# Presentation: 672193

## Cost: Estimate, Contingency, Tracking, Control

**Michael Tuts (Columbia)**
**Co-Project Manager**

**Cost Summaries**
**Accounting & Tracking Tools**
**Contingency & Performance**
**Manpower Costs**

## History

**D0 upgrade approved 4/96 - M&S cost estimate established**
**Lehman Review 5/96 essentially agreed that the  M&S cost estimate and contingency were reasonable**
**Request for manpower estimate and laboratory plan to meet our needs**

## Total Estimated Capital Cost

**We are requesting the D0 upgrade project be baselined **
**Total Estimated Cost**
**includes labor on equipment, G&A, and contingency**
**but not R&D or Operating**

## FY97-FY00 Capital Costs

**The corresponding capital costs for FY97-FY00 are shown below**

## FY97-FY00 SWF Costs

**The total manpower cost estimates (which includes contingency, and SWF on equipment, see Stanfield) for FY97-FY00 are shown below **

## Cost Estimate Variances

**We have been operating as if the D0 Upgrade has been ~baselined**
**M&S cost estimate + contingency ~stable since early 96**
**L3 managers reviewed costs since then**
**Summary of variances since last Lehman review (5/96)**
**Total cost+contingency is up 55k$ (FY95$)**

## M&S Cost Methodology

**Cost estimate kept centrally in Excel spreadsheet**
**Cost estimate is used to update MS Project (entered as resource)**
**WBS level 3 subproject managers provide (FY95$)**
**cost estimate**
**contingency estimate (based on experience & guidelines)**
**Reviewed by Project Managers**

- roll up costs
- at higher WBS

## M&S Contingency Guidelines

**General guidelines given to ensure uniformity at the time the estimate is generated**
**~0% for items that are complete (e.g. cosmic ray scintillator)**
**~5% for items that have been purchased (ie PO issued) but not received. Accounts for change orders, shipping, etc**
**~10-15% for items that can be readily estimated, eg commercial electronics, parts**
**~20-30% for conceptual design items, where details not firm**
**[~40% for “placeholder” items, no conceptual design in hand]**
**After initial estimate, contingency is held ****only**** by Project Managers**

## Total Capital Costs (FY95k$)

## Cost Accounting

**Business manager (Landrud) has set up a cost accounting/tracking system (Excel) available to sub-project managers**
**Laboratory accounting/tracking carried out at WBS level 4, corresponding to 125 Lab budget codes**

## Financial Reports

**Financial Reports**

- 125 budget codes at level 4

- Then year $

## Project to Date Obligations

**Project managers have current (based on D0 database) YTD and project to date information**

## Cost Tracking

**The Lab financial system is presently inadequate to track costs below WBS level 4**
**we must track costs at the deepest WBS level for adequate cost & contingency management**
**Our solution:**
**D0 (not Lab) accounting database tracks WBS numbers for every requisition**
**Not an exact accounting system, but ideal for cost management and control**
**Reqs are entered electronically via Web version (or paper)**
**Old reqs (before system) have been assigned WBS numbers and entered into new system**
**Report of detailed level tracking available to sub-project mng.**

## Cost Tracking Reports

**Cost tracking reports provide at every WBS level **
**cost estimate information**
**current YTD obligations**
**contingency information for project managers**
**WBS level 3 reports valid, but deeper levels still need tidying up (recall we had to enter old reqs into system)**
**Allows immediate feedback and tight cost control by project managers and sub-project managers**

## Cost Control

**Project Managers and Sub-project managers have the tools available to monitor and control costs ****at requisition time**
**before signing a req, the manager has available: cost estimate, and project to date obligation information for each WBS item**
**responsible to see that costs are within budget, or initiate change control procedure if the use of contigency is needed (as discussed by Christenson earlier)**

## Change Control

**If a sub-project manager requires the use of contingency, he/she must initiate a change control request**
**Change control form is under development**
**Initiator of change request**
**WBS item requesting contingency**
**Changes to cost**
**triggers PMG on passing threshold (100k$ at WBS level 2)**
**Reason for change or compensating change elsewhere**
**Disposition:**
**Sub-project manager accept/reject**
**Project managers accept/reject**
**PMG accept/reject**

## Contingency Management

**Using this tracking system, we are able to provide at the lowest WBS level:**
**cost control**
**contingency management**
**Obligations to date (now 1/97) ****[OTD]**
**Estimate (Cost) to complete ****[CTC]**
**L3 managers provide the cost estimate fraction of obligated items for each WBS. The difference from the full cost estimate is the estimate to complete **
**Estimate at Completion ****[EAC]**
**The sum of OTD + CTC**
**Contingency Remaining ****[CR]**
**Actual obligations for each WBS item minus**** ****the amount we estimate we should have obligated based on the cost estimate (see CTC)**
**% Contingency on the cost to complete ****[%CCTC]**
**Remaining contingency as a % of the CTC**

## Performance

**From 1/97 Tracking Report (in FY95k$)**

## Manpower Costs

**At the last Lehman review, we were asked to provide manpower costs, and the lab for a plan to provide the requiste labor**
**have initiated effort reporting to track manpower costs by WBS level 2**
**The manpower estimates are obtained from the resource loaded schedule **
**Present manpower ~matches the needs extracted from the schedule**

## Manpower Costs

**Methodology**
**Use Project schedule to extract manpower profile sorted by**
**FNAL and non-FNAL manpower**
**type (e.g. Electrical/Mechanical Engineer andTechnician,...)**
**WBS Level 3 subproject (and categories for General Support, Project Management to Level 3)**
**Physicists not included (unless directly involved in project management)**
**Apply worktime correction (47wks/yr) for vacation/sick day**

## Salary/Contingency

**Methodology - cont’d**
**Use Particle Physics Division average salaries (FY95$) x 1.28 for fringe**
**Use same average salaries for non-FNAL manpower as a guide for total manpower costs**
**Assign Contingency**
**Contingency only assigned for FY97-FY00**
**Project managers assign separate contingency for WBS level 3 tasks**
**Contingency for non-FNAL manpower is assumed by collaborators**
**only exception is our  Russian collaborators manpower where concerns lead us to assign 25% to WBS 1.3.3-1.3.5**

## Manpower Contingency

**Methodology - cont’d**
**Assign Contingency**
**Contingency only assigned for FY97-FY00**
**Project managers assign separate contingency for WBS level 3 tasks**
**Contingency for non-FNAL manpower is assumed by collaborators**
**only exception is our  Russian collaborators manpower where concerns lead us to assign 25% to WBS 1.3.3-1.3.5**

## Manpower Contingency

**Methodology - cont’d**
**Assign contingency - cont’d**
**Use the following guidelines for FNAL manpower:**
**20% for non-critical tasks that can be well estimated, or which are conservatively estimated**
**25% for tasks that are closer to critical path, but which can be well estimated**
**30% for tasks that are more poorly defined**
**35% for tasks with some technical risk and near critical path**
**40% for tasks that are more open ended or hard to estimate (e.g. programming)**

## SWF Cost Summary

**For FY97-FY00 (in FY95$)**

## Manpower Cost Profile

**Total contingency (FY95$) = $3,816k**
**Cost profile from schedule manpower + contingency **
**Majority of the contingency is reserved for FY99, and some in FY00, where schedule may be underestimating need**
**Profile with contingency is consistent with lab SWF funding guidance (in FY95 M$)**

## Cost Summary

**summaries of previous tables (FY95$)**

## Summary

**We have an extensive cost accounting, tracking, control, and management system in place**
**Project and Sub-Project managers have access to all the tools required for effective management**
**Equipment obligations from the cost estimate are used in the schedule to provide profiles**
**Manpower costs by type and by sub-project are extracted from the schedule for manpower costs**
**Our M&S and SWF costs are well matched to the Lab profiles, the cost estimate is stable, and contingency usage is below expectations**
**We now look forward to baselining at this review**

## The following slides are backup slides

## Salary Averages

**Methodology - cont’d**
**Use Particle Physics Division average salaries (FY95$) x 1.28 for fringe**
**Use same average salaries for non-FNAL manpower as a guide for total manpower costs**

## Manpower in M&S Cost Estimate

**Some manpower (ED&I and testing) at collaborating institutions is included in the D0 Upgrade M&S cost estimate (FY95$)**

## SWF Contingency

## Manpower Cost Summary

**Summary of manpower costs by WBS Level 3 system (FY95$, no non-project management physicists, includes SWF on Equipment, no Operating SWF for <FY97)**

## Manpower Cost Profile

**Total contingency (FY95$) = $3,816k**
**Cost profile from schedule manpower + contingency **
**Majority of the contingency is reserved for FY99, and some in FY00, where schedule may be underestimating need**
**Profile with contingency is consistent with lab SWF funding guidance (in FY95 k$)**

## Total Estimated Capital Cost

**We are requesting the D0 upgrade project be baselined **
**Total Estimated Cost**
**includes labor on equipment, G&A, and contingency**
**but not R&D or Operating**

- * typo in PMP reads $5,023

## R&D Obligations

**Total R&D in then year $, shows allocation for FY97, and estimate for FY98**

## Calorimeter R&D

**These are Fermilab R&D funds, separately we estimate R&D by collaborators (some PC boards, PC test stations, software in support of cicuit development) - then year $**

## Lab Profile

**The Lab profile from 5/96 guidance (in FY95$)**

## Costing Profile

**Based on our database and Lab system (then yr$)**