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**Acquisition Strategy**

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**Revision X**

**September 200X**

**APPROVALS**

> **DOE/NNSA:**
>
> **Submitted for Approval:**

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Federal Project Director, NNSA Date

> **Recommended for Approval:**

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Contracting Officer Date

> **Concurrence**:

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Deputy Director, Office of Acquisition Date

and Supply Management, NNSA/NA-63

> **DOE NNSA Approval:**

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Associate Administrator, Date

Infrastructure and Environment, NNSA/NA-50

# 

# CHANGE LOG

  --------------------------------------------------------------------------
  **Rev.   **Date**   **Change Description**                   **Pages
  No.**                                                        Modified**
  -------- ---------- ---------------------------------------- -------------
  Rev. A   10/04      Initial Draft                            N/A

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               

                                                               
  --------------------------------------------------------------------------

**TABLE OF CONTENTS**

[**CHANGE LOG iii**](#change-log)

[List of Tables v](#list-of-tables)

[1.0 DESIRED OUTCOME AND REQUIREMENTS DEFINITION
1](#desired-outcome-and-requirements-definition)

[2.0 COST AND SCHEDULE RANGE 3](#cost-and-schedule-range)

[3.0 MAJOR APPLICABLE CONDITIONS 4](#major-applicable-conditions)

[4.0 RISK AND ALTERNATIVES 6](#risk-and-alternatives)

[5.0 BUSINESS AND ACQUISITION APPROACH
13](#business-and-acquisition-approach)

[6.0 MANAGEMENT STRUCTURE AND APPROACH
15](#management-structure-and-approach)

# List of Tables

[Table 1 -- Total Project Cost Range 3](#__RefHeading___Toc114649830)

[Table 2 -- Funding Profile (\$K) 3](#__RefHeading___Toc114649831)

[Table 3 -- Key Milestones 4](#__RefHeading___Toc114649832)

[Table 4 -- Risk Summary 6](#__RefHeading___Toc114649833)

[Table 5 -- Alternative Advantages/Disadvantages Summary
7](#__RefHeading___Toc114649834)

[Table 6 -- Life Cycle Cost Analysis Summary
9](#__RefHeading___Toc114649835)

[Table 7 -- Alternatives Analysis Matrix
10](#__RefHeading___Toc114649836)

[Table 8 -- Alternatives Analysis Graphic
11](#__RefHeading___Toc114649837)

[Table 9 -- DOE/NNSA Management Team Members
16](#__RefHeading___Toc114649839)

# DESIRED OUTCOME AND REQUIREMENTS DEFINITION

> **Summary Project Information**
>
> **Lead Program and Project Office:**

-   Facilities and Infrastructure Recapitalization Program (FIRP)

> **Total Project Cost (TPC):**

-   \$7.80 to \$10.21 Million (M)

> **CD-0 Mission Need Approved:**

-   November 19, 2003

> **CD-0 Approving Official:**

-   

> **CD-0 Material Change:**

-   44,405 Linear Feet (LF) offsite gas-line in CD-0, changed to 47,000
    LF.

-   Added re-seed of construction easement.

-   Added three-strand barbed wire fence on both sides of the easement
    for construction.

-   Planned acquisition altered from Design-Bid-Build to Design-Build
    strategy

-   National Environmental Policy Act (NEPA) strategy changed from
    Categorical Exclusion to Environmental Assessment (EA)

> **Project Description**
>
> The purpose of the project is to provide reliable natural gas service
> to support Manufacturing and Infrastructure operations. The project
> addresses those areas of the gas main and distribution system that are
> of questionable reliability due to aging, incompatible materials, and
> use of antiquated technologies. Additionally, the project will
> minimize risks to the government associated with failures both onsite
> and offsite, eliminate the deferred maintenance for the system, and
> provide a design life of 25 years. Specific areas to be addressed are:

-   Pipeline replacement/upgrade

-   Upgrade of appurtenances

-   Cathodic protection installation

> Pipeline replacement/upgrade includes approximately 47,000 LF of steel
> piping offsite (installed in the early 1950's) and approximately
> 27,445 LF of steel piping onsite (installed in the early 1940's).
>
> Instrumentation required to meter the flow of natural gas from the
> supplier will be upgraded with the latest technological devices. New
> flow regulators and isolation valves will be installed, and a Motor
> Operated Isolation Valve (MOIV) with remote-control capability will be
> installed at the Plant property line where the gas main enters the
> site, for enhanced safety and control.
>
> Utilization of High Density Polyethylene (HDPE) in place of steel
> piping for the underground portions of the system eliminates the need
> for impressed ground beds for cathodic protection. Metallic valves,
> regulations, and metering components will be cathodically protected
> using sacrificial anodes and test stations.
>
> **Performance Parameters Required to Obtain Desired Outcome**
>
> This project will revitalize the system to meet NNSA mission for
> Project parameters, will assure facility infrastructure reliability,
> and NNSA mission expectations.
>
> Ruptures in the current gas system affect various manufacturing and
> infrastructure operations at the plant. Gas distribution failures have
> increased over the past several years. Most gas interruptions are
> minor, since the Steam Plant and other critical items have the
> capability of switching to an alternate fuel source (diesel). The use
> of diesel however, becomes an environmental air quality permit issue.
> The Plant carefully monitors all usage of the alternate fuel source to
> ensure that the environmental air quality permit is not violated.
>
> Replacement and upgrade of the gas system will minimize potential
> violation of the air quality permits, and reduce impacts to the
> following critical facilities and processes:

-   Steam for environmental controls for mission essential bays and
    cells.

-   Steam for process equipment.

-   Steam for heat in buildings and ramps.

-   Direct gas fired heating and water heating.

-   Plant water well pump operations.

-   Emergency generator for medical facility.

-   Sanitization of classified material (incinerator).

-   Metal treating for Tooling Operations.

> NNSA's nuclear facilities require a reliable and safe Infrastructure.
> Natural gas utilities are an essential part of ensuring reliable
> facilities. The project will require modern materials and
> appurtenances that promote safety and longevity at low cost. These
> materials will have to be able to resist damage due to mechanical
> means or natural occurrences. A modern, well-designed gas main and
> distribution system will reduce or eliminate maintenance costs over
> its design life and provide the reliability that the Plant needs.
>
> Operational requirements reflect the core functions that the current
> system lacks. The current system is potentially unreliable, unsafe,
> and does not provide for future needs. Operational requirements will
> be the same for each alternative considered.
>
> The final requirement for the upgrade is that it must provide for the
> Plant's current and future needs as noted above, and have a design
> life of 25 years as reflected in the DOE Accounting Handbook, Chapter
> 10, attachment 10-1, "Standard Service Lives" and is consistent with
> the DOE Conditions Assessment Survey (CAS) Manual. Note that this
> design life is below the expected life of HDPE piping, a conservative
> 40 years (estimated by HDPE manufacturer Polypipe).

# COST AND SCHEDULE RANGE

> **Total Project Cost Range**
>
> The preliminary Total Project Cost (TPC) Range at CD-0 was \$5.340 -
> \$7.540M.
>
> The current Total Project Cost Estimate is \$8.856M as outlined in
> Table 1, below.
>
> Total Project Cost Range is \$7.800M - \$10.210M:

[]{#__RefHeading___Toc114649830 .anchor}Table 1 -- Total Project Cost
Range

+--------------------------+-----+---------+-------------+------------+
| **Task**                 | *   | **E     | **Minimum   | **Maximum  |
|                          | *WB | stimate | Cost        | Cost       |
|                          | S** | (\$K)** | (\$K)**     | (\$K)**    |
|                          |     |         |             |            |
|                          | **L |         |             |            |
|                          | eve |         |             |            |
|                          | l** |         |             |            |
+==========================+=====+=========+=============+============+
| 1.01                     | 2   | 126     | 113         | 138        |
| Pre-conceptual/Mission   |     |         |             |            |
| Need                     |     |         |             |            |
+--------------------------+-----+---------+-------------+------------+
| 1.02 Conceptual Design   | 2   | 624     | 562         | 686        |
+--------------------------+-----+---------+-------------+------------+
| 1.03 Title I/Title II    | 2   | 733     | 669         | 806        |
| Design                   |     |         |             |            |
+--------------------------+-----+---------+-------------+------------+
| 1.04 Construction        | 2   | 6,116   | 5,529       | 6,728      |
+--------------------------+-----+---------+-------------+------------+
| 1.05 GFE Equipment       | 2   | 0       | 0           | 0          |
+--------------------------+-----+---------+-------------+------------+
| 1.06 Acceptance /        | 2   | 257     | 232         | 282        |
| Start-up                 |     |         |             |            |
+--------------------------+-----+---------+-------------+------------+
| **Total Project Cost**   |     | 7,856   | 7,107       | 8,640      |
+--------------------------+-----+---------+-------------+------------+
| **Program                |     | 1,000   | 1,000       | 1,000      |
| Contingency\***          |     |         |             |            |
+--------------------------+-----+---------+-------------+------------+
| **Total Project Cost**   |     | **      | **8,107**   | **9,640**  |
|                          |     | 8,856** |             |            |
+--------------------------+-----+---------+-------------+------------+

NOTE: Program Contingency (risk contingency) established for potential
Land and Livestock losses.

> **Funding Profile**
>
> []{#__RefHeading___Toc114649831 .anchor}Table 2 -- Funding Profile
> (\$K)

  ------------------------ ----------- ---------- ---------- ---------- -- ---------- -----------
  **FY**                   **Prior     **2005**   **2006**   **2007**      **2008**   **TOTAL**
                           Years                                                      
                           (03-04)**                                                  

  PED                                  1,091                                          **1,091**

  Construction                                    3,700      3,145                    **6,845**

  Other Project Costs      323         202        100        100           195        **920**

  Total Project Costs                                                                 **8,856**
  ------------------------ ----------- ---------- ---------- ---------- -- ---------- -----------

> The Budget Department, in accordance with NNSA budget guidance,
> manages the budgeting and funding. The funding for the Title I and
> Title II Design Phase is to be funded from the Project Engineering and
> Design (PED) funds. Total funding requirements are defined in the
> Construction Project Data Sheet (CPDS), which has been updated to
> reflect the funding profile utilized in the development of this
> document. The Integrated Construction Program Plan (ICPP) will also
> need to be modified to reflect this profile.

**Key Milestones and Events**

The following are the milestones planned for this project:

[]{#__RefHeading___Toc114649832 .anchor}Table 3 -- Key Milestones

  -------------------------- ---------- -------------------------- --------
  Milestone                  Date       Milestone                  Date

  **Approval for CD-0        11/20/03   **NTP Construction --      1Q FY07
  (Completed)**                         offsite**                  

  **Approval for CD-1**      10/05      **NTP Construction -       3Q FY07
                                        onsite**                   

  **Approval for CD-2**      06/06      **Acceptance/ Start-Up     3Q FY08
                                        Complete**                 

  **Approval for CD-3**      06/06      **Approval for CD-4**      3Q FY08

  **Award Design-Build       4Q FY06                               
  Contract**                                                       
  -------------------------- ---------- -------------------------- --------

# MAJOR APPLICABLE CONDITIONS

> **Brief Statement of Mission**
>
> The project is the replacement and upgrade of existing infrastructure
> at the Plant. Natural gas is a required utility service that supports
> mission essential and mission support facilities on the Plant.
>
> The goals of the project are reflected in the Facilities and
> Infrastructure Recapitalization Program (FIRP) within NNSA. The goals
> were established to "extend facility lifetimes, reduce the risk of
> unplanned facility system and facility equipment failures and or
> increase operational efficiencies and effectiveness."
>
> **Environmental and Regulatory**
>
> No environmental issues have been identified to date that would
> significantly impact this project. The project entails the upgrade of
> natural gas distribution system onsite and the gas main offsite.
> Preliminary NEPA analysis during Pre-Conceptual phase indicated that
> the project is categorically excluded as applicable within 10 CFR
> 1021, Subpart D, Appendix B.1, however, due to the sensitivities
> involved with offsite landowners, and potential NNSA vulnerabilities,
> the project has prepared an Environmental Assessment (EA). A
> Pre-decisional EA for this project was completed and made available to
> the public for review and comment. The Finding Of No Significant
> Impact (FONSI) and final EA were issued on September 15, 2005.
>
> The project area cuts across three different land uses; cultivated
> ground, native grass or pastureland, and land in the Conservation
> Reserve Program (CRP). The United States Department of Agriculture has
> confirmed that CRP payments to landowners will not be impacted as long
> as ground cover is re-established within two (2) years of the
> construction. The project entails scope to reseed all areas affected
> by construction utilizing the appropriate ground cover material (seed
> mix).
>
> Terrestrial habitats may be disturbed by construction. Shortgrass
> prairie (buffalo grass, blue grama, and, in mestic sights, western
> wheatgrass) represents the primary habitat for species of concern (ex:
> Texas horned lizards, ferruginous hawk, western burrowing owls, song
> birds) in the area. The Natural Resource Coordinator of the Regulatory
> Compliance Department will be contacted if a nest(s) of any bird is
> encountered prior to or during the project. The project documents will
> require that the Plant's wildlife biologist be notified well in
> advance to any planned construction across these specific areas of
> concern.

The project does involve construction in or crosses Solid Waste
Management Units (SWMUs). These areas have been assessed and do not pose
a hazard. The crossing of the SWMUs will be coordinated with the
construction contractor and the Regulatory Compliance Department, SWMU
management section. The Regulatory Compliance Department and
Environmental Remediation Services will evaluate the work within the
SWMUs and the construction contractor will be provided with instructions
on how to manage these areas.

Use of the alternate fuel source (diesel) could be a risk for air
quality management, but the project is working to mitigate this usage by
performing tie-ins/cutovers of the new system on weekends when natural
gas demand to support mission critical programs is at its lowest.

> **Pollution Prevention Plans**

The construction contract will require the Contractor to protect the
environment. Throughout construction, storm-water management techniques
will be used to prevent erosion and contain storm water while the site
is disturbed. Dust control measures will be implemented to minimize air
pollution during site preparation and construction. The Design-Build
firm will be required to conform to the requirements of the Plant's
Master Specification Division 1, Section 01557, "Environmental
Protection" and Section 01558, "Storm Water Pollution Prevention".

> **Security**
>
> Project scope has been coordinated with the site technical security
> office, and there are no technical security issues that need to be
> captured in the design. Access to the Plant for design or construction
> activities will be by a security escort where applicable. Any changes
> in security requirements will be addressed upon official notification
> by NNSA, and will be factored into the project as applicable. Possible
> security issues are heightened security levels and commensurate
> restrictions on work at the site. Contingency measures are available
> to mitigate impacts if these conditions occur.
>
> **Technology and Research and Development**

No technology issues have been identified.

> **Funding**

No funding issues have been defined.

> **Operational Including Shutdown and Start Up Planning**

No operational issues have been identified.

# RISK AND ALTERNATIVES 

> **Risk Analysis**

An essential part of the project planning will be to ensure the risks
associated with the project have been identified, analyzed, and
determined to be either avoidable or manageable. Risk identification and
analyses will be continued throughout the planning process, including
the Acquisition Strategy (A/S) and the Project Execution Plan (PEP).
Each of the identified risks will be monitored at each critical decision
and review point to ensure they have been satisfactorily addressed,
eliminated, or managed.

The risk assessment process was started before CD-0. Risk analysis
process and conclusions were reviewed and revised during both the
Independent Cost Review (conducted in January 2005) and the CD-1
preparation.

A formal risk assessment plan has been prepared for this project that
includes strategies for mitigating the risks. For additional risk
assessment detail, refer to the current version of the Risk Assessment
Plan. In the assessment, a total of 11 risks were identified. Of the
active risks, there were no High risks, 5 are Moderate, and 5 are Low,
based on the mathematical database (5X5 Risk Level Matrix).

[]{#__RefHeading___Toc114649833 .anchor}Table 4 -- Risk Summary

  ----------------------- ---------------- ----------------- -------------
  Category                High             Moderate          Low

  **Interface**                            1                 1

  **Budget**                               3                 1

  **Design**                                                 1

  **Security**                             1                 

  **Safety**                                                 1

  **Environmental Health                                     1
  & Safety**                                                 
  ----------------------- ---------------- ----------------- -------------

The general conclusion of this analysis is:

The predominant consequence of the identified risks is a potential for
cost and schedule increases.

Based on this analysis and conclusion, the following activities are
recommended:

-   The risks continue to be monitored and managed throughout the
    project.

-   Continue to monitor and coordinate potential security risks.

-   Coordinate with operations and maintenance to facilitate outages.

-   Evaluate lessons learned and stress the importance of safe work
    practices.

-   Monitor contractor performance to ensure safe work practices are
    followed.

-   Inspect all work and material being installed for compliance.

-   Ensures all adequate resources are available to implement those
    mitigation strategies that have been identified as Moderate and
    support alternative work locations in the event of a security event.

-   Quantify any cost impact of the residual risks and include in the
    project cost estimate. Once baseline is approved, monitor and trend
    all deviations.

> **Technical Alternatives Analysis**
>
> Alternatives that cover the range of available technical approaches
> for future service are identified as follows:
>
> **Alternative 1** Do nothing defined as retaining existing system and
> performing repairs as required.
>
> **Alternative 2** Replace only onsite distribution system and
> relinquish ownership of offsite main to existing natural gas provider.
>
> **Alternative 3** Replace the existing DOE owned offsite gas main and
> onsite distribution system.

The advantages and disadvantages for each of these three alternatives
are summarized in Table 5, below.

[]{#__RefHeading___Toc114649834 .anchor}Table 5 -- Alternative
Advantages/Disadvantages Summary

+-----------+-------------------------+-------------------------------+
| AL        |                         |                               |
| TERNATIVE |                         |                               |
| ANALYSIS  |                         |                               |
+===========+=========================+===============================+
| **        | **[Ad                   | **                            |
| [Alternat | vantages]{.underline}** | [Disadvantages]{.underline}** |
| ive]{.und |                         |                               |
| erline}** |                         |                               |
+-----------+-------------------------+-------------------------------+
| **1 -- Do | -   No construction     | -   Life Cycle Cost PV is     |
| Nothing** |     cost                |     \$13,216,552              |
|           |                         |                               |
|           | -   No impact on users  | -   Unacceptable              |
|           |     or interruptions in |     environmental risk        |
|           |     plant operations    |                               |
|           |     during upgrade of   | -   Unacceptable personnel    |
|           |     system              |     safety risk               |
|           |                         |                               |
|           | -   No construction     | -   Unacceptable risk of      |
|           |     risks               |     system failure,           |
|           |                         |     particularly to those     |
|           | -   No immediate public |     portions of pipeline      |
|           |     relations concerns  |     currently located in      |
|           |     with offsite        |     SWMU, Radiological        |
|           |     landowners          |     Controlled Areas,         |
|           |                         |     Confined Space, and       |
|           | -   No Environmental    |     congested plant areas     |
|           |     Assessment required |                               |
|           |                         | -   Fails to eliminate \$3.1M |
|           |                         |     Deferred Maintenance      |
|           |                         |     backlog                   |
|           |                         |                               |
|           |                         | -   Does not comply with DOE  |
|           |                         |     "Useful Life"             |
|           |                         |     requirements              |
|           |                         |                               |
|           |                         | -   Does not update           |
|           |                         |     deteriorating, obsolete,  |
|           |                         |     and inadequate system     |
|           |                         |                               |
|           |                         | -   Potential unacceptable    |
|           |                         |     loss of natural gas from  |
|           |                         |     aging pipeline            |
|           |                         |                               |
|           |                         | -   Minimal system            |
|           |                         |     reliability               |
|           |                         |                               |
|           |                         | -   Dedicated line for NNSA   |
|           |                         |     service to site is not    |
|           |                         |     available                 |
|           |                         |                               |
|           |                         | -   Remote operation for      |
|           |                         |     shut-off in the event of  |
|           |                         |     a leak is not available   |
+-----------+-------------------------+-------------------------------+
| **2 --    | -   Life Cycle Cost PV  | -   Repair costs over 25      |
| Replace   |     is \$8,228,206      |     years would have to be    |
| only      |                         |     "accepted" by Atmos as    |
| onsite    | -   Minimal impact on   |     part of the ownership     |
| dis       |     plant-wide users    |     transfer agreement for    |
| tribution |                         |     offsite portion of main   |
| system    | -   No impact to        |     line                      |
| and       |     offsite users       |                               |
| r         |                         | -   Construction risks        |
| elinquish | -   Eliminates \$3.1M   |                               |
| ownership |     Deferred            | -   Unacceptable              |
| of        |     Maintenance backlog |     environmental risk        |
| offsite   |                         |                               |
| main**    | -   Reduces             | -   Unacceptable personnel    |
|           |     Preventative        |     safety risk               |
|           |     Maintenance cost    |                               |
|           |                         | -   Risk of site impact       |
|           | -   Utilizes latest     |     during distribution       |
|           |     equipment           |     system replacement        |
|           |     technologies        |                               |
|           |                         | -   Continued unacceptable    |
|           | -   Reduces risk of     |     risk of system failure    |
|           |     personnel safety    |     from deteriorating gas    |
|           |     issues              |     main supply               |
|           |                         |                               |
|           | -   Complies With DOE   | -   Does not update           |
|           |     "Useful Life"       |     deteriorating, obsolete,  |
|           |     Requirements        |     and inadequate system     |
|           |                         |                               |
|           | -   No immediate public | -   Potential unacceptable    |
|           |     relations concerns  |     loss of natural gas from  |
|           |     with offsite        |     aging pipeline            |
|           |     landowners          |                               |
|           |                         | -   Minimal system            |
|           | -   No Environmental    |     reliability               |
|           |     Assessment required |                               |
|           |                         | -   Eliminates NNSA's control |
|           | -   Improves            |     over gas main taps,       |
|           |     reliability of      |     sizing, reliability, and  |
|           |     distribution system |     replacement schedule for  |
|           |     (onsite)            |     supply line, jeopardizing |
|           |                         |     site's ability to meet    |
|           | -   Reduces risk of     |     future needs for natural  |
|           |     system failure for  |     gas demand                |
|           |     portions of         |                               |
|           |     pipeline currently  | -   Eliminates NNSA's ability |
|           |     located in SWMU,    |     to negotiate with other   |
|           |     Radiological        |     natural gas providers to  |
|           |     Controlled Areas,   |     achieve better gas prices |
|           |     Confined Space, and |                               |
|           |     congested plant     | -   Dedicated line for NNSA   |
|           |     areas               |     service to site is not    |
|           |                         |     available                 |
|           |                         |                               |
|           |                         | -   Remote operation for      |
|           |                         |     shut-off in the event of  |
|           |                         |     a leak is not available   |
+-----------+-------------------------+-------------------------------+
| **3 --    | -   Excellent system    | -   Moderate construction     |
| Replace   |     reliability         |     cost estimated at         |
| Gas Main  |                         |     \$5.5M-\$6.7M             |
| &         | -   Eliminates \$3.1M   |                               |
| Dis       |     Deferred            | -   Construction risks        |
| tribution |     Maintenance backlog |                               |
| System at |                         | -   Risk of site impact       |
| Plant     | -   Significantly       |     during replacement        |
| (offsite  |     reduces             |                               |
| &         |     Preventative        | -   Public relations concerns |
| onsite)** |     Maintenance cost    |     with offsite landowners   |
|           |     (approximately      |                               |
|           |     \$130K operating    | -   Environmental Assessment  |
|           |     and maintenance     |     is required               |
|           |     cost over next 25   |                               |
|           |     years)              |                               |
|           |                         |                               |
|           | -   Utilizes latest     |                               |
|           |     equipment           |                               |
|           |     technologies        |                               |
|           |                         |                               |
|           | -   Reduces risk of     |                               |
|           |     unplanned outages   |                               |
|           |                         |                               |
|           | -   Efficient Use of    |                               |
|           |     Capital Resources   |                               |
|           |                         |                               |
|           | -   Complies With DOE   |                               |
|           |     "Useful Life"       |                               |
|           |     Requirements        |                               |
|           |                         |                               |
|           | -   Reduces risk of     |                               |
|           |     system failure for  |                               |
|           |     portions of         |                               |
|           |     pipeline currently  |                               |
|           |     located in SWMU,    |                               |
|           |     Radiological        |                               |
|           |     Controlled Areas,   |                               |
|           |     Confined Space, and |                               |
|           |     congested plant     |                               |
|           |     areas               |                               |
|           |                         |                               |
|           | -   Eliminates confined |                               |
|           |     space entries for   |                               |
|           |     valve access        |                               |
|           |                         |                               |
|           | -   Eliminates          |                               |
|           |     maintenance work in |                               |
|           |     radiological area   |                               |
|           |     associated with     |                               |
|           |     pipeline            |                               |
|           |                         |                               |
|           | -   Reduces             |                               |
|           |     environmental risk  |                               |
|           |                         |                               |
|           | -   Reduces personnel   |                               |
|           |     safety risk         |                               |
|           |                         |                               |
|           | -   Reduces probability |                               |
|           |     of natural gas loss |                               |
|           |     from pipeline       |                               |
|           |                         |                               |
|           | -   Dedicated line for  |                               |
|           |     NNSA service to     |                               |
|           |     site                |                               |
|           |                         |                               |
|           | -   Improved safety     |                               |
|           |     conditions due to   |                               |
|           |     remote operation    |                               |
|           |     for shut-off in the |                               |
|           |     event of a leak     |                               |
+-----------+-------------------------+-------------------------------+

In addition to analyzing the advantages and disadvantages for each
alternative, the project team completed a Life Cycle Cost (LCC) analysis
as summarized in Table 6, below.

[]{#__RefHeading___Toc114649835 .anchor}Table 6 -- Life Cycle Cost
Analysis Summary

+----------------------------+-----------+--------------+-------------+
|                            | **Al      | *            | **          |
|                            | ternative | *Alternative | Alternative |
|                            | 1-**      | 2-**         | 3-**        |
|                            |           |              |             |
|                            | **Do      | **Replace    | **Replace   |
|                            | Nothing** | Onsite       | Onsite &    |
|                            |           | Only**       | Offsite**   |
+----------------------------+-----------+--------------+-------------+
| Total Project Cost         | \$0       | \$4,700,000  | \$8,856,000 |
+----------------------------+-----------+--------------+-------------+
| Total Maintenance &        | \$        | \$4,597,650  | \$4,597,650 |
| Operations Cost (25 yrs)   | 4,597,650 |              |             |
+----------------------------+-----------+--------------+-------------+
| Total Failure Repair Cost  | \$1       | \$671,232    | \$671,232   |
| (25 yrs)                   | 7,634,946 |              |             |
+----------------------------+-----------+--------------+-------------+
| Total Life Cycle Cost      | \$2       | \$9,968,882  | \           |
| Summary                    | 2,232,596 |              | $14,124,882 |
+----------------------------+-----------+--------------+-------------+
| **Present Value,           | **\$13,   | **\          | **\$1       |
| Discounted 2.95%**         | 216,552** | $8,228,206** | 2,132,574** |
+----------------------------+-----------+--------------+-------------+

Assumptions used to develop the LCC for each alternative are as follows:

-   Discount rate of 2.95 percent, per OMB Circular A-94.

-   Useful life of 25 years.

-   Total project cost of \$8.856M for replacing on-site and off-site
    gas distribution.

-   Total project cost of \$4.700M for replacing on-site gas
    distribution.

-   \$94K per year for on-site gas distribution operations (\$80K) and
    maintenance costs (\$14K). It is assumed this cost will remain
    constant for all alternatives.

-   \$83K per year for off-site gas distribution operations (\$63K) and
    maintenance cost (\$20K). It is assumed this cost will remain
    constant for all alternatives.

-   Maintenance and Operations costs for all alternatives were based
    upon HDPE pipe replacement (see Additional Alternatives Considered
    below, on page 13)

-   Cost of failures is assumed to be approximately \$300,000 per
    failure.

-   Projection failures for Alternative 1, Do Nothing, were estimated
    using information from a previous HPFL LCC analysis that was based
    on information from the book "Control of Pipeline Corrosion,"
    by A. W. Peabody, and statistical software, TableCurve. TableCurve
    has different methods for determining the best fit line of
    logarithmic data using different equations: y=ae(bx), lny=a+bx, and
    weighted lny=a+bx. The most conservative projected failures line
    (weighted lny=a+bx) was used for this LCC analysis.

-   For Alternative 2, it is assumed that when DOE/NNSA relinquishes
    ownership of the off-site main, DOE/NNSA would not be responsible
    for repair costs.

All of the alternatives were evaluated against the LCC analysis, risk
analysis, and major functional and operational requirements. The team
chose to use a three-step process that develops selection criteria,
weighs each criterion against each other, and then evaluates each
alternative against each criterion. The resulting weights and relative
scores are shown in Tables 7 and 8, below.

[]{#__RefHeading___Toc114649836
.anchor}![](media/image4.wmf){width="7.0625in" height="2.5in"}**Table 7
-- Alternatives Analysis Matrix**

These results are also expressed graphically in Table 8, below.

> All values assigned to the alternatives selection matrix were derived
> by project team consensus and reviewed and approved by PXSO.

-   **WEIGHT**: The number in the colored box is the weight assigned to
    the criteria. The weight was assigned on a 1:10 basis, 1 being the
    lowest and 10 being the highest. The percentage derived for each
    weighted criteria was calculated based on the individual criteria
    weight divided by the total of all criteria weights. For example:
    Safety was assigned a criteria weight of 10 by the team. The total
    of all criteria weights is 77, so Safety is 10/77 or 13% of the
    overall decision weight.

-   **IMPACT VALUE**: The number in the upper triangle is the impact
    value. This is the score assigned to the impact the alternative has
    on the criteria. The impact value was assigned on a 1:10 basis, 1
    being the lowest (does not meet criteria) and 10 being the highest
    (fully meets criteria/need).

-   **SCORE**: The weight multiplied by the impact value equals the
    score assigned for each criteria for each alternative. This number
    is shown in the lower triangle. These scores then make up the values
    used in the stack chart, so that each "stack" equals the TOTAL score
    for each alternative.

[]{#__RefHeading___Toc114649837
.anchor}![](media/image5.wmf){width="5.624305555555556in"
height="4.334722222222222in"}**Table 8 -- Alternatives Analysis
Graphic**

Based upon the information evaluated as presented above, the project
team elected to develop Alternative 3. The overall benefit to the
government was the basis of this decision, rather than cost alone.

Alternative 1 was deemed unacceptable due to the number and severity of
unacceptable risks associated with a pipeline failure that would be an
increasing possibility as the pipeline continued to age and deteriorate.
Additionally, this alternative does not meet goals to reduce the
deferred maintenance backlog, reduce preventive maintenance costs,
increase system reliability, and does not comply with DOE "Useful Life"
requirements for the gas main and distribution system; this system has
already exceeded the 25-year service life (DOE Accounting Handbook) by
approximately 25 years. Furthermore, this option would not allow the
plant to meet increased natural gas demand for future needs, nor would a
dedicated line with isolation capability be available. The project also
had the highest LCC of the three alternatives considered.

Alternative 2 was deemed unacceptable due to the number and severity of
unacceptable risks associated with a pipeline failure that would be an
increasing possibility as the offsite gas main pipeline continued to age
and deteriorate. This alternative does not significantly increase system
reliability because the offsite portion would continue to deteriorate
and NNSA would no longer have control over gas main taps, sizing,
reliability, and replacement schedule for supply line. This would
virtually eliminate the possibility of NNSA locating a dedicated
pipeline with isolation capability of sufficient size to meet future
needs for natural gas demand for the Plant. Additionally, NNSA would
lose the ability to negotiate with other natural gas providers to
achieve better gas prices in the future. This alternative also relies
heavily upon the assumption that the current natural gas provider would
be willing to accept ownership of and liability for an aging asset with
little forecast service expansion. Although this alternative does
provide the lowest LCC, it does not provide the best value to the
government.

Alternative 3 is recommended as the preferred alternative because it is
the most efficient use of capital funds that also meets the safety and
technical objectives required by Plant operations. The recommended
approach in this project meets the requirements to address all
identified concerns in the Gas Main and Distribution System at the
Plant. The estimated initial investment/construction cost of
\$5.5M-\$6.7M is based on the updated detailed cost estimate as
validated by an Independent Cost Review conducted in January, 200X. This
alternative places the entire burden of construction cost for a new line
on site. In addition, The Plant would maintain liability for any
problems that arise. Even though this alternative does not have the
lowest LCC, it is considered the best option because it provides the
most value to the government. NNSA could negotiate for better gas prices
in the future, as it has done in the past, saving money in the long run.
In addition, NNSA would not have to place any taps on this line, leaving
it completely dedicated to the Plant. Furthermore, a new Motor Operated
Isolation Valve (MOIV) would provide the capability of remotely
operating the valve to quickly isolate the natural gas supply onsite in
the event of a leak or other incident.

> **Additional alternatives that were evaluated include the following
> alternative studies:**
>
> Alternative methods for replacing the gas main and distribution lines
> were explored. The use of a graded approach to replace the most
> critical or deteriorated lines was explored. This alternative would
> allow replacement of the worst portions of the lines and deteriorated
> lines that provide natural gas to the most critical areas. The
> remainder of the system not selected for replacement would continue to
> age and be replaced on a "replace when fails" basis. At present, this
> alternative is not advisable due to the continuing safety risks and
> maintenance needs for sections not replaced; this alternative does not
> improve the reliability of the system and the risk of unplanned
> outages to plant operations is unacceptable.
>
> Alternate pipeline materials were also explored. The current gas main
> is constructed of steel, and it has proven to be a durable,
> long-lasting material. However, steel is heavy, expensive to purchase
> and install, and expensive to maintain because it requires the use of
> a cathodic protection system. The Plant gas main and distribution
> system operates in the low to mid pressure range, so a material as
> strong as steel is not required. High Density Polyethylene (HDPE) is a
> modern material that is lightweight, durable, non-reactive, and easy
> to work with. HDPE works well in low to mid range transmission and
> distribution systems, such as the one under consideration. HDPE is
> currently used for all new gas distribution projects on the Plant.
> HDPE is currently considered the best material option for this
> project, but this alternative will be further evaluated for Life Cycle
> Cost and Value Engineering during the design process.
>
> **Location Alternatives Analysis**
>
> The location alternatives for this project are limited. The
> distribution system is located on the Plant site to serve the existing
> equipment, and buildings that are in fixed locations, so there were no
> other practical location alternatives available for consideration.
>
> Several location alternatives for the gas main supply to serve the
> Plant were considered. In addition to the existing main line that
> currently supplies the gas main, three alternative transmission lines
> were researched for their ability to meet the Plant needs relative to
> this project. Options identified were:

-   24" line owned by Transwestern Pipe Line Company, which grazes the
    southeast corner of the Plant on the opposite side of Highway XX

-   12.75" line owned by Oneoke Westex Transmission, also at the SE
    corner of the plant on the opposite side of Highway XX, in the same
    location

-   12.75" line owned by Oneoke Westex Transmission, located at the
    closest point about 8000' from the west, northwest side of the
    Plant.

> The two 12.75" lines owned by Oneoke were considered unacceptable
> location alternatives because the Plant requires at least a 10" line
> to meet its natural gas requirements. It was assumed that Oneoke could
> not meet its current demand on these lines with such a large, new tap.
>
> The gas distributor was contacted regarding capacity of the 24" line.
> The distributor stated that it had already tried to tap into the 24"
> line with a tap smaller than that required by the Plant, and had been
> rejected due to insufficient capacity. Therefore, this location
> alternative was also deemed unacceptable.
>
> As a result, the remaining gas main supply location---the existing
> supply line for the Plant---was considered the only viable
> alternative.
>
> **Acquisition Alternatives Analysis**
>
> Various alternatives have been considered with respect to this
> project. The alternatives considered are Federal led or utilizing the
> current Management and Operating contractor. The Federal led
> alternative consists of the Site Office relying on either the U.S.
> Army Corps of Engineers (USACE), directly contracting with a qualified
> Architect-Engineering (A-E) firm and qualified construction company,
> or directly contracting with a Design-Build (D-B) firm to perform the
> required services. Due to the simplicity of the design and the
> relatively advanced level of development of the construction scope
> requirements, The site office recommends the use of a D-B firm through
> a Federally led acquisition.

# BUSINESS AND ACQUISITION APPROACH

> **Contract Administration**
>
> The Site Office will manage and administer the D-B, and/or other
> service type contracts and have the following responsibilities:

-   Develop the Request For Proposal (RFP) for the design and
    construction with the Project Management Team and submit to NNSA
    Service Center for issue.

-   Attend Project Team and construction progress meetings.

-   Conduct pre-proposal meetings.

-   Conduct price negotiations.

> **Acquisition and Contract Types**
>
> The NNSA Service Center will award and the Site Office will administer
> and manage the prime contract for this project with technical support
> from the USACE and the Managing and Operating (M&O) contractor.
> Construction and Technical Management of the D-B project will be
> performed by the USACE. Critical components of the project will be
> subject to M&O review and support during construction. Memorandum of
> Understanding (MOU) will be initiated between all parties. MOU will
> outline roles and responsibilities for each participating party to
> include submittal reviews, quality assurance, contracting officer
> duties, contract administration, construction administration, and
> oversight, at a minimum.
>
> A competitive selection of the D-B firm for project will be based on
> demonstrated technical expertise, qualifications, capability, and
> resource availability to meet schedule requirements. The final
> solution may use price as a consideration from finalist firms, as
> determined appropriate. Price will be negotiated as a Firm Fixed Price
> (FFP) basis with technical criteria being weighed more than cost. The
> FFP D-B contract will include all design, materials, equipment, and
> services necessary to achieve a complete and functional utility
> meeting all required criteria.
>
> The Site Office, in conjunction with the NNSA Service Center, NA-50
> and NA-63, and support from the USACE, will actively search for
> prospective small business contractors by using electronic sourcing to
> include the U.S. Small Business Administration's Central Contractor
> Registration Database and Pro-Net. The D-B contract will provide
> Preliminary Design, Detailed Design, construction services and
> engineering support, as well as closeout and post-construction
> services.
>
> **Competition**
>
> The D-B contract will be competitively solicited and awarded to the
> Small Business Administration Contractor Community first with other
> contracting entities considered if Small Business Administration
> contracting is not successful. Historically, construction contracts in
> this range do not attract architect/engineer and general contractors
> beyond the local area. Solicitation of general contractors will be
> made within the region, with consideration for small business,
> veteran‑owned small business, service‑disabled veteran‑owned small
> business, HUBZone small business, small disadvantaged business and
> women‑owned small business concerns. The award will be based on the
> best value determined from an evaluation of technical criteria such as
> technical qualifications, past performance and experience, as well as
> cost considerations.
>
> It is anticipated that the D-B project will be openly competed to both
> small and large business firms, with the large business firms being
> considered if not successful with small business firms. Awards to a
> large business above \$500,000 (\$1,000,000 for construction) require
> a Small Business Subcontracting Plan. The plan must include goals for
> the utilization of small business, veteran-owned small business,
> service-disabled veteran-owned small business, HUBZone small business,
> small disadvantaged business, and women-owned small business concerns
> as subcontractors. The goals, if necessary, shall be negotiated by the
> Site Office Contracting Officer, with support from the USACE, and
> approved by NA-52 and NA-63.
>
> The site is located in an area where subcontractor resources are
> limited in some trades and competitive bidding in this area has been
> increasingly difficult. Due to this fact, the Site Office and the
> USACE will be working with local and regional Association of General
> Contractors (AGC) and Construction Specifications Institute (CSI)
> affiliates as well as the Panhandle Regional Planning Commission
> (PRPC) in order to solicit and develop contractors from outside the
> area.

# MANAGEMENT STRUCTURE AND APPROACH

> **Identify IPT, Organization Structure and Staffing Skills**
>
> Table 9, below the project organization chart, identifies DOE/NNSA
> Management Team members.
>
> **Project Organizational Structure**
>
> []{#__RefHeading___Toc114649839 .anchor}Table 9 -- DOE/NNSA Management
> Team Members

  ---------------------------------------------------------------------------------------------------------------------
  **[DOE/NNSA Management Team                                                          
  Members]{.smallcaps}**                                                               
  ----------------------------- ------------------------ ----------------------------- --------------------------------
  **[Position]{.smallcaps}**    **[Name]{.smallcaps}**   **[Telephone]{.smallcaps}**   **[Organization]{.smallcaps}**

  **Program Sponsor­**                                                                  

  **Program Manager**                                                                  

  **Technical Director**                                                               

  **Site Office Manager**                                                              

  **Federal Project Director**                                                         

  **Site Office AB Staff                                                               
  Member**                                                                             

  **Contracting Officer**                                                              

  **SS Team Member**                                                                   

  **Order 420.1 Team Member**                                                          

  **NEPA Team Member**                                                                 

  **Safety & Health Team                                                               
  Member**                                                                             
  ---------------------------------------------------------------------------------------------------------------------

> **The government's role relating to acquisition are summarized as
> follows:**

-   The NNSA Associate Administrator for Infrastructure & Environment
    approves the Acquisition Strategy.

-   The Associate Administrator for Infrastructure & Environment chairs
    the Equivalent Energy Systems Acquisition Advisory Board and
    approves critical decisions for the project.

-   The Federal Project Director acts as the single point of contact
    with the Plant organization and NNSA. He oversees the design,
    construction, and ES&H efforts performed by the M&O and the USACE
    and any subcontractors relating to the project.

> The M&O Contractor under the DOE prime contract dated February 1,
> 200X, will provide activities as described herein and in accordance
> with the Memorandum of Understanding (MOU) to be established between
> M&O, the Site Office, and the USACE.
>
> **Approach to Performance Evaluation and Validation**
>
> **Project Controls**
>
> DOE Order 413.3, Program and Project Management for the Acquisition of
> Capital Assets, will be used as the primary management tool and
> guideline to execute the project.
>
> The Site Office and M&O are implementing a certifiable EVMS that is in
> compliance with ANSI/EIA-748-A-1998. This EVMS will be certified in
> the XX quarter of FY 200X, and will be implemented and used to monitor
> and evaluate project progress and performance for the duration of the
> project.
>
> An activity based Network Analysis System (NAS) including estimated
> costs and resources will be utilized to manage this proposed project.
> Throughout the various phases of this project, the NAS will be updated
> and refined to reflect the sequence of activities required to be
> accomplished within specified milestone completion dates and planned
> costs. The NAS will be updated monthly to document progress with
> respect to performance durations and cost. The Site Office will
> coordinate the preparation and submittal of any status reports
> required by DOE/NNSA Headquarters.
>
> **Change Control**
>
> The Site Office has an established change control process. This
> process will be utilized to manage any required changes to cost,
> scope, or schedule.
>
> **Project Reporting**
>
> Monthly reporting will be accomplished through the DOE Project
> Assessment and Reporting System (PARS). This project is below the \$20
> million threshold but the project management system used by the
> contractor is based on earned value (EV), calculated by PARS.
>
> PXSO will use the FIRP monthly/quarterly reporting system and all
> projects will be reviewed monthly and quarterly as prescribed by
> DOE/NNSA Headquarters guidelines.
>
> **Project Meetings**
>
> The FPD will conduct regularly scheduled meetings and reviews to
> discuss project technical scope, schedule, and cost status, and any
> emerging issues that may have an adverse impact on technical scope,
> schedule, or cost. Participants will include the Integrated Project
> Team representatives as deemed appropriate.
>
> **Interdependencies and Interfaces**
>
> The Site Office will utilize the M&O contractor and the USACE to
> coordinate any required interdependencies or interfaces required with
> other contractors at the Plant.