1. Operated by the University of California for DOE/NNSA Electric Dipole Moment of the Neutron (EDM) Project CD-1 Preparation & Project Management Discussions Prepared By: John Tapia Joe Onstott March 3, 2006 EDMEDM

2. EDMEDM 2 Outline 1.Why Project Management? 2.What is Project Management? 3.What is Project Management in a DOE Construction Environment? 4.Applying Project Management To EDM Best Practices Management Principles Integration 5.Path Forward 6.Backup

3. EDMEDM 3 Why Project Management? Success is Getting Harder to Achieve: –Resources ($) are getting scarce. –Teams are more diverse and geographically dispersed –Customers to expect “Real Time” information and that expectation is hard to meet We are obligated as stewards of taxpayer ($): –Ensure ($) are put to optimal use, but only the use for which they were intended –Meet expectations for transparency and accountability Competition for every research ($) is getting stiffer –Meeting customer expectations necessary for obtaining future funding and projects –Build institutional knowledge to tackle future endeavors There are many analogies used to describe successful project management today – one of the best is the Olympic scoring analogy. “The difference between bronze medals and gold medals is less than 10% of the total score, ……You’re expected to deliver the other 90% because you were good enough to be invited.” For big science projects, 90% of the project management expectation must be met routinely, the remaining 10% is where we are judged for success. If we don’t achieve the 90% routinely, we seldom get to the level of success our customers demand.

4. EDMEDM 4 What is Project Management? Defined in the PMBOK as “the application of knowledge, skills, tools and techniques to project activities to meet the project requirements” Project management best practices help ensure success –Two roads to success: luck and good planning Projects are divided into phases of the project life-cycle that mirror the DOE CD process –Initiation – Determination of mission need –Planning – concept exploration and definition –Implementation – concept validation and manufacturing –Closeout - Deployment

5. EDMEDM 5 What is Project Management in a DOE Environment? DOE Order 413.3, “Project Management for the Acquisition of Capital Assets” governs all DOE capital construction projects DOE Order 413.3 outlines a process for implementing projects that includes a series of critical decisions Each critical decision determines whether or not the project may continue to the next stage Each critical decision allows the expenditure of federal funds –CD-0 – Mission Need – Decides if a project is warranted –CD-1 – Approval of Conceptual Design – Determines if PED funds are released to fund a preliminary design –CD-2 – Approval of Preliminary Design – Decides if funding for a detailed design is approved –CD-3 – Begin Construction – Determines if capital funds should be released for acquisitions –CD-4 – Construction Complete – Determines if asset is ready for operations Initiation Planning Implementation Closeout

6. EDMEDM 6 What is Project Management in a DOE Environment (cont.)? The DOE process requires that for a project the size of EDM: –Has a defined work breakdown structure –Is organized so that individuals are assigned and accountable for all aspects of the project (OBS) –Has cost and schedule estimates that are traceable to the scope of work associated with them (work packages) –Has completions points (milestones) for objectively determining progress and performance –Follows a formal change control process for modifications to the approved project work scope

7. EDMEDM 7 What is Project Management in a DOE Environment (cont.)? Approval of Conceptual Design (CD-1) requires the following: –Describing the problem(s) to be solved and how they will be solved Includes sketches and probable solutions Not enough detail to complete project –Matching the mission needs statement to the project requirements –Defining how the project must perform when completed –Evaluating alternatives to the problem –Determining whether the solution is available, affordable and whether the benefits outweigh the costs –Asking whether technology is available to implement the solution –Analyzing life-cycle costs including operations, maintenance and disposal –Considering competing design concepts to determine the feasibility of a particular approach

8. EDMEDM 8 What is Project Management in a DOE Environment (cont.)? Completed Conceptual Design Report (CDR) Should: –Document the physics requirements to be met (technical assessment) –Describe technical solutions that are likely to meet the physics requirements –Provide a credible estimate of the cost range and associated supporting information to justify the cost range –Present a credible schedule duration that shows how long it will take to complete design and construction Project team should be solidified and be capable of carrying the design forward to a baseline –A qualified project management team should be in place –The physicists, engineers and other personnel needed to complete the design have been identified and made available –There is a plan to complete the R&D needed for the design and resources to implement the plan have been identified

9. EDMEDM 9 What is Project Management in a DOE Environment (cont.)? Preliminary Project Execution Plan (PPEP) addresses all required elements of the PEP at a preliminary level –Details can be completed at CD-2 when the final PEP is approved –If a Project Management Plan (PMP) will be used to supplement the PEP, then a draft should also exist at a similar level of detail Preliminary Hazard Analysis Report that identifies major safety issues and conceptual solutions to mitigate these issues Preliminary Acquisition Plan Draft External Collaborations and Parternships Plan

10. EDMEDM 10 Applying Project Management to EDM – Best Practices I Mission Need and Strong Program Support are Critical –Science community support cannot waver –Must be an Institutional priority with commensurate commitment & accountability within lower organizations –Political support required –DOE-SC support required Management Team Must Have Project Mentality –Appropriate experience for the job –Success in building the mission need doesn’t ensure success in execution

11. EDMEDM 11 Applying Project Management to EDM – Best Practices II Managing Project Execution is not Rocket Science –Build a strong team, anticipate problems, manage changes proactively, stay on top of the details –Keep your eye on the ball (EVMS, EAC, risk) –Plan the work then work the plan –Drive schedule, Drive schedule, Drive schedule Multi-Organizational Partnerships Add Another Dimension –Lead Organization must have ability to distribute budget and to hold others accountable –Management of each organization must make commitment and accept ownership and accountability –Lead Organization must have the technical expertise to be strong systems integrator

12. EDMEDM 12 Applying Project Management to EDM – Best Practices III Tracking Project Performance –Use the tools of the trade Work Packages: Document scope definition, costs and assumptions Risk analysis: Employ an effective risk management system that documents and plans for possible risk events Critical Path Analysis: Monitor the critical path carefully (PEP, Integrated Project Schedule, Working Schedule) Earned Value Trending: Evaluate both cost and schedule performance at appropriate WBS level –Get regular, candid advice –Details, details, details Long-range strategy needs to be established between DOE and Lab –Enough detail to guide decisions –Facilitate future scope enhancements

13. EDMEDM 13 Applying Project Management to EDM – Management Principles Strong management team necessary that is: –Highly motivated as the future user/recipient of data –Strong partner with DOE Need Trust at all levels, open communications, and constructive criticism Active identification and resolution of issues before they become significant without waiting for reviews and written reports Maintain a peer review process on all aspects of project (i.e. Semi-Annual reviews and Advisory Committees) –Incorporates lessons learned from other projects –“Peer pressure” will be a strong motivator –Tool for managing risks and vulnerabilities Hold ad hoc reviews as needed (project management systems, engineering designs, safety analysis reports, etc.) Keep constant, unrelenting control of cost & schedule using disciplined management systems

14. EDMEDM 14 Applying Project Management to EDM – Integrate Processes Each of the 9 processes above will need to be integrated on the EDM Project to successfully meet the objectives. We plan to describe how these processes will be managed in the PEP.

15. EDMEDM 15 Recommended Path Forward Define the project – Draft CDR! Agree on a simple CD-1 project plan Confirm project next-steps after EDM Collaboration Meeting Finalize Organizational Chart Confirm Scope of Work for each partner Create a more detailed WBS Hold Project Fast Start with team members to define: Project Requirements Project Organization Listing Stakeholder List Planning Assumptions and Constraints Project Objective And Scope of Work Statement Constraint Matrix Deliverables List Risk Log Work Breakdown Structure Project Schedule Key Milestones List Project resource estimate

16. Operated by the University of California for DOE/NNSA Back-Up Slides

17. EDMEDM 17 Project Management Activities in the EDM Project 1.Organization –Define and organize the authorized project scope in a WBS –Identify which organizations and subcontractors are authorized and responsible for work on the project in the OBS –Provide for the integration of processes for project planning, scheduling, budgeting, work authorization, and cost accumulation –Provide for the integration of the WBS with the OBS to create the Responsibility assignment matrix (RAM) –Document the process and organization responsible for the management and control of indirect costs. 2.Planning, Scheduling, and Budgeting –Establish an integrated, time-phased schedule and corresponding budget at the control account level –Identify, sequence, and authorize work in a transparent and interdependent manner –Clearly define the products and deliverables –Ensure management visibility for cost and schedule control –Provide timely, valid, and traceable baseline performance and trend data –Prevent duplication of budget and cost baselines

18. EDMEDM 18 Project Management Activities in the EDM Project (cont.) 3.Accounting Considerations –Establish a consistent cost collection system without allocation to more than one control account –Follow CAS and make sure they are approved by DOE –Allocate indirect costs on a fair share basis –Collect and compare actual cost performance in the same manner as planned. 4.Analysis and Management Reports –Provide timely visibility into technical, cost, and schedule progress –Generate planning and performance data at the appropriate level to be used by management in the decision making process –Develop meaningful performance indicators to provide early warning of potential problems –Use effective communication processes to maintain project integration and baseline definition between project participants and sponsors. 5.Baseline Revisions and Maintenance –Ensure cost effective, accurate, timely and properly controlled baseline changes at appropriate levels using risk based processes. –Reconcile budget changes traced to technical scope and control accounts –Use a project change control process to prevent unauthorized modifications to the baselines and document approved changes

19. EDMEDM 19 Outline & Planning Sequence CD-0 CD-1 CD-2 CD-3 CD-4 Identify need Evaluate possible solutions Select appropriate solution Present Business Case Establish preliminary organization Identify stakeholders Define objectives Risk assessment Define scope of work Derive WBS Prepare initial schedule Establish Core Team Optimize detailed schedule Update risk assessment Launch project Monitor, track & report progress Manage risks & issues Manage stake- holders & customers Verify objectives met Finalize handover process Evaluate project Close out project Propose follow- on projects Prepare final reports Approval to close Initiation Planning/ Definition Planning/ Design Implementation Closeout OK Fast Start for Projects

20. EDMEDM 20 Earned Value Management Traditional Project cost and funding management looks only at costs against a pre-determined spending plan Earned value looks at “true” cost performance by comparing schedule status and cost status together Planned or schedule value is recognized as work is completed and equals the project’s earned value Tracks three distinct values: –The Planned Value of the work –The Earned Value of the physical work accomplished –The Actual Costs incurred by the project Results in several metrics, including schedule variance (SV), cost variance (CV), estimate at completion (EAC), and cost and schedule indices Provides management with a full picture of the project’s performance (schedule & cost) and serves as an early warning sign of minor difficulties so they can be addressed before major problems arise If employed on EDM, would require WBS managers to report monthly percent complete information on schedule activities and milestones

21. EDMEDM 21 Work Breakdown Structure Project XYZ DesignFabricateInstallInspection AlignmentPlacement Work Package "n"Prelim. DrawingsActivity "n" MaterialsTooling Activities The top level represents the total project Activity "n" Level 0 Level 1 Level 2 Level 3

22. EDMEDM 22 EDM Work Breakdown Structure Synopsis The WBS for the EDM Project will be broken down to the level where a single organization or person can be named as responsible for the work To identify costs and activities for Conceptual Design, we will need to brake the WBS down to a point at which work elements can be fit into the required “phases” The next step in the process is to make the cost and schedule estimates traceable to the WBS by breaking each work scope into distinct activities to which we assign resources, duration and expenses

23. EDMEDM 23 Current EDM Work Breakdown Structure (Draft) EDM Management 1.0 Martin Cooper John Tapia DOE Office of Nuclear Physics Program Manager Jehanne Simon-Gillo Neutron Beam Line & Shielding 1.1 TBD Magnets & Magnetic Shielding 1.3 TBD High Voltage, Measuring Cells, Light System, SQUIDs 1.4 TBD Electronics, Computers, Simulations, Data Analysis 1.5 TBD Conventional Construction 1.6 TBD Integration & Commissioning 1.7 TBD EDM Project Controls Cryogenics, 3He Systems, Atomic Beam Source & Interface 1.2 TBD LANL Physics Division Leader Jack Shlachter DOE LASO Project Manager Eugene Colton

24. EDMEDM 24 EDM Scheduling and Cost Estimating In the lower levels of the WBS (where the work will be accomplished), scheduling and cost estimating is a simple process that includes the following steps: 1.Develop a list of activities 2.Sequence the list of activities 3.Establish a duration for each activity 4.Assign resources (labor and M&S) to each activity

25. EDMEDM 25 Managing Risks

26. EDMEDM 26 Managing Risks Risk Management is an essential feature of successful projects Risks are managed throughout the project life-cycle by: –Identifying risks –Analyzing risks –Mitigating risks –Monitoring risks to their retirement In preparation for CD-1, we will be requesting that you identify any risks that could affect the cost estimates that you will be providing, assess their likelihood and determine ways to mitigate them. Examples of Cost Risks: Possible price escalations Overly optimistic cost estimates No prior cost data available for cutting-edge work Limited understanding of scope

27. EDMEDM 27 Managing Risks (cont.) Methods of addressing risks include: –Acceptance – If you understand the risk and have sufficient information to address the potential impacts, the project can choose to accept the risk by: Increasing the amount of contingency allocated to a budget Increasing the amount of time allocated to complete a task –Avoidance – Take an action that prevents the risk from being realized Technology development plans or prototyping Insure against the risk –Transfer – Move the risk burden to another entity Use a fixed-price procurement strategy Use programmatic R&D focused on de-scoping elements of the project to clarify the technical outcome in a timely manner and reduce the risk to accept the scope back into the project

28. EDMEDM 28 Project Controls Continued... Scheduling –Need to identify appropriate scheduling tool (P3, P3E, or MSP) –Need to determine if parts of the project will be managed as subprojects to the Master EDM project within the schedule. –Need to prepare a high level schedule at WBS level 3 Performance Measurement –Requires CD-2 approval. Appropriate tool will then be used to measure project performance. –Implement a Cost Performance Report (CPR) to track and report cost and schedule performance –Variance analysis and corrective action planning performed at WBS level 3 is recommended

29. EDMEDM 29 EDM Project Questions to Consider Technical Are the final technical requirements stated? Will these requirements be stated as technical performance requirements / specifications? Can the design(s) in the proposal be built? Will the proposed design(s) meet the meet the technical specifications? Is it a reasonable design? Management Is there an appropriate management organizational structure in place or proposed to accomplish the design and construction? Have responsibilities been assigned or have they been proposed? Are there adequate staffing resources available or planned for this effort? Is there a funding plan proposed to meet the resource requirements to realize the project requirements?

30. EDMEDM 30 EDM Questions to Consider (cont.) Cost Has a specific Work Breakdown Structure (WBS) been developed or other listing of cost elements been prepared? Do the cost estimates for each WBS (or cost) element have a sound basis and are they reasonable ? Schedule Is there a proposed schedule for the project? If, so are the activity durations reasonable for the assumed resources? Has the schedule been “resource loaded”?

31. EDMEDM 31 Management Controls PEP with MOA’s AB PlanQA PlanWBS Descriptors Parameters List Cost Est. Database Project Master Schedule ES&H Plan IPS Work packages Detailed Schedules Milestone Log Project Controls Manual Hazard & Accident Anal. Tech Integration Safety Eval. Report ORR Preparations Document Control & Records Mgmt Design Integration Plan System Reqs Documents Design Control Documents Interface Control Docs Configuration Mgmt Plan Advanced Proc. Plans Monthly performance Reports (with earned Value reporting) Admin. Plans & Procedures Staffing Plans Action Tracking System Org Chart QA Procedures Acceptance Criteria Listings System Integration Procedures Drawings Specifications SOWs Design Review Procedures Procurement Procedures