Office of Project Assessment CD-1 Review Report on the

Integrated Engineering Research Center (IERC) Project at Fermi National Accelerator Laboratory

February 2017

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EXECUTIVE SUMMARY A Department of Energy/Office of Science (DOE/SC) review of the Integrated Engineering Research Center (IERC) project was conducted on February 7-9, 2017 at the Fermi National Accelerator Laboratory (FNAL). The review was conducted by the Office of Project Assessment (OPA) at the request of Stephanie Short, Associate Deputy Director for Field Operations, SC. The review was chaired by Ethan Merrill, OPA. The purpose of this review was to assess the project’s readiness to approve Critical Decision 1 (CD-1), Approve Alternative Selection and Cost Range. The project team presented a detailed, well thought-out plan for this stage of project development. The project is ready to proceed to CD-1 after addressing recommendations from this review. Technical and Environment, Safety and Health The programmatic and mission need drivers for the facility are clearly defined for this stage of the project and the Conceptual Design Report (CDR) is well developed and thorough. The CDR program is mature for this stage of the project and the preliminary performance requirements have been established. A high level of program participation and support is evident. Potential scope contingency is not yet graphically identified; however, the project identified functions that can be omitted if required. The current threshold deliverable technical scope is 87,500 gsf, target scope is 97,500 gsf, and objective scope is 130,000 gsf. To help ensure delivery of the target scope (assuming fully functional build-out) at target cost, the project must continue to evaluate and manage the full range of risks and design uncertainty. At this stage of development, the Committee noted the high proportion of laboratory space and clean room space and the potential for more demanding requirements as the design evolves. As a combined laboratory/office building, the current conceptual design does not include conservative assumptions about possible future need for stringent vibration, temperature, and electromagnetic interference/radio-frequency interference (EMI/RFI) criteria. If these needs (which are becoming typical at many sites) arise it could add substantially to the cost. The 90/100/110 approach (where 100% is the 97,500 gsf design-to-cost scope of the architect/ engineer (A/E) and 90% is the threshold Key Performance Parameter (KPP) of 87,500 gsf) appears sound for this stage of the project. This will allow for a design with a clear deductive option in the event construction bids are high. As the design progresses, the project should ensure scope contingency deducts at least 10% in estimated construction cost during preliminary and final design. Environment, Safety and Health (ES&H) considerations are appropriate for this stage of the project, and are being addressed with respect to risk and requirements analysis, acquisition plans, and conceptual designs. Existing FNAL ES&H programs and systems are in place, and related operational controls should continue to positively impact project development. The IERC project will not change the FNAL safeguards and security requirements. The IERC siting-related safety and health issues, such as traffic and pedestrian flow, construction safety, beamline considerations, and interactions with Wilson Hall have been recognized and mitigation strategies are at the appropriate stages of development. Project documents (Preliminary Hazard Analysis Report, National Environmental Protection Agency (NEPA) Categorical Exclusion) are in place

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and reflect project ES&H aspects. Updating IERC’s expected/projected chemical and gas inventory and emission/waste generation should be completed prior to CD-2 to support design efforts and regulatory impact analysis. Cost and Schedule The preliminary Total Project Cost point estimate of $86.0 million appears adequate to meet the threshold KPP. The proposed cost ($15.843 million) and schedule contingencies (23 months) presented appear adequate and were validated by qualitative analysis and Monte Carlo analysis. The project’s cost estimate, which was independently estimated from bottom-up, is further along than the typical conceptual design cost estimate. The CD-4 date of February FY 2024, with 23 months of schedule contingency, appears realistic and achievable. When estimating general conditions and overhead in the construction estimate, the project should ensure the additional cost of performing work at a DOE national laboratory is incorporated. The project should consider including design contingency into the construction cost to account for unknown design issues/scope that may be identified during remaining design development. Having design contingency included in the cost estimate at this stage of the project is a prudent practice. By completing a Primavera resource loaded schedule, the project is in good position to begin Earned Value Management System reporting when appropriate. The project is incorporating best practices at CD-1 through Acumen Fuse and Defense Contract Management Agency (DCMA) schedule analysis, which confirms a high degree of schedule logic. The DOE cost estimating guide suggests a minimum +20% factor for the high-end range along with a minimum -15% factor for the low-end range when determining a Level 4 point estimate cost range. The project should consider adjusting the high end of the cost range to account for the +20% factor. Project Management The Committee commended IERC for the level of team experience and qualifications, including the assignment of an experienced architect to manage the design process. A comprehensive and experienced project team is in place for the execution of the project with experienced control account managers. A credible Analysis of Alternatives (AoA) was completed resulting in the identification of the “new building” alternative as the preferred solution to satisfying the Mission Need. The AoA included both qualitative sensitivity analysis and quantitative building lifecycle cost analysis. The project may wish to address costs associated with maintenance, deferred maintenance and repairs, cost of missed collaboration opportunities, and facility cost of excess facilities. The AoA sensitivity analysis utilized a 25% weighted value for Net Present Value. The project should consider evaluating this weighting factor to ensure it provides the proper weighting score to the qualitative analysis. The FNAL Risk Management policy/procedure is well defined and thorough. The IERC Risk Registry has been appropriately prepared for CD-1 and includes 45 risks and 4 opportunities, although opportunities have not been included in the Monte Carlo Analysis. The risk probability associated with risk items 602.32 Changes in Programming, and 602.33 Errors and Omissions, appear to be low. The project should consider continued evaluation of risk probabilities with the Risk Management Board. The Committee suggested obtaining official program/user sign-off/approval on Basis of Design and/or programming requirements documentation to minimize project risk.

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Project documents should be updated to clearly identify key project information as “preliminary” (i.e., preliminary KPP, Schedule, Milestones) and remove the AoA from the Acquisition Strategy to create a stand-alone document. As the project proceeds to CD-2, it should consider further definition of the 90/100/110 project strategy to clearly identify the design scope that will support the range of preliminary KPPs with consideration for future growth and/or changes in the facility requirements. The Committee supported performing the site preparation activities as soon as possible using a CD-3a or Project Management Executive letter approval. Doing so shortens the duration of the project, reduces overall project costs, and reduces potential risks associated with the relocation of underground utilities. KEY RECOMMENDATIONS

Strive to resolve definitive environmental requirements for laboratories and cleanrooms so the impacts are incorporated in the estimate prior to CD-2.

Assure that methods to decrease deliverable scope to achieve threshold KPPs can be integrated in the project design before CD-2.

Re-evaluate the high end of the cost range prior to CD-1. Update preliminary KPP table to omit the “Site Improvements” prior to CD-1. Create a stand-alone AoA document prior to CD-1. Update appropriate required CD-1documents prior to CD-1. Upon completion of recommendations proceed to CD-1.

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CONTENTS

Executive Summary ........................................................................................................................ i

1. Introduction ............................................................................................................................. 1

2. Technical Systems Evaluations ............................................................................................... 2

3. Environment, Safety and Health .............................................................................................. 6

4. Cost and Schedule ................................................................................................................... 8

5. Project Management .............................................................................................................. 11

Appendices

A. Charge Memorandum B. Review Participants C. Review Agenda D. Schedule Chart E. Funding Table F. Management Chart

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1. INTRODUCTION

The Integrated Engineering Research (IERC) project at Fermi National Accelerator Laboratory (FNAL) is a Department of Energy (DOE) line-item project that will provide 21st-century, state-of-the-art laboratories, technical, and office space for particle physics-related research and development projects. The objective of the proposed IERC project is to provide laboratory and office space for the mission of engineering technical groups necessary to support the scientists and project teams pursuing the Particle Physics Project Prioritization Panel (P5) mission, who are located in adjoining Wilson Hall. The project received Critical Decision 0 (CD-0), Approve Mission Need, on July 17, 2015. In a December 23, 2016 memorandum, Ms. Stephanie Short, Associate Deputy Director for Field Operations requested that an Independent Project Review (IPR) be conducted to support CD-1, Approve Alternative Selective and Cost Range. The desired outcome will be obtained when construction of new space is completed in accordance with the contract drawings and specifications, safety requirements, and within the approved schedule and cost baseline. According to current estimates, new construction is anticipated to be in the range of 87,500 -130,000 square feet (sf). The focus of this review was to assess all aspects of the project’s conceptual design and associated plans—technical, cost, schedule, management, and Environment, Safety and Health (ES&H)—in preparation for CD-1.

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2. TECHNICAL SYSTEMS EVALUATIONS 2.1 Findings The IERC project presented a conceptual design for a combined laboratory/office building of approximately 97,500 gsf at a target cost of $86 million. The proposed facility would include 22,685 net assignable square feet (NASF) of flexible office and technical space, 25,500 NASF of laboratory and cleanroom space and 12,600 gsf of collaboration space of class. The preferred alternative would construct this new facility adjacent and connected to Wilson Hall and would include an architectural theme complimentary to the notable architectural presence of Wilson Hall. Utility services would be relocated in the area as part of a CD-2/3a early procurement and the new structure would be constructed after CD-3b. The IERC is necessary to support FNAL’s Long Baseline Neutrino Facility (LBNF) program, which is recognized as a top priority of the HEP program’s P5 committee. LBNF is part of an international consortium of users that are investing in the program and are expected to significantly increase the campus population. The science drivers presented by the P5 committee, plans for U.S. particle physic, and the DOE/SC ten-year plan indicate the importance of FNAL collaboration with the Large Hadron Collider CMS Detector experiment and leading the LBNF neutrino research program. The master campus plan presented the IERC as a top priority to consolidate remotely dispersed staff and provide facilities to improve efficiency and collaboration of staff in support of the science mission. Consolidation of remote dispersed engineering and technical staff from old repurposed facilities and locating them adjacent to Wilson Hall where scientific staff are located will improve efficiency by minimizing travel time for interactions, increasing frequency of interactions, and eliminate maintenance and deferred maintenance associated with the old dispersed facilities. It will also enable relocation of electrical technical shops currently located in office space in Wilson Hall to more appropriate technical space in the new facility.

The technical performance goals for the IERC include threshold KPPs of 87,500 gsf, target scope of 97,500 gsf, and objective scope of 130,000 gsf. The proportions of office/technical/laboratory/ cleanroom space have been determined for the target design but not yet fully developed for the threshold or objective cases. The schedule presented is based on a funding profile initiating design in 2017 and completing delivery in 2020 with an added 19-24 months schedule contingency to CD-4. The Total Project Cost cost range is $73.0-86.0 million, with target cost of $86.0 million at 97,500 gsf. FNAL established a science requirements task force to develop the program needs for the IERC, including: detector R&D space; laboratory space with dedicated laboratories; clean rooms and laboratory support; office and technical space and shared space for collaboration. Flexible space is a key design consideration to enable response to future changes in mission needs. Design charrettes were conducted for the Conceptual Design Review (CDR) and included notable independent architects in addition to the contracted architect/ engineer (A/E) and on-site team to consider architectural solutions that were complimentary to the presence of Wilson Hall. Site selection for the new building considered impact to views and egress to the Wilson Hall, shadow

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impacts, parking impacts and relative collaboration feasibility among others factors. The preferred location was identified as adjacent the North East corner of Wilson Hall. An Analysis of Alternatives (AOA) was performed that considered five options. Two options were rejected as not mission capable. The other three, the Build New, Improve Existing and Renovate Existing options, underwent life cycle cost (LCC) analysis that indicated the Build New option had the lowest LCC by nearly a factor of two. This approach was also considered most capable of meeting the mission need.

The project prepared a Risk Management Plan and Risk Registry. Four high-rank risks were identified from a risk registry listing 49 risks. The technical risks were credible and comprehensive and ranked as medium to minor.

The conceptual sight plan indicated the East Pond (cooling pond) would be drained and filled with on-site material to form the parking lot for the IERC. Environmental permits are not needed for this action since it is not considered a wetland. National Environmental Protection Agency (NEPA) review of the project was completed and a Categorical Exclusion was approved. A design competition is currently underway to select the A/E to perform the preliminary and detailed designs for the facility—this was considered the best approach to achieve an architectural design that is complimentary to the iconic design of Wilson Hall. A commissioning contractor will be used during design and construction to assist with design review and provide system commissioning services during and after construction.

The FNAL site does not perform classified work and the addition of the IERC is not expected to change site security requirements.

In addition to providing office space, the IERC must provide space for electronic laboratories and laboratories supporting development of silicon detectors. Aggressive etching chemicals are not expected to be used in the Si detector fabrication process. The current plan is for use of a gas/chemical inventory that will enable Class B occupancy and includes no flammables. To comply with a Class B designation, only very small inventory of some gases will be allowed. Corrosives and reactives are also not expected to be required.

The proposed laboratories include electronics laboratories and clean rooms. Although there are requirements for humidity control, requirements for specific vibration criteria, strict temperature control and electromagnetic interference/radio-frequency interference (EMI/RFI) shielding are not expected so heavier steel and concrete, added isolation and more complex HVAC controls are not included in the design or cost estimate. The current plan for laboratory exhaust runs ductwork through an interstitial space horizontally along nearly the full length of the building before going up a vertical chase, which is near to Wilson Hall. A utility analysis was conducted and the plan is to relocate existing utilities (power, water, cooling water, storm and sanitary) out of the footprint of the building. A major communication duct in the footprint may be able to remain and be integrated into the new building concrete substructure. The cooling capacity and boiler capacity from the Central Utility Building (CUB)

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is not sufficient to meet the full added peak cooling and heating demand of the IERC so the plan includes a heat recovery chiller (heat pump) in the IERC of about 200 tons cooling to supplement cooling and provide a comparable energy amount for heating. The electrical system will separate laboratory power from building power to provide a clean power system. The plans also include a 250kw emergency generator for life safety loads, standby loads for selected equipment, elevator and certain laboratory equipment and exhausts. The plans include a number of sustainability features include variable air volume (VAV) HVAC systems, use of outside air for heating or cooling, chilled beam systems, a green roof, solar hot water, and all LED lighting.

The project identified 55,000 gsf as available for demolition, but it is not included in the project cost.

The interior design focuses on “collaboration commons” areas to promote spontaneous scientific interactions among technical, engineering, and scientific staff and the user community. The target scope does not include a seminar space but seminar space is proposed as part of the objective scope. The objective scope also includes modification to a Wilson Hall stairway at the northwest entry, which is an important improvement to pedestrian flow and wayfinding and includes a ramp for improved Americans with Disabilities Act (ADA) accessibility.

The current conceptual plans to add or delete scope are described in terms of functional space but are not physically represented in the current design. The project team proposes to indicate one or more central bays as additive or deduct scope as the design advances. 2.2 Comments The project team presented a convincing case for the programmatic and mission need drivers for the facility, and a robust site planning effort for the proposed alternative that is consistent with the site master plan. It was readily apparent from the tour of the existing facilities that the current dispersed, old, non-purpose-built facilities do not adequately support the intended growth in program needs, provide improved operational efficiencies and enhanced collaboration opportunities and that renovation or improvement of the existing facilities would not provide equivalent mission capability compared to the preferred option of building a new facility adjacent Wilson Hall. The project team prepared an AoA that arrived at a logical conclusion that the lowest LCC option was the build new option and that this approach was most capable of meeting the mission need. The analysis outcome is accurate but could be improved to reinforce the benefit of the new building alternative by considering the deferred maintenance and repair cost savings of the build new option and recognize the added efficiency gains of enhanced collaboration opportunities.

The design effort put forth for the CDR was impressive and comprehensive. The program development included a thorough process of outreach to determine technical scope and program requirements including A/E design charrettes that included input from noted national architects to assist with the challenge of marrying a new facility to Wilson Hall without detracting from its

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iconic visage. The project team is commended for finding a functional and attractive architectural solution that retains Wilson Hall’s command of the site.

The IERC is a combined laboratory/office building that includes substantial clean room space. The current design does not include conservative assumptions about possible future need for stringent vibration, temperature control, or EMI/RFI criteria. If these needs (which are becoming typical at many sites) are later deemed necessary, it can add substantially to cost of the facility. The overall impression of the technical deliverables vs target estimate is that the estimate may be low given the high proportion of laboratory and clean room space with the potential for more demanding requirements to be invoked as the design evolves.

Accordingly, the target scope may not be achievable (assuming fully functional buildout) at target cost given the full range of risks and design uncertainty at this stage of development. As is often the case for a CDR, the potential scope contingency has not been graphically identified in the design yet but the project has identified functions that can be omitted if required. It will be important for the project team to assure that additive or deductive scope is included in the design such that the important technical deliverables are retained in the project scope (and threshold KPPs are achieved) if bid results are unexpectedly high. This can also apply as a secondary priority to potential objective scope items should bid results be favorable. The conceptual laboratory exhaust design involves a long horizontal run, nearly the length of the IERC building, to a vertical exhaust chase at the Wilson Hall end of the IERC. Since this is the conceptual design stage, plume modeling has not been done yet. The project should consider routing laboratory exhaust to the east side of the building. Although this may introduce some challenges to the architectural theme for the building, it would be a shorter, less costly run and would reduce plume impacts on Wilson Hall if chemical use processes change. 2.3 Recommendations

1. Strive to resolve definitive environmental requirements for laboratories and cleanrooms so the impacts are incorporated in the estimate prior to CD-2.

2. Assure that methods to decrease deliverable scope to achieve threshold KPPs can be integrated in the project design before CD-2.

3. Proceed to CD-1.

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3. ENVIRONMENT, SAFETY and HEALTH 3.1 Findings Environment, Safety and Health and Quality Assurance (ESH&Q) resources are identified and reported directly to the IERC Project Director’s Office. There are currently both ES&H and QA staff supporting the project as an overhead function. An additional ESH&Q staff appears in the appropriate WBS for construction. Both the risk evaluation and the preliminary design includes appropriate ESH&Q elements. Sustainability is clearly a major aspect of the building design. Additionally, QA programs are engaged and construction QA/Quality Control (QC) is planned for later stages. The project will not change FNAL’s safeguards and security requirements. IERC siting related safety and health issues (such as traffic and pedestrian flow, construction safety, beamline considerations and interactions with Wilson Hall) have been recognized and mitigation strategies are at the appropriate stages of development. Project documents (e.g., Acquisition Strategy, PPEP, and Preliminary Hazard Analysis Report (PHAR), NEPA Categorical Exclusion) are in place. 3.2 Comments FNAL’s existing ES&H programs and systems (Integrated Safety Management, Worker Safety and Health Management Program, Environmental Management Program, Emergency Management Program and QA Program) are mature and the associated operational controls are being utilized appropriately during the initial IERC design phases. The project team appropriately recognized the need to ultimately integrate the project’s Emergency Management procedures with the larger FNAL program. Qualified resources have been assigned to the project development team and appear in future WBS elements. These staff members feel engaged in the program and empowered to recommend project elements. The project documentation and various analysis (including risk and PHAR) reflect this attention. The ES&H team also documented lessons learned from other FNAL Science Laboratory Infrastructure (SLI) projects and are integrating those lessons into the IERC. The project team demonstrated a notable recognition of potential hazards during construction activities, not only to the construction contractors but also to the general FNAL population (hazards such as vehicle and pedestrian traffic) due to the IERC’s location.

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Given the level of requirements identification and design, the appropriate high-level, operational ES&H considerations, such as hazardous material handling, and personnel safety systems, have been discussed. Updating IERC’s expected/projected chemical and gas inventory and emission/waste generation should be completed prior to CD-2 to support design efforts and regulatory impact analysis. 3.3 Recommendation

4. Proceed to CD-1.

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4. COST and SCHEDULE 4.1 Findings

The Total Project Cost (TPC) range is $74.0-86.0 million and is based solely on the proposed alternative of constructing a new multi-use building. The high-end range completes 97,500 gsf, which represents the threshold scope and a portion of objective scope being used as scope contingency (10,000 gsf). The high-end range includes 23% cost contingency to go ($15.84 million), no separate design contingency, 3-4% escalation, and 12.4% general condition/overhead/profit on construction. A proposed $86.0 million point estimate was used to develop the high end of the cost range. The low end was developed using a -15% factor suggested from the DOE cost estimating guide at this stage of the project. Bottom-up, third-party, and A/E conceptual cost estimates were developed and reconciled to within 0.5% of each other when disregarding additive factors such as general conditions, design contingency, and escalation. The $86.0 million proposed TPC includes an EDIA percentage of approximately 20%. CD-4 is currently planned for second quarter FY 2024 with 23 months of schedule contingency. Early finish is scheduled for March 2020. There are currently no external project dependencies driving the CD-4 date, as such no external dependencies are specifically identified in the cost estimate or schedule. The project developed a preliminary resource loaded schedule with 76 activities and 83 milestones. The schedule is based on the assumption of a three-month Continuing Resolution in all fiscal years and includes a long lead procurement (CD-3a) approval for site preparation, which entails draining the east reflection pond, parking lot removal, and utility relocations. Equipment and personnel moves are planned to be done off project. The

PROJECT STATUS – Pre CD-1 as of 2/2/2017

Project Type Line Item

CD-1 Planned: 3Q FY17 Actual: TBD

CD-2/3A Planned: 3Q FY19 Actual: TBD

CD-3B Planned: 3Q FY20 Actual: TBD

CD-4 Planned: 2Q FY24 Actual: TBD

TPC Percent Complete Planned: N/A Actual: N/A

TPC Cost to Date $0.8471M in OPC

TPC Committed to Date $0.8471M in OPC

TPC - Preliminary Range $74.0M - $86.0M

TEC - Preliminary Range $73.0M - $85.0M

Contingency Cost – Preliminary $15.84M Contingency Schedule on CD-4 – Preliminary 23 months

CPI Cumulative N/A

SPI Cumulative N/A

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early finish date is based on obtaining CD-2/3a (site preparation) and Project Engineering and Design (PED) funding in FY 2017. The project has run Acumen Fuse schedule diagnostics. The critical path runs through a preliminary design, final design, and then construction. The building construction phase is scheduled to take 27 months to complete. The project is scheduled to receive $2.5 million in PED funds in FY 2017, but may not receive these funds if there is a yearlong Continuing Resolution. Site Preparation activities are scheduled to start fourth quarter FY 2018 and are not considered to be on the critical path. The project risk register identified an expected six-month project delay due to an FY 2017 Continuing Resolution. The risk registry identified 45 risks and 4 opportunities. A preliminary risk cost and schedule Monte Carlo analysis was performed showing 90% confidence of completing the project with 19 months schedule contingency and $8.4 million in cost contingency. The project identified $13.2 million in estimate uncertainty. When eliminating duplicate items in the estimate uncertainty and risk register, the 90% confidence level of expected risk is $2.7 million. The high-risk items identified include a FY 2017 funding delay, CM/GC proposals coming in too high, trade package bids coming in too high, and a change in indirect rates. A Risk Management Plan was developed and the project is planning for monthly risk meetings after CD-1 approval. The project analyzed five different alternative strategies. It was determined that alternatives #1, #2, and #3 were viable and further analyzed. Alternative #3’s total life cycle cost for ($191 million) was the lowest when compared to alternative #1 ($331 million) and #2 ($368 million).

1. Improve Existing 2. Renovate Existing 3. Construct New Building (next to Wilson Hall or in the Technical Campus) 4. Retain Building Status Quo 5. Construct New Building at another Laboratory

The analysis used a 50-year service life. The major cost difference between the improve/ renovate existing and the new construction alternatives is the annual productivity loss avoidance cost of $2.74 million per year. This contributes to a majority of the difference in the analyzed alternatives. A scoring system was also used, which ranked the alternatives according to net present value (NPV), collaboration, modern mission-ready facilities, ES&H, and location/site condition. Alternative #3 ranked highest in all of the criterion. 4.2 Comments The project completed a thorough analysis of several alternatives and the proposed renovation of new construction appears to be the best and lowest cost alternative to fulfill the mission gap. The project should consider updating the AoA with respect to the cost inputs in the renovation and improving existing space alternatives by refining or evaluating the need to include the productivity loss calculation. This cost input does not appear to change the NPV ranking.

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The proposed TPC point estimate of $86.0 million appears adequate to meet the threshold KPP square footage. The amount of cost contingency is also considered adequate at this stage of the project. The project’s cost estimate, which included an independently developed bottom-up estimate, is further along than the typical conceptual design cost estimate. The proposed cost ($15.843 million) and schedule contingencies (23 months) presented appeared to be adequate and were validated through qualitative analysis and Monte Carlo analysis. The project team also performed a parametric comparison with a recent and geographically close SLI project, Argonne National Laboratory’s Materials Design Laboratory (MDL) project, which at CD-1 was estimated at $762/sf (including escalation at 3% for three years); compared to IERC’s calculated $591/SF at 97,500 gsf, and $659/sf at 87,500 gsf. Since there are significant scope differences between IERC and MDL, two bottom-up cost estimates were performed by the project, and IERC’s $/sf appeared to be reasonable. The Preliminary Project Execution Plan (PPEP) presented the cost for Construction (WBS 602.4) as $57,640K, but this did not match the the cost estimate presented ($55,455K). The project should ensure that the Basis of Estimates (BOEs) are updated accordingly to align with independent cost estimates going forward. When estimating general conditions and overhead in the construction estimate, the project team should ensure the additional cost is incorporated for performing work at a DOE national laboratory. For example, DOE safety and Earned Value Management System (EVMS) requirements are not costs that are typically incorporated in a university or private sector construction project. The project team should consider including design contingency into the construction cost to account for unknown design issues/scope that may be identified during the remaining design phases. Having design contingency included in the cost estimate at this stage of the project is a prudent practice. The DOE cost estimating guide suggests a minimum +20% factor for the high-end range along with a minimum -15% factor for the low-end range when determining a cost range around a Level 4 point estimate. The project should consider adjusting the high-end cost range to account for the +20% factor. The CD-4 date of February 2024 with 23 months of schedule contingency appears realistic and achievable. If a full year FY 2017 Continuing Resolution occurs, the early completion date may be delayed by a year, and the point estimate may rise due to construction escalation costs. Due to the high probability of occurrence, the project should consider accepting the FY 2017 Continuing Resolution delay risk and adjusting the project schedule and cost accordingly. The 90/100/110 approach where 100% is the 97,500 gsf design-to-cost scope of the A/E and the 90% is the threshold KPP of 87,500 gsf appears sound. This will allow for a design with a clear deductive option in the event construction bids are high. As design progresses, the project team should ensure scope contingency deducts total at least 10% in estimated construction cost during preliminary and final design. The risk register appears thorough and complete at this stage of the project. The project team should consider adding Level 3 milestones into the PPEP.

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By completing a Primavera (P6) resource loaded schedule, the project is in good position to begin EVMS reporting when appropriate. The project is incorporating best practices in incorporating Acumen Fuse and Defense Contract Management Agency (DCMA) schedule analysis at CD-1, which confirms a high degree of schedule logic.

4.3 Recommendation

5. Re-evaluate the high end of the cost range prior to CD-1 approval.

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5. PROJECT MANAGEMENT 5.1 Findings The IERC project’s preliminary KPPs were found to have a scope threshold value of 87,500 gsf and an objective value of 130,000 gsf and “Site Improvements”. The project Total Estimated Cost (TEC) range was presented at $73.0-86.0 million. The overall cost contingency is $15.8 million on TEC or 23.3% on the costs-to-go. The project team presented a preliminary EDIA calculated at 14% of the TEC, which is in-line with similar/recent SLI projects. An analysis of similar projects was presented for the benefit of the review team. The Committee found that a credible AoA had been completed, resulting in the identification of the Construct New Building alternative as the preferred solution to satisfying the Mission Need. Both a qualitative sensitivity analysis and quantitative building LCC analysis were performed and the conclusions and recommendations are consistent and recommend Alternative #3, Construct New Building. The FNAL laboratory-standard Risk Management Procedure for projects utilized by the IERC team is well defined and thorough. A Risk Management Board has been established and the IERC Risk Registry has been appropriately prepared for CD-1. Forty-five risks and four opportunities have been identified. Risks are consistent with similar DOE SLI projects and those risks associated with conventional construction of a new facility. Opportunities have not been included in the Monte Carlo Analysis. The high-level risks have been identified:

High CM/GC proposals High subcontractor/construction trade bids FY 2017 funding delay due to continuing resolution Changes in FNAL indirect rates

The CDR program is mature for this stage of the project (CD-1) and the preliminary performance requirements have been established. A high level of program participation and support is evident in the documentation and was conveyed to the Committee. However, an official acceptance of the programming is not evident (see comments section). That said, the project team concurred that the IERC project is aligned strategically to the “Building for Discovery” (Particle Physics P5 Plan) and the Fermi Annual Laboratory Plan. A CD-1 Director’s Review was conducted in August 2016. The project adequately addressed the five management comments from this review, as well as the additional twelve recommendations from the other sub-committees. The Committee found a comprehensive and experienced IERC project team in place for the execution of the project. Experienced control account managers (CAMs) are in place to manage the Project Management, Design, and Conventional Construction cost accounts. Adequate avenues of communication via Integrated Project Team meetings, the Project Management

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Group, Performance Oversight Group, and Risk Management Board are in place for the execution of the project. CD-1 documentation is well prepared with minor comment and recommendations. Procurement plans are in place for the acquisition of A/E and CM/GC services that are thorough and well planned. A SharePoint site has been established for ongoing collaboration and coordination of project documentation. The project determined that the facility will not be a nuclear facility, commonly referred to as a radiological facility or radiological activities, as defined in 10 CFR 830. Subsequently, the 10 CFR 830 requirements have not been flowed-down into sub-contract requirements for design and construction of the facility and no further action will be required at this time. 5.2 Comments The Committee found that the project does have overall adequate cost and schedule contingency for this stage of project development (CD-1). This should continue to be periodically evaluated and refined as the project towards CD-2 due to “external” high levels of uncertainty with respect to funding and project schedule commitment, outside of the control of the project. The project should consider updating project documents to clearly identify key project information as “preliminary” (i.e., preliminary KPP, sSchedule, milestones). At present, they read more like CD-2 documentation and it should be very clear that at this time the KPPs, cost, schedule, and milestones are preliminary and will be baselined at CD-2. The IERC project is to be commended for the level of team experience and qualifications. The presentation of key resumes was very helpful for the Committee with respect to determining the project team qualifications. The assignment of an experienced architect to manage the design process is also commendable as someone with an architect’s experience would be most suited to manage the A/E contract and science users. The project should consider removing the AOA from the Acquisition Strategy to create a stand-alone document. It is not required to be included in the Acquisition Strategy and has created some minor confusion. The project should consider revisiting the AoA to ensure costs associated with maintenance, deferred maintenance and repairs, cost of missed collaboration opportunities, and facility cost of excess facilities are adequately addressed and identified as elements of productivity gain/loss. The AoA sensitivity analysis utilized a 25% weighted value for NPV. The project team shoulc consider evaluating this weighing factor to ensure it provides the proper weighting score to the qualitative analysis. Given the high level of importance placed on project net present value cost, it does appear low. The risk probability associated with risk items 602.32 Changes in Programming, and 602.33 Errors and Omissions, appear to be low. Typically one might expect probabilities in the 75%

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“+” range for these risks. The project should consider continued evaluation of these and other risk probabilities with the Risk Management Board. The generic inclusion of “Site Improvements” within the objective KPPs created some concern for the Committee. In order to avoid ambiguity, the project team should consider removal of the performance parameter “site improvements.” Further clarification of the project strategy of 90/100/110 project scope should be considered prior to design. Identification of design scope that would not be constructed and/or project scope that would be added to the project to accomplish a 90/100/110 (%) project scope will help the A/E design team focus on a strategy for segmenting the building design options to ensure that the threshold KPP will be accomplished. While evidence of support and participation is apparent, the Committee suggested obtaining official program/user approval on Basis of Design and/or programming requirements documentation. While not required at this time, the project should consider a radiological protection review of the proposed facility activities prior to CD-2 to ensure that the facility will not need to be classified now or in the future as a nuclear facility as defined in 10 CFR 830. 5.3 Recommendations

6. Update preliminary KPP table to omit the “Site Improvements” prior to CD-1. 7. Create a stand-alone Alternatives of Analysis document prior to CD-1. 8. Update appropriate required CD-1 documents prior to CD-1. 9. Upon completion of recommendations proceed to CD-1.

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Appendix A Charge Memo

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Appendix B Review Committee

DOE/SC CD-1 Review of the Integrated Engineering Research Center (IERC) Project (FNAL)

February 7-9, 2017

REVIEW COMMITTEE PARTICIPANTS

Department of Energy Ethan Merrill, DOE/SC, Chair Review Committee Subcommittee 1: Technical and ES&H *Marty Fallier, BNL Ben Maxwell, LBNL Bill Rainey, TJNAF Subcommittee 2: Cost and Schedule *Jerry Kao, DOE/ASO Jason Budd, ANL Subcommittee 3: Project Management *Steve Cannella, BNL Gary Bloom, ORNL *Lead Observers Stephanie Short, DOE/SC Gary Brown, DOE/SC Steve Neus, DOE/FSO Mike Fenn, DOE/PM

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Appendix C Review Agenda

DOE/SC CD-1 Review of the Integrated Engineering Research Center (IERC) Project (FNAL)

February 7-9, 2017

AGENDA

Tuesday, February 7, 2017—Comitium (WH2SE) 8:30 am DOE Full Committee Executive Session ............................. E. Merrill/G. Brown/S. Neus 9:00 am Welcome and IERC Project Overview – One West (WH1W)

Welcome and Introductions ....................................................................... N. Lockyer Campus Strategy and IERC Project Overview ........................................ R. Ortgiesen Science .................................................................................................. E. Gottschalk

10:00 am Break—One West (WH1W) 10:15 am IERC Project

Project Management ........................................................................... K. Sienkiewicz Conceptual Design ...................................................................... G. Van Zandbergen Construction Management ........................................................................ D. Pelletier ESH&Q .........................................................................................................D. Mertz

11:45 am Lunch—2nd Floor Crossover 12:45 pm Reviewer Photo—1st Floor Atrium 2:15 pm Break—Outside Comitium (WH2SE) 1:00 pm Breakout Sessions

Technical and ES&H One East (WH1E) Cost and Schedule Snake Pit (WH2NE) Project Management Comitium (WH2SE)

4:30 pm DOE Full Committee Executive Session—Comitium (WH2SE) 5:30 pm Adjourn Wednesday, February 8, 2017

8:30 am Facility tour: Current Spaces of IERC Program (WH14 and SiDet) 10:00 am Subcommittee Breakout Sessions and Report Writing—Room Assignments Above 12:00 pm Working Lunch—2nd Floor Crossover 1:00 pm Subcommittee Breakout Sessions and Report Writing 2:30 pm Dry Run #1 4:30 pm Coordination with Laboratory/Project Team 5:45 pm Adjourn Thursday, February 9, 2017

8:30 am DOE Full Committee Executive Session/Dry Run—Comitium (WH2SE) 11:00 am Closeout Presentation to Fermilab and IERC Management—One West (WH1W) 12:00 pm Adjourn

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Appendix D IERC Schedule Chart

Preliminary Schedule

nary Milestones

Preliminary Milestones

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Appendix E IERC Funding Chart

Preliminary Funding Profile by Fiscal Year ($M)

Preliminary Point Estimate

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Appendix F IERC Management Chart