GUIDANCE FOR EXHIBIT 300 AND 300-1 - CAPITAL ASSET PLAN AND BUSINESS
CASE AND PROJECT PROFILE

**OVERVIEW**

This attachment provides guidance for business plans to be submitted as
part of the 2005 budget process based on OMB Circular A-11. OMB Circular
A-11 establishes policy for planning, budgeting, acquisition and
management of capital assets and provides instructions for budget
justifications and reporting requirements. Circular A-11 can be accessed
for further reference via OMB website at
[www.whitehouse.gov/omb/circulars/index.html]{.underline}.

**IT Capital assets** - New this year, Exhibit 300s will be submitted
for every major system or IT investment. Complete all parts of the
Exhibit 300. All other investments reported in the Exhibit 53 will be
reported on Exhibit 300**-1 Project Profile** -- a simplified, one-page
business case. Attachment I-1 provides the Exhibit 300**-1**. Submit
business cases on information technology to the Chief Information
Officer.

**Construction Capital assets** -- Submit an Exhibit 300 for all major
projects: those that are \$10 million or more or specifically requested
by OMB. Bureaus should prepare business cases for all projects of \$2
million or more for internal, bureau management. See Attachment G for
instructions on the five-year plan. Submit business cases on
construction to the Director, Office of Managing Risk and Public Safety.

# CAPITAL ASSET PLANNING FUNDING CRITERIA

Investments in capital assets proposed for funding should meet the
following criteria. OMB assessment of business cases will consider the
scores of projects based on scoring criteria provided later in these
instructions as well as a programmatic review based on these criteria.
**OMB has indicated that they will recommend new or continued funding
only for those capital asset investments that satisfy these criteria.**

1.  Support core/priority mission functions that need to be performed by
    the Federal Government and Interior.

2.  Be undertaken because no alternative private sector or governmental
    source can support the function more efficiently.

3.  Support work processes that have been simplified or otherwise
    redesigned to reduce costs, improve effectiveness, and make maximum
    use of commercial, off-the-shelf technology.

4.  Demonstrate a projected return on the investment that is clearly
    equal to or better than the alternative uses of available resources.
    Return may include improved mission performance in accordance with
    measures developed pursuant to the Government Performance and
    Results Act; reduced cost; increased quality, speed, or flexibility;
    and increased customer and employee satisfaction. Return should be
    adjusted for such risk factors as the project's technical
    complexity, the agency's management capacity, the likelihood of cost
    overruns, and the consequences of under or non-performance.

5.  For information technology investments, be consistent with Federal
    and Interior enterprise architectures.

6.  Reduce risk by avoiding or isolating customer-designed components to
    minimize the potential adverse consequences on the overall project;
    using fully tested pilots, simulations, or prototype implementations
    when necessary before going to production, establishing clear
    measures and accountability for project progress, and securing
    substantial involvement and buy-in throughout the project from the
    program officials who will use the system.

7.  Be implemented in phased, successive segments as narrow in scope and
    brief in duration as practicable, each of which solves a specific
    part of an overall mission problem and delivers a measurable net
    benefit independent of future segments, unless it can be
    demonstrated that there are significant economics of scale at
    acceptable risk from funding more than one segment or there are
    multiple units that need to be acquired at the same time.

8.  Employ an acquisition strategy that appropriately allocates risk
    between the Government and the contractor, effectively uses
    competition, ties contract payments to accomplishments, and take
    maximum advantage of commercial technology.

As a general rule, funding should be requested in a phased basis by
segment, unless it can be demonstrated that there are significant
economics of scale at acceptable risk from funding more than one segment
or there are multiple units that need to be acquired at the same time.
For projects that are ongoing and may not meet the criteria, bureaus
should address the use of existing resources (previously allocated) to
finance additional planning, as necessary, to support the establishment
of realistic cost, schedule, and performance goals for the completion of
the project. This planning could include the redesign of work processes,
the evaluation of alternative solutions, the development of information
system architectures, and if necessary, the purchase and evaluation of
prototypes. Realistic goals for each project are critical to evaluate
the viability of the project, to provide the basis for fully funding the
project to completion, and to set the baseline for monitoring the
project and maintaining accountability to ensure that the project is
delivered within established time and funding goals.

# DEFINITIONS

**300.4 Capital assets** are land, structure, equipment, intellectual
property, and information technology used by the Federal government with
an estimated useful life of two years or more.

**Capital planning and investment control** is a decision-making process
for ensuring that investments integrate strategic planning, budgeting,
procurement, and the management of capital assets in support of agency
mission and business needs. Effective capital programming requires
long-range planning and a disciplined budget decision-making process as
the basis for managing a portfolio of assets to achieve performance
goals and objectives with minimal risk, lowest life-cycle costs, and
greatest benefit to the agency's business.

**Major IT systems are reported on \"Capital Asset Plan and Business
Case,\" Exhibit 300. For 2005 reporting purposes, major systems include
projects that fit any of the following criteria:**

-   Life cycle cost of \$35 million or more;

-   Annual cost \$5 million or more;

-   Systems that link to the first two layers of the Federal Enterprise
    Architecture;

-   Financial management systems that cost more than \$500,000;

-   Projects that were reported on Exhibit 300s in the 2004 budget
    process;

-   Projects that are Department-wide;

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-   Projects that directly support the President\'s Management Agenda
    Items or are of particular interest to OMB, i.e., meet the criteria
    of \"high executive visibility.\"

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-   Projects that are E-Government in nature or use e-business
    technologies must be identified as major projects regardless of the
    costs.

-   Major projects should account for at least 60 percent of the IT
    investment portfolio for FY 2004 reporting. If you are unsure about
    what systems to consider as \"major,\" consult your CIO.

Large infrastructure investments (e.g., major purchases of personal
computers or local area network improvements) should also be evaluated
against these criteria.

Systems not considered \"major\" are \"non-major.\" A simplified
business case, Exhibit 300**-1**, is to be prepared for all non-major
investments. Attachment I-1 provides the format for this Exhibit
300**-1**.

300.7 Exhibit 300 consists of two parts, each of which is designed to
collect information that will assist in budget review and the ongoing
management of capital assets. The review of asset plans will be used to
determine if the portfolio of capital assets meets agency mission needs
reconciled with existing capabilities, priorities, and resources. Asset
investments will be compared against one another, rated and ranked using
decision criteria to create a prioritized portfolio. Funding will be
requested for the priority investments that comply with the requirements
of the capital programming process. New and ongoing investments will be
evaluated based on the need to fill a gap in the Department's ability to
meet strategic goals and objects, in consideration of existing
investments, and relative to the President's Management Agenda including
e-government initiatives. The review will also provide a opportunity to
improve strategic management to achieve goals set by security, privacy,
records management, and electronic transactions (GPEA) policies.

**Federal Enterprise Architecture Business Reference Model (BRM)** is a
function-driven framework for describing the Lines of Business and
Internal Functions performed by the Federal Government independent of
the Agencies that perform them. The BRM serves as the business layer of
the Federal Enterprise Architecture. It provides a foundation on which
the applications, data, and technology layers of the FEA are developed.
Agency Capital Asset Plans (Exhibit 300s) will be mapped against this
framework to identify opportunities for cross-agency collaboration and
potential system redundancies.

The BRM employs a three-tiered hierarchy to describe the business of the
Federal government. *Business Areas* provide a high-level view of the
types of operations the Federal Government performs. The Four Business
Areas decompose into 31 *Lines of Business* and *Internal Functions*.
The Lines of Business describe more specifically the services and
products the Government provides to its stakeholders, while the Internal
Functions describe the back office and support activities that enable
the Government to operate. Finally, there are 132 *Sub-Functions* that
form the final level of decomposition within the FEA BRM and communicate
the specific activities that Federal Agencies perform within each Line
of Business and Internal Function.

**INSTRUCTIONS FOR THE EXHIBIT 300**

You must submit a capital asset plan, Exhibit 300, for each new and
on-going major acquisition included in your agency\'s capital asset
portfolio. **You must submit an Exhibit 300-1, for projects and
investments other than those defined as major. This includes
participation in e-government projects and support for Department-wide
systems.**

**300.9:** An electronic version of Exhibit 300 is available at
[www.cio.gov](http://www.cio.gov/). The format for the new simplified
business case, Exhibit 300a, is attached to these instructions. Exhibit
300 requires information that demonstrates compliance with the capital
programming and capital planning and investment control policies, OMB
Circular A-11, and justifies new or continued funding.

For information technology, the funding stages for planning plus full
acquisition are the same as Development/modernization/enhancement (DME)
and maintenance is the same as Steady State (SS). The information you
report will depend on whether you are reporting a new project or an
ongoing project.

If you are **reporting a new project**, you must complete part 1, except
for sections 1.H.3. and 1.H.4. **Projects in initial concept or planning
phase** will have less detail and defined specificity than projects
moving into the acquisition or operational phase. All of the areas on
the Exhibit 300 must be part of an agency\'s planning and the business
case (Exhibit 300) updated as soon as the information is known.

While Exhibit 300s are officially submitted to OMB twice yearly, they
should be management tools used within an agency and updated as the
information is available. If a project you are reporting has not reached
the life-cycle phase that would provide a particular part of the
business case, the Exhibit 300 should note that information and when you
believe the information will be available or when the decision can be
made.

**Projects that are in operation and use** must demonstrate how close
actual annual operating and maintenance costs are to the original
life-cycle estimates, and whether the level or quality of
performance/capability meets the performance goals and continues to meet
agency and user needs.

**300.9:** **If you are reporting an Ongoing IT Major Project that is in
operational mode (Steady State) and is NOT being migrated to a new
e-business solution, you must demonstrate that the project has undergone
an e-Government Strategy Review.**

In order to perform an E-Government Strategy Review, you must answer all
sections in Part I and II with the appropriate responses to reflect that
the project is undergoing an e-Gov review. As an example, when
addressing the justification questions, you must indicate whether the
current way of doing business and performing the function is the most
advantageous and cost-effective to the government. The section on
performance goals must identify the performance goals for the project as
it stands today, program management must address the four questions,
alternatives analysis must be performed with a future-focus included in
your E-Gov strategy rather than an alternatives analysis that was
performed several years ago and no longer valid. The sections in Part
II, must be answered in their entirety with a focus on the E-Gov
strategy review. All of your answers must demonstrate that you have
reviewed alternative ways to perform the business with a specific focus
on e-government or e-business technologies and supporting the
President\'s Management Agenda.

**If you are reporting an Ongoing IT Major Project that will be migrated
to an e-business solution, you only need to do an Exhibit 300-1 and
state that the system is being migrated to xxxx system.**

**300.9:** **Infrastructure projects** such as local area networks
(LANs), wide area networks (WANs), telecommunications, and desktop
upgrades, require a different level of information in the business case
than projects in the development, modernization, or enhancement
category. While the business case must still be made for the
infrastructure projects, infrastructure projects in most cases are
investments that are made in support of the business applications of the
agency. In many cases the success of the business applications depend
upon a strong and well-planned infrastructure. **The business cases for
infrastructure projects must still address the same issues as other
projects and complete all sections on the business cases, including
Parts I and II of the exhibit 300.**

**For Part 2: IT Infrastructure and Office Automation of the DOI Exhibit
300, there will be three (3) Department-wide Exhibits 300 for Office
Automation, Infrastructure, and Telecommunications.** Each Bureau will
do an Exhibit 300-1 for each of these categories. If you have more than
one entry in your Bureau Exhibit 53 for any of these categories, combine
your dollar totals and describe in your Exhibit 300-1 for inclusion in
the Department-wide Infrastructure Exhibits 300.

For those entries in the Exhibit 53 that will be migrated to the DOI
Enterprise Services Network (ESN) Exhibit 300 (further guidance will be
coming out soon on which systems will be included), you will need to
complete an Exhibit 300-1 Project Profile and indicate that it is being
migrated.

System owners for the Department-wide systems including IDEAS, FFS, etc.
will assist bureaus in preparation of supporting 300-1, Project
Profiles, by providing standardized titles, definitions, and other
information.

For Parts 3 and 4: Each bureau will submit an Exhibit 300-1 for each
system or project listed in these categories.

10. **Business cases are scored against a core set of criteria** that
    are meant to ensure that planning and management of assets is
    consistent with OMB and Interior policy and guidance. Scoring
    criteria that will be used provided in Circular A-11.

**COMPLETING THE EXHIBIT 300**

**Part I: Capital Asset Plan and Business Case**

-   **Agency** is the Department of the Interior

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-   **Bureau** is your bureau or office

-   **Location in Budget** indicates where the project would be
    addressed in the agency's Budget Justification

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-   **Account Title** Title of account used in the Exhibit 53 -- include
    Account, Activity, Subactivity

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-   **Account Identification Code** (Same as 4-digit funding source used
    in Exhibit 53 and identified by the name in the "Account Title"
    above)

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-   **Program Activity** (Name of Program Office of the Program Sponsor)

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-   **Name of Project** should be a meaningful, standardized name for
    the project that **matches the name used in the Exhibit 53 and in
    other budget materials**

-   **Unique Project Identifier -- for IT projects only. See the
    instructions in Attachment H on project identifier. For 2005 the
    identifier is 23 digits.**

-   **Project Initiation Date** MM/YY/YYYY Date that project begins,
    including planning

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-   **Project Planned Completion Date** MM/YY/YYYY The planned
    completion date

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-   **This Project is:** (Check **ONLY one** category), including:
    Initial concept, planning, full acquisition, steady state, or mixed
    life cycle.

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-   The rest of Part 1 is a series of questions that should all be
    answered

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-   **"Did the Executive/Investment Review Committee (Bureau/DOI Review
    Boards depending on whether it is major or non-major) approve
    funding" and "Did the CFO review the cost goal?" screening
    questions. Projects will not be considered for funding if the answer
    is no.**

-   **Summary of spending chart** - show the breakout into stages of the
    project -- planning, acquisition, and maintenance. **A row is added
    to the bottom of this chart to break out FTE, Contract Services, and
    Hardware/Software costs.**

-   **I.A. Project description** --Include an explanation of the status
    of the project relative to the bureau/office and Department's CPIC
    process.

-   **I.B. Justification** -- be sure to address how this project
    supports the core/priority mission functions of the Department,
    bureau/office, supports work processes that have been simplified or
    otherwise redesigned to reduce cost, improve effectiveness, and make
    maximum use of commercial, off-the-shelf technology, and how this
    project relates to the business processes of the program that this
    supports.

-   **I.C. Performance goals and measures** -- goals and measures should
    relate to the Department's draft strategic plan released for public
    comment on February 24, 2003.

-   **I.D. Program management** -- answer the questions provided

-   **I.E. Alternatives analysis** -- provide information on alternative
    approaches to this project. Your explanation should lead the reader
    to conclude that there is no alternative private sector or
    governmental source that can support this function more effectively
    or efficiently. **OMB is introducing risk adjusted ROI (see the CIO
    Council website, Best Practices at
    <http://www.cio.gov/documents/ValueMeasuring_Highlights_Oct_2002.pdf>).**

-   **I.F. Risk Inventory and Assessment** --Your risk assessment should
    address how you have reduced risk specifically by avoiding or
    isolating custom-designed components, used tested pilots,
    established clear measures and accountability for project progress,
    and secured substantial involvement throughout the project from
    program officials that will use the system. **Be sure to address the
    risks identified in the first paragraph in I.F. (These were left off
    last year.)**

-   **I.G. Acquisition Strategy** -- Be sure to explain that you have
    employed an acquisition strategy that appropriately allocates risk
    between the bureau/office and the contractor, uses competition, ties
    contact payments to accomplishments (performance-based contracting),
    and take advantage of commercial technology. For other than
    firm-fixed price, performance-based contracts, define the risk not
    sufficiently mitigated in the risk mitigation plan, for that
    contract/task order, that requires the Government to assume the risk
    of contract achievement of cost, schedule and performance goals.
    Explain the amount of risk the government will assume.

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-   **I.H. Project and Funding Plan --** Information for this section is
    from your earned value management system - Earned Value Management
    (EVM) is a project management tool that effectively integrates the
    project scope of work with schedule and cost elements for optimum
    project planning and control. The qualities and operating
    characteristics of earned value management systems are described in
    *EIA STANDARD: Earned Value Management Systems*, American National
    Standards Institute (ANSI) ANSI/EIA--748--1998, approved May
    19, 1998. Reference OMB Circular A-11 for excel workbooks that will
    help you calculate earned value analysis (Exhibit 300, Part I.H.4 B)
    and cost benefits analysis/net present value (Exhibit 300, Part
    I.E.2 and I.E.3.B).

**Part II: Additional Business Case Criteria for Information
Technology**

-   **Ii.A. Enterprise Architecture -** Information technology
    investments are to be consistent with Federal and Interior
    enterprise architectures which integrate work processes and
    information flows with technology to achieve strategic goals,
    reflect Interior's technology vision, specify standards that enable
    information exchange and resource sharing, and ensure that security
    is built into and funded as part of the enterprise architecture in
    accordance with OMB Memorandum M-00-07, *Incorporating and Funding
    Security in Information System Investments*. Use the following
    description for the status of the Enterprise Architecture.

> **For new or developmental systems: "**Interior is in the process of
> developing a high-level Enterprise Architecture. To date, we have
> established our Common Requirements Vision, our Conceptual
> Architecture and associated principles, and our Technical Reference
> Model. A Conceptual Migration and Implementation Plan had been
> developed, containing a number of infrastructure and policy-related
> initiatives. Program initiatives will be identified in the near
> future. This project is being developed in accordance with the IEA
> documents, and they or any future revision of them will be included as
> requirements in any contracts for this project. Any exceptions are
> noted in the subsequent questions related to the specific architecture
> layers."
>
> **For operational or near-operational systems**:  "Interior is in the
> process of developing a high-level Enterprise Architecture. To date,
> we have established our Common Requirements Vision, our Conceptual
> Architecture and associated principles, and our Technical Reference
> Model. This project was initiated and developed prior to development
> of the architecture. However, it has been compared against the IEA
> guidance requirements, and meets some of them. As the project is
> modified or replaced, each iteration will move toward fuller
> conformance with the IEA."
>
> **For Bureau-Specific Initiatives, when the IEA does not apply use the
> following guidance:**
>
> **New and developmental:** Each bureau with such unique business needs
> is required to develop architectural requirements and guidance for
> those specific cases, and the initiative should adhere to those
> bureau-specific architectural artifacts. The 300 should state the
> following;

"Interior is in the process of developing a high-level Enterprise
Architecture. It is a federated model, with only a certain percentage of
it pertaining to cross cutting initiatives. The Interior Enterprise
Architecture does not apply to this project because it is bureau
unique."

**Operational:** Each bureau with such unique business needs is required
to develop architectural requirements and guidance for those specific
cases, and the initiative should adhere to those bureau-specific
architectural artifacts. The 300 should state the following;

"This project was initiated and developed prior to development of the
bureau architecture. As the bureau architecture is developed and the
project is modified or replaced, each iteration will move toward fuller
enterprise architectural conformance to the extent possible."

-   **II.B. Security and Privacy --** This section should address the
    security at the project level, referring to security plans is not
    acceptable. Indicate the dollar level funded within the project --
    this amount as compared to total project funding should match the
    percentage for security you indicated on Exhibit 53. **Any part of
    Security for this project that is funded through a different Exhibit
    300 should not be included as part of this project's IT Security
    dollars.**

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-   **II.C. GPEA --** Indicate if this project supports electronic
    transactions or record-keeping that is covered by GPEA. Relate this
    project to your bureau/office GPEA inventory most recently
    completed.