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Appendix F: Building Flexibility into Projects to Manage Uncertainty
Pages 108-111

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From page 108...
... An example could be a project manager recognizing that the cost and development of a specialized component depends on the design expertise of a particular vendor. The depletion of that vendor's capabilities could increase costs beyond the budget limits, constrain development of the component, or both.
From page 109...
... The threat posed by these uncertainties was that if development efforts failed in either way, the project could be delayed too long to meet its deadline and would incur very high unbudgeted costs. Although LLNL had established relationships with experienced laser glass vendors, none could guarantee successful development a priori.
From page 110...
... Based on this reasoning, DOE and LLNL contracted with two vendors to support parallel development efforts. The uncertainty about the technology's viability was resolved in early 1999, when both vendors successfully produced pilot runs of glass using a continuousmelting process.
From page 111...
... , the major project risk is identified as "unfunded estimated project cost (EPC) owner's contingency: If Congress does not authorize an additional $435 million to cover ORP contingency allowances (includes normal estimating variability and risk allowances)


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