1. Project Management Considerations B. Nelson US ITER TBM Meeting INEL August 11, 2005

2. 11 August, 2005ITER TBM Meeting2 Presentation Outline Project Organization – getting started DOE Project Management Requirements Lessons from recent projects

3. 11 August, 2005ITER TBM Meeting3 Project Organization – getting started Establish project management team Define technical objectives- requirements, deliverables Define Work Breakdown Structure Define project organization –Assign responsibilities for WBS elements –Establish reporting relationships/org chart Develop management tools and procedures, including configuration control, cost / scheduling system, CAD system, Web site, etc. Develop conceptual design – (CAD models, dwgs, cost, etc)

4. 11 August, 2005ITER TBM Meeting4 Work Breakdown Structure (WBS) provides roadmap for project management Organizes all the tasks into outline form Establishes the scope of each task, so –Responsibilities are clear –Bases for cost estimates are clear Easily modified, expanded as more detail becomes available Includes WBS dictionary that expands definition of each element

5. 11 August, 2005ITER TBM Meeting5 WBS for US Contributions to ITER built around major procurement packages WBS 1.0 (Level 1): Total approved US ITER scope WBS 1.X (Level 2): 6 work groups, correlates with ITER WBS) –WBS 1.1 Tokamak (Magnets, Blanket/Shield) –WBS 1.2 Tokamak Ancillary Equipment and Cryostat –WBS 1.3 Tokamak Fluids (Vac Pumping and Fueling) –WBS 1.4 Power Supplies –WBS 1.5 Port Interfacing Systems (IC/EC H&CD, Diagnostics) –WBS 1.6 Project Support –WBS 1.7 Support to International team) WBS 1.X.Y (Level 3): Major systems WBS 1.X.Y.Z (Level 4): Major Procurement Packages (9) WBS 1.X.Y.Z.W (Level 5): Standard elements –Administration –R&D –Engineering (design, Title III) –Fabrication/Procurement –Installation

6. 11 August, 2005ITER TBM Meeting6 WBS for US Contributions to ITER

7. 11 August, 2005ITER TBM Meeting7 WBS for NCSX built around major components and activities

8. 11 August, 2005ITER TBM Meeting8 Work Plan evolves from WBS, identifies individual work packages, deliverables, milestones Forms resource loaded schedule

9. 11 August, 2005ITER TBM Meeting9 Possible WBS elements for ITER TBM Each element would include: –Administration –Engineering (Design and Title III) –R&D –Materials and subcontracts (procurements) –Fabrication and assembly –Installation Cost would include: –Labor hours, rates –M&S (Procurements) –Overhead –Escalation

10. DOE Requirements for Project Management

11. 11 August, 2005ITER TBM Meeting11 DOE requires structured project management The DOE Order 413.3, Program and Project management for the Acquisition of Capital Assets, and the DOE Manual 413.3-1, Project Management for the Acquisition of Capital Assets, establish a management process to translate user needs and technological opportunities into reliable and sustainable facilities, systems and assets that provide the required mission capability. The management process is organized by project development phases and “Critical Decisions (CDs).” The Deputy Secretary is the Secretarial Acquisition Executive (SAE) for the Department of Energy (DOE). As the SAE, he/she promulgates Department-wide policy and direction, and personally will make critical decisions for Major System Projects. The project development phases represent a logical maturing of broadly stated mission needs into well-defined technical, system safety and quality requirements, and ultimately into operationally effective, suitable, and affordable facilities, systems, and other end products. Ref: Energy Systems Acquisition Advisory Board Procedures, 9/22/2004

12. 11 August, 2005ITER TBM Meeting12 Critical Decisions define phases of project CD-0 Approve Mission Need (initiation phase) –Formally establishes project –Must develop/get approval of Mission Need Statement –Initiates status reporting (PARS)* and quarterly progress reviews (ESAAB)** –Approval starts conceptual design activities CD-1 Approve Alternative Selection/Cost Range (definition phase) –Clearly documents requirements basis for design and engineering phases –Develops Conceptual Design Report and Cost Range –Develop/get approval of (high-level) acquisition strategy that accounts for risks/mitigations –Develop/get approval of preliminary Project Execution Plan –Approval starts preliminary design activities *Project Assessment Reporting System (PARS), **Energy Systems Acquisition Advisory Board (ESAAB) Ref: C. Strawbridge, ITER mtg, Oct. 2004

13. 11 August, 2005ITER TBM Meeting13 Critical Decisions define phases of project (2) CD-2 Approve Performance Baseline (execution phase) –Defines cost, schedule, technical scope and performance commitments for execution – Project Baseline –Initiates monthly project performance tracking –Final approval of Acquisition Plan and PEP –ANSI/EIA-748 Earned Value Management System in place –External Independent Review by DOE (OMBE/OECM) –Approval starts Final Design activities Ref: C. Strawbridge, ITER mtg, Oct. 2004

14. 11 August, 2005ITER TBM Meeting14 Critical Decisions define phases of project (3) CD-3 Approve Start of Construction (execution phase) –Initiate/complete procurements –Execution External Independent Review by DOE (OMBE/OECM) –Takes project through completion of baseline plan CD-4 Approve Project Transition to Ops/Close-out (transition / closeout phase) –Transition/close-out plan (part of PEP) Ref: C. Strawbridge, ITER mtg, Oct. 2004

15. 11 August, 2005ITER TBM Meeting15 Costing and scheduling activities continue through life of project Cost range and basic schedule developed during conceptual design phase Baseline cost and Integrated Project Schedule established during preliminary design phase Project tracked monthly to baseline –earned value method (BCWS, BCWP, ACWP) must be certified by DOE –adjustments to baseline are made as project evolves and contingency is drawn down

16. 11 August, 2005ITER TBM Meeting16 Baseline statused monthly – NCSX example summary from CD3 review Ref: R. Strykowski, NCSX CD3 Review, June 2004 SPI = BCWP/BCWSCPI = BCWP/ACWP

17. 11 August, 2005ITER TBM Meeting17 Contingency is key element risk management and cost estimate Detailed contingency allocations developed during all cost estimating phases based on Technical, Cost, and Schedule risks All contingency held by project management, cannot be drawn down without DOE project manager approval Review panels want to see 40% or more contingency on developmental items and total contingency of 30% throughout project, may require elimination of scope

18. 11 August, 2005ITER TBM Meeting18 Technical Baseline must be under configuration control General Requirements Document System Requirements Documents System Description Documents Technical specifications Procedures Drawings

19. 11 August, 2005ITER TBM Meeting19 Other key documents / activities Advanced Acquisition Strategy Acquisition Strategy Preliminary Project Execution Plan Project Execution Plan Environmental Impact Statement Value engineering Risk Management Plan Reviews

20. 11 August, 2005ITER TBM Meeting20 Office of Science Project Decision / Approval Matrix (11/1/04)

21. 11 August, 2005ITER TBM Meeting21 Acquisition Strategy High-level business and technical strategies to achieve project objectives within resource constraints Presents rationale and intended outcomes of Integrated Project Team’s approach to successful execution 6 major elements, emphasis on clarity Major focus for DOE-OECM Process/schedule for development: (next) Ref: C. Strawbridge, ITER mtg, Oct. 2004

22. 11 August, 2005ITER TBM Meeting22 Acquisition Strategy: (elements and example schedule for US ITER) Ref: C. Strawbridge, ITER mtg, Oct. 2004

23. 11 August, 2005ITER TBM Meeting23 Preliminary Project Execution Plan Summarizes critical information and plans necessary to manage and control project execution Includes organization, R2A2s, WBS, schedule, risk management… (18 elements) Process/schedule for development: (next) Ref: C. Strawbridge, ITER mtg, Oct. 2004

24. 11 August, 2005ITER TBM Meeting24 Preliminary Project Execution Plan: (elements and example schedule for US ITER) Ref: C. Strawbridge, ITER mtg, Oct. 2004

25. Lessons Learned from recent projects

26. 11 August, 2005ITER TBM Meeting26 Things that are working well System Integration Team – weekly meetings of key project personnel Integrated Project Team – minimum of monthly meetings – includes project and DOE personnel Critical Issues list and meetings – tracks issues, risk mitigation strategies, and resolution of issues Numerous web-based telecons using Netmeeting – encourages frequent interaction, reduces unneccesary travel Formal design and document review system with documented comments (chits) and resolution of comments

27. 11 August, 2005ITER TBM Meeting27 Things that are working well (2) Rigorous Change Control based on reviewed and approved documentation Project Baseline and Earned Value system – kept up to date with monthly statusing, highlights issues, promotes re-planning Value Engineering effort to identify cost savings Project web site – Contains all project documentation Common CAD database – available to all participants, keeps configuration current at remote sites Prototypes of key components from competing vendors – develops more than one source, promotes competition, aids eventual bid process

28. 11 August, 2005ITER TBM Meeting28 Things that are problematic Unforseen cost increases due to: –Optimistic cost estimates - double or triple some early design and fabrication estimates! –Not enough time allotted for reviews, meetings –Vendor issues / misunderstandings that require design changes Unforseen schedule slips due to: –Prolonged R&D, can’t finalize design until problems are solved –Lack of resources to solve schedule problems (slips also cost more) –Vendor fab problems Everything takes longer and costs more than planned –Do not scrimp on contingency –Avoid too many incremental design changes. Better is the enemy of good enough! –Remember Westhiemer’s rule

29. 11 August, 2005ITER TBM Meeting29 Summary Project planning and management must be in place from inception of project, must develop –Project scope and technical requirements –WBS and responsibilities –Resource loaded schedule DOE requires rigorous management processes and documentation, projects phased with critical decisions CD-0,1,2,3,4 Everything costs more and takes longer than planned