Download DRAFT LBNF/DUNE COSTING POLICY AND PROCEDURE 20 April

LBNF/DUNE COSTING POLICY AND PROCEDURE
20 April 2015
The LBNF and DUNE Projects will involve multiple countries and funding agencies. Participation will be
via in-kind contributions to accomplish the goal of designing and building the facility and the
experiment. The DOE-managed project will need to provide costs in both U.S. dollars in the DOE TPC
accounting method for the entire project as well as a broader, common accounting in terms of in-kind,
non-cash contributions from all participants. The latter for LBNF and DUNE is titled “CORE accounting.”
The two methods are described here with basic outlines for what is included and what is not.
The default method of accounting on the LBNF and DUNE Projects is CORE accounting, with DOE TPC
accounting used only on the DOE-funded portions of the Projects.
U.S. DOE TPC Accounting Methodology
DOE costing is meant to include all costs required to create a complete facility or piece of equipment in
accordance to DOE requirements, starting from DOE Critical Decision 0 Mission Need, through Critical
Decision 4, Start of Operations. This includes labor and material for R&D, design, prototyping,
fabrication, construction, and installation. In addition to the technical labor, the cost of management
effort by all workers is included.
Total Project Costs must be represented in as-year or then-year dollars, including escalation (i.e.,
inflation) that represents the commitment to the cost in the expected year. This is accomplished by
applying standard escalation rates documented by U.S. DOE Laboratory Chief Financial Officers at
appropriate labs, or by developing specific escalation rates for specific industries (as LBNF has done for
conventional facilities). Escalation rates may be different for M&S and labor.
Contingency or management reserve must be included in the Total Project Costs. This is done through a
contingency analysis for both cost and schedule.
When the Total Project Cost is baselined at CD-2, there is no additional budget beyond the TPC for the
project during its duration by DOE.
CORE Methodology for In-Kind, Non-Cash Contributions
CORE contributions are generally defined as:




Technical components for the facility or experiment (also personnel needed to perform the
testing, installation and/or integration)
Major facilities for the experiment
Personnel made available for specific tasks during the construction phase
Other products and services relevant for the completion of the facility or experiment
This method focuses on and puts a value on direct production costs and excludes basic infrastructure
and personnel costs. Thus, it includes things like components, production, outsourced assembly,
installation, and commissioning, or what is known in the U.S. as M&S costs and the direct labor involved
to produce them. It does not include items such as infrastructure at institutions for production or
technical support, the labor or materials for R&D, design, management, or prototyping. It also does not
put a cost value on direct laboratory or university labor by scientists, engineers, or technical or
administrative staff but includes these labor hours for the CORE items when they are directly related to
CORE-included items (see Table 1).
CORE unit costs will developed in FY15US$ as the base fiscal year and do not include escalation,
contingency, or institutional indirect charges. Funding agencies and institutions take care of this in
accordance with each agency’s own policies.
The CORE costs agreed to by LBNF and DUNE [at level of IJOG? RRB?] constitute the percent share of
participation in this scientific endeavor by each institution. The contributions are tracked by the DUNE
and LBNF project management organizations in the CORE cost book.
A tabular view of the comparison of the 2 costing methods this is shown in Table 1.
Table 1 Comparison of CORE Accounting and DOE TPC Accounting Methods where X indicates this item is included in this
method.
ITEM
Conceptual design
Design simulation
Small Prototyping
System tests
Component design
Component full-scale prototyping
that could be used in final production
Component production
Spares production
Assembly
Integration
Inspection
Pre-Ops Commissioning
Operations
Conventional facilities design
Conventional facilities construction
Contracted management services
Non-contracted management
Decommissioning
NonCORE
X
X
X
X
X
CORE METHOD
CORE
M&O
DOE TPC METHOD
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
LBNF and DUNE Projects’ Estimating and Accounting Approaches
Estimate Development: All costs will be estimated in FY15 U.S.$ with direct labor hours for laboratory
and university personnel for both DOE TPC method and the CORE elements. Costs for items eventually
anticipated to be provided by non-DOE partners will be estimated with assistance from non-DOE
partners where possible. Otherwise, for CD-1-R, U.S. project leaders will document their basis for these
estimates as best possible, including assumptions about where procurement, fabrication, and assembly
occur.
DOE TPC Cost Book: For the DOE CD-1-R, U.S. projects leaders will create a DOE TPC estimate and cost
book for the entire LBNF/DUNE enterprise for discussions with the DOE utilizing the direct costs and
hours but including escalation, labor rates, and contingency in accordance with procedures outlined in
the DUNE/LBNF PMP. This cost book will not be posted or presented but will be available for review.
A cost book in the same DOE TPC accounting will be created and maintained for all DOE-funded work on
the DUNE and LBNF Projects for the duration of the Projects. This cost book will be shared as part of all
reviews.
CORE Cost Book: For the CD-1-R, all activities will be tagged in a field in the resource-loaded schedule as
CORE or non-CORE in accordance with Table 1. A CORE cost book will be produced showing the CORE
cost for each element by WBS and by funding source (as understood at the time).
When responsibilities are understood and commitments made between partners to the enterprise, the
value and source of CORE contributions will be agreed to in FY15 US$ and maintained in the cost book.