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4 Federal Agency Practices Plan for what is difficult while it is easy, do what is great while it is small. The most difficult things in the world should be done while they are still easy, the greatest things in the world should be done while they are still small. For this reason, sages never do what is great, and this is why they can achieve that greatness. Sun Tzu, The Art of War, 1000 BCE INTRODUCTION The material presented in this chapter is a compilation of responses to interviews organized around the general themes discussed in Chapters 2 and 3. Where appropriate, specific agencies and practices are identified and their tools and documents cited. Some of the statements include the opinions of the authors based on specific comments and their knowledge of the preproject planning process. This chapter is based on 25 interviews conducted between March and August 2002. Agencies providing at least one interview included: Department of Defense (DOD) Department of Energy (DOE) Department of State (DOS) Department of Veterans Affairs (VA) General Services Administration (GSA) Indian Health Service (IHS) International Broadcasting Bureau (IRE) National Aeronautics and Space Administration (NASA) Naval Facilities Engineering Command (NAVFAC) Smithsonian Institution (SI) U.S. Air Force Air Combat Command (ACC) U.S. Army Corps of Engineers (USAGE) U.S. Coast Guard (USCG) 27

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28 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS SCOPES OF WORK FOR DESIGN The interviews included questions about the scope of work for design document. The timing of the develop- ment of a scope of work for design is related to the discussion in Chapter 2 of structured approval gates in the preproject planning process. Nine of the 13 participating agencies use clearly defined approval gates prior to developing a scope of work for design, and more importantly, they base the scope of work for design on a detailed project scope definition package that has been developed with key stakeholder involvement. Six agencies use standard scopes of work for design, tailored for each project. When asked to describe their standard documents, four agencies stated that they were based on earlier project scope definition documents, one has developed a master specification approach, and two provide space layouts for facility components to the designer. One respon- dent emphatically stated that the problems he commonly experiences are not with the scope of work for design itself but occur in the project scope definition process and because of poor communication among stakeholders. As mentioned previously, it is critical that a scope of work for design be based on a well-developed project scope of work, which is one of the results of effective preproject planning. PREPROJECT PLANNING PROCESS Figure 1 outlines a preproject planning process used by private- and public-sector organizations. Figure 3 is a generic process map for federal government projects that shows, at a very high level, activities performed in the time between identification of the need and authorization of construction funds. The length of the entire project delivery process, from initiation to commissioning, can be from four years (or shorter in case of urgent need) to decades. Figure 3 generally follows the process shown in Figure 1 organizing for preproject planning typically occurs at the point where the need is identified, alternatives are selected in conceptual planning, and development of the project definition package occurs during scope definition/schematic design. Eleven of the 13 agencies interviewed have an established process for preproject planning. The level of detail of these processes varies. The most effective form is a detailed logic or precedence diagram organized into phases, Conceptual Planning Scope Definition/ Schematic Design Preproject Planning FIGURE 3 Generic process map for federal government projects. Detailed Design_. Construction .

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FEDERAL AGENCY PRACTICES 29 with deliverables identified for each task in the phase and approval gates prior to moving forward to the next phase. Although all agencies have some sort of approval requirement prior to the expenditure of detailed design funds (the approval is typically at the level of authorization for these funds), the study sought to identify clearly defined approval gates in preproject planning processes. Nine agencies had clearly defined approval gates prior to the authorization of detailed design. The others conduct subjective or informal project reviews prior to authorization to proceed with detailed design. Those agencies that have approval gates see them as vital parts of their processes to improve the definition of the project scope of work and the accuracy of the cost estimate that is submitted to Congress for approval. Many of the preproject planning processes reviewed have been developed on sound project management principles, but they are not implemented on all projects. Eight of the 13 agencies interviewed stated that their preproject planning process is implemented on all major projects. The higher-cost preproject planning activities are most commonly restricted to use on selected projects. In 12 of the 13 agencies the preproject planning process is managed through contracts as well as by in-house staff; in the wake of recent downsizing and increased outsourcing, this is not surprising. The private sector is experiencing the same shift to outsourcing. Only the IBB, the smallest agency interviewed, continues to conduct preproject planning efforts exclusively with in-house staff. Seven of the 13 interviewed agencies track the cost of preproject planning. Representatives from three agencies said they typically spend between 2 and 5 percent of project cost on preproject planning; this range is consistent with the average preproject planning costs for building projects in the Construction Industry Institute's (CII) database. Preproject planning is performed effectively in some federal agencies but not consistently. This inconsistency equates to missed opportunities. Preproject planning processes should focus on the three key elements discussed in Chapter 3: The organization should ensure that it is pursuing the right project. The project manager and team should ensure that they develop the right work product during preproject planning. The project manager and team should choose the right approach to project design and construction execution. The organization should ensure that it is performing the right project. This requires leadership and stake- holder involvement. As noted in Chapter 3, key elements include leadership, stakeholder identification, team alignment, understanding project requirements, and managing expectations. Continuity of project leadership is an important feature of a good preproject planning process. The project manager is a key stakeholder and should be involved in the project scope development. Six agencies assign project managers prior to detailed project scope development. The remainder transfer leadership after the project scope of work is developed and in most cases after it has been approved by the agency or submitted to Congress for approval. This risks damaging the alignment of the project team, as the project manager is tasked with executing a project scope of work and many times a budget and schedule that he or she had no input in developing. In situations where continuity will not be maintained, research has shown that a well-defined preproject planning process, specific and detailed documentation of the project scope of work and the decisions made, and a well- structured turnover procedure that includes a turnover meeting and project reviews with new stakeholders can mitigate alignment problems and minimize project scope changes during detailed design and construction. Stakeholder identification is an integral part of preproject planning and the subsequent development of effective scopes of work for design. Without the representation of appropriate stakeholders, a team cannot gain all the input necessary to effectively communicate the project design requirements to the designer. In addition, stakeholder involvement fosters timely decisionmaking throughout the process. It appears that all interviewed agencies establish their project teams with good representation from the user/ client, facilities/project personnel, operations and maintenance personnel, technical support functions, local repre- sentatives, and regulatory agencies. Ten of the 13 agencies have an established process to identify stakeholders.

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30 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS The ACC, NASA's Johnson Space Center (JSC), and the DOE's National Nuclear Security Administration (NNSA) have each developed checklists to assist in the proper identification of stakeholders. An adaptation of the JSC's stakeholder identification checklist is provided in Appendix F as an example. These checklists are tailored to the specific agency and type of project; generally, representation by the following stakeholder groups is recommended (Construction Industry Institute, 1997~: Business: Business and market evaluation Financial analyst Human resources Labor relations Legal advisor Project sponsor Public relations Operations: Facility operations Maintenance Procurement Research and development Safety Warehousing Project Management: Cost and schedule Environment Estimating General engineering Project controls Process engineering Project manager Quality/inspection Others: Construction General public Information management Specialist engineering Security None of the participants interviewed indicated that their agencies measure the effectiveness of their stake- holder identification processes through metrics. Representatives from the GSA, INS, DOS, and VA specifically mentioned the use of postoccupancy evaluations as a means of gathering feedback from occupants, which would indirectly measure stakeholder input during preproject planning. Two agencies measure effectiveness by the number of complaints received about the final project or their involvement in the process. The use of periodic stakeholder satisfaction surveys throughout the process may be more appropriate than either of these methods. The long duration of the process for congressionally funded projects is a significant challenge. Changes in mission and personnel between the time of the identification of the facility's needs and its construction often cause requests for new requirements and result in late changes. Keeping stakeholders involved in the process can be a communication-intensive challenge. To ensure that this occurs, a significant management effort, including an educational/training component, is required. Some agencies have already addressed this in their processes by making stakeholders an integral part of the process through early involvement and extensive coordination. Some specific examples are provided later.

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FEDERAL AGENCY PRACTICES 31 Three agencies specifically mentioned manpower shortages, and two mentioned funding shortages as having an adverse impact on the proper identification and involvement of stakeholders. In particular, the project manager is a key stakeholder and should be identified prior to detailed scope development not having the involvement of this key member can lead to continuity problems in the leadership of the project team. A successful project is designed to meet a defined business need. The Office of Management and Budget's (OMB) (1997) Capital Programming Guide provides guidance on this issue and offers "Three Pesky Questions" that should be addressed during the strategic planning of a potential new facility: lassoes the investment in a major capital asset support core/priority mission functions that need to be performed by the federal government? Does the investment need to be undertaken by the requesting agency because no alternative private-sector or governmental source can better support the function? Does the investment 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? Five agencies specifically mentioned business case analyses in their processes. An additional six agencies mentioned mission requirements as being an essential consideration in the review of a project. Examples of business analysis or mission requirements include: GSA project and business personnel work together to confirm that business and project goals are aligned and to develop a prospectus for each project. The DOS recently instituted the requirement for a business case analysis. USACE is required by law to document acceptable cost-benefit analyses for civil works projects, such as locks, dams, and shoreline structures. The USCG developed a Shore Facilities Capital Asset Management strategy that combines strategic planning and a business approach to facilities management that considers the total cost of ownership and operation over a facility' s operational life. The VA recently developed a process that requires answers to the "Three Pesky Questions" and includes a total life-cycle cost analysis early in the development of its project proposals. The project manager and team should ensure that they develop the "right work product" during preproject planning. Planning activities such as team building, alignment, and Project Definition Rating Index (PDRI) reviews have been shown to be a cost-effective investment in the project scope definition process. Representatives from 12 agencies stated that the eventual owners, users, and operations personnel are involved in the development of the project scope of work. Five agencies utilize working meetings to develop the project scope on selected, typically large or complex, projects. For example, the ACC uses analysis and design charrettes to develop project scopes of work. The charrette is a collaborative team effort that focuses on functional relationships and results in an initial design flow. Six of the 13 agencies interviewed measure the degree or quality of their project scope definition. Most of the measurement tools are in checklist form, and again, the level of detail varies. Those that do not use metrics to evaluate the level of project scope definition have a subjective review process for design authorization that relies primarily on the experience of the reviewers. With a few exceptions, it appears that project life-cycle costs are not routinely analyzed. Such an analysis is often the basis for the entire decisionmaking process in the private sector. DOE (NNSA) and GSA currently use CII' s PDRI. NASA and DOE' s Office of Environmental Manage- ment have each customized the PDRI for their internal use (Gibson et al., 2000; Gibson, 2001; Office of Environ- mental Management, 2001~. SI and DOS are beginning to implement PDRI in their processes. DOE uses internal and external Independent Project Reviews in conjunction with the PDRI based on project size. These independent project reviews use detailed, internally developed checklists to assess the degree of project scope definition.

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32 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS DOS utilizes an Integrated Design Review to expedite the design review and comment process, although these are typically used in the detailed design phase. INS and VA use space layout tools to define the project scopes of work for their medical facilities and to provide the basis for detailed design. Seven of the 13 agencies interviewed determine successful project scope definition from a program perspec- tive, as opposed to only on an individual project basis. The measures used to determine successful project scope definition from a program perspective are often the same as those used for individual project evaluation, but the program perspective involves analyzing performance trends over time. The most common parameters (three agencies each) measured were change orders and customer satisfaction. Budget and schedule performance were mentioned twice each. Other measures mentioned were time to execution and whether the project was actually built or not. The project manager and team should choose the "right approach" to project design and construction execution. Acquisition strategy is best considered during conceptual design and is best determined on a project- specific basis. At a summary level, acquisition strategy is determined on a project-by-project basis. Four of the 13 participating agencies consider acquisition strategy very early in the preproject planning process. Most have the option of using design-build or design-bid-build, with a best value selection process being more prevalent than the traditional low bid. As an example, an acquisition strategy format recently developed by DOE requires a detailed assessment of the acquisition background and objectives and development of a business and contracting strategy before design funds are released (Department of Energy, 2002~. The key components of this format are included in Appendix G. The choice of delivery method can impact stakeholder identification and preproject planning processes, as evidenced by the differences between the Design-Build Institute of America standard design contract forms and those from the American Institute of Architects and EJCDC. One respondent stated that in complex acquisitions, the acquisition plan is instrumental in identifying the important stakeholders and ensuring that they are included in the preproject planning process. Five agencies reported that acquisition strategy does not have a significant impact on their stakeholder identification or preproject planning processes. Allowing the contractor who develops the project scope of work to compete for the detailed design contract provides the opportunity to maintain continuity of project knowledge as well as the project team. Many agencies utilize Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts for architect/engineer (AIE) services, for both preproject planning and detailed design work. Two agencies incorporate details of their preproject planning processes, which will be discussed later in this chapter, into their design development requests for proposals (RFPs) and their ultimate selection of an architect/engineer (A/E) firm. ACC specifies charrettes and the development of a Customer Concept Document (CCD), and NASA specifies a PDRI workshop at the 30- percent design review. These are effective ways to ensure that the contractor knows the agency's expectations. Most agencies that contract their scope definition functions award the detailed design under a separate contract, and the contractor developing the scope is typically allowed to compete for the detailed design contract. In addition to the typical AIE and construction services, agencies reported hiring consultants for activities such as team building, partnering, PDRI facilitation, and training. None of the agencies interviewed measure the effectiveness of their acquisition processes through metrics, although some track lessons learned and success stories of various projects and acquisition strategies. For instance, respondents anecdotally indicated that most design-build projects result in comparable costs and faster delivery than traditional design-bid-build projects. FUNDING, PROCESS, AND OTHER RELATED ISSUES Respondents were asked what challenges or limitations they faced in their planning processes. The execution of effective preproject planning seems to be easily derailed by resource constraints and, in some cases, congres- sional add-one that require a project scope and cost estimate for authorization in as little as one day. These and other issues are discussed below.

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FEDERAL AGENCY PRACTICES 33 Funding Issues Eleven agencies mentioned resource constraints as having a negative impact on their preproject planning efforts eight cited funding shortages, and five cited manpower shortages. It is interesting to note that represen- tatives from some agencies reported that they generally have adequate planning funds because they include funds for preproject planning in their budget requests. Adequate resources are essential for thorough preproject planning. The issue of funding has become more significant with increased outsourcing of preproject planning activities. Eight agencies fund preproject planning efforts with money from their operations budgets. This can be effective if 2 to 5 percent of the planned capital expenditure is set aside for preproject planning activities in the development of the budget, but at times these funds have been shifted to other operational priorities. NASA, USACE (Civil Works), DOE, VA, and USCG fund preproject planning efforts with capital funds set aside at the headquarters level. This appears to be a better approach as the preproject planning efforts do not compete with operational priorities for the same funds. NAVFAC is in the process of designating early project planning as a mission-funded activity in order to ensure that funds are available for planning. In some cases, Congress or the agency locks in the budget, or the agency adopts a position regarding the budget, prior to detailed development of the project scope. In effect, the budget is viewed with much more accuracy than it deserves, based on the information supporting it. Funding a project based on an early estimate that contains a significant level of inherent uncertainty leads to unpredictable cost performance. In cases where projects are overfunded, the scope generally expands to match the budget. In cases where projects are underfunded, there are only two options increase funding to meet scope, or reduce scope to meet the budget; in essence, the project scope is used as contingency. Five agencies reported using a project scope definition quantification tool prior to developing a scope of work for design. Some agencies accurately capture preproject planning costs so that future budget requests can include ad- ~ ~ , ~ ~ ~ ~ O equate amounts for planning. As discussed earlier, preproject planning can provide a significant return on . . . . ~ . . . . . . . . Investment and Improve project cost performance through reducing rework and change orders. Process Issues There are also a number of process-related aspects that hinder effective preproject planning. The long duration of the congressional approval process is a challenge, as people, administrations, and even missions can change in the time between identification of the need and construction of the facility. One agency has a significant backlog of projects that have been authorized but not funded. If these delays are significant, the project requirements can change between authorization and funding. In the event of a significant delay between authorization and funding, the project team should reverify/update the project scope of work prior to developing a scope of work for design. INS and VA have steps in their processes specifically designed for this situation. Execution pressure can cause mistakes. Thorough scope definition is often not completed if it would risk the project missing a congressional approval window. However, submitting poorly defined projects for funding approval will almost certainly result in increased actual costs as well as increased uncertainty surrounding project costs. It appears that in some cases project scopes of work and budgets are locked in by Congress and/or agency headquarters prior to significant project scope definition efforts. Organizational reluctance to spend time and money on a project that has not yet been authorized can cause problems. The first key element of an effective preproject planning process, as discussed in Chapter 3, is that the project manager and team should ensure that it is performing the "right project." The proper time to do this is prior to congressional authorization; part of the reason for the investment in preproject planning is to determine whether the project should proceed. Some field-level participants mentioned that they are asked to develop a scope of work for design for which they did not participate in the project scope definition process. Lack of key stakeholder continuity is a problem in this situation.

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34 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS Another field participant stated that sometimes there is an opportunity to modify a scope and budget prior to congressional approval, based on further refined planning. However, the agency headquarters does not approve the revisions either because they are considered too large or the agency considers the budget to be locked in based on its preliminary approval for design funds. Core Competencies and Training Preproject planning processes in a significant number of agencies rely heavily on their experienced planning personnel. This may currently be effective, but the participants in this study had an average of 28 years of work experience. Much of this knowledge may be lost as these employees retire within the next decade. "Lessons learned" programs and organizational processes can aid in institutionalizing this knowledge in order to maintain continuity in agencies' ability to effectively manage projects. Effective training and mentoring are necessary in order to successfully implement these processes and transfer the planning experience to new managers. Six agencies conduct training on their preproject planning processes and tools, but the level of detail varies. DOE is developing a comprehensive training program, while another agency relies solely on the experience of its Project managers and on-the-iob training. GSA. NASA. and SI have recently hired consultants to conduct ~ ~ i, ~ i, , , ~ ~ , , ~ , ~ , ~ ~ ~ . . __ ~_ T ~ . ~ facilitation and training on subjects such as planning best practices, Pl)Rl, and partnering. Two agencies make training available to clients NASA conducts PDRI orientation sessions with facility tenants, and INS makes its annual Health Systems Planning software training sessions available to tribal representatives, facility managers, and tenants, in addition to engineers and area planners. A well-developed training plan will facilitate consistent performance across an agency's project portfolio. PERFORMANCE MEASUREMENT The use of proper metrics provides a measure of performance that can be used to improve the preproject planning process. Nine of the 13 agencies interviewed measure project performance. The most common para- meters (eight agencies each) were cost and schedule performance, followed by postoccupancy reviews or other forms of customer evaluation (five agencies). The next most common parameters (three agencies each) were technical/quality and the timing of funding obligations. Although useful as a metric, obligation rate is a measure of overall program or budget execution, rather than project performance; it only tracks whether an agency obli- gates its money "on time," without regard for how effectively the money is spent. Other parameters included change orders and the scope or size of the project. Some agencies utilize project-reporting systems to collect performance data and conduct periodic performance review meetings. PREPROJECT PLANNING ACTIVITIES IN SELECTED AGENCIES This section highlights the preproject planning processes or innovative aspects of those processes of some but not all of the agencies interviewed. Department of Energy An example of a documented process is DOE (2000) Order 413.3, which clearly defines five "critical decisions" as approval checkpoints, as shown in Figure 4. The process includes definitions of, actions authorized by, and prerequisites for each critical decision. This process is being refined and is not yet uniformly used across the department. For the purposes of this study, DOE's preproject planning process ends at Critical Decision 2 (CD-2), which establishes the project baseline (cost, schedule, and scope). CD-0 requires a justification of mission need, acquisition strategy, preconceptual planning, and an Independent Project Review prior to proceeding with conceptual design. These independent project reviews use detailed, internally developed checklists to assess the degree of readiness to proceed to the next phase. CD-1 requires an acquisition plan, conceptual design report, preliminary project execution plan and baseline range, project data sheet for design, verification of mission need, and preliminary

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FEDERAL AGENCY PRACTICES DOE O 413.3 PROJECT, ACQUISITION PROCESS AND CRITICAL DECISIONS Project Planning Phase Project Execution Phase Preconceptual | Conceptual Preliminary | Final Planning I Design Design I Design . ~ ~ ~ CD-0 CD-1 CD-2 CD-3 Approve Approve Approve Approve Start of Mission Need Preliminary Performance Construction Baseline Range Baseline Construction . CD-4 Approve Start of Operations or Project Closeout Mission Operations CD~ | CD-1 | CD-2 | CD~ | CD Actions Authorized by Critical Decision Approval . Proceed with Allow Establish baseline budget Allow expenditure conceptual design expenditure of for construction of funds for using program funds PED funds for Continue design construction Request PED design Request construction funding l I fun ing ~ l Critical Decision Prerequisites . Justification of Acquisition Preliminary design Update Project mission need Plan Review of contractor Execution Plan document Conceptual project management and performance Acquisition Strategy Design Report system baseline Preconceptual Preliminary Final Project Execution Final design and planning Project Plan and performance procurement Mission Need Execution baseline packages (**) I ndependent Project Plan and I ndependent cost Verification of Review baseline estimate mission need range National Environmental Budget and Project Data Policy Act documentation congressional Sheet for Project Data Sheet for authorization and design construction appropriation Verification of Draft Preliminary Safety enacted mission need Analysis Report Approval of Preliminary Performance Baseline Safety Hazard External Independent documentation Analysis Review Execution Report Readiness I ndependent Review . Allow start of operations or project closeout Operational Readiness Review and acceptance report Project transition to operations report Final Safety Analysis Report After CD -4 Closeout Project closeout report (**) To the degree appropriate to initiate construction as scheduled FIGURE 4 DOE project acquisition process and critical decisions. 35 hazard analysis report prior to the authorization to expend design funds and begin preliminary design. Project scope definition continues to be developed during the preliminary design phase, leading to the development of a project performance baseline at CD-2. This preproject planning process generally follows the process outlined in Chapter 3. For example, the NNSA undertook a thorough preproject planning effort in order to write the REP for a recent design- build project. That particular project was completed ahead of schedule and under budget, with no project scope changes. DOE currently requires that acquisition execution plans be reviewed by the chief financial officer's

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36 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS organization on all projects in excess of $5 million. The contents of the acquisition strategy requirements have been previously discussed in general and are provided in Appendix G (Department of Energy, 2002~. Department of Veterans Affairs The VA recently revamped its Capital Investment Planning Process. The VA Capital Investment Methodology Guide (www.va.gov/budget/capital) "requires that facility investment proposals be clearly tied to Department goals and objectives before they will be considered for funding." This process uses OMB's (1997) Capital Programming Guide as a reference and requires that OMB's "Three Pesky Questions" be answered before a proposal is considered for review. Formulation is the first step in the process and consists of three phases: functional development; technical review; and strategic review. During the functional development phase, strategic needs are analyzed, capital and other assets are planned to meet those needs, and data are developed to help evaluate and prioritize spending projects. Templates and instructions for completing the application and conducting analyses for cost effectiveness, alternatives, and risk are provided. The project scope is further developed in the technical review phase. Invest- ment proposals are evaluated and prioritized by a board or council of subject matter experts. Evaluation criteria vary by asset type and may be updated annually. In the strategic review phase, proposed projects are evaluated, prioritized, and measured against the VA's strategic plan and OMB's requirements to determine the best combination of assets to meet the department's mission, obligations, goals, and objectives. Each project proposal undergoes quality control to ensure that the supporting data, documentation, and analyses are valid. Regarding alternative selection, the validity check requires that at least three viable alternatives be fully evaluated and compared to the chosen option. Following validation, each proposal is scored on twenty criteria and, based on that score, strategically prioritized with other project proposals for approval by the VA Capital Investment Board. Finally, this process includes an execution review after proposals have been approved and funded but prior to the project being initiated. Proposal teams submit progress reports to determine if schedules and costs are on target. An earned value analysis tool has been developed to aid the proposal team in this step. General Services Administration General Services Administration project needs are typically generated by their regional offices. A feasibility study is developed into a design prospectus, which is reviewed by staff at GSA headquarters and the OMB, and then is submitted to Congress for planning and design funding. The cost estimate at this point in the process is generated from the General Construction Cost Review Guide (GCCRG), a benchmark-type cost estimating sys- tem. GSA ensures that the project meets the defined business need by specifically emphasizing the alignment of business goals (developed by real estate portfolio personnel) and project goals (developed by project personnel). An occupancy agreement outlines the future lease responsibilities of GSA and the tenants. A consultant, typically under an ID/IQ contract, develops a Program Development Study (PDS), which is a detailed definition of the project scope that the scope of work for design is based on. The consultant preparing the PDS may continue with the detailed design, but this does not always occur. GSA attempts to involve the design contractor early enough in the process to allow the designer to participate in preproject planning and to have some influence on the final PDS. A new cost estimate based on the PDS is then submitted to Congress for construction authorization. GSA adds prospective construction management firms to the project team where possible. Short-listed firms provide construction input early in the design phase, and the quality of their input is considered in the construction management selection process. GSA also uses partnering consultants to improve team performance and PDRI reviews to validate project scope definition.

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FEDERAL AGENCY PRACTICES 37 Indian Health Service The IHS conducts three phases of preliminary planning prior to awarding a detailed design contract. Project needs are identified by area managers in field offices. Phase 1 consists of a headquarters preliminary screening of the need. Phase 2 involves headquarters validation of the need based on population demographics and conceptual facility requirements. Detailed project scope development begins in Phase 3. Area offices with support from two engineering services offices manage this phase, which includes charrette-type work sessions with stakeholders (Indian Health Service, 2000). IHS has developed a Health Systems Planning Manual to develop comprehensive project scopes of work for health care facilities. The project scope of work developed in Phase 3 is documented in a Program Justification Document (PJD), which specifies the size of the facility, medical services, and other functions to be included in the facility and provides a cost estimate. The PJD is reviewed by staff at the headquarters level. Upon approval of the PJD, the project is placed in a priority list ready for funding from Congress through a budget formulation process. The project scope of work is further developed using a computer program that tailors architectural templates and/or layouts for each required functional area. The templates include information on equipment and finishes and adjacency requirements for the various functions and are provided to the designer in an electronic format. This automated system "allows an area planner to plan for the expansion or replacement of a facility in a matter of days instead of the months it took in the past" (Indian Health Service, 2001~. This software-based planning tool can be a very effective approach for planning similar facilities, such as what IHS constructs. The resulting package is the Program of Requirements (POR). After Congress provides initial funding for the project (which can be years after the PJD is approved), the area planners update and revise the POR for execution, and that becomes the basis for the scope of work for design. National Aeronautics and Space Administration-ISC The NASA-JSC process map is shown in Figure 5. A key feature of the process is that JSC conducts PDRI reviews three times prior to beginning detailed design once during establishment of the initial requirements, once during an interim assessment in the planning process, and once at the 30-percent design review stage. This third PDRI score is used to assess the official schedule and budget for the project and leads to the basis for the scope of work for design. JSC specifies this final PDRI workshop in its design development RFPs; this is a vital part of CY 1997 1 CY 1998 T cY 1999 T CY2000 CY 2001 1 N 1 D 1 J 1 St . r ' 1 . S 1 _ I_ D TJ TF |M TA TM |J TJ TA TS IO |N |D |J | _....................................................................................................... ~ Initial Center Plannina ....... . ~ _ ~ FIGURE 5 Example of pre-project planning time line with PDRI evaluation points (Gibson et al., 2000).

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38 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS the acquisition strategy that clearly communicates the importance of this evaluation to the design development contractor. JSC project staff members often partner with design consultants and contractors are included on the team to gain input regarding project constructability. As a result, JSC has experienced improved information flow and improved customer satisfaction, as indicated by surveys. Naval Facilities Engineering Command (NAVFAC) NAVFAC identified three initiatives related to preproject planning and developing scopes of work: the Functional Area Concept Development (FACD), the NAVFAC Design-Build Master (NDBM), and the Business Management System (BMS). These initiatives are in differing stages of development. The Functional Analysis Concept Development (FACD) process is currently used to confirm project scope and budget, improve understanding by all involved parties of project issues, and to minimize redesign and associated expenses, among other purposes. The process begins with a working meeting, where all key stakehold- ers and design personnel evaluate project requirements/needs, costs, goals, and objectives over the course of a few days (charette for small projects) or through an intense two-week workshop (for major projects). Concepts are then presented, issues are identified and resolved or plans are developed to resolve them. The FACD report represents the final, confirmed project scope and the preliminary design, which becomes the basis for later submittals. Value Engineering concepts and principles are applied. NAVFAC emphasizes effective communication and alignment of project objectives by building this process around customer input. The NAVFAC Design-Build Master (NDBM) is a Web-based tool for projects using a Request for Proposal (RFP) format; when deployed, it will be hosted by the National Institute of Building Sciences (NIBS). The NDBM takes the best of the design-build processes currently being used in the Navy, combines them with newly created, performance-based technical specifications and design criteria to provide a single source for documents to prepare a Design-Build RFP. The NDBM will include seven Unified Facilities Criteria documents design guides organized by technical discipline which provide guidance for the RFP preparer and design requirements for the Contractor's Designer of Record. They will apply to both design-bid-build and design-build projects. The process of creating the NDBM and the resulting Web site will clarify Navy policy, promote common practice within the Navy, promote design- build as a procurement method, and create uniform RFPs for Navy projects. The Business Management System (BMS) is being deployed in phases. EMS will provide NAVFAC's employees and clients with Web-based access to its business processes. One of these, the Capital Improvements Acquisition Process, consists of seven steps: (1) Project Initiation to develop the acquisition strategy (design and construction) and schedule (2) Other Business Line Coordination (e.g., obtaining environmental services and NEPA compliance and finalizing real estate actions) (3) Operational Outfitting Considerations (e.g., collateral and other equipment; operating permits; and the like) (4) Construction Document Strategy Execution to develop scope of work and project requirements; execute A/E services contracts; develop acquisition clauses and finalize construction contract documents. The FACD and NDBM processes support this step (5) Bids, Proposals and Contract Award (6) Finalize Design and Build the Facility (7) Project Closeout: Contract and Financial Closeouts; Client Feedback The FACD, design-build procurement, and capital improvements acquisition processes have some similarities with other federal agency processes described in this chapter and to the preproject planning process described in Chapter 3. The early focus is on development of the project scope of work and the acquisition strategy. This process is compatible with the DBIA standard contract forms discussed in Chapter 2 in that the project scope is sufficiently developed prior to the award of the contract.

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FEDERAL AGENCY PRACTICES 39 Smithsonian Institution The SI has project managers permanently assigned to each building or bureau, so they are involved from the initiation of any project. The process was recently revised to create a control (baseline) scope and budget and to add a review at 35 percent design to reconfirm project scope prior to proceeding. This decision point was instituted to reduce the risk of changed project scopes of work and renegotiations. The new process includes charrettes and three PDRI reviews for some larger projects, the last of which is conducted at the 35-percent design review. This revised process is similar to the one used by NASA presented in Figure 5. U.S. Air Force Air Combat Command The ACC uses planning and design charrettes to involve stakeholders in project scope development. ACC finds these charrettes very helpful in developing a team approach to early scope definition. ACC considers charrette experience a prerequisite for A/E selection and includes the charrette requirements in its architect- engineer RFPs. ACC also documents project scope for all major projects in a Customer Concept Document (CCD), which becomes the foundation for the scope of work for design. This planning document details user requirements, project siting, base constraints, parametric cost estimates, general floor layouts, and any models. The standard Scope of Work for a CCD is contained in Appendix H. The ACC spends a maximum of $50,000 to develop a CCD, including the design charrette. The CCD is completed during preproject planning and provides the basis for detailed design. The CCD is considered a critical step in gaining and documenting buy-in from the team members for the remainder of the project. ACC has experienced a steady decrease in the growth of military construction project costs: 4.3 percent for FY 1998 projects, 2.6 percent for FY 1999, and 1.6 percent for FY 2000. The improvement is attributed to ACC's preproject planning process, specifically its effective use of charrettes and CCDs. U.S. Coast Guard The USCG has developed the Shore Facilities Capital Asset Management (SFCAM) strategy, which com- bines strategic planning and a business approach to facilities management that considers the total cost of owner- ship and operation over a facility's operational life. The USCG couples this SFCAM strategy with regional strategic planning to ensure that facility projects and priorities are driven by mission requirements. This integrated decisionmaking approach is supported by the use of information technology to handle the data. The USCG also collects and distributes lessons learned and best practices in its facilities management program. Department of State The Department of State's Office of Overseas Buildings Operations (OBO), in conjunction with all its stakeholders, including the OMB and Congress has developed a long-range overseas buildings plan (LROBP).The LROBP outlines the facilities requirements new construction, major renovation, security, and other programs with a long-term focus necessary to support the State Department's priority diplomatic readiness goal. It pro- vides the basis for proceeding in a logical and focused fashion to improve the safety and security of facilities overseas. Although it is not a budget document, the LROBP is an important planning tool to inform the budget decision-making process and to measure financial performance. The OBO has specific and distinct areas of planning, design and construction. The planning office is respon- sible for both the LROBP and for Project Analysis Packages which outline project scope, cost, and schedule parameters. The Design and Engineering Division is responsible for managing the designs according to the Project Analysis Packages and for developing the RFPs for most major design-build projects. The Construction and Commissioning Division handles construction management and support. Much of OBO's work for new construction uses a Standard Embassy Design (SED) and a design-build contracting strategy. OBO has developed a standard Request for Proposal (RFP) format for SED projects that

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40 STARTING SMART: KEY PRACTICES FOR DEVELOPING SCOPES OF WORK FOR FACILITY PROJECTS includes standard drawings, specifications, and an "Application Manual" to address site specific needs. OBO personnel report that this approach has significantly reduced project cycle time. The SED also incorporates a Lessons Learned module of ProjNet, a Web-based application developed by the U.S. Army Construction Engi- neering Research Laboratory to integrate continual feedback and improvement into the program. Each year SED documents are updated to incorporate lessons learned as well as new standards and guidelines. OBO has developed standardized scopes of work for multiple building types to be used for renovations and projects using a design-bid- build contracting strategy. SUMMARY Many processes, methods, and tools are used by federal agencies to conduct preproject planning and to develop scopes of work for design. One of the goals of this study is the dissemination of knowledge and experience gained by agencies in the successful execution of projects. Elements contributing to successful execution include a formal, structured preproject planning process; training to develop and maintain core compe- tencies; projects that support agency mission and accurate business case analysis; identification and involvement of project stakeholders; selection of an appropriate acquisition strategy; use of processes and tools that encourage effective communication; risk quantification and assessment; and structured reviews of the project scope of work throughout development.