MREFC Process

MREFC Process

Mark ColesDeputy Director, Large Facility Projects

Office of Budget, Finance, and Award Management

NSF

June 12, 2006

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Topics

• MREFC process for preconstruction planning and budgeting, prioritization

• Timeline for planning

• Budget status and plans

• Budget issues surrounding the MREFC account

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New NSF process for pre-construction planning

• “Guidelines for Planning and Managing the Major Research Equipment and Facilities Construction (MREFC) Account”– Outlines a formal process for planning and

developing large facilities that coordinates development of scope, budget, and NSF plans for oversight

– On NSF external web site– Attempt to implement the best features of processes

used by other agencies and still preserve NSF’s ability to respond flexibly to community needs and initiatives

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Motivations for MREFC process

• Lack of a formal process has resulted in NSB approval of some projects whose scope was not well defined, nor fully budgeted– Resulted in descoping, cancellation, and deferral of

construction start

• Brinkman Report: “Setting Priorities for Large Research Facility Projects Supported by the NSF”– Addressed these issues– Cited need for a well-defined, rigorous pre-

construction planning process

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NSF pre-construction planning process

Conceptual Design

Preliminary Design

Final Design

Construction

Operations

R&RA $ R&RA $ R&RA $ R&RA $MREFC $

DOE Translation:

CD 0 CD 1 CD 2 CD 3 CD 4

Approve mission need

Approve alternate selection and cost range

Approve performance baseline

Approve construction start

Approve operations start

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Conceptual Design StageConceptual Design Stage Readiness Stage Board Approved Stage Construction

Concept development – Expend approximately 1/3 of total pre-construction planning budget

Develop construction budget based on conceptual design

Develop budget requirements for advanced planning

Estimate ops $

Preliminary design

Expend approx 1/3 of total pre-construction planning budget

Construction estimate based on prelim design

Update ops $ estimate

Final design over ~ 2 years

Expend approx 1/3 of total pre-construction planning budget

Construction-ready budget & contingency estimates

Preliminary Design

Develop site-specific preliminary design, environmental impacts

Develop enabling technology

Bottoms-up cost and contingency estimates, updated risk analysis

Develop preliminary operations cost estimate

Develop Project Management Control System

Update of Project Execution Plan

Final Design

Development of final construction-ready design and Project Execution Plan

Industrialize key technologies

Refine bottoms-up cost and contingency estimates

Finalize Risk Assessment and Mitigation, and Management Plan

Complete recruitment of key staff

Conceptual design

Formulation of science questions

Requirements definition, prioritization, and review

Identify critical enabling technologies and high risk items

Development of conceptual design

Top down parametric cost and contingency estimates

Formulate initial risk assessment

Initial proposal submission to NSF

Initial draft of Project Execution Plan

Construction per baseline

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n Merit review, apply 1st and 2nd ranking criteria

MREFC Panel briefings

Forward estimates of Preliminary Design costs and schedules

Establishment of interim review schedules and competition milestones

Forecast international and interagency participation and constraints

Initial consideration of NSF risks and opportunities

Conceptual design review

NSF Director approves Internal Management Plan

Formulate/approve Project Development Plan & budget; include in NSF Facilities Plan

Preliminary design review and integrated baseline review

Evaluate ops $ projections

Evaluate forward design costs and schedules

Forecast interagency and international decision milestones

NSF approves submission to NSB

Apply 3rd ranking criteria

NSB prioritization

OMB/Congress budget negotiations based on Prelim design budget

Semi-annual reassessment of baseline and projected ops budget for projects not started construction

Finalization of interagency and international requirements

Final design review, fix baseline

Congress appropriates MREFC funds & NSB approves obligation

Periodic external review during construction

Review of project reporting

Site visit and assessment

MREFC $

Expenditure of budget and contingency per baseline

Refine ops budget

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Funded by R&RA or EHR $

NSF oversight defined in Internal Management Plan, updated by development phase

Proponents development strategy defined in Project Development Plan Described by Project Execution Plan

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Conceptual Design

Definition of science objectives and quantitative science requirements

Notional proposal that NSF can react to and encourage or discourage

Conceptual design report

System definitions

Site independent design

Top-down budget and contingency estimates

Forecasts for international partnership

Operations budget estimates

Conceptual design review by NSF

NSB approval to enter “Readiness Stage” (preliminary design)

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Preliminary Design - aka “Readiness Stage”Project baseline defined - detailed design and planning activities that form the basis for a request to Congress for construction funds

All significant cost drivers and major risk factors understood

Site specific design

NEPA/NHPA impacts and mitigations budgeted

Partnership intentions firmly stated

How NSF will manage the project is described in an Internal Management Plan, approved by NSF Director

Preliminary Design and Final Design activities defined by proponents in Project Development Plan – budget, schedule, deliverables

Projects failing to progress against objectives of PDP fall out of Readiness Stage

Projects emerge following successful Preliminary Design Review by NSF

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Final Design – aka Board Approved Stage – aka “the Queue”MREFC panel proposes a prioritization to NSF Director

Director consults with OMB, and brings a project forward for NSB consideration only if construction appropriation is likely within period budget estimates are valid

Director recommends project to NSB with prioritization

NSB reviews NSF external review results, PEP and IMP

NSB annually reprioritizes approved projects in NSF budget request to Congress

Project proceeds with final pre-construction planning activities during period prior to Congressional appropriation and construction start

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Construction StageConstruction proceeds according to PEP

Periodic external review by NSF

Construction scope includes commissioning activities

Considerable latitude in defining scope of construction activity during pre-construction, but must adhere to that definition during construction period

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Example timeline

Fall 2006 PDR Winter NSF assessment

March or May 2007 NSB approval Summer submission of FY09 budget

Fall OMB negotiations Feb 2008 submission to Congress

Spring 2008 appropriations hearings Oct ’08 (or later) FY09 appropriation NSF approval to obligate MREFC funds Construction begins in FY09

2006

2007

2008

2008 or 09

Calendar year

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Readiness Stage – Preliminary Design

• Entrance and exit from Readiness Stage controlled by MREFC Panel– NSF Deputy Director (chair) + AD’s and Office Heads– Ensures uniformly high standards are applied – Reviews competition for NSF resources and recommends to NSF

Director a relative prioritization for projects entering and exiting

• NSF Director – reviews/approves MREFC Panel recommendations– Approves Internal Management Plan (how NSF will provide oversight,

how NSF will fund this activity)– Recommends projects to NSB for construction funding, with priority

• NSB– Annually reprioritizes the queue of projects awaiting construction

funding

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Projects in construction

• Atacama Large Millimeter Array MPS• EarthScope GEO• IceCube OPP-MPS• Scientific Ocean Drilling Vessel GEO• South Pole Station Modification OPP

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Projects approved by NSB for construction but not appropriated by Congress

• NEON (BIO) - FY07 start request

• ARRV (GEO) - FY07 “ “

• OOI (GEO) - FY07 “ “

• Advanced LIGO (MPS) - FY08 ““

The “Queue”

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Projects in Readiness Stage

• Advanced Technology Solar Telescope (MPS)– possible FY09 start – PDR planned for October 2006

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Ongoing MREFC Projects

0

50

100

150

200

250

300

350

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Million $

Ongoing Projects

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Ongoing + NSB Approved MREFC Projects

0

50

100

150

200

250

300

350

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Million $

NSFApproved Projects

Ongoing Projects

New start profiles are NSF’s best understanding at this point, but could change

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Ongoing + NSB Approved + Readiness Stage

0

50

100

150

200

250

300

350

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Million $

ATST

NSFApproved Projects

Ongoing Projects

Possible scenario for ATST – pre-PDR estimates

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Considerations in starting a new project

• Some attempt for balance across NSF in range of disciplines supported by MREFC– Competition from Computer Science,

Engineering, Earth Science, as well as Physics and Astronomy for future projects.

Example projects that may progress to Readiness Stage:

GENI CISECLEANER ENGEarthScope InSAR GEOGEOS GEOPetascale Cyber Infrastructure for Geoscience GEOERL Phase II/XFEL MPSDUSEL MPSEVLA Phase II MPSLSST MPSSquare Kilometer Array MPSThirty Meter Telescope MPS

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Other considerations

• Desire to close out queue in FY07 budget request – no long-term queue residents– Likelihood of near-term funding will be a

consideration in proposing future projects for construction funding

• “Appetite control” – Enforced by high standards and a rigorous

process of pre-construction planning – Competition with base program activities

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Pre-construction funding• Why not an agency-wide account for advanced

preconstruction planning and development?– Pre and post construction annual outlays are about equal.

NSF capability to support pre-construction and post-construction are linked.

• Preconstruction planning ranges from 5-25% of total construction cost.

• Annual operating costs + science utilization are 10-25% of total construction cost.

– Avoid “politicizing” the facility selection process• Preserve objectivity of selection and prioritization process,

based on expert assessment and peer review.• Preserve “off-ramps” for projects in advanced planning that

should not be built.

Size of base program is the limiting factor in new facility construction

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Backup materials

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FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016ALMA 29.81 50.70 49.30 45.14 47.89 47.07 37.37 20.98EarthScope 29.81 43.24 44.80 46.40 27.40HIAPER 13.00 12.54IceCube 25.75 38.36 48.10 46.25 28.65 22.38 11.33 0.95LHC 9.69NEES 13.48 8.05SPSM 12.69 21.03 16.86 9.13DOJ Judgment 3.00Terascale 44.83 10.05SODV 6.08 53.09 42.88Ongoing Projects 179.03 183.96 165.14 190.88 158.95 69.45 48.70 21.93ALMA Increment 17.38 55.00 36.38 21.78 21.44 3.00NEON 12.00 18.00 41.00 58.00 79.00 79.00 61.00OOI 13.50 48.00 77.00 78.00 53.00 40.00ARRV 56.00 42.00AdvLIGO 28.48 42.81 46.31 36.25 22.90 7.60ATST 65.42 28.58 28.54 20.22 12.95 10.32 7.44 1.53Total 179.03 183.96 165.14 190.88 257.83 260.93 311.31 254.60 218.23 165.12 81.55 10.32 7.44 1.53