# Presentation: 658334

## Facilities Modernization At          Y-12 National Security Complex

**Facilities Modernization At          Y-12 National Security Complex**

***“******The legacy of an aging Cold War plant sized to meet Cold War needs is directly related to Y-12’s facility and infrastructure cost over the next ten years.”***

##  53% of the Y-12’s total floor space was constructed before 1953 

*** ******53% of the Y-12’s total floor space was constructed before 1953 ***
***These buildings have been in continuous use and reuse for more than 50 years. ***

**Gross Square Feet (GSF)**

**ORNL**

## Y-12 has a significant amount of aging floor space . . .

***Y-12 has a significant amount of aging floor space . . .***
***Even when compared to other DOE sites.***
*** ***

**Savannah River**

**INEEL**

**Los Alamos**

**Lawrence Livermore**

**Nevada Test Site**

**Y-12**

**33% GSF**
**>**
**35 years**

**50% GSF**
**>**
**24 years**

**50% GSF**
**>**
**30 years**

**54% GSF**
**>**
**30 years**

**60% GSF**
**>**
**31 years**

**70% GSF**
**>**
**50 years**

## Solution:

***Problem:***
***  ******Y-12’s aging infrastructure is impacting our ability to fulfill our mission.***
***  ******NNSA has charged BWXT Y-12 with addressing aging infrastructure by 2006.***

***Integrated Financing Program***
***Line Item funding for mission-related improvements ***
***FIRP funding for deferred maintenance reduction / recapitalization / facility removal       ***
***Alternate (private sector) financing for reconfigurable laboratory and technical support space***
*** ***

***Solution:***

## MMSC

**Fire Station **

**Records Storage **

**PSS / EOC / TOC on South Ridge  **

**Vehicle Mgmt**

**MMSC**

**Materials Mgmt**

**Purification Plant **

**HEUMF**

**Admin/Tech**

**Visitors’ Center & Badging**

**New PIDAS  **

**Upgrade Steam Plant**

**EU Reno**

**DU Relocation**

**QE Relocation**

**Café / Med**
**Prototype  **

**Committed Line Item Projects**
**Proposed Line Item Projects**
**Proposed Line Item Renovations**

**FIRP / GPP Funded Projects**

**Alternate (Private) Financed Projects**

**Excess Facilities**

- NNSA’s limited line item funds should be applied to projects that are mission-essential major science and manufacturing facilities and infrastructure

- Discrete, freestanding projects that support mission-essential functions are the most appropriate use of FIRP funds.  These may include Weapons Records Storage, Fire Station, Vehicle Management, and Materials Management.

- The most appealing projects to attract private financing are commercial labs, light manufacturing, and technical support space in a multi-use complex large enough to generate significant rental income.  NNSA and DOE support alternative financing.

- Construction and renovation of these line item, FIRP, and privately financed projects will allow old, expensive floor space to be vacated, declared excess, and either demolished or moved to EM.

**NMAA Storage **

**Beryllium**

## Line Item Projects

***Line Item Projects***

** **
**Purification Plant****	****	****10,000 GSF**
**Highly Enriched Uranium        103,000 GSF Manufacturing Facility****	**

***Committed Line Item Projects***

***  ******To improve operating efficiency***
***  ******To reduce health and safety risk of operations ***
***  ******To maintain Y-12’s ability to fulfill its mission***

## FIRP  Projects’ Purpose

***FIRP  Projects’ Purpose***

** **
**Medical Facility****	**** ****	****25,000 GSF**
**Material Management****	****20,000 GSF**
**Records Storage (2)****	****	****40,000 GSF**
**Fire Station****	****	****25,000 GSF**
**Vehicle Management Facility****	****25,000 GSF**
**	**

*** ******To refurbish the aging nuclear weapons complex***
*** ******To reduce deferred maintenance by removing excess facilities***
***  ******Projects are limited to a maximum of $5M***

***Possible FIRP Projects***

## Alternate Funding

***Alternate Funding***

***   ******To give NNSA access to private financing***
***  ******To take advantage of commercial financing and construction practices –        more able, agile, and affordable***
***  ******ORNL’s experience indicates 50% construction cost savings ***
***   ******PNL, LANL, INEEL, all implementing or assessing alternate finance projects***

***Alternate Funding Candidate Components***

**Prototyping Laboratory**
**Manufacturing Materials Research**
**Engineering and Science Offices**
**ES&H Offices**
**Management Offices**
**Occupational Health Facilities**
**Employee Interface: Cafeteria, Conferencing**
** **
**	**

## Integrated Financing 5 -Year Plan

***Integrated Financing 5 -Year Plan***

**FY03**

**FY04**

**FY05**

**FY06**

**FY07**

**FY08**

**Records**

**Office**

**Fire Station**

**Vehicle Management**

**Materials Management**

**Materials Manufacturing Science Center**

**Visitors Center**

**Purification**

**HEU Materials Facility**

**FIRP**

**Alternate Financing**

**Line Item**

*** ******Aggressive, integrated financing program allows revitalization of mission-essential and technical support facilities within a 5-year period.***

**Project Construction Schedule**

## Alternate Financing 

***Alternate Financing ***
***Preliminary Planning Schedule***

**FY03**

**FY04**

**Prepare EOI Package**

**Prepare RFP Package**

**Develop Feasibility Study / Business Case**

**Select Finance/ Design/ Build/ Lease Developer  **

**EA FONSI Issued  **

**Select Qualified Bidders**

**CERCLA Covenant Deferral Request Approved**

**Establish Non-Profit Holding Company**

**Transfer Quitclaim Deed**

**Start Private Sector Construction**

**We Are Here**

## Alternate Financing Preliminary Program

***Alternate Financing Preliminary Program***

- 	**Building Groups****	****	****	****Total GSF****	****Total Pop****	****Avg. Age****	****Current Major Occupants**
- 	Administrative Office Buildings  			290,000	364	50	YAO, FI&S, ES&H, PA, F&BM, S&S
- 	Engineering Office Buildings  			329,700	525	56	BS, PP&I, PM, FI&S, ES&H
- 	Critical Support Buildings  			  85,000	82	55	E&T, ES&H, FI&S, BS
- 	Research & Development Buildings  		459,300	241	49	Mfg, E&T, QA
- 			**TOTALS / Average**	**1,164,000****	****1,212****	****53**

**Key:**

***Candidates for Replacement with Alternate Funded Project(s)***

**Y-12 National Security Complex**

## Basic Programming Needs  

***Basic Programming Needs  ***

** **
**900 Employees @ 225 USF/person     =  202,500 USF**
**202,500 USF @ 85% efficiency           =  240,000 GSF**
**	****	****	****              ****Say,    =  240,000 GSF**
**	**

*** ******Provide office/technical space for approximately 900 employees***
*** ******GSA recommends average 200 Usable Square Feet (USF) per employee***
***  ******Many in this population are engineers or senior managers who require more space; therefore, use 225 USF/person***
***  ******Assume 85% building efficiency***

***Admin/Technical Space***

## Basic Programming Options  

***Basic Programming ***_***Options***_***  ***

** **
**Reconfigurable light labs and high-bay prototyping space**
**Classrooms, meeting rooms, and offices**
**	****	****	****     ****Assume,    =  175,000 GSF**
**	**

*** ******Provide agile laboratory and prototyping space for approx. 240 employees***
***  ******Advanced Machining and Technology***
***  ******Basic Weapons Materials Science***
***  ******Prototyping, Deployment, Test Beds, and Technology Development***
***  ******Nuclear Nonproliferation Conferencing and Classrooms***

***Prototyping Facility***

## Basic Programming Needs  

***Basic Programming Needs  ***

** **
**Cafeteria****	****	****	****	****15,000 GSF**
**Occupational Health****	****	****	****15,000 GSF**
**Conferencing & Collaboration Space****	****20,000 GSF**
**	****	****	****              ****Say,    =  50,000 GSF**
**	**

***  ******Current cafeteria is 55 years old and serves 460 meals per day***
***  ******Current medical facility is 55 years old and does 3,000 physicals/year ***
***   ******Y-12 lacks meeting and networking space that would encourage interaction, information exchange, and integration of functions***

***Support  & Interface Space***

## Alternate Financing Preliminary Program

***Alternate Financing Preliminary Program***

***Manufacturing Materials Science Complex (MMSC)***

***   ******Finance/Design/Build/Leaseback allows NNSA to avoid capital outlay***
***   ******1.2M GSF of inefficient, unsafe, and costly space can be excessed ***
***  ******And replaced with 465,000  GSF of ***_***able, agile, affordable space***_
***    ***

**MMSC**
**Alternate 1**

**Excess facilities**

**Facilities Modernization At          Y-12 National Security Complex**

**MMSC**
**Alternate 2**

## Net Annual Savings:                $22.5M  to $50M 

***Annual Costs,  & Cost Savings & Avoidances***

** **
**Total annual lease payments on**
**465,000 GSF @ $22.75/GSF****	****	****                          $10,600,000**
**Based on ORNL’s negotiated lease rate**

** **
**1.  Maintenance and utility cost avoidance**
**$4.50/GSF  --  $8.00 / GSF****	****	****$5,200,000   --   $9,300,000**
**2.  Deferred maintenance cost avoidance**
**per year for 10 years****	****	****	****$2,600,000   --   $2,600,000**
**3.  Renovation cost avoidance 1.2M GSF **
**@ $75   --  $120 / GSF **
**spread over 10 years/year      ****	****	****$8,700,000  --  $14,000,000 **
**4.  5%  --  20% staff efficiency  ****	****	****$6,000,000  --  $24,000,000**
***Net ***_***Annual***_*** Savings:                ******$22.5M  to $50M****** ***
**Annual cost avoidances less annual costs**
**	**

***Annual Costs***

***Annual Cost Savings & Avoidances***

## Cost and Savings Graph over 25-year Life

***Cost and Savings Graph over 25-year Life***

***Cumulative Cost Savings******	******$382,000,000     --     $965,000,000***

***Cumulative Lease Payments******	******$254,400,000     --     $254,400,000***

***Net Savings ***_***over 25 Years***_***      $127,600,000  --  $711,000,000***

## Deed / Lease Process per ORNL

***Deed / Lease Process per ORNL***

**Private Sector**

**NNSA**

**M&O Contractor BWXT Y-12**

**Deed bare land to private sector non-profit**

**Lease bare land to selected design/build/ lease developer**

**Lease facility back to non-profit**

**Quitclaim Deed**

**Ground Lease**

**Facility Lease**

**Operating Lease (Approved by NNSA)**

*** ******Deed/lease arrangements are designed to access private capital in response to a government need***

**NNSA has option to purchase facility at nominal cost at prescribed time**

## Three Basic DOE / NNSA Questions	

***Three Basic DOE / NNSA Questions******	***

***   ******Financial risk***
**How is the long-term financial risk for private sector construction addressed?**
***   ******Fairness of price***
**How is the government assured that costs will be at fair market prices?**
***   ******Cost to NNSA  ***
**Will this approach involving private sector construction result in higher costs to NNSA?**

## Financial Risk

***    ******To Investors***
**       ****Convince potential investors that NNSA has a long-term mission **
**  ****	****Convince them that Y-12 is an integral part of that long-term mission**
**       ****Convince them that the proposed complex is an essential part of the long-term mission**
*** ******	******To NNSA***
**  ****	****M&O contractor’s sublease will have a 12-month cancellation provision, so NNSA’s risk would never be more than 12 months’ lease cost ****	**

## Fairness of Price

***    ******To NNSA***
**  ****	****Use competitive procurement procedures for finance/design/build/leaseback developer**
**	****M&O contractor’s sublease will require NNSA/DOE approval**
** ****	****Lease cost/SF used in this proposal is based on ORNL’s recently negotiated rate, which was reviewed against current regional costs**
** ****	****Some variation in cost is expected depending on the final site location’s attractiveness to the private sector and site preparation issues**

## Cost to NNSA

**	****Avoids capital outlay**
** ****	****Avoids or reduces operating costs:**
**	****Maintenance**
**	****Utilities**
**	****Deferred maintenance**
**	****Facility renovations**
** ****	****Improves operational and staff efficiency**
***Preliminary cost/benefit analysis shows potential savings to NNSA of****** ***
***$127M to $711M ***
***over the 25-life of the complex***

## Architect’s Concept of MMSC

***Architect’s Concept of MMSC***

## Architect’s Concept of MMSC --  Alternate 1

***Architect’s Concept of MMSC --  Alternate 1***

## Architect’s Concept of MMSC --  Alternate 2

## Candidates for Replacement with MMSC

## Cost Avoidance & Savings Analysis

## MMSC Square Foot Need Analysis

***MMSC Square Foot Need Analysis***

## MMSC Lease Cost Analysis

***MMSC Lease Cost Analysis***

## 25-Year Cost/Benefit Analysis