Engineering Cost Analysis in Support of the DOE Mission

1
Engineering Cost Analysis in Support of the DOE
Mission

• By
• Jim Studer, Consulting and Funding Resources, LLC
• Malcolm Siegel, SNL and ITRD Program
• FeDTIP Meeting
• Kennedy Space Center
• February 13, 2002

2
Presentation Outline

• What is the ITRD Program?
• What are DOE EM needs in ECA and cost information
  management?
• What is ITRD doing to provide improved ECA and
  cost information?

3
ITRD Program Goals

• Accelerate deployment of innovative
  characterization and remediation technologies
• Reduce barriers to use of innovative technologies
  by reducing risks to DOE and Industry
• Design combinations of technologies for
  innovative solutions to site-specific problems
• Reduce regulatory barriers by involving all
  stakeholders early in the evaluation process
• Generate cost and performance data to support
  adoption of innovative technologies to address
  specific site needs often establishing first
  or second data pt

4
ITRD Process
Potential Technologies
Applicable Technologies
TAG
Technical Advisory Group
Suggested System Concepts
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Recent ITRD ECA Assignments

• Developed detailed cost estimates for conducting
  DNAPL partitioning interwell tracer tests (PITT)
  at Hanford 200 West
• Performed combined technical review and
  preliminary life cycle cost analysis of six
  remedial alternatives for the Hanford 100 North
• Conducted a limited demonstration of the ECA tool
  called Integrated Data Evaluation and Analysis
  Library (IDEAL) C-Sparge site
• Performed an engineering cost analysis software
  evaluation for ITRD Program (report to be posted)
• Pantex engineering cost analysis (in progress)

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ITRD Process
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Perceived DOE Needs Cost Estimates

• Improved
• estimates of cost to perform innovative
  technology demonstrations
• estimates of cost to deploy innovative
  technologies at full-scale at specific sites
• estimates of Return on Investment (ROI)
  associated with full-scale deployment
• ability to capture these estimates

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Perceived DOE Needs Cost Estimates

• Continued
• Improved
• ability to capture costs incurred at both scales
  of deployment
• ability to relate estimated costs to actual costs
  and feed derived relationships back to management
  and estimators
• estimates of final ROI associated with
  investments made in the combination of technology
  development, facilitation support, and full-scale
  deployment

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Factors Affecting Cost Estimates in ITRD Projects

• Vendors not familiar with DOE sites
• Waste generation/handling,
• Operational, utility, security constraints
• Sites present novel technical challenges
• Vendors may provide inaccurate or incomplete
  information about their technologies
• Risk to workers initially not considered

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Factors Affecting Cost Estimates in ITRD Projects

• Continued
• Poorly defined definition of end-point for
  clean-up
• DOE and MI generally have few incentives to
  conduct remediation better, faster, cheaper.
• Liability concerns
• Lack of teamwork and communication
• Procurement and budget barriers

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Tech Vendor versus Site Cost Estimates
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Cost Estimate Difference Explained

• Assuming subcontractor scope is stable, the site
  level cost estimate will be significantly larger
  due to these components
• Site contractor markup of Subcontractor
• Site contractor technical contributions (MO in
  particular)
• Site contractor oversight management support
• General site overhead (e.g., facility security)
• Site contractor risk management markups degree
  of newness, complexity, typical uncertainty
  concerns
• Site contractor profit

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So.whats the problem?

• Other than subcontractor/technology vendor costs
  (which relate directly to technology use), it is
  difficult to predict what the site level cost
  components will be across the complex at any
  given time, and over time in response to changing
  Site Contractor management teams.
• It is the Estimated TOTAL SITE COST that
  influences decisions by the Site Contractor, DOE
  field office, and DOE HQ.
• Direct technology implementation cost AND site
  level cost components must be tracked
  concurrently

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Example Cost Information Management Process
Innovative Technology/Non-PB Based Contract
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ITRD Plan for ECA Support

• Engineering Cost Analysis (ECA) is now at the
  same level of importance as technical
  regulatory analysis
• Developing ECA process for use during TAG process
  
• Developing updated strategy for working with
  MO/MI (PB and not) and technology vendors
• Support life cycle analysis and stress
  cost/schedule risk mitigation

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Desired ECA System

• Supports TAG Stakeholder/Value Eng process
• Integrates with MO/MI baseline planning
• Promotes comprehensive/consistent estimates
• Addresses First of Kind projects
• Provides accessible, collaborative tool with
  security management
• Utilizes existing tools, techniques, and
  methodologies to the extent practical

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Pantex ITRD Project Example

• ITRD Project started in 2001. TAG started in 2001
• Southeast Groundwater Plume with RDX and chromium
  as principal COC
• Pump Treat as baseline technology
• An interim PT system (capacity 500 gpm) in place
• Full PT Life Cycle cost unacceptable
• ITRD Project requested to assist in developing
  innovative alternatives

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Pantex ITRD Project Example

• Continued
• Insitu Direct Oxidation, Insitu Biological
  Treatment, and Insitu Chemical Redox Manipulation
  are three key technology options
• ITRD developing original bench scale performance
  and cost data with TAG partners
• ITRD brought in insitu remediation expertise and
  remediation cost estimating specialist to work as
  a team with TAG to develop and cost Technology
  Unit Scenarios (TUS), Conceptual Treatment
  Scenarios (CTS), and Baseline Alternatives (BA)
• Initial thrust is bottoms up estimates to be
  followed, as appropriate, by cost modeling using
  IDEAL

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Existing Tools Evaluated Recently

• Environmental Cost Element Structure (ECES)
• Environmental Cost Analysis System (ECAS)
• Life Cycle Analysis methodologies
• Integrated Data Evaluation and Analysis Library
  (IDEAL)
• RACER, Cost Risk, Crystal Ball, _at_Risk, others

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Concluding Remarks

• ITRD cost estimating experiences are a microcosm
  of what is experienced by DOE managers throughout
  the complex
• The Total Site Cost Estimate and Total
  Incurred Cost are the metrics of most importance
  to DOE managers and their overseers
• All cost components (as previously listed) must
  be tracked to enable accurate prediction of total
  cost and ROI across the complex

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Concluding Remarks

• Continued
• ITRD is working towards improved ECA performance
  through people, process, and tools
• Develop a team of environmental remediation
  engineers and cost estimators
• Develop a continuous feedback loop featuring
  collaboration with all key stakeholders, life
  cycle analysis, consistent use of one baseline,
  and a focus on quantifying the key site level
  cost components

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Concluding Remarks

• Continued
• Use ECA tools that already exist and support
  effective feedback
• Knowledge management through careful input of
  historical data on innovative technology
  demonstrations into ECAS and careful creation of
  cost estimate data and cost models using tools
  like IDEAL