scientific objectives and opportunities that provide the
       context and compel the need for their development
     – Will provide discussion of overarching considerations used for cross-
       disciplinary prioritization (first and second NAS ranking criteria)
•   Facility Plan will be a public document, updated annually by NSF
    Director
•   Facility Plan should become a strategic tool for communicating with
    research communities and government policy makers
•   First public draft of plan expected in April or May, 2005 following March
    NSB meeting
•   Expect to post for public comment

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 Process of Large Facility Project Development

• Revises existing process defined in NSF’s Facilities
  Management and Oversight Guide:
  http://www.nsf.gov/pubs/2003/nsf03049/nsf03049.pdf
• Defines a new stage in the pre-construction
  development process:
   – ―Readiness Stage‖:
      • Has well defined entrance and exit gates
      • Entrance requires formally defined and publicly distributed
        development plan
   – Readiness Stage Development plan included in NSF’s Facility
     Plan

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                        Project Life-cycle stages

•   Horizon Stage
     –   Blue sky thinking
•   Concept Stage
     –   First NSF support for workshops, studies, small scale research
•   Development Stage
     –   More focused development
     –   Initial facility proposal
     –   Formulation – with NSF – of project development plan for readiness stage
•   Readiness Stage
     –   Activities that bring project to a ―construction ready‖ status with cost projections that
         have a high degree of confidence
     –   Begins 1-2 years prior to expected for NSB approval for inclusion in budget request
•   New start pool of NSB approved projects proposed for funding
•   Construction
•   Operations
•   Renewal, re-competition, termination, etc.

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                  Project Development Plans

•   Written by project developers in consultation with NSF
•   Lays out the development trajectory for a project in the Readiness
    Stage
     – Technical, managerial activities needed to bring a project to construction
       readiness
     – Planning activities that result in mature construction budget estimates and
       sound projections of expected operations costs
     – Development budget requirements
•   NSF adds oversight decision points during Readiness Stage
•   Decision points (criteria for advance and ―off-ramps‖):
     – Developed by NSF
     – Approved by NSB
     – Made public – included in Facilities Plan


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                Readiness stage gatekeepers

•   Entry:
     – Community expresses strong endorsement
     – Advisory committee endorses first and second level criteria
     – Division and Directorate endorsement
     – MREFC Panel (NSF Deputy Director, Assistant Directors, OPP, CFO, LFP
       Deputy – ex officio)
     – NSB approval
•   Exit:
     – Division and Directorate review and endorsement of project, including M&O
       budget
     – CFO and LFP Deputy assertion that budget and project plans are
       ―construction ready‖
     – MREFC panel assertion that project meets science objectives and maintains
       priority
     – NSF Director concurrence with MREFC panel
     – NSB approval
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                      Exiting Readiness Stage

•   Projects exit Readiness Stage because:
     –   Board approved
     –   Fail to advance against project development plan criteria
     –   Eclipse by other projects
     –   Reprioritization
     –   Other factors, as deemed appropriate by NSF Director
•   Successful exiting projects are in ―Candidate for New Start‖ pool
•   NSB may re-prioritize pool when candidates are added
     – Reprioritization rationale will be made public
•   NSF Director proposes subset of new start pool to OMB for construction
    funding
•   OMB approves project inclusion in NSF budget request
•   Congress appropriates funds

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                                Next steps

•   Revise NSF’s Facilities Management and Oversight Guide to incorporate
    these new policies
•   Challenges:
     – Describe specific implementation steps that incorporate these principles
     – Define steps to develop ―sufficiently mature‖ budget projections prior to
       construction approval
     – What can be done to minimize risk of potential backlog of approved new
       starts?
     – Can this new framework can be used to aid fields (like Astronomy) that
       have needs for very long lead items as part of facility development?
•   Advisory Committee input welcome




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           Defining “construction ready”

•   Creation of a robust final project “baseline”:
       •   Enabling technical developments are complete
       •   There exist thorough cost and contingency estimates with
           high degree of certainty that project can be completed within
           scope
       •   Project management is in place
       •   Project Management Control System (PMCS) in place.
•   Expensive: 5-15% of total construction budget, but
    must be done eventually
       •   PMCS alone is typically 1-2% of total project cost
•   Perhaps overly ambitious definition of “construction
    ready”

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                 Baseline Development

• Need to account for practical considerations, such as
  difficulty of fully staffing key positions prior to
  construction approval.
• Need to preserve goal of defining scope and budget
  with “acceptable levels of uncertainty” prior to request
  for construction funds.
• Need to define “acceptable”. For example:
   – High Energy Physics projects typically allocate 25-45%
     contingency (45% LHC detectors, 25%: IceCube, LIGO)
   – Projects with large software component can be higher
   – Projects with large “build to print” component much less.


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        Can the framework of NSB/NSF’s new process
        encompass the natural steps typical of project
                        evolution?

• Planning large projects naturally evolves through several stages
  that are typically well understood:
    –   Conceptual design
    –   Preliminary design
    –   Final design
    –   Construction
    –   Commissioning
    –   Operation
• Match NSF’s internal policies to these general notions in M&O
  Guide
• The Guide should also define how solicitations for these
  proposals may be made, if required

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              Common baseline evolution

• Conceptual design
   – Functional requirements, definition of systems and functional areas.
   – Large cost uncertainty.
   – About 1/3 of total design effort.
• Preliminary design
   – Site-specific design. Principal components, types of equipment,
     members, sizes defined.
   – Cost uncertainty much reduced, roughly 25% larger than final
     design cost uncertainty.
   – About 1/3 of total design effort.
• Final design
   – Interconnections of components defined. Component vendors
     defined. Mounting and installation defined.
   – About 1/3 of total design effort.
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 Coordination with initiatives in other agencies

• Want to make sure that Facilities Plan and
  the NSF’s Management and Oversight Guide
  broadly mesh NSF’s strategic planning with
  activities in other agencies – DOE, NASA
• Incorporate project-specific factors, criteria,
  timing of inter-agency coordination within
  development plans – will be published as
  components of Facilities Plan
• Natural place to articulate NSF’s intentions for
  specific international partnerships
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Next steps in revision of Facilities Management
             and Oversight Guide

• Identify specific implementation steps that
  support principles promulgated in NSB/NSF
  report
• NSB review
• Expect a period for public reaction and
  comment
• Useful to have advisory committee input on
  these issues and other problems that exist in
  current Facilities Guide

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Backup materials
              NAS Study Findings


• ―There is a lack of funding for disciplines to
  conduct idea-generating and project-ranking
  activities and, once ideas have some level of
  approval, a lack of funding for conceptual
  development, planning, engineering, and
  design—information needed when judging
  whether a project is ready for funding in light
  of its ranking and for preparing a project for
  funding if it is selected‖.

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               More planning resources will:

•   Reduce uncertainties in construction and operations budgets
•   Reduce uncertainty in construction schedule
•   Reduce likelihood of de-scoping
•   Thorough pre-construction risk assessment will create a more robust
    Project Execution Plan
•   Create an appropriate framework for cooperation for activities involving
    international and inter-agency partnerships as an integral part of in-
    depth planning.
•   Make project oversight during construction more straightforward, add
    more definition to the proposed workscope and decision points.
•   Allow more in-depth consideration of transition to operations and
    greater certainty in predicted O&M costs.
•   Avoid a funding hiatus. Overlap some development activities beyond
    NSB approval and inclusion in annual NSF budget submission.

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                   NSF/NSB Report:


• ―The National Academies’ Report properly calls attention to the
  necessity for considerable pre-approval funding for planning and
  development when it questions whether there is sufficient NSF
  support for this "bottom up" process. NSF endorses the Report’s
  recommendations to provide researchers access to funding
  sufficient to develop compelling research agendas, to refine and
  prioritize their facility requirements, and to complete research
  and development on facility designs and needed technologies.
  The level and form of funding for planning and development will
  be reviewed, and an evaluation will be made of how project
  funds are best invested to attain robust plans and schedules
  with better cost projections, so that only well-defined and
  thoroughly-costed projects are brought forward for
  consideration by the Board.”

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            More NSF/NSB Report:


• ―The Director and the Board recognize the need to
  strengthen oversight of the implementation of large
  facility projects, which will require increased
  investments of NSF staff time and travel funds. The
  Report emphasizes the importance of initial planning
  and definition of technical scope, budget, and
  schedule, followed by periodic post-award status
  reviews held on-site by external experts, with
  implementation of a transparent process for
  management of changes to a project’s
  implementation plan.‖
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