DOE O 4700.1 Chg 1, Project Management System

3-6-87 Change 1: 6-2-92 PROJECT MANAGEMENT SYSTEM 1. 2. 3. 4. PURPOSE. To establish the Department of Energy (DOE) project management system and provide implementing instructions, formats, and procedures, and to set forth the principles and requirements which govern the development, approval, and execution of DOE’s outlay program acquisitions as embodied in the Project Management System (PMS). APPLICATION TO CONTRACTS. The provisions of this Order are to be applied to covered contractors and they will apply to the extent implemented under a contract or other agreement. A covered contractor is a seller of supplies or services involved with Major System Acquisitions, Major Projects, and Other Projects, as defined at Figure I-1 on page I-3, and awarded a procurement contract or subcontract. The term “procurement contract” does not include small purchases. Covered contractors shall be required to comply with all paragraphs of this Order except paragraph 10 on page 5. REFERENCES. See Attachment 1. POLICY. a. b. c. It is Department policy to manage all projects in accordance with this Order. The chapters of this Order provide instructions, formats, and procedures to implement the project management system. Where programs/projects of a classified nature are conducted, procedures will be tailored accordingly. This Order does not apply to facilities and activities covered under Executive Order 12344. Pursuant to the Bonneville Project Act, the Federal Columbia River Transmission System Act, the Pacific Northwest Electric Power Planning and Conservation Act, and other statutory authorities, the Administrator of the Bonneville Power Administration (BPA) is authorized and directed to provide, construct, operate, maintain, and improve electric transmission lines and facilities as necessary, desirable, or appropriate for the purpose of transmitting electric energy for sale to existing and potential markets. These authorities are coupled with the Administrator’s responsibility to ensure the safety, security, and reliability of electric power Vertical line denotes change All Departmental Elements Office of Procurement, Assistance and Program Management DOE 4700.1 Chg 1 6-2-92 2 5. marketing and transmission as well as to meet its legal and contractual obligations. In light of these unique authorities, this Order shall not apply to BPA. d. This Order does not alter the procedure outlined in the May 7, 1986 memorandum entitled “Modified Project Management System for the Western Area Power Administration, Western Area Power Administration.” e. Formality and documentation requirements will be significantly greater for Major System Acquisitions (MSAs) and major projects, but this fact does not lessen the responsibility for proper planning and execution of any project. Acquisition Executives, Program Secretarial Officers and Heads of Field Elements shall ensure that the project management system is implemented at a proper level in all projects. BACKGROUND. a. b. c. d. e. f. The project management system has evolved as one of the principal management processes for the Department. The principles, policies, and procedures for the system were first promulgated in 1978. This implemented and institutionalized OMB Circular A-109, Major System Acquisitions, of 4/5/76. The next step in the evolutionary process of PMS was issuance of a requirement for decentralization in 1979. This policy brought the field offices clearly into the process as a full partner in project management.

In 1980, the Acquisition Executive decision process for Major Projects was delegated to the Program Secretarial Officers. In 1989 and 1990 the Department emphasized the strengthening of the project management system. The project management system, since inception, has been substantially improved to: (1) simplify the procedures; (2) streamline the system; and (3) allow for management by exception. This revision incorporates the following to the extent noted: (1) SEN-6D-91, Departmental Organizational and Management Arrangements, added titles to definitions. (2) SEN-9-89, Federal Manager’s Financial Integrity Act and Audit Resolution and Followup, of 7-26-89. Added in its entirety to Chapter IV, Part A. (3) SEN-1OE-91, Authorities and Responsibilities of the Deputy Secretary and Under Secretary, of 6-17-91. Updated titles throughout document. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 3 (4) SEN-25-90, Strategic Planning Initiative, of 7-24-90. Added to Chapter II. (5) SEN-27-90, Strengthening the Department of Energy Project Management System, of 8-15-90. Incorporated in its entirety into Chapters I and II. (6) DOE N 4700.4A, Baseline Change Control Process at the Executive Level, of 10-31-91. Incorporated in its entirety into Chapter III. 6. OBJECTIVES. a. The primary objective of this Order is to assure the application of sound management principles to provide a disciplined, systematic, and coordinated approach to project management resulting in efficient planning, organization, coordination, budgeting, management, review, and control of DOE projects. b. The overall objectives of the project management system and this Order are to facilitate meeting mission needs, aid in achieving and sustaining excellence in project management, minimize procedural requirements, and foster the concepts of baseline management, accountability, and performance assessment. c. The specific objectives of the project management system are summarized as follows: (1) (2) (3) (4) (5) (6) Ensure all projects are based on clearly defined missions and mission analyses and are developed with clear time-phased goals and objectives that support program requirements. Ensure proper coordination by all appropriate line and staff elements beginning with program or project inception. Provide a basis for determining priorities among programs and projects, and, in turn, relate these to various levels of resource availability. Promote project execution which achieves tecnnical, schedule and cost objectives. Technical objectives include safeguards and security, environment, health, safety, quality assurance and all programmatic aspects. Avoid commitment of major resources prior to adequate project definition. Provide an overall plan for project execution including evaluation of project progress in relation to specific milestones. This plan should also identify the required Government staffing as well as the responsibility and authority of project and matrix staff. Vertical line denotes change 4 DOE 4700.1 Chg 1 6-2-92 (7) Provide visibility on all key decisions and timely feedback for all levels of management, and maintain accountability and traceability of management decisions through and across all levels of the organization with the minimal amount of procedures and paperwork. (8) Centralize authority for project approval and for allocation of resources, and assure line management authority for project execution and the utilization of resources in that execution.

(9) To assure preparation of well planned budgets. 7. DISCUSSION. a. The magnitude of the Department’s project management task is formidable. The diverse array of project responsibilities and activities requires wide familiarity with, and understanding and working knowledge of scientific, engineering and managerial skills. These attributes are necessary to assure that projects meet mission needs, achieve planned technical and management objectives and are accomplished on schedule, within cost and scope, and that the projects serve the purposes intended. b. This Order is the Department of Energy’s primary written reference for project managers and program managers responsible for project management. c. The cost, complexity, and longevity of a multimillion-dollar effort demands a formal management system, prescribed authorities and responsibilities, and finite planning and control. These, in turn, bring to mind project justifications, plans and charters, reporting, and project review. However, every project effort--regardless of size and complexity-has certain inherent characteristics. Every project effort needs several specific ingredients: (1) Someone in charge and accountable. (2) An understanding of that person’s responsibility and authority. (3) A clear definition of the work scope. (4) An integrated schedule, including milestones (network schedule). (5) Supportive budget planning and execution that considers overall funding availability within the Department as well as program and project management. (6) An overall plan for performance. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 5 (7) Project execution against the plan. (8) Sufficient reporting to stay aware of progress. (9) Periodic management review to ascertain project status. (10) Organizational commitment to successful project completion. d. The management differences between MSAs, major projects, and other projects have to do with substance, not intent. In other words, all projects must be managed; the extent and formality of that management is the only issue. Attachment 2 summarizes PMS application. e. The attached Chapters I through V comprise the Project Management System. 8. DEFINITIONS. See Attachment 3. 9. RESPONSIBILITIES. a. b. c. d. e. Acquisition Executive and the Director of Procurement, Assistance and Program Management, jointly determine and approve changes or additions to the policies and procedures in the project management system. The Associate Director for Program/Project Management and Control through the Director of Program/Project Management, is responsible for initiating and updating the guidance for the project management system, for monitoring its implementation, and for review and concurrence of all reporting requirements. Heads of Headquarters Elements assure that the provisions of this Order, which apply to project management functions over which they have program direction, both in the field and at Headquarters, are carried out. Heads of Field Elements carry out all project management functions delegated or assigned by Program Secretarial Officers as required by applicable directives. Heads of Headquarters Elements and Heads of Field Elements (the senior ranking DOE official at a DOE office location) shall include in a procurement request package, for each procurement requiring the application of this directive, the following: (1) identification of the directive, (2) identification of the specific requirements with which a contractor or other awardee is to comply, or, if this is not practicable, identification of the specific paragraphs or other portions of this directive with which a contractor or other awardee is to comply, and (3) requirements for the flowdown this directive to any subcontract or subaward. For

of provisions of application to Vertical line denotes change 6 DOE 4700.1 Chg 1 6-2-92 awarded management and operating contracts, Heads of Headquarters Elements and Heads of Field Elements may set forth this information in a written communication to the contracting officer rather than in a procurement request package. BY ORDER OF THE SECRETARY OF ENERGY: DONALD W. PEARMAN, JR. Acting Director Administration and Human Resource Management Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 Attachment 1 Page 1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. REFERENCES DOE 1300.2A, DEPARTMENT OF ENERGY STANDARDS PROGRAM, of 5-19-92, which establishes general policy guidelines, authorities and responsibilities for DOE standards programs, use of voluntary consensus standards, and guidelines for participation in private sector standards organizations. DOE 1324.2A, RECORDS DISPOSITION, of 9-13-88, which assigns responsibilities and authorities, and prescribes policies, procedures, standards, and guidelines for the orderly disposition of Departmental records. DOE 1332.1A, UNIFORM REPORTING SYSTEM, of 10-15-85, which establishes and provides implementing instructions for a uniform system of reporting the accomplishments under contracts. DOE 1332.2, UNIFORM REPORTING SYSTEM FOR FEDERAL ASSISTANCE (GRANTS AND COOPERATIVE AGREEMENTS), of 10-31-83, which establishes and provides implementing instructions for a uniform system of reporting the accomplishments under grants and cooperative agreements. DOE 1360.1A, ACQUISITION AND MANAGEMENT OF COMPUTING RESOURCES, of 5-30-86, which establishes Departmental policies and procedureS for the acquisition and management of automatic data processing equipment and resources. DOE 2200.4, ACCOUNTING OVERVIEW, of 3-31-88, which establishes the policy, principles, objectives, and responsibilities for Departmental accounting and reporting in accordance with Government regulations and generally accepted commercial and industrial accounting principles. DOE 2200.9A, MISCELLANEOUS ACCOUNTING, of 3-30-89, which provides Department of Energy (DOE) policy and general procedures for payroll accounting (does not include payroll processing procedures), travel and transportation accounting, financial closeout of contract procedures, grant accounting, and accounting procedures unique to the power marketing administrations. DOE 2250.1D, COST AND SCHEDULE CONTROL SYSTEMS CRITERIA, of 6-12-92, which delineates the requirements, procedures, authorities, and responsibilities for establishing and documenting uniform standards for assessing contractor cost and schedule control systems criteria (CSCSC). DOE 3220.4, CONTRACTOR PERSONNEL AND INDUSTRIAL RELATIONS REPORTS, of 6-4-85, which prescribes policy and procedures, and assigns responsibilities and authorities for the preparation and submission of the subject reports. DOE 4200.1C, COMPETITION IN CONTRACTING, of 1-9-87, which establishes policies and procedures to assure that competitive procedures are utilized to the maximum extent practical in the acquisition of personal property and nonpersonal services. Vertical line denotes change Attachment 1 DOE 4700.1 Chg 1 Page 2 6-2-92 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. DOE 4240.1K, DESIGNATION OF MAJOR SYSTEM ACQUISITIONS AND MAJOR PROJECTS, of 6-23-92, which lists the specific Department of Energy (DOE) projects which have been designated as major system acquisitions and major projects in accordance with the references.

DOE 4300.16, REAL PROPERTY MANAGEMENT, of 7-1-87, which establishes DOE policies and procedures for the acquisition, use, and disposal of real estate or interest therein. DOE 4320.16, SITE DEVELOPMENT PLANNING, of 1-7-91, which provides the policy and procedures for site development, facility utilization, and related planning. DOE 4330.4A, MAINTENANCE MANAGEMENT PROGRAM, of 10-17-90, which provides policy and procedures for the establishment of programs for the maintenance and repair of Departmental property. DOE 5000.3A, OCCURRENCE REPORTING AND PROCESSING OF OPERATIONS INFORMATION, of 5-30-90, that sets forth policy, assigns responsibility, and provides criteria and instructions for a system of reporting occurrences that have programmatic significance to DOE operations, analyzing the information reported and disseminating the analysis results. DOE 5100.3, FIELD BUDGET PROCESS, of 8-23-84, which provides requirements and procedures for the preparation and submission of field budget material for preparation of the Departmental budget. DOE 5160.1A, REPROGRAMMING, RESTRUCTURING, AND APPROPRIATION TRANSFER PROCEDURES, of 12-1-86, which establishes the major policies, criteria, and procedures for initiating reprogramming, restructuring, and appropriation transfer actions relating to the appropriation accounts of the Department of Energy. DOE 5440.1D, NATIONAL ENVIRONMENTAL POLICY ACT COMPLIANCE PROGRAM, of 2-22-91, which establishes procedures to implement regulation 10 Code of Federal Regulations (CFR) 1021 for use in complying with the National Environmental Policy Act of 1969 (NEPA), as amended; Executive Order 11514, as amended; as supplemented by the regulations of the Council on Environmental Quality and DOE guidelines for compliance with NEPA; including DOE’s “Environmental Compliance Guide,” Volumes I and II. DOE 5480.1B, ENVIRONMENT, SAFETY, AND HEALTH PROGRAM FOR DOE OPERATIONS, of 9-23-86, which establishes the environmental protection, safety, and health programs for the Department of Energy operations. DOE 5484.1, ENVIRONMENTAL PROTECTION, SAFETY, AND HEALTH PROTECTION INFORMATION REPORTING REQUIREMENTS, of 2-24-81, which establishes the requirements and procedures for the reporting of information having environmental protection, safety, or health protection significant for DOE operations. Vertical line denotes change DOE 4700.1 Chg 1 Attachment 1 6-2-92 Page 3 21. 22. 23. 24. DOE 5500.2B, EMERGENCY CATEGORIES, CLASSES, AND NOTIFICATION AND REPORTING REQUIREMENTS, of 4-30-91, which provides for the coordination and direction of Departmental planning, preparedness, and response to operational emergencies involving DOE or requiring DOE assistance, in which there is a potential for personal injury, destruction of property, theft or release of toxic, radioactive, or other hazardous material which represent a potential threat, including terrorist threats of acts, to health, safety, or the environment. DOE 5500.3A, PLANNING AND PREPAREDNESS FOR OPERATIONAL EMERGENCIES, of 4-30-91, which establishes requirements for the development of DOE site specific emergency plans and procedures for radiological emergencies occurring in existing or planned DOE reactors and nonreactor nuclear facilities. DOE 5600.1, MANAGEMENT OF THE DEPARTMENT OF ENERGY WEAPONS PROGRAM AND WEAPON COMPLEX, of 6-27-79, which establishes the policy and procedures for the management of the Department’s weapons program and weapon complex and utilization of the weapon complex facilities for nonweapon DOE activities.

DOE 5700.2C, COST ESTIMATING, ANALYSIS, AND STANDARDIZATION, of 11-2-84, which establishes the policy and responsibilities for developing and reviewing project cost estimates; preparing independent cost estimates and analyses; standardizing cost estimating procedures; and improving overall cost estimating and analytical techniques, cost data bases, cost and economic models escalation, and cost estimating systems. DOE 5700.6C, QUALITY ASSURANCE, of 8-21-91, which provides Departmental policy, sets forth principles, and assigns responsibilities for establishing, implementing, and maintaining programs of plans and actions to assure quality of achievement in DOE programs. DOE 5700.7B, WORK AUTHORIZATION SYSTEM, of 9-24-86, which establishes a formal process for budget development, authorization, and monitoring of Departmentally funded work performed at specified contractor facilities. DOE 6430.1A, GENERAL DESIGN CRITERIA, of 4-6-89, to be implemented in coordination with the Director of the Office of Administration and Human Resource Management memorandum of 6-10-81, which establishes policies and objectives, responsibilities and authorities, procedures, and requirements for development and maintenance of general design criteria and their application in the planning and design, or acquisition, of the Department’s facilities. DOE/S-00141, “National Energy Policy Plan of October 1983,” which describes the policies, plans and goals for the Department of Energy. DOE/MA-0040, “Cost and Schedule Control Systems Criteria for Contract Performance Measurement, Work Breakdown Structure Guide,” of October 1981. DOE/MA-0046, “Cost Estimating Manual,” of January 1982, which is a compilation of DOE cost estimating procedures. 25. 26. 27. 28. 29. 30. Vertical line denotes change Attachment 1 DOE 4700.1 Chg 1 Page 4 6-2-92 31. 32. 33. 34. 35. 36. DOE/MA-0063, Volume 1, “Cost Guide (Economic Analysis),” of January 1982, which discusses economic analysis in cost estimating. DOE/MA-0063, Volume 2, “Cost Guide (Standard Procedures for Determining Revenue Requirements),” of June 1982, which concerns itself with establishing standards for conducting economic evaluations using revenue requirements or product cost methodology. DOE/MA-0063, Volume 3, “Cost Guide (Cost Factors),” of April 1982, which provides cost, labor, and material information concerning facilities or systems. DOE/MA-0063, Volume 4, “Cost Guide (Cost Data and Cost Estimating Relationships--CER)," of May 1982, which details the methodology for establishing CER’s on equipment, material, facilities, and modules. DOE/MA-0063, Volume 5, “Cost Guide (Construction of Economic Escalation Indices), Of May 1982, which covers the construction and use of price change indices to be used in estimating and forecasting. DOE/MA-0154, “Acquisition Regulators Handbook - Source Evaluation,” of 2-86 which provides guidance for carrying out procurement in excess of $5 million. DOE/PR-0045, “DOE Acquisition/Assistance Guide for Technical Personnel.” OMB CIRCULAR A-34, “Instructions on Budget Execution,” which applies to the management of all appropriations, funds, and other authorizations, except deposit funds. OMB CIRCULAR A-76, “Performance of Commercial Activities,” of 8-4-83, which sets forth procedures for determining whether commercial activities should be performed under contract with commercial sources or using government facilities and personnel.

OMB CIRCULAR A-109, “Major System Acquisitions,” of 4-5-76, which establishes policies to be followed by executive branch agencies in the acquisition of major systems. OMB CIRCULAR A-119, “Use of Voluntary Standards,” of 1-17-80, which establishes policies to be followed by executive branch agencies in working with organizations that plan, develop, produce, and coordinate voluntary standards. Federal Acquisition Regulations (FAR) of 4-1-84, which establishes uniform acquisition regulations for use by Federal Agencies. 37. 38. 39. 40. 41. 42. Vertical line denotes change DOE 4700.1 Chg 1 Attachment 1 Page 5 (and 6)6-2-92 43. Department of Energy Acquisition Relations (DEAR) of 4-1-84, which implements the provisions of the FAR. 44. P.L. 95-224, “Federal Grant and Cooperative Agreement Act of 1977,” which describes the appropriate circumstances for using government contracts grants or cooperative agreements. 45. P.L. 95-507, “Small Business Investment Act of 1977,” which provides guidelines for the utilization of small and disadvantaged businesses in government contracting. Vertical line denotes change DOE 4700.1 3-6-87 Attachment 2 Page 1 APPLICATION OF THE PROJECT MANAGEMENT SYSTEM ELEMENT TO DOE PROJECTS CHAPTER AND PART OF ORDER APPLICATION MAJOR SYSTEM MAJOR OTHER ACQUISITION PROJECTS PROJECTS (MSA) (MP) (OTHER) ELEMENT Acquisition Executive X X Acquisition Strategy X X O Advanced Acquisition or Assistance Plan Projects X X O I-C II-E/Attachment II-6 II-E/Attachment II-7 IV-B/Attachment IV-7Annual Report for General Plant Projects Architect/Engineer (A/E) Services X X X O X X X X V-A III-ABaseline Business X XManagement Strategy Group II-E/Attachment II-6X X X V-B/Attachments V-9 & V-10XConceptual Design Report Configuration Management III-C/Attachments III-5 & III-6X X X X X X O V-C/Attachment V-C-12Construction Completion Report X X XX V-AConstruction Manager X XContingency Management II-D II-D X XCost Estimating Cost and Schedule Control Systems Criteria (CSCSC) III-F/Attachment III-F-7X X O = Optional X = Required Attachment 2 DOE 4700.1 Chg 1 Page 2 6-2-92 ELEMENT APPLICATION CHAPTER AND PART OF ORDER MSA MP OTHER Design Criteria Package X X X V-A/Attachment V-3 Energy System Acquisition Advisory Board (ESAAB) X O I-C/Attachments I-I & I-2 II-F II-F II-F Environmental Assessment (EA) X X X X X Environmental Compliance Plan X X Environmental Impact Statement (EIS) X X Finding of No Significant Impact (FONSI ) Independent Cost Estimate (ICE) X X X X X X X II-F X II-D Internal Review Budget X X II-C Justification of Mission X II-A/Attachment II-1 Need Mission Mission Network XAnalysis Requirements Scheduling Diagram) X I-B X X X I-B X X X X X X X II-A/Attachment H4(Logic OMB Budget Organizational Financial Plan X II-C X II-C Vertical line denotes change DOE 4700.1 Attachment 2 3-6-87 Page 3 APPLICATION ELEMENT CHAPTER AND PART MSA MP OTHER OF ORDER Performance Measurement Program Manager’s Quarterly Report to the Acquisition Executive Project Authorization System Project Data Sheet Project Management Plan (PMP) Project Manager’s Progress Report Project Manager’s Quarterly Supplemental Report, Cost and Cost-Plus Commitment Chart Project Manager’s Quarterly Summary Report, Management and Construction Manpower Project Manager’s Quarterly Summary Report, Progress Photographs

Project Manager’s Quarterly Summary Report, Project Activity Project Plan (PP) Project Plan Changes (Baseline Changes) x x x x x x O O o x x x x x x x x x o 0 o x x x III-F IV-B/Attachment IV-8 V-A II-A/Attachment II-5 II-A/Attachment II-4 IV-B/Attachment IV-1 IV-B/Attachment IV-4 IV-B/Attachment IV-5 IV-B/Attachment IV-6 IV-B/Attachment IV-3 II-A/Attachment II-2 II-A/Attachment II-3 Generic Attachment 2 Page 4 DOE 4700.1 3-6-87 APPLICATION ELEMENT CHAPTER AND PART MSA MP OTHER OF ORDER Project Reporting Project Status Review Project Transition Plan Project Validation Quality Assurance Responsibility Matrix Safety Analysis Review (Report-SAR) Semiannual Status Report Status of DOE Energy Management Projects Summary Project Performance Report to Senior Management Systems Engineering Test and Evaluation (T&E) Uniform Reporting System (URS) Work Breakdown Structure (WBS) Work Package Authorization System (WPAS) 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 x x x x x x x x x x x x IV-B IV-A II-H II-C III-D II-A/Attachment II-4 II-F IV-B/Attachment IV-2 IV-B/Attachment IV-2 IV-B/Attachment IV-9 III-6/Attachments III-1 & III-2 III-B/Attachments III-3 & III-4 III-F II-B II-C DOE 4700.1 Chg 1 6-2-92 DEFINITIONS Attachment 3 Page 1 1. 2. 3. 4. 5. 6. 7. ACCEPTANCE TESTING. The performance of all necessary testing to demonstrate that installed equipment will operate satisfactorily and safely in accordance with the plans and specifications. It includes required hydrostatic, pneumatic, electrical, ventilation, mechanical functioning and run-in tests of portions of systems, and finally of completed systems. ACQUISITION EXECUTIVE. The individual designated by the Secretary to integrate and unify the project management system and to monitor implementation of prescribed policies and practices. Approves the initiation of a major system acquisition (or a selected major project) and its transition through phases of the acquisition process and other sub-phases involving major commitments; selects, from among competing systems, those that are to be advanced to development, demonstration and production/operations; and authorizes development of a noncompetitive (single concept) system. ACQUISITION PROPONENT. The DOE component having the primary responsibility for research, development, demonstration, production or operation of a major system acquisition project (to include, when applicable, the system for its logistic support) which meets Departmental objectives in carrying out DOE missions. ACQUISITION STRATEGY. A description contained in the “Justification of Mission Need” and subsequent Project Plan of the proposed overall DOE business approach which will be utilized to ensure that the system being acquired or supported satisfies the approved mission need. Specific details of individual procurement actions should be made part of the Advance Acquisition/Assistance Plan in the Project Management Plan. ADVANCED DEVELOPMENT. The effort guided by the principle that the work should lead ultimately to a particular application or product. Advanced development can cut across several scientific disciplines and is intended to explore focused innovation in a particular area of one or more energy technologies.

AGENCY COMPETITION ADVOCATE. The individual appointed pursuant to the Competition in Contracting Act of 1984 to promote full and open competition in the Department’s acquisitions and to challenge barriers to competition. In DOE, this is the Competition Advocate located in the Office of Procurement, Assistance and Program Management. APPLIED RESEARCH. Systematic study directed towards fuller scientific knowledge or understanding for direct use in fulfilling specific energy requirements. Vertical line denotes change Attachment 3 Page 2 8. 9. 10. 11. 12. DOE 4700.1 Chg 1 6-2-92 APPORTIONMENT. A distribution by the Office of Management and Budget of amounts available for obligation in appropriation of fund accounts of the executive branch. The distribution makes amounts available on the basis of time periods (usually quarterly), programs, activities, projects, objects, or combinations thereof. The apportionment system is intended to achieve an effective and orderly allocation of funds. APPROVED FUNDING PROGRAM (AFP). The AFP is an internal DOE document issued by the Office of Budget to program managers and operating activities, setting forth the funds available for the program release activity in each appropriation and fund account. The AFP specifies pertinent legal limitations and funding ceilings applicable to programs, sub-programs, activities, and elements of expense. The AFP delegates the authority to program managers to initiate program release documents for their respective programs. Each allottee will use the AFP in conjunction with the associated allotment to establish funding ceilings on the obligational authority available to program managers and organization elements (formerly referred to as Financial Plans). ASSESSMENT. A determination of project or system acquisition conditions based on a review of project cost, schedule, technical status, and performance in relation to program objectives, approved requirements, and baseline project plans. Assessments are made by the responsible managing or advocate program organization or independently by the Office of Program/Project Management. In all cases, assessments must be based on knowledge of the actual project status, performance, problems, and significant development in both the actual execution activities as well as required institutional approval, licensing, review, and environmental processes. They may take the form of: a. Monthly report status ratings of project performance and outlook prescribed rating categories; or b. The Acquisition Executive; the Director of the Office of Procurement Assistance and Program Management; or acquisition proponent review ratings of project performance and outlook in similar rating categories; or c. Detailed evaluations of all project and system parameters prior to phase change or key resource commitment decisions. BASELINE. A quantitative expression of projected costs, schedule, and technical requirements. Baseline establishment should include criteria to serve as a base or standard for measurement during the performance of an effort. It is the data plan against which the status of resources and the progress of a project can be measured. BASELINE CHANGE CONTROL BOARD. A multi-discipline functional body of representatives designated and chartered by the appropriate management level to ensure the proper definition, coordination, evaluation, and disposition of all changes to project baselines within their chartered jurisdiction.

Vertical line denotes change 3DOE 4700.1 Chg 1 Attachment 6-2-92 Page 3 13. 14. 15. 16. 17. 18. BASELINE CHANGE PROPOSAL (BCP). The instrument/document prepared to provide a complete description of a proposed change and its resulting impacts on project baselines. BASIC RESEARCH. Systematic, fundamental study directed toward a more comprehensive scientific knowledge or understanding of subjects bearing on national energy needs. BENEFICIAL USE OR OCCUPANCY DATE. The date on which a facility, portions thereof, or the last piece of principal equipment, is released for use by others, prior to final acceptance. Nonintegral or subsidiary items and correction of design inadequacies subsequently brought to light may be completed after this date. On multiple-facility projects, beneficial use of the overall project will be the beneficial use date of the last major building or facility. CHANGE IN SCOPE. A change in objectives, work plan, or schedule that results in a material difference from the terms of an approval to proceed previously granted by higher authority. Under certain conditions, stated in the approval instrument, change in resources application may constitute a change in scope. Under contractual agreement, contracting officers are the only Government personnel authorized to issue a change order of contract modification to a contractor/performer, in order to implement a change of scope. A change in scope may also affect the availability of current year funds until the proper congressional notification procedures have been executed. (See Federal Acquisition Regulation (FAR) 43.101 for additional information.) COMPONENT. A major organizational subdivision of DOE, usually at the program or sub-program level. CONCEPTUAL DESIGN. Conceptual design encompasses those efforts to: a. Develop a project scope that will satisfy program needs; b. Assure project feasibility and attainable performance levels; c. Develop reliable cost estimates and realistic schedules in order to provide a complete description of the project for congressional consideration; and d. Develop project criteria and design parameters for all engineering disciplines, identification of applicable codes and standards, quality assurance requirements, environmental studies, materials of construction, space allowances, energy conservation features, health safety, safeguards, and security requirements and any other features or requirements necessary to describe the project. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 19. 20. 21. 22. 23. 24. 4 6-2-92 CONDITIONAL OR PROVISIONAL ACCEPTANCE. The acceptance of a unit or facility with a documented listing of the specific testing to be accomplished or work remaining including the furnishing of any outstanding submittal of technical and record data, to be completed by the construction contractor, and on or by what date the actions are scheduled to be complete. CONFIGURATION. The functional and/or physical characteristics of hardware and/or software, as set forth in technical documentation and achieved in a product. CONFIGURATION MANAGEMENT. The systematic evaluation, coordination, approval (or disapproval), documentation, implementation, and audit of all approved changes in the configuration of a product after formal establishment of its configuration identification.

CONSTRUCTION. Any combination of engineering, procurement, erection, installation, assembly, or fabrication activities involved in creating a new facility or altering, adding to, or rehabilitating an existing facility. It also includes the alteration and repair (including dredging, excavating and painting) of buildings, structures, or other real property. This does not involve the manufacture, production, finishing, construction, alteration, repair, processing or assembling of items categorized as personal property. (See FAR 36.102 for additional information.) CONSTRUCTION COMPLETION DATE. The date on which work normally performed by construction forces (including installation of equipment by operating contractors or others) is accepted by the Government. This includes the completion of all building items, the erection and/or installation of mechanical units and/or processing equipment and the installation of all furnishings as required to make a full functioning building, facility, or process. Correction of minor deficiencies and exceptions may be accomplished after the recorded date. CONSTRUCTION MANAGEMENT. Services that encompass a-wide range of professional services relating to the management of a project during the pre-design, design, and/or construction phases. (These services are deemed to be “professional” in accordance with FAR 15.204, Personal or Professional Services.) The types of services include development of project strategy, design review relating to cost and time consequences, value engineering, budgeting, cost estimating, scheduling, monitoring of cost and schedule trends, procurement, observation to assure that workmanship and materials comply with plans and specifications, contract administration, labor relations, construction methodology and coordination, and other management efforts related to the acquisition of construction. Vertical line denotes change DOE 4700.1 Chg 1 Attachment 3 6-2-92 Page 5 25. 26. 27. 28. 29. 30. 31. 32. CONTINGENCY. An amount budgeted to cover costs that may result from incomplete design, unforeseen and unpredictable conditions, or uncertainties. The amount of the contingency will depend on the status of design, procurement, and construction and the complexity and uncertainties of the component parts of the project. Contingency is not to be used to avoid making an accurate assessment of expected cost. CONTRACT. A binding legal relationship basically obligating the seller to furnish personal property or nonpersonal services (including construction) for which the buyer compensates. It includes all types of commitments which obligate the Government to an expenditure of funds and which, except as otherwise authorized, are in writing. In addition to a two-signature document, it includes all transactions resulting from acceptance of offers by awards or notices of awards; agreements and job orders or task orders issued thereunder; letter contracts; letters of intent; and orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance. It also includes contract modifications. CONTRACT ADVANCE FUNDING. Obligations to a contract or project, to cover future work or materials not yet ordered. The value of advanced funding is the difference between uncosted obligation and unfilled orders outstanding. CONTRACTING OFFICER. A person designated to enter into and/or review, modify, or terminate any contracts, financial assistance awards, and sales contracts and make related determinations and findings.

CONTRACTING OFFICER’S TECHNICAL REPRESENTATIVE. The individual in DOE who is assigned responsibility for overall technical monitoring of a contract and identified as such in the contract. The contracting officer’s technical representative monitors the technical work performed under the contract, evaluates the contractor’s performance, provides the contractor and the contracting officer with technical guidance, reports on contract status to DOE program and project management, and recommends corrective action when necessary. CONTRACTOR. The term “contractor” is intended to mean and include all persons, organizations, departments, divisions, and companies having contracts, agreements, or a memorandum of understanding with DOE. COST ESTIMATE. A documented statement of costs estimated to be incurred to complete the project. Cost estimates provide baselines against which cost comparisons are made during the life of a project. COST-SHARING CONTRACT. A cost-reimbursable type contract under which the contractor receives no fee but is reimbursed only for an agreed portion of its allowable costs. This type of contract is suitable for those procurements that cover production or research projects which are jointly sponsored by the Government and the contractor with benefit to the contractor in lieu of full monetary reimbursement of costs. In consideration of this benefit, the contractor agrees to absorb a portion Vertical line denotes change Attachment 3 D0E 4700.1 Chg 1 Page 6 6-2-92 33. 34. 35. 36. 38. of the costs of performance. The following illustrate situations in which this type of contract is generally desirable: a. Jointly sponsored research and development work with nonprofit educational institutions or other nonprofit organizations; or b. Other research and development work where the results of the contract may have commercial benefit to the contractor. COSTS TO DATE. Costs incurred to date by the contractor and reported to DOE. These are recorded as accrued costs. They represent all charges incurred for goods and services received and other assets required, regardless of whether payment for the charges has been made. This includes all completed work and work in process, chargeable to the contract. Accrued costs include invoices for: (1) completed work to which the prime contractor has acquired title; (2) materials delivered to which the prime contractor has acquired title; (3) services rendered; (4) costs billed under cost reimbursement or time and material subcontracts for work to which the prime contractor has acquired title; (5) progress payments to subcontractors that have been paid or approved for current payment in the ordinary course of business (as specified in the prime contract); and (6) fee profit allocable to the contract. DEFINITIVE WORK. The effort on which a contractual agreement for the dollar value of the effort has been reached. DELIVERABLE. A report or product of one or more tasks which satisfies one or more objectives and must be delivered to satisfy contractual requirements. DEMONSTRATE. To verify the soundness of the chosen design concept(s) in an environmentally acceptable manner, the technical and economic feasibility of new or advanced equipment, and facilities or processes by designing, constructing, testing, operating and evaluating near-full scale modules. DEMONSTRATION. The verification of scale-up, economic and environmental viability for commercial application, through design, construction, test, and evaluation of large-scale energy systems in operational circumstances.

37. DEVELOPMENT. The development and test of systems and pilot plants judged to be technically and economically desirable as a means of achieving principal Departmental goals. Engineering development concerns itself with processes, preproduction components, equipment, subsystems, and systems. Initiation of work in this category is dependent upon successful demonstration of technical feasibility and economic, potential during the technology phase. Vertical line denotes change DOE 4700.1 Chg 1 Attachment 3 6-2-92 Page 7 39. DEVIATION. A specific, before-the-fact, written authorization to depart from a particular performance or design requirement of a contract, specification, or referenced document. A deviation differs from an engineering change, in that, an approved engineering change requires corresponding revision of the documentation defining the affected product, whereas a deviation does not contemplate revision of the applicable specification or drawing. 40. 41. 42. 43. 44. DIRECT COST. Any cost that can be specifically identified with a particular project or activity, including salaries, travel, equipment, and supplies directly benefiting the project or activity. DIRECTED CHANGE. A change imposed on a project(s), with direction to implement, which affects one or more of the project’s (projects’) baselines. Examples of directed changes include, but are not limited to: a. b. Changes to approved budgets, or funding; and Changes resulting from DOE policy directives and regulatory or statutory requirements. ENGINEERING CHANGE. An approved change to controlled identification documentation. An Engineering Change Proposal (ECP) is a recommended Engineering Change (EC). There are typically two classes of EC’s: a. Class 1. Changes of configuration which affect the Departmental interest and require approval from the appropriate approval authority or designated representative. Class 1 engineering changes are those which affect: (1) technical baseline requirements and/or (2) nontechnical contractual provisions such as fee, incentives, cost, schedule, guarantees, or deliveries. b. Class 2. Changes to a product which do not affect any of the Class 1 engineering change requirements. The Department’s approval prior to implementation is not required, although such changes are subject to post-facto classification review by the project office. Other distinctions may be made at the discretion of the project manager. ENGINEERING DEVELOPMENT. Systematic use of the knowledge and understanding gained from research and technology development to achieve the detailed design, construction and test for performance, producibility and reliability of energy system prototypes, pilot plants, and research facilities. ENVIRONMENT(AL). Air and water quality, land disturbances, ecology, climate, public and occupational health and safety, and socioeconomic (including nonavailability of critical resources and institutional, cultural, and aesthetic) considerations. For conciseness, these are normally referred to as environment, safety and health considerations. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 45. 46. 47. 48. 49. 50. 51. 8 6-2-92 FACILITIES. Buildings and other structures; their functional systems and equipment, including site development features such as landscaping, roads, walks, and parking areas; outside lighting and communications systems; central utility plants; utilities supply and distribution systems; and other physical plant features.

FIELD OFFICE (FO). The new designation for the nine major Departmental offices responsible for day-to-day management of designated functional activities. FINAL ACCEPTANCE. A written statement by the contracting officer or designee that the work performed by the construction contractor has been accepted as being in accordance with approved plans and specifications. The operating contractor should also be included in the final acceptance, if applicable, indicating acceptance of the facilities as constructed and the date the facilities are to be occupied or available for the use of operating contractor. FIXED PRICE CONTRACTS. Fixed price contracts provide for a firm price or, under appropriate circumstances, may provide for an adjustable price for the supplies or services that are being procured. In providing for an adjustable price, the contract may fix a ceiling price, target price (including target cost), or minimum price. Unless otherwise provided in the contract, any such ceiling, target, or minimum price is subject to adjustment only if required by the operation of any contract clause which provides for equitable adjustment, escalation, or other revision of the contract price upon the occurrence of an event or a contingency. FORECAST. The DOE project management office’s most current performance projection for cost, schedule, and scope. GENERAL PLANT PROJECTS (GPP). Congress has recognized DOE’s need to provide for miscellaneous construction items which are required during the fiscal year and which cannot be specifically identified beforehand. Congress provides, annually, an amount for these purposes under the title of General Plant Projects. GENERAL PURPOSE FACILITIES PROJECTS. Line item construction projects estimated to cost greater than $1.2 million and which are required to support the long-term administrative and technical needs of DOE-operated laboratories and facilities. Examples of general purpose facilities projects are light or heavy laboratories, administrative offices, machine shops, steam plants, electrical utilities, roads, railroads, and warehouses. Multiprogram general purpose facilities are restricted to general purpose facilities projects at the multiprogram laboratories/site where no one program will use more than approximately 60 percent of the planned facility. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 Attachment 3 Page 9 52. GOVERNMENT ESTIMATES. Estimates are used to determine the reasonableness of competitive bids received in connection with formally advertised construction contracts, and serve as a control in evaluating cost and pricing data in negotiated contracts. Normally, the Title II design estimate, after being reviewed and approved by the Government, is the basis for the Government estimate. However, the services of an operating contractor, architect-engineer, cost-plus-fixed-fee construction contractor (with respect to subcontracts), or construction manager may be used appropriately to prepare, review, or revise the Government estimate prior to Government approval (refer to FAR 36.203). Cost-type contractors shall be required to follow cost estimate procedures when subcontracting for construction services. Government review and approval of the Government estimate is not required when the estimate is within the limits established by the Government’s approval of the cost-type contractors procurement system. The specifics of a Government estimate vary with the size and type of contract.

53. INCURRED COSTS. Costs are applied to the performance of the project. All costs incurred for a project are reported whether they arise from payments, cost accruals, or transfers of costs from other DOE locations or Federal agencies. Any time costs are incurred by cost-type contractors, the amount will be included in that period. Incurred costs also comprise payments made or due to date, including any retained percent-ages, and lump-sum and unit price contracts based on payment estimates approved by the contracting officer and designated representative for the purpose of making the progress or final payments on work performed to date. Costs shall not be accrued on the basis of a percentage of physical completion, unless the amounts of such costs are approved by the contracting officer or his or her designated representative as progress or partial payments. 54. INDEPENDENT ASSESSMENT. An assessment, made outside the normal advocacy chain, of a project’s status or condition. In the project management system, it is made by the Office of Program/Project Management in its role of independent monitoring. It will consist of independent evaluation of all pertinent factors in order to provide a condition rating or detailed analysis of the project or system situation. Independent assessments will typically be provided in conjunction with Headquarters reporting to senior DOE management; advisory board decision reviews; or other purposes associated with the program planning and budgeting system, acquisition or other DOE management control and direction processes. These independent evaluations must be based on knowledge of the actual project and related institutional matters. The Office of Program/Project Management will obtain this knowledge through reports from the project management and program organizations; conduct of field and Headquarters reviews with the program organization, the Departmental managing office and principal contractors; and direct communication and discussion of project matters with the DOE managing and program offices. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 55. 56. 58. 60. 61. 62. 10 6-2-92 INDEPENDENT COST ESTIMATE. A documented cost estimate that has the express purpose of serving as an analytical tool to validate, cross- check, or analyze estimates developed by proponents for a project. An independent cost estimate also serves as a basis for verifying risk assessments. It is usually performed by an independent contractor. 57. INDIRECT COST. A cost incurred by an organization for common or joint objectives and which cannot be identified specifically with a particular project or activity. See 10 CFR 600. INSPECTION. The survey of a unit, facility or area to determine overall compliance with contract drawings and specifications. It may vary from inspection of detailed items to extensive testing of operating equipment (which must be provided for in the contract). It may also serve in making a determination of the adequacy of the design effort. It includes a preliminary inspection to fix the number of work items remaining to be completed (list of exceptions or “punch list”), and a final inspection to accept the completed construction. (See Title III Services) LEAD PROGRAM SECRETARIAL OFFICER (LPSO). The individual assigned line management responsibility and accountability for Headquarters and field operations and to which one or more multiprogram field offices report directly.

LIFE CYCLE COST (LCC). The sum total of the direct, indirect, recurring, nonrecurring and other related costs incurred or estimated to be incurred in the design, development, production, operation, maintenance, support and final disposition of a major system over its anticipated useful life span. Where system or project planning anticipates use of existing sites or facilities, restoration, and refurbishment costs should be included. LINE ITEM PROJECTS. Projects which are specifically reviewed and approved by Congress. Projects with a total project cost greater than $1.2 million are categorized as line item projects. LONG LEADTIME PROCUREMENT ITEMS. Those items of equipment and/or construction materials that require an order date prior to the estimated physical construction start to assure availability at the time needed so as not to delay the construction performance. 59. MILESTONE. An important or critical event and/or activity that must occur in the project cycle in order to achieve the project objective(s). Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 Attachment 3 Page 11 63. MISSIONS. 64. 66. a. Responsibilities assigned to the Department of Energy for meeting national needs. Agency missions are defined by the Comptroller General of the United States in Budgeting Definition s, November 1975, as: “Those responsibilities for meeting national needs assigned to a specific agency. Agency missions are expressed In terms of the purpose to be served by the programs authorized to carry out functions or subfunctions which, by law, are the responsibility of that agency and its component organizations. (See Section 201 of the Budget and Accounting Act, 1921, as amended.)” b. Additionally, Section 601(i) of the Congressional Budget Act of 1974 (Public Law 93-344) requires that: “The Budget. ..” shall contain a presentation of budget authority, proposed outlays, and descriptive information in terms of: (1) a detailed structure of national needs which shall be used to reference all agency missions and programs; (2) agency missions; and (3) basic programs. “To the extent practicable, each agency shall furnish information in support of its budget requests in accordance with its assigned missions in terms of Federal functions and subfunctions, including mission responsibilities of component organizations, and shall relate its programs to agency missions.” MISSION ANALYSIS. Continuing analysis of assigned mission areas, reconciled with overall program capabilities technological opportunities, priorities, and resources that are involved. 65. MISSION AREA ASSIGNMENT. Assignment to a Program Secretarial Officer, by the Secretary, of the responsibility for the formulation and conduct of programs to carry out functions or subfunctions which by law and Administration policy are within the mission responsibilities of the Department. MISSION NEED. A required capability within DOE’s overall purpose, including cost and schedule considerations. When the mission analyses, or studies directed by appropriate executive or legislative authority, identify a deficiency in existing capabilities or an opportunity, this will be set forth as justification for purposes of system acquisition approvals, planning, programming, and budget formulation. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 67. 68. 69. 70. 12 6-2-92 OPERATIONAL DATE.

a. Production Plant. The date when operations personnel introduce feed materials into the process equipment with the intent to produce the design plant product (excludes functional testing). For gaseous diffusion plants, term “on-stream date” is synonymous with operation date. (1) Initial Operational Date. If the facility is a multiple unit type, the date on which feed materials are introduced into the first of a number of process or production units. (2) Complete Operational Date. If the facility is a multiple unit type, the date on which feed materials are introduced into the last of the process of production units. b. Reactor. (1) Initial Operational Date. The date on which initial criticality is achieved. (2) Complete Operational Date. The date on which tests have been completed and permission granted by the designated authority to go to full power for purposes of normal operation. c. Accelerators. The date on which operations personnel inject a subatomic particle into the accelerator and achieve an initial accelerated beam. d. Other. Normally, the date on which a building or facility is first occupied and functions in accordance with its intended purpose. However, on development projects it refers to completion of the first major milestone in output. ORIGINAL ESTIMATE. The first total estimated and total project cost that are shown: (1) in a project data sheet submitted to the Congress for line item projects; or (2) in a project data sheet submitted to OMB for contingency type projects; or (3) in the initial authorization for general plant, operating funded, equipment funded, or other contingency- type projects. ORIGINAL SCHEDULE DATES. The start and finish dates of design, construction, procurement, and operation submitted in conjunction with the original estimate or in the first approved schedule. PHYSICAL CONSTRUCTION START. For purposes of reporting construction progress, the date on which work at the site physically starts, including work on site preparation, temporary construction and any earth moving. The start date of construction of permanent facilities should also be indicated. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 Attachment 3 Page 13 71. 72. 73. PLANNING ESTIMATES. Developed for each project at the time of project identification. Since these are developed prior to conceptual design, they are order of magnitude only and have the least amount of accuracy and lowest confidence level. Care should be exercised in these estimates to assure that the order of magnitude is correct, since a tendency exists to avoid changing this estimate, particularly upward, once established. PLANT ENGINEERING AND DESIGN FUNDS. Appropriated by Congress at the request of the Department for the performance of Title I and Title II design prior to authorization and appropriation of construction funds for a project. Plant engineering and design funds are limited to requests for projects which will receive high priority in future year budget submittal. Completed conceptual design is a prerequisite for allocation of plant engineering and design funds.

PRELIMINARY DESIGN (TITLE I). Continues the design effort utilizing the conceptual design and the project design criteria as a basis for project development. Title I design develops topographical and subsurface data and determines the requirements and criteria which will govern the definitive design. Tasks include preparation of preliminary planning and engineering studies, preliminary drawings and outline specifications, life-cycle cost analysis, preliminary cost estimates, and scheduling for project completion. Preliminary design provides identification of long lead procurement items and analysis of risks associated with continued project development. For a detailed description of the services provided during preliminary design, see Department of Energy Acquisition Regulation (DEAR) 936.605c and 952.236.70. 74. 75. PRODUCT DATA REQUIREMENT. A contract requirement which directs contractors to collect, organize, prepare, maintain, transmit, deliver, or retain information incident to the design, development, production, operation, preservation, maintenance, or repair of contract end items. Product data includes engineering drawings, product specifications and standards, part breakdown lists, catalog item physical qualities and characteristics, preprocurement data, test plans and reports, and other such data. PROGRAM. An organized set of activities directed toward a common purpose, or goal undertaken or proposed in support of an assigned mission area. It is characterized by a strategy for accomplishing a definite objective(s), which identifies the means of accomplishment, particularly in quantitative terms, with respect to manpower, materials and facilities requirements. Programs are typically made up of technology base activities, projects, and supporting operations. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 14 6-2-92 76. 77. 78. 80. 81. PROGRAM ASSESSMENT. A determination of program condition based on a review of cost, schedule, technical status and performance in relation to mission area assignments, program objectives, approved strategy and milestones. Assessments are made by the responsible line program organization and outside the advocacy chain by the Office of Program/ Project Management. In all cases, program assessments must be based on knowledge of the actual program status, performance, problems, and significant development in approval; review; and environment, safety, health, and quality assurance processes. PROGRAM MANAGEMENT. Management responsibility and authority for specific programs will normally be delegated by the cognizant Program Secretarial Officer. The Headquarters functions of program management includes planning and developing the overall program; establishing broad priorities; providing policy and broad program direction; preparing and defending the budget; establishing the technical performance, scope, cost, and schedule requirements for projects; controlling DOE Headquarters-level milestones; integrating all components of the program, providing public and private sector policy liaison; expediting Headquarters interface activities and followup actions; and retaining overall accountability for program success. The field function includes implementing these program activities, controlling field-level milestones, and providing major support to the Headquarters programming budgeting and processes.

PROGRAM MANAGER. An individual in an organization or activity who is responsible for the management of a specific function or functions, who is responsible for budget formulation, and for execution of the approved budget. The Program Manager receives an approved funding program from the Chief Financial Officer identifying program dollars available to accomplish the assigned function. PROGRAM OBJECTIVES. A statement or set of statements defining the purposes and goals to be achieved during performance of a program to fulfill a DOE mission including the technical capabilities, cost, and schedule goals. PROGRAM OFFICE. The Headquarters organizational element responsible for managing a program. PROGRAM SECRETARIAL OFFICER (PSO). A senior outlay program official which includes the Assistant Secretaries for Conservation and Renewable Energy (CE), Defense Programs (DP), Fossil Energy (FE), Nuclear Energy (NE), Environmental Restoration and Waste Management (EM) and the Directors of Energy Research (ER), Civilian Radioactive Waste Management (RW), and New Production Reactors (NP). 79. Vertical line denotes change DOE 4700.1 Chg 1 Attachment 3 6-2-92 Page 15 82. 83. 84. 85. 86. PROJECT. A project is a unique major effort within a program which has firmly scheduled beginning, intermediate, and ending date milestones; prescribed performance requirements, prescribed costs; and close management, planning, and control. A project is a basic building block in relation to a program which is individually planned, approved and managed. A project is not constrained to any specific element of the budget structure (e.g., operating expense or plant and capital equipment). Construction, if required, is part of the total project. Authorized, and at least partially appropriated, projects will be divided into three categories: major system acquisitions, major projects, and other projects. PROJECT DATA SHEET. A generic term defining the document containing summary project data and justification required to include the entire project effort as a part of the Departmental budget. Specific instructions on the format and content of the project data sheet are contained in the annual budget call, and DOE 5100.3. PROJECT DESIGN CRITERIA. Those technical data and other project information developed during the project identification, conceptual design, and/or preliminary design phases. They define the project scope, construction features and requirements, and design parameters; applicable design codes, standards, and regulations; applicable health, safety, fire protection, safeguards, security, energy conservation, and quality assurance requirements; and other requirements. The project design criteria are normally consolidated into a document which provides the technical base for any further design performed after the criteria are developed. PROJECT MANAGEMENT. A management approach in which authority and responsibility for execution are vested in a single individual, at a level below the general manager, to provide focus on the planning, organizing, directing, and controlling of all activities within the project. In general terms, project management functions include assisting the program manager in preparing Headquarters documents and establishing key milestones and overall schedules. Other activities include developing and maintaining the project management plan; managing project resources; establishing and implementing management systems, including performance measurement systems; and approving and implementing changes to project baselines.

PROJECT MANAGER. An official who has been assigned responsibility for accomplishing a specifically designated unit of work effort or group of closely related efforts established to achieve stated or designated objectives, defined tasks, or other units of related effort on a schedule for performing the stated work funded as part of the project. The project manager is responsible for the planning, controlling, and reporting of the project. PROJECT OFFICE. The organization responsible for administration of the87. project management system, maintenance of project files and documents, and staff support for officials throughout the project life cycle. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 88. 89. 90. 93. 94. 16 6-2-92 PROJECT SUMMARY WORK BREAKDOWN STRUCTURE. A summary work breakdown structure tailored by project management to the specific project with the addition of the elements unique to the project. Generally, the project summary work breakdown structure will identify project elements through the third level. PROJECTIONS. Estimates of budget authority, outlays, receipts, or other budget amounts that extend a minimum of 5 years beyond the current year. Projections generally are intended to indicate the budget implications of continuing current or currently proposed programs and legislation for an indefinite period of time. These include alternative program and policy strategies and ranges of possible budget amounts. Projects should be regarded neither as firm estimates of what actually will occur in future years nor as recommendations regarding future budget decisions. QUALITY ASSURANCE. All of the planned and systematic actions necessary to provide adequate confidence that a facility, structure, system or component will perform satisfactorily in service. Quality assurance includes quality control, which comprises all those actions necessary to control and verify the features and characteristics of a material, process, product, or service to specified requirements. 91. REAL PROPERTY. Land and/or improvements including interests except public domain land. SCOPE . In baseline management terminology, the term “scope” therein, refers to92. those performance and design requirements, criteria, and characteristics derived from mission needs that provide the basis for project direction and execution. In budget terminology, the term “scope” refers to the congressionally approved project parameter/tasks as defined in the Congressional Project Data Sheet. SITE. A geographic entity comprising land, buildings, and other facilities required to perform program objectives. Generally a site has, organizationally, all of the required facilities management functions. That is, it is not a satellite of some other site. SITE DEVELOPMENT AND FACILITY UTILIZATION PLAN (SITE DEVELOPMENT PLAN). A formal written document summarizing all of the various data necessary to plan for the most effective utilization, orderly future development; and disposal of facilities at an individual site. Such planning shall be in accordance with site related program objectives and requirements and shall represent the consolidated views of site management, the field organization and the resource sponsor. 95. SITE OFFICE. Term used to describe small organizations established near work sites for the accomplishment of specific projects or work assignments receiving administrative support from another field organization. Vertical line denotes change

DOE 4700.1 Chg 1 Attachment 3 6-2-92 Page 17 96. 97. 98. STATE-OF-THE-ART TECHNOLOGY ASSESSMENTS. An integral part of the technology base element of a program. The objective of these assessments is to ensure that technology base and project activities can benefit from relevant state-of-the-art technology where appropriate. Furthermore, these assessments can assist in the identification of mission needs and ensure that DOE officials have a clear understanding of where a specific energy-related technology stands before making significant program or project decisions. SUBCONTRACT. Any agreement or arrangement between a contractor and any person (in which the parties do not stand in the relationship of an employer and an employee): a. For the furnishing of supplies or services or for the use of real or personal property, including lease arrangements, which, in total or in part, is necessary to the performance of any one or more contracts; or b. Under which any portion of the contractor’s obligation under any one or more contracts is performed, undertaken, or assumed. SUBSYSTEM. An aggregation of component items (hardware and software) performing some distinguishable portion of the function of the total system of which it is a part. Normally, a subsystem could be considered a system in itself, if it were not an integral part of the larger system. 99. SUPPORTING OPERATIONS. All work in an outlay program that is not in the science and technology base activity and not in projects. It includes program overhead, personnel, and standing studies, and is generally characterized by level of effort. 100. SYSTEM. A collection of interdependent equipment and procedures assembled and integrated to perform a well-defined purpose. It is an assembly of procedures, processes, methods, routines, or techniques united by some form of regulated interaction to form an organized whole. 101. TECHNICAL BASELINE. A configuration identification document or a set of such documents formally designated and approved at a specific time. (The time need not be the same for each document in the set. ) Technical baselines, plus approved changes to those baselines, constitute the current configuration identification. 102. TECHNICAL DIRECTION. The monitoring or surveillance of the scientific, engineering, and other technical aspects of a work program, as distinguished from the administrative and business management aspects. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 103. 104. 105. 106. 107. 108. 109. 18 6-2-92 TECHNOLOGY. A demonstration by experiment of the technical feasibility of alternative inventive concepts. This category may concern itself with processes, components, equipment, subsystems, or initial system prototype, and may encompass: experimental exploitation and refinement of a known phenomenon; demonstration of the acceptability of the technical and operational characteristics of one or more specific concepts; and preliminary system studies responsive to a particular problem including system analysis, tradeoff, preliminary cost/benefit studies, and planning and programming studies. TECHNOLOGY BASE. The equipment and facilities produced for, and the accumulated results and skills produced by, the conduct of basic research, applied research and technology development. TECHNOLOGY OR EXPLORATORY DEVELOPMENT. The systematic application of knowledge from research toward proof of technology, including development of nonspecific application prototypes and processes.

TITLE I DESIGN ESTIMATES. Estimates prepared upon completion of Title I design. Through use of plant engineering and design funds, Title I may be completed prior to inclusion of the project in the budget. If this should occur, the Title I design estimate becomes synonymous with the budget estimate. TITLE I DESIGN SUMMARY. An overview and record document of preliminary engineering and project management planning, reflecting completed Title I design and usually prepared under architect-engineer services or by the operating contractor. Title II design estimates are developed for each project by the designer as part of the Title I design summary. The estimates, since they are based on the definitive design, are the most accurate and have the highest confidence level of any estimate. TITLE II DESIGN. This continues the development of the project based on approved preliminary design (Title I). Definitive design includes any revisions required of the Title I effort; preparation of final working drawings, specifications, bidding documents, cost estimates, and coordination with all parties which might affect the project; development of firm construction and procurement schedules; and assistance in analyzing proposals or bids. For a detailed description of the services provided during definitive design, see DEAR 936.605(c)(3) and (4) and DEAR 952.236.70. TITLE III SERVICES. Those activities required to assure that the project is constructed in accordance with the plans and specifications (e.g., construction inspection), and that the quality of materials and workmanship is consistent with the requirements of the project (e.g., materials testing). (See DEAR 936.605(c)(3) and (4) and DEAR 952.236.70 for additional details.) Vertical line denotes change DOE 4700.1 Chg 1 Attachment 3 6-2-92 Page 19 110. TOTAL ESTIMATED COSTS (TEC) AND TOTAL PROJECT COSTS (TPC). Definitions for TEC and TPC are provided in DOE 5100.3, FIELD BUDGET PROCESS, and 5700.2C, COST ESTIMATING, ANALYSIS, AND STANDARDIZATION. The below listed definitions, extracted from these documents form the basis for development of standardized cost estimates. On occasion, there may be projects which cannot comply with these definitions and guidance. For these projects, variances must be requested by the project and approved by the Office of Program/Project Management prior to Key Decision No. 1 when establishing project baselines and requesting line item funding. a. TEC. TEC includes the following estimated costs: Land, land rights, depletable resources, and improvements to land. Engineering, design, and inspection (Titles I, II, and III). Construction Management of main plant, balance of plant, other facilities, other structures and significant alterations, additions, and improvements to structures (excluding normal maintenance). Utilities - including water and sewage systems, heating ventilation and air conditioning, power systems, communication systems, and fire prevention systems. Quality Assurance. Pre-operational construction changes shown to be required during integrated systems testing and hot start testing. Safeguards and security systems. project and construction management. Direct and indirect construction costs. Standard and special facilities. All equipment, furniture, and systems contained in main, balance of plant facilities and administrative areas to render the facility useable. Computer systems, if dedicated to the project.

Contingency and economic escalation. Decontamination and/or disposal cost of equipment and construction rubble when the purpose of the project is to replace existing facilities. Vertical line denotes change Attachment 3 DOE 4700.1 Chg 1 Page 20 6-2-92 b. TPC. TPC includes all research and development (R&D), operating, plant and capital equipment costs, specifically associated with project construction up to the point of routine operations, which will include but not be limited to: Total Estimated Costs. Pre-Title I activities, such as: - Conceptual Design Reports (CDR). - Preliminary Safety Analysis Report, if initiated prior to KD-1. - Preparation of Project Data Sheets, design criteria, National Environmental Policy Act (NEPA) documentation, and formulations of Quality Assurance Criteria. R&D necessary for fabrication, testing, and rework of prototype equipment. R&D (scale-up or demonstration plants of high-risk technology) required prior to start of construction. One-time costs related to testing, startup, operator training, and commissioning. Initial inventories and spare parts. Site suitability testing and evaluation. Quality Assurance related to site suitability and testing. Regulation compliance. Grant to state and local governments. Payments equal to taxes. Systems studies and selected systems engineering services. Institutional activities related to facility siting and external interactions. Decontamination and decommissioning costs. Economic escalation. Contingency (applicable to TPC). Vertical line denotes change DOE 4700.1 Chg 1 Attachment 3 6-2-92 Page 21 (and 22) 111. 112. USER. The entity which ultimately will operate or otherwise use the system being developed. When the project objective is to demonstrate to the private sector the utility or feasibility of a given system for commercial application, the identity of the ultimate user may not be known. In such case, only the most likely type of user (utility, constructor, energy supplier) may be identifiable. VALIDATION. The process of evaluating project planning, development, baselines and funding prior to inclusion of funds for a project or system acquisition in the DOE budget. It requires a review of project planning and conceptual development documentation, as well as discussion with the program or field element and principle contributing contractors to determine the source basis, procedures, and validity of proposed requirements, scope, cost, schedule, funding, and so forth. Findings and recommendations resulting from the validation process will be provided for use in the annual budget formultion. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 i TABLE OF CONTENTS CHAPTER I - DOE PROJECT MANAGEMENT SYSTEM PART A - OVERVIEW OF THE PROJECT MANAGEMENT SYSTEM 1. Introduction 2. Categories of Work Effort a. Operational Categories Figure I-1 - Categories of DOE Projects Figure I-2 - Categories of Work Effort and Research and Development of Acquisition Phases b. Statutory Categories c. Research and Development Phases PART B - PROGRAM/PROJECT RELATIONSHIPS 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Program Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Project Evolution. . . . . . . . . . . . . . . . . . . . . . . . . . Figure I-3 - Program Hierarchy . . . . . . . . . . . . . . . . . 4. State-of-the-Art Assessments . . . . . . . . . . . . . . . . . . . .

PART C - MANAGEMENT ROLES, RESPONSIBILITIES, AND AUTHORITY . . . . . . . 1. 2. 3. 4. 5. 6. 7. a. 8. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . Role of the Acquisition Executive . . . . . . . . . . . . . . . . . . Figure I-4 - Project Management System Relationships . . . . . . Energy System Acquisition Advisory Board . . . . . . . . . . . . . . Program Secretarial Officers . . . . . . . . . . . . . . . . . . . . Heads of Field Organizations . . . . . . . . . . . . . . . . . . . . Project Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . Specific Responsibilities . . . . . . . . . . . . . . . . . . . . b. Project Execution. . . . . . . . . . . . . . . . . . . . . . . . Departmental Support Organizations . . . . . . . . . . . . . . . . . . a. Director of Procurement, Assistance and Program Management . . . (1) The Associate Director for Program/Project Management and Control (2) Director of Procurement, Assistance and Program Management . (3) The Chief Financial Officer . . . . . . . . . . . . . . . . (4) General Counsel (5) Assistant Secretary for Environment, Safety, and Health . (6) Director of Organization, Resources and Facilities Management . . . . . . . . . . . . . . . . . . . . . . . . I-1 I-1 I-2 I-2 I-3 I-4 I-5 I-5 I-7 I-7 I-7 I-7 I-8 I-9 I-11 I-11 I-11 I-11 I-12 I-13 I-13 I-14 I-16 I-16 I-16 I-17 I-17 I-17 I-19 I-20 I-20 I-20 I-21 Vertical line denotes change ii DOE 4700.1 Chg 1 6-2-92 9. 10. a. Support to the Project Manager . . . . Organizational Options b. Other Than Departmental Support . . Key Government Functions . . . . . Management Assignments . . . . . . . . c. I-21 I-21 I-21 I-22 I-22 I-22 I-22 a. a. Project Management Assignment . . . . . . . . b. Establishment of Special Project Office . . . PART D - MAJOR SYSTEM ACQUISITIONS AND MAJOR PROJECTS I-25 1. 2. 3. 4. 5. Introduction . . . . . . , . . . . . . . . . . . Key Decisions. . . . . . . . . . . . . . . . . . I-25 I-26 Figure I-5 - Major System Acquisition and Major Project Decisions . . . . . . . . . . . . . . . . I-27 I-29 I-30 c. Designation of Major System Acquisitions and Major Projects DOE Acquisition Process.. . . . . . . . . . . . . . . . . Figure I-6 - Major System Acquisition--Phase Transition Decision Points . . . . . . . Project Planning for Major System Acquisitions or I-30a I-31 I-31 I-31 I-31 I-31 I-32 I-32 I-32 Major Projects Management Information . . . . . . . . . . b. Use of Government or Non-Profit Organizations Affordability . . . . . . . . . . d. Timeliness . . . . . . . . . . . e. Competitive Concept Development . f. Cost Estimates . . . . . . . . . g. Cost Participation . . . . . . . Figure I-7 - Key Decisions in the Acquisition Construction or Development Projects Process I-34 PART E -OTHER PROJECTS . . . . . . . . . . . . . . . . . . I-35 1. Introduction . . . . . . . . . . . . . . . . . . . . . 2. Other Project Decisions . . . . . . . . . . . . . . . . 3. Other Project Management Process . . . . . . . . . . . Attachment I-1 - Energy System Acquisition Advisory Procedures. . . . . . . . . . . . . . . . . . I-35 I-35 I-35 Board I-37 I-47 I-59 Attachment I-2 - Guidelines for Preparation for ESAAB Meetings Attachment I-3 - Major System Acquisition Procedures. . CHAPTER II - STRATEGIC PLANNING, PROJECT PLANNING AND BUDGETING PART A - PROJECT INITIATION AND PLANNING DOCUMENTATION . . . . II-1

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . 2. Strategic Planning . . . . . . . . . . . . . . . . . . . . II-1 II-1 Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 iii PART B - WORK BREAKDOWN STRUCTURE . . . . . . . . . . . . . . . . . . . . . II-9 PART C - PROJECT BUDGET PROCESS . . . . . . . . . . . . . . . . . . . . II-15 PART D - COST ESTIMATING AND CONTINGENCY ESTIMATING PART E - PROJECT ACQUISITION FOR MAJOR SYSTEM ACQUISITIONS AND MAJOR Vertical line denotes change iv DOE 4700.1 Chg 1 6-2-92 PART F - ENVIRONMENTAL PLANNING AND REVIEW . . . . . . . . . . . . . . II-31 PART G - CONSTRUCTION PLANNING . . . . . . . . . . . . . . . . . . . . . II-39 PART H - PROJECT TRANSITION . . . . . . . . . . . . . . . . . . . . . . II-43 CHAPTER III - PROJECT CONTROL PART A - CHANGE CONTROL AT THE EXECUTIVE LEVEL Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 v PART B - SYSTEMS ENGINEERING, TEST, AND EVALUATION . . . . . . . III-5 PART C - CONFIGURATION MANAGEMENT . . . . . . . . . . . . . . . . III-11 PART D - QUALITY ASSURANCE . . . . . . . . . . . . . . . . . . . . III-17 PART E - CONSTRUCTION MANAGEMENT . . . . . . . . . . . . . . . . . . . III-23 PART F - PROJECT CONTROL . . . . . . . . . . . . . . . . . . . . . . III-25 Vertical line denotes change vi DOE 4700.1 Chg 1 6-2-92 PART G -PROJECT TERMINATION . . . . . . . . . . . . . . . . . . . . . . III-41 CHAPTER IV - PROJECT REVIEW, REPORTING, AN ASSESSMENT PART A - PROJECT STATUS REVIEW . . . . . . . . . . . . . . . . . . . . . IV-1 Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 vii PART B - PROJECT REPORTING AND ASSESSMENT . . . . . . . . . . . . . . . . IV-3 Attachment IV-1 - Project Manager’s Progress Report Instructions and Example . . . . . . . . . . . . . . . . . IV-11 Attachment IV-2 - Semiannual Status Report for Non-General Plant Projects Below $5 Million in Total Estimated Cost, Instructions and Example . . . . . . . . . . . . . . . . . . . IV-23 Attachment IV-3 - Project Activity Report, Instructions and Example . . . . . . . . . . . . . . . . . . . . . . Attachment IV-4 - Cost and Cost Plus Commitment Chart, Instructions and Example . . . . . . . . . . . . . . . . . IV-29 Attachment IV-5 - Engineering, Management, and Construction Manpower for Cost Type projects Report, Instructions and Attachment IV-6 - Progress Photographs Instructions . . . . . . IV-35 Attachment IV-7 - Annual Report for General Plant Projects, Instructions and Example.. . . . . . . . . . . . . . . . . . . . IV-37 Attachment IV-8 - Instructions for the Program Manager’s Summary Report to the Acquisition Executive . . . . . . . . . . . . IV-39 Attachment IV-9 - Summary Project Performance Report to Senior Management, Instructions and Example . . . . . . . . . . . . . . . IV-41 Attachment IV-10 - Example of a Quarterly Status Report - Construction Projects . . . . . . . . . . . . . . . . . . IV-43 Vertical line denotes change viii DOE 4700.1 Chg 1 6-2-92 CHAPTER V - PROCEDURES FOR CONSTRUCTION MANAGEMENT PART A - PROCEDURES FOR MANAGING CONSTRUCTION EFFORTS Vertical line denotes change DOE 4700.1 Chg 1 ix (and x) 6-2-92 PART C -EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . .V-33 Attachment V-1 - Example of a Project Authorization . . . . . . . V-65 Attachment V-2 - Construction Management . . . . . . . . . . . . V-67 Attachment V-3 - Design Criteria Package Checklist . . . . . . . V-77 Attachment V-4 - Control Aid Descriptions . . . . . . . . . . . . V-83 Attachment V-5 - Planning Chronology for Fiscal Year 1986

Construction Budget Projects . . . . . . . . . . . . . . . . V-85 Attachment V-6 - Short Form Data Sheet Contents . . . . . . . . . V-87 Attachment V-7 - Example of a Short Form Data Sheet . . . . . . . V-89 Attachment V-8 - Conceptual Design . . . . . . . . . . . . . . . V-91 Attachment V-9 - Conceptual Design Reports . . . . . . . . . . . V-95 Attachment V-10 - Conceptual Design Report Title Page Example . . V-97 Attachment V-11 - Contents of a Title I Design Summary . . . . . V-99 Attachment V-12 - Construction Completion Report Content . . . V-103 Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 I-1 CHAPTER I DOE PROJECT MANAGEMENT SYSTEM PART A - OVERVIEW OF THE PROJECT MANAGEMENT SYSTEM 1. INTRODUCTION. The Department’s project management system is an approach to management in which authority, responsibility, and accountability are vested in a single individual to provide the detailed planning, organizing, directing, and controlling of all activities leading to the successful execution of the project. a. The project manager’s planning activities include developing a plan for management and control of the project. He/she is responsible for ensuring that the baselines established in that plan are followed. The project manager’s basic tools for controlling baseline activities are monitoring and contractor reporting. b. The contractor’s planning efforts must support those of the Department. Part of the contractual agreement requires inclusion of how the contractor will measure project performance so that the DOE project management plan will reflect that data. These agreed-to plans then become the project manager’s mechanisms for directing and controlling the project. c. Baseline establishment, baseline change control, and current, complete, and accurate contractor reporting are the keys to proper project management. The project manager is responsible for ensuring that the project baselines are realistic, for understanding the need for and value of adequate reporting to measure baseline performance, and for establishing the proper control mechanism (Uniform Reporting System and Cost and Schedule Control Systems Criteria) to measure project performance. These requirements demand that the project manager be fully cognizant of the concepts and procedural details of the tools which are available for use. d. DOE project management policy requires decentralization of projects unless an exception is granted by the Acquisition Executive. Decentralization in this context simply means assignment of project management responsibility to field elements. Normally, for large decentralized projects such as Major System Acquisitions (MSAs), Major Projects (MPs) or major line items; scope, cost, and schedule baselines are provided and controlled by Headquarters. Vertical line denotes change I-2 DOE 4700.1 3-6-87 e. The Department categorizes projects into three separate groups: MSAs, MPs, and other projects. The definition of these categories are detailed in Figure I-1. For project reporting purposes, other projects are further subdivided into those costing $15-$50 million, those $5-$15 million, those $1.2-$5 million, and those under $1.2 million (general plant projects). Chapter IV explains reporting requirements for all project categories. 2. CATEGORIES OF WORK EFFORT. The projects covered by the project management system include not only construction efforts, but also activities which may be defined in terms of operational/statutorial categories of work effort and the various phases of research and development. Figure I-2 shows the relationship of the activities; further details are provided below:

a. Operational Categories. The full spectrum of outlay program efforts can be divided into three categories which together constitute an individual program. (1) (2) Science and Technology Base. This normally accounts for 8 to 12 percent of the outlay program’s total estimated cost. This work effort is referred to as tasks or work units, and is managed or performed by personnel designated as principal investigators, as opposed to the more formal procedures in projects and project management. The work is generally characterized as level of effort, and the documentation and management techniques are not as formalized or rigorous as those required for project management. An exception to this is the construction of large experimental facilities, in such programs as high energy physics and fusion, to be used in support of technology base activities. Projects. Concept and demonstration development projects and full scale development projects normally account for 20 to 40 percent of the outlay program’s total estimated cost. Projects proceed through several discrete phases, each phase being separated by a key decision point as shown in Figure I-2. Key decisions are defined and explained in Chapter I, Part B, paragraph 2. These project phases can be contained within only a single statutorial phase of research and development, or they may pertain to the project as it moves through the various phases of research and development. It should be recognized that few projects come from science and technology base and proceed neatly through the research and development phases. (3) Operations and Support. Normally in excess of 50 percent of the outlay program’s total estimated cost can be attributed to operations and support work effort, which encompasses all work in an outlay program that is not in the science and technology base or projects. It includes production, fabrication, and testing, as well as program overhead, personnel, and studies, much of which is generally characterized by level of effort. Historically, some of this work moves into projects over time. DOE 4700.1 Chg 1 6-2-92 I-3 Figure I-1. Categories of DOE Projects Major System Acquisitions A. National urgency, importance, size or complexity. B. Dollar value-normally those systems or projects which have a total project cost in excess of $100 million. Major Projects A. Total project cost of the project from $50 to $100 million. B. Importance of project to program objectives. C. Size and complexity of the project. D. Degree of DOE control required. E. Visibility of the project. F. Potential severity of environmental impact. G. Recommendations by Program Secretarial Officers. Other Projects A. Total project cost of the project below $50 million, including line items, and GPP items. B. Line items. C. GPP items. Vertical line denotes change FIGURE 1-2 CATEGORIES OF WORK EFFORT AND RESEARCH AND DEVELOPMENT OR ACQUISITION PHASES DOE 4700.1 I-5 3-6-87 b. Statutory Categories. Within the Department, research, development, and demonstration efforts consist of three statutory general categories: (1) (2) (3) Science and Technology Base includes basic research, applied research, and technology or exploratory effort. Normally for budge- tary reporting purposes, research and development facilities and devices completed and capitalized are included in this base. The goal of this effort is to conceive, scope, and explore technology options to provide the foundation for the development of specific projects.

Concept and Demonstration Development includes advanced development and engineering development. Its goal is the systematic application of knowledge towards the identification of solutions to meet specific energy requirements, including specific application prototypes and processes. Normally, there is an intended commitment to large scale projects. Full Scale Development includes demonstration and production or operation and is the systematic application of knowledge towards pro- duction of useful materials, devices, systems or methods; this in- cludes design, development and improvement of equipment and processes to meet specific energy requirements. There is a major commitment of significant resources at this point. c. Research and Development Phases. The statutory categories above are further subdivided into research and development phases. The first three are level-of-effort type phases; the last four are called the acquisition phases. (1) (2) (3) (4) Basic Research. Systematic, fundamental study directed toward fuller scientific knowledge or understanding of subjects bearing on national energy needs. Applied Research. Systematic study directed toward fuller scientific knowledge for direct use in fulfilling specific energy requirements. Technology or Exploratory Development. Systematic application of knowledge from research towards proof of technology including devel- opment of nonspecific application prototypes and processes. Advanced Development. Effort that leads ultimately to a particular application or product. Advanced development can cut across several scientific disciplines and is intended to explore innovation in a particular area of one or more energy technologies. I-6 DOE 4700.1 3-6-87 (5) Engineering Development. Systematic use of the knowledge and understanding gained from research and technoloy development to achieve the detailed design, construction, and test for performance, producibility, and reliability of energy system prototypes, pilot plants, and research facilities. This category also includes the preparation of appropriate National Environmental Policy Act documen- tation. (6) Demonstration. Verification of economic and environmental viability through design and construction, test and evaluation of large energy systems in operational circumstances. Demonstration projects are intended to: (a) Overcome “scale-up” problems; (b) Contribute to the understanding of the economics of fabrication and operation; and (c) Resolve other questions such as public assistance and institu- tional and environmental issues. Preparation of appropriate National Environmental Policy Act documentation is included in this phase. (7) Production or Operations. (a) Production. Producing the item in quantity, bulk, or other parameters which meet specifically stated requirements. (b) Operations. Bringing the system or project from prototype or pilot plan operational testing status to full-scale operational condition to meet stated objectives. DOE 4700.1 I-7 3-6-87 PART B - PROGRAM/PROJECT RELATIONSHIPS 1. INTRODUCTION. a. Program Requirements flow from Departmental missions and mission area assignments made by the Secretary. The goals established by the program requirements necessitate pursuit of state-of-the-art technology develop- ment, various project executions, and operation of pilot and fully integrated facilities.

b. Responsibilities. The program manager is responsible for attaining program goals within a mission area assignment and concentrates on assimi- lation of all aspects of the program into a single entity. The project manager is responsible for a single project within the program and con- centrates on meeting project objectives within established baselines. 2. PROGRAM POLICY. Program policy establishes the base for project policy and execution. a. Each program Secretarial Officer is responsible for the planning, programing, budgeting, and execution of programs under his or her cognizance. b. Headquarters and field responsibilities and authorities are set forth for each program. c. There is a clear hierarchical relationship between missions, programs, and projects. This hierarchical relationship is graphically depicted in Figure I-3. d. Only programs and their constituent elements that fulfill a mission need, and are in consonance with assigned mission areas, will be conducted. e. Continuing mission analysis and independent monitoring are conducted to ensure that programs are planned, developed and, upon approval, executed in accordance with assigned mission areas. f. Significant program issues and near-term milestones of interest to senior management are identified and their status periodically reviewed. 3. PROJECT EVOLUTION. a. The Secretary requests proposed changes to current mission area assign- ments from the program Secretarial Officers. These changes are based on the results of continuing mission analysis. I-8 DOE 4700.1 3-6-87 Planning Flow for Programs DOE Project Management System Figure I-3 Program Hierarchy DOE 4700.1 3-6-87 I-9 (and I-10) b. A program summary is developed for each program which includes the mission area assignment supported by the following data: (1) program objectives and related issues; (2) the program strategy; (3) summary of program logic; (4) near- and long-term milestones; (5) significant projects; and (6) the program project structure. The Secretary approves the program strategy and near-term milestones, and selects milestones and issues for periodic review. c. The approved projects and/or project elements of the program then become specific budget items in the annual planning, programing, budgeting phase of program management. The planning and programming activities entail the translation of strategic Departmental policy objectives at a specific point in time within constrained resources. 4. STATE-OF-THE-ART ASSESSMENTS. a. The project management system assumes the technical risks associated with research and technology development are investigated prior to the establishment of a project, especially MSA’s or MP’s. This risk can vir- tually be eliminated by requiring proven technology to be available prior to project initiation. The impact of this requirement, however, may be severe in terms of cost and schedule penalties as well as unrealistic for meeting a mission need. In other words, there must often be a tradeoff between project schedule and state-of-the-art technology. An assessment has to be made of the impact of one or the other situations. b. This state-of-the-art assessment is primarily the responsibility of the program manager, who has better visibility into the technology related to his program. The assessment should then become an integral part of the risk assessment aspect of the justification for new start and be sum- marized in the alternatives and capability section.

c. Although the program manager has primary responsibility, the project manager must also be alert to technology change. State-of-the-art assessments may relate to any phase of the project, since various com- ponents in a system may be in different stages of development throughout the project’s life. In updating the project plan, the project manager should describe the status of technology as it relates to the project. Then, as the project matures, early warning of potential deficiencies in technology readiness should be highlighted in the project manager’s status reports. DOE 4700.1 Chg 1 6-2-92 I-11 PART C. MANAGEMENT ROLES, RESPONSIBILITIES, AND AUTHORITY 1. INTRODUCTION. It is the intent of the Department to place authority and responsibility at the appropriate management level commensurate with the project effort. This approach allows decisions to be made and actions to be taken at the appropriate levels within DOE line management. Below are the detailed roles played by various management levels within the Department as they relate to the project management system. 2. ORGANIZATION. a. Headquarters program organizational elements will be responsible for overall program policy, planning, program development (including establishment of Broad priorities), budget preparation and defense (with major support from field organizations), and broad program direction. Field organizations will be responsible for implementing these program activities and for providing major support to the Headquarters programming and budgeting process. b. Implementation of the Project Management System (PFK) involves both a “line” chain of authority and necessary participation of various “staff” elements. The line organization chain begins with the Secretary and progresses through the Program Secretarial Officers, Headquarters program organizations, and finally, to the project manager, the single individual who has full responsibility for detailed planning and execution of all project activities. Staff participation and coordination begin very early in a project’s life cycle and carry through to project completion. (A chart showing project management system relationships follows as Figure I-4). c. Project Line Management. The project line management for MSAs, MPs, and other projects, as depicted in Figure I-4, is the Office of the Secretary/Acquisition Executive, the Program Secretarial Officer, the Program Office, the Head of the Field Element, and the Project Manager. 3. ROLE OF THE ACQUISITION EXECUTIVE a. The Secretary has delegated the principal responsibility for project management activities to the Acquisition Executive. This includes establishing Department project management policies, approving the PMS, serving as the chairman of the Energy System Acquisition Advisory Board (ESAAB) and Level Baseline Change Control Board (BCCB) for the Department’s MSAs and selected MPs and approving establishment of special project offices. b. Key decisions on MSAs and certain decisions on selected MPs are normally reserved for the Acquisition Executive. In some cases, the Secretary may elect to act as the Acquisition Executive on critical projects. These include decisions to enter the acquisition phase or to make transitions between phases (key decisions) and any decisions Vertical line denotes change I-12 DOE 4700.1 3-6-87 DOE 4700.1 Chg 1 6-2-92 which will directly result in commitment of major portions I-13

(e.g.,procurement of large long-lead items) of-the- project funds. Additionally, the Acquisition Executive a case-by-case basis. c. Other decisions on MSAs and similar key MPs are typically made by the cognizant may reserve other decisions on and significant decisions on Program Secretarial Officers. 4. ENERGY SYSTEM ACQISITION ADVISORY BOARD. a. The ESAAB supports the Acquisition Executive by providing advice, assistance, and recommendations at key decision points for each MSA and designated MPs. Attachment I-1 provides complete ESAAB membership and procedures. The ESAAB provides a single forum for the discussion of issues and alternatives and is designed to assure coordinated, objective senior level management advice to the Acquisition Executive. Attachment I-2 details ESAAB review meeting highlights. b. The Acquisition Executive is responsible for convening formal meetings, as required to facilitate the decision process. Board members and appropriate advisors will attend all meetings. Other advisors are not required to attend unless asked to participate by the Acquisition Executive. In addition to prescribed meetings, any board member may request a meeting to consider significant issues at any point in the acquisition process for any MSA. 5. PROGRAM SECRETARIAL OFFICERS. a. Each Program Secretarial Officer has full responsibility for the management planning and execution of his/her program activities including projects, subject to the national energy plan; approved Departmental policies and program strategies; mission area assignments; enacted budget legislation; approved resource allocations; and the Departmental PMS. For MPs, the Program Secretarial Officer is responsible for each approval or key decision not specifically reserved for the Acquisition Executive. Additionally, he/she is responsible for providing current information on program management decisions, the progress of work, status or resource utilization, major problems encountered, and planned corrective actions, to the Acquisition Executive and other Departmental elements having responsibility for activities which must interface with project activities. b. Normally, the type and level of detail for the information provided will be the minimum required for the recipient office to fulfill its responsibilities in those areas which interface with project activities. In general, the information concerning projects that is provided to the Acquisition Executive will be that associated with MSAs and MPs although special reviews and reports may be requested for other projects on a case-by-case basis. Vertical line denotes change I-14 c. d. e. f. DOE 4700.1 Chg 1 6-2-92 The responsibility and authority for decision-making shall be delegated to the appropriate organizational level. To accomplish this, only those approvals and key decisions on MPs, associated with entering or making the transition between acquisition phases, those directly resulting in large commitment of funds (e.g., procurement of large long lead items) or those of unusual national or programmatic importance or sensitivity are required at the Program Secretarial Officer level. Assistant Secretary for Defense Programs (DP-1) has special responsibilities for non-weapon work assigned to the weapon complex. In coordination with appropriate DOE sponsors, he/she reviews the nature, scope, and future requirements of non-defense-related work. Additionally, he/she concurs or nonconcurs in the assignment of non- weapon work or lead missions to the weapon complex facilities.

Program Organizations. (1) Management responsibility for specific programs is delegated by the cognizant Program Secretarial Officer to one of his/her DOE Headquarters program offices. This includes overall responsibility for any projects included in the program activities. The program organizations are responsible for assuring that overall requirements are fulfilled in the areas of environment, technical performance, scope, safety, quality assurance, cost, schedule, and operational environmental safety and health. They also continually evaluate and balance project needs against other programmatic needs and constraints. (2) In general, the heads of the program offices are responsible for all the Headquarters approvals and key decisions which are not specifically reserved for the Program Secretarial Officer or the Acquisition Executive. Program Organization Staff. The program organization staff will assist the director of the Headquarters program organization in the execution of assigned responsibilities. Precise delineation between the line management and the staff role is difficult since the staff functions are highly dependent upon overall organizational arrangements. 6. HEADS OF FIELD ORGANIZATIONS. a. Certain planning and all executing responsibility for MSAs, MPs, and other projects shall be assigned to field offices unless an exception is obtained from the Acquisition Executive by the Program Secretarial Officer. The field element shall be involved in the planning of all assigned projects and shall develop much of the project documentation, which includes the “Justification of Mission Need” and the Project Plan, including the project charter. The Head of the Field Element shall establish an appropriate project management organization and will delegate appropriate authority to the project manager for management and direction of the project(s). Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 I-15 b. Specific Responsibilities. Heads of Field Elements will: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) Participate and concur in the determination regarding assignment of project(s) to the field organizations; Develop project plans, including charters, and other project documentation for the cognizant program element; Establish a project management organization and delegate appropriate authority to the project manager for the management and direction of the project(s) within the delegated authority; Assure the project manager is provided the necessary support to accomplish the project within the project charter guidelines, particularly in the area of personnel, in both administrative and technical areas; Review and approve project management plans; On MSAs, select the project manager with the concurrence of the cognizant Program Secretarial Officer or designated representative; on MPs, select the project manager or designate management responsibility, after consultation with the cognizant Program Secretarial Officer or designated representative; and on all other projects designate management responsibility; Assure satisfactory management of the project in accordance with the project plan, including the project charter and project management plan; Provide independent assessment on regular reports on project status, progress, problems, and variances provided to Headquarters management by the project manager; Coordinate and integrate all necessary in-house and outside administrative and technical support to meet project objectives and requirements;

Develop project managers and project management capability; Within the authority delegated, conduct such contractor selections and subcontractor approvals as are required. Within authority delegated, execute and administer contracts; Assure that the minimum technical reporting requirements of the Department are met and that all scientific, technical, and engineering publications are deposited in a timely fashion with the Office of Technical and Scientific Information; Assist, when needed, the contractors or industrial partners in— efforts to formalize experimental research and development programs to support the assigned project(s); Vertical line denotes change I-16 DOE 4700.1 Chg 1 6-2-92 (15) Assure that adequate policy and procedures consistent with Departmental policy are established to assist the project manager in accomplishing the planning and execution of the construction portion of the project; (16) Prepare National Environmental Policy Act documentation and assure the environmental protection, safety, and health protection aspects of facility operations; (17) Accept the completed contractor efforts; and (18) Assure effective implementation of required quality assurance activities. 7. PROJECT MANAGER. a. Specific Responsibilities. The project manager will be the point of contact for the information flow to Headquarters. Day-to-day activities within the scope and charter thresholds and milestones will normally flow between the project manager and the program manager. The project manager shall be dedicated full time to the MSAs; however, on other projects the same project manager may have authority and responsibility for more than one project. For all projects, the OMB Circular A-109 requirement to minimize layering above the project manager must be satisfied. b. Project Execution. The project manager has direct primary responsibility and accountability for execution of the project in accordance with the approved project plan, including the project charter and the project management plan. The project manager is responsible for actions indicated below: (1) Technical Support. The support may be provided, as appropriate, by technology centers, laboratories, or contractors. Technical support services generally will be procured directly by the project manager, but may alternately be provided by contract from the program manager. (2) Environment, Safety, and Health. The project manager is responsible for assuring that all project activities are carried out in compliance with Federal, State, and local regulations, laws, and standards for protection of the environment and the safety and health of employees and the public. The project manager may procure support services as necessary to achieve such compliance. In preparing National Environmental Policy Act documentation, the project manager shall obtain guidance from the appropriate field organization unit responsible for environment, safety, and health, and from the Assistant Secretary for Environment, Safety, and Health. (3) Reporting. The reporting will be carried out in accordance with the project management plan and this Order. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 I-17 (4) Quality Assurance. Procedures in the management of the project shall be established. (5) Administrative Matters. The Head of the Field Element will provide necessary support to the project manager to fulfill administrative responsibilities associated with the project.

(6) Procurement. The project manager shall initiate all procurement actions necessary for execution of the project. The Head of the Field Element will provide necessary support to the project manager to fulfill these procurement responsibilities. (7) Construction. The project manager shall oversee design review, construction review, and construction management activities related to the project. (8) Financial. Management of project finances including contingency. Financial management support will be provided by the Head of the Field Element. (9) Test Plan and Program. Preparation and execution of a complete test plan to assure full technical performance capabilities of the project. The Head of the Field Element will provide necessary support to the project manager to fulfill these test plan and program responsibilities. (10) Configuration Management. Configuration management should be included for each project that establishes and documents the configuration baseline; institutes a configuration control system to ensure the review, approval, and documentation of changes; and institutes a program of configuration audits to assure compliance with the form and intent of the configuration control system. 8. DEPARTMENTAL SUPPORT ORGANIZATIONS. a. Director of Procurement, Assistance and Program Management (PR-1) is responsible for procurement, cost estimates, and the development of management and business related policy. Specifically, responsibilities with respect to the project management system are carried out by the following: (1) The Associate Director for Program/Projec t Management and Control (PR-20), through the Office of Program/Project Management has the primary responsibility for Department-wide overview of project activities for the Acquisition Executive. In this role, the Office of Program/Project Management and Control shall develop, implement, and maintain Department-wide program/project management policies and systems. Specific responsibilities of PR-20 include: (a) Project Management System (PMS). 1 Develops and maintains the PMS Vertical line denotes change I-18 DOE 4700.1 Chg 1 6-2-92 2 Establishes policies and procedures for DOE-wide program and project management and provides oversight, guidance and evaluation of this area of responsibility. 3 Establishes requirements for and overview of configuration management including the Baseline Change Control Process at the Executive level. 4 Develops, implements, and maintains the Uniform Reporting System and Cost and Schedule Control Systems Criteria. 5 Establishes requirements for, and overviews, mission analysis as it relates to the acquisition process. 6 Provides support to and serves as the Energy System Acquisition Advisory Board and the Level O Baseline Change Control Board (BCCB) Secretariat. (b) Project Documentation. 1 2 3 4 5 (c) Reviews and concurs on project documentation for MSAs and selected MPs. Provides input for preparation of project plans as requested, and reviews final versions and provides recommendations. Reviews and recommends approval of project baselines to the Acquisition Executive. Provides support to both the ESAAB and Program BCCBs, including training and consultation for the Program and Project BCCBs as required. Ensures programs keep project documentation, reporting and information current. Project Execution 1 Performs independent project assessment at each decision point and presents findings/recommendations to the Acquisition Executive.

2 Completes staff work and coordination to bring the decision to the Acquisition Executive for approval. 3 Provides evaluation and recommendations on baseline changes to the Executive Level Change Control Boards. 4 Acts as focal point for development and dissemination of cost estimating data bases and methodologies for the Department. Vertical line denotes change DOE 47O0.1 Chg 1 I-196-2-92 1 2 3 4 (2) 5 Conducts independent cost estimates prior to Key Decision 1, at the completion of Title I and II designs and at critical phases of the project, as deemed necessary. 6 Conducts independent cost estimates, as appropriate, of change control actions for review and approval by the Acquisition Executive (Level O BCCB). (d) Analysis and Evaluation Tracks execution against project baselines and provides independent assessment of project performance against approved baselines. Provides coordinated recommendations to the Acquisition Executive. Provides coordinated quarterly summary project performance reports covering project execution and issues to senior management. Provides recommendations to Program Secretarial Officers and Acquisition Executive for periodic project reviews. Conducts program/project validations, in conjunction with the program organizations, and in coordination with the Chief Financial Officer and the Office of Policy, Planning and Analysis in support of the annual Internal Review Budget. Director of Procurement, Assistance and Program Management (PR-1) performs the following duties: (a) Policy Development. Provides expertise in procurement, financial assistance, and business management to support development of Departmental project management policies. (b) Project Development. Assists program offices in development and subsequent implementation of procurement matters on projects. These procurement and assistance services are required for MSAs and designated MPs. Assists program and project offices in development of the procurement strategy through provision of direct advice and counsel, as well as through business strategy groups, and concurs in the project plan and related documents to assure satisfactory business arrangements. (c) Project Execution. Responsible for supporting procurement aspects of project execution. Field and Headquarters procurement organizations provide assistance to project organization in the planning of individual procurement actions, and carrying out necessary actions to solicit, award, and administer procurements. Vertical line denotes change I-20 DOE 4700.1 Chg 1 6-2-92 (d) Other Responsibilities. The Director has specific responsibilities in two other areas that impact project management: 1 Personal property management; and 2 Materials allocation program. (3) The Chief Financial Officer is responsible for budget formulation and execution activities including: (a) Assurance that financial controls are established and maintained in accordance with legislative authority; (b) Development and publication of budgeting, accounting, and other policies necessary for implementation of this Order; (c) Preparation of financial reports as may be requested or required by Congress, the Office of Management and Budget, or the General Accounting Office; (d) Coordination on financial aspects of reports or other documents required by this Order; and

(e) Determination in conjunction with the component program support offices whether congressional notification is needed prior to commitment of funds to any action which will result in, or as a result of, a change in scope, Total Estimated Cost (TEC), major thrust, or other significant departure from the previous congressional budget presentation. (4) General Counsel (GC-1) provides legal counsel to assure that activities are planned and conducted in accordance with statutory and regulatory requirements. Counsel organizations in field organizations perform the specific legal functions necessary for project execution. (5) Assistant Secretary for Environment, Safety, and Health (EH-1) has three basic roles in the PMS. (a) (b) Coordination of Energy Policy. Has primary staff responsibility. Draft policy, however, is coordinated with Program Secretarial Officers before issuance: This role focuses on the front end of the acquisition process, most specifically, on the Department-wide budget and program planning process. Identification, Coordination, and Integration of Major Issues Analyses and Decisions. These studies are performed on selected policy and program issues which require the Secretary’s priority attention for the formulation of budget and legislative programs. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 I-21 1 2 3 (c) Independent Review. Independent review of the conformance to laws, regulations, and DOE Orders related to environment, safety, and health. These responsibilities are accomplished through the following procedures: The review and approval of environmental documentation, by assuring compliance with the National Environmental Policy Act; The independent overview of operational environment, safety, and health (occupational and public), and quality assurance requirements/activities including the safety analysis and review systems; and Independent management appraisals of DOE programs and 9. projects subject to this project management system in the areas of environmental safety and health protection and quality assurance per DOE 5700.6C and DOE 5480.1B. (6) Director of Organization, Resources and Facilities Management (AD-1O) is responsible for overall facilities management, cost of ownership issues, specifically in the areas of general design criteria, In-House Energy Management, maintenance management, real estate, site development planning, utilities management, and value engineering. SUPPORT TO THE PROJECT MANAGER. The project manager and/or the Head of the Field Element will develop a proposed project organization. The project organization will be summarized in the project plan and detailed in the project management plan. a. Organizational Options. Because of the diversity of projects and field organizations, there is not a standard project organization. The project organization can range from a relatively large dedicated project office for large, complex projects to a single project manager (having responsibility and authority for more than one project) receiving matrix support for all activities. The typical project organization consists of a small, dedicated project office (or designated individual) with general matrix support provided by the field organization. This project office reports to the Head of the Field Organization, generally through an assistant manager.

b. Other Than Departmental Support. In addition to DOE personnel, support from other Federal agencies and/or contractors may be utilized to extend and strengthen the capabilities of the Departmental managing organization. Support from other Government agencies (such as the U.S. Army Corps of Engineers) is obtained through use of interagency agreements. Contractor support may come from operating contractors or specialty-type contractors. Vertical line denotes change I-22 DOE 4700.1 Chg 1 6-2-92 c. Key Government Functions. Provisions must be made for Government performance of those responsibilities that cannot be delegated to contractors. These responsibilities include: (1) Determination of project and contract scope; (2) Establishment of the project management and contracting approach; (3) Selection of prime contractors as well as the award and administration of prime contracts for work; (4) Determination of satisfactory contractor performance and acceptance of completed work; (5) Assurance of project execution within agreed upon objectives; (6) Direction and supervision of Government employees; (7) Distribution and accountability of Government funds; (8) Assurance of project cost, schedule, and technical performance; (9) Development, justification, and approval of input into the President’s budget; and (10) Management of project contingency funds. 10. MANAGEMENT ASSIGNMENTS. a. Project Management Assigmment. Responsibility for project management will generally be assigned to the field element with the greatest expertise in the program area under which the project falls. If no single field organization has major exclusive expertise in the program or project subject area, the program manager will identify an appropriate field organization for project management on the basis of staff experience and availability. The cognizant program manager and the Head of the Field Element will jointly decide the project management assignment and will issue a charter to the cognizant Program Secretarial Officer as part of the project plan. b. Establishment of Special Project Office. Under extraordinary conditions, a special project office may be established separate from the existing field structure. A recommendation for this office shall originate with the cognizant program manager, program director, or Program Secretarial Officer. The recommendation will be coordinated with the Office of Procurement Assistance and Program Management and the Office of Organization, Resources and Facilities Management, and will be submitted to the Acquisition Executive for approval. (1) A special project office imposes the heaviest burden on the Department in terms of Government personnel, and exceptional justification is required to support a recommendation to establish one. The specific level of support by a field organization and its reporting relationship will be established Vertical line denotes change DOE 4700.1 Chg 1 I-23 and (I-24) 6-2-92 on a case-by-case basis in consultation with the field organization involved. (2) The office shall report to the program office of the cognizant Program Secretarial Officer or as directed by the Secretary. Vertical line denotes change DOE 4700.1 3-6-87 I-25 PART D - MAJOR SYSTEM ACQUISITIONS AND MAJOR PROJECTS 1. INTRODUCTION. a. OMB has issued an Executive Department policy statement entitled “Major System Acquisitions” (OMB Circular A-109). This circular establishes policy to be followed by executive branch agencies in the acquisition of major systems and provides basic policy guidance for the PMS. DOE MSAs and MPs shall conform to these requirements.

b. OMB and DOE policy requirements include: (1) Top level management attention to the determination of agency mission needs and goals; (2) An integrated systematic approach for establishing mission needs, budgeting, contracting, and managing programs; (3) Early direction of research and development efforts to satisfy mission needs and goals; (4) Improved opportunities for innovative private sector contributions to national needs; (5) Avoidance of premature commitments to full-scale development and production/operations; and (6) Early communication with Congress in the acquisition process by relating MSAs to agency mission needs and goals. (7) Early identification of projects requiring major siting decisions. c. The nature of DOE projects requires that consistent policy be established for their management and that all participants understand the objectives of the project. It is important that all Departmental participants coordinate their efforts in order to: (1) Assure proper coordination by all appropriate line and staff elements beginning with program or project inception; (2) Relate program or project objectives to national planning documents, mission area assignments, strategy papers, and legislation, as appropriate; (3) Assist in determining priorities among programs and projects and, in turn, relate these to various levels of resource availability; (4) Avoid commitment of major resources prior to adequate project definition; and I-26 DOE 4700.1 Chg 1 6-2-92 (5) Provide program and project managers with a clear view of related program and project objectives and plans. 2. KEY DECISIONS. a. b. c. d. e. OMB Circular A-109 also specifies certain key decisions and outlines the logical sequence of activities in the MSA process. The key decisions and sequencing provide DOE w how to meet the requirements of the po Figure I-5 outlines the key decisions. Key decisions are approved by the Acqu and selected MPs. Program Secretarial on major MPs not reserved for the Acqu i l th flexibility in determining icy and staff key decisions. sition Executive on all MSAs Officers make the key decisions sition Executive. Key i i decisions on other projects, when required, shall be made by the Program Secretarial Officer or formally delegated. Project baselines are related to the key decisions. Key Decision O, Approval of Mission Need, allows the Conceptual Design Report (CDR) to be developed which provides the data required to develop initial technical, cost, and schedule baselines. Initial technical, cost, and schedule baselines are established at Key Decision 1 based on the CDR and other support documentation. The initial baselines will be refined and updated as the project proceeds through preliminary design (Title I), final/detailed design (Title II), construction/full scale development, testing, and successful start of operations. For projects funded from operating funds, appropriate equivalent decisions points reflecting significant expenditure of funds will be identified by Secretarial Officers and recommended to the Acquisition Executive. The baselines will be managed using the change control system at the executive level as defined in Chapter III and project change control systems for those changes not requiring Headquarters approval. Updated baselines reflecting incorporation of approved Baseline Change Requests will be presented at each key decision to the ESAAB or Program Secretarial Officer, as appropriate.

An Independent Cost Estimate (ICE) will be conducted prior to Key Decision 1 based on the proposed project baselines established from the CDR and supporting CDR data. The original baselines ICE will be refined at the completion of preliminary design (Title I) and final/detailed design (Title II) to provide independent project cost assessments prior to Key Decision 2 and Key Decision 3, respectively. The project manager will notify the Office of Program/Project Management well in advance of the need to update an ICE. Key decisions may be expanded to include additional Acquisition Executive milestones or decision points, as appropriate, between the standard key decisions. These expanded decision points will ensure the proper Headquarters visibility and ESAAB action prior to all major commitments of resources for a project. Key decisions and expanded decision points shall be integrated into the project summary schedule. Vertical line denotes change DOE 4700.1 Chg I-27 KEY DECISION O - Approval of Mission Need Prerequisite for requesting conceptual design funding in the internal review budget cycle. Approval must occur prior to the planning stages of the annual internal review budget cycle and submission of initial funding requests to the Office of Management and Budget and Congress. Documentation Requirement: Approving Mission Need. Prerequisite for release of appropriated funding by the CFO. KEY DECISION 1 - Approval of New Start Prerequisite for requesting project line item finding in the internal review budget cycle. Approve Project Plan including initial project baselines. Initial technical, cost and schedule baselines for the project will be based on the CDR and its support documentation. Implement a change control system delineating specific responsibilities, authority and accountability at the appropriate management levels for changes affecting the project baselines. Other input to the decision process includes completion of the budget validation, and independent cost estimate, and the project data sheet. Prerequisite for release of appropriated funding by the CFO. KEY DECISION 2 - Approval to Commence Title II, or Final/ Detailed Design Scheduled prior to start of Title II, or Final/Detailed Design. Input to decision process includes update to the project baselines reflecting completion of preliminary design (Title I), and an independent cost estimate. Figure I-5 Major System Acquisition and Major Project Key Decisions Vertical line denotes change I-28 DOE 4700.1 Chg 1 6-2-92 ● Current project plan reflecting approved baseline changes, as appropriate. ● Approval to begin long-lead procurement, if applicable. ● Prerequisite for release of appropriated funding by the CFO. KEY DECISION 3 - Approval to Commence Construction or Enter Full- Scale Development. ● Scheduled prior to start of construction or full-scale development. ● Input to the decision process includes the update of project baselines reflecting completion of final/detailed design (Title II) and an independent cost estimate. ● Current project plan reflecting approved baseline changes, as appropriate. ● Other input to the decision process includes evidence of readiness to process, appropriateness of timing and a firm baseline. ● Prerequisite for release of appropriated funding by the CFO. KEY DECISION 4 - Approval to Commence Operation/Production

● Scheduled prior to the transition from acquisition to operation/production; transition is not formally made until demonstrated capability to meet technical performance goals specified in the baseline. ● Prerequisite for released of appropriated funding by the CFO. Figure I-5 (continued) Major System Acquisition and Major Project Key Decisions Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 I-29 3. f. Each key decision point (including expanded decision points) will require ESAAB approval prior to the releases of appropriated funds by the Chief Financial Officer to proceed with the next phase of the project. g. In the event that there are no key decisions or expanded decision points in a given year for the project, an Energy System Acquisition Review (ESAR) will be scheduled to advise the Acquisition Executive on current project status. Attendance at the ESAR will be the same as an ESAAB meeting with the Acquisition Executive serving as the chairman. The ESAR will be conducted similar to an ESAAB meeting in that the Acquisition Executive will review project performance (cost, schedule, and technical) against current baselines. The Acquisition Executive may delegate the responsibility for the ESAR to the cognizant Program Secretarial Officer. DESIGNATION OF MAJOR SYSTEM ACQUISITIONS AND MAJOR PROJECTS. Projects that fulfill the prescribed MSA or MP criteria will be so designated by the Acquisition Executive using the following procedures: a. The Office of Program/Project Management and Control, which maintains DOE 4240.1, will develop a list of MSAs and MPs. The list is submitted to the program organizations for review and comment. b. Comments and unresolved designations which cannot be resolved at the program management levels will be forwarded to the Acquisition Executive for resolution. Appropriate notification of changes or additional designations is made to OMB and its Office of Federal Procurement Policy. Subsequently, a change to DOE 4240.1K, DESIGNATION OF MAJOR SYSTEM ACQUISITION AND MAJOR PROJECTS (or its successor) is issued. c. If the approval of any change by a Level O, 1, or 2 Baseline Change Control Board (BCCB) action caused the Total Project Cost for a project to change from either the threshold for a MSA ($100 million), or for a MP ($50 million), the chairperson of the Level 1 BCCB approving the change shall be required to immediately notify the Director, Office of Procurement, Assistance and Program Management (PR-1) of the situation. Specifically, the Level 1 BCCB chairperson is required to provide such notification in writing within 5 working days of the approval of the project action which caused the change. The notification letter shall provide complete explanation of the new technical, cost, and schedule baselines and status of the project relative to key decision points to enable PR-1 to make determination whether an Energy System Acquisition Advisory Board/Energy System Acquisition Review should be convened, and whether DOE 4240.1 should be revised to include the subject project. Vertical line denotes change I-30 4. DOE 4700.1 Chg 1 6-2-92 DOE ACQUISITION PROCESS. a. b. Each MSA or MP is directed through the acquisition process by the project manager who has a charter which provides sufficient authority and resources to accomplish the stated project objectives and goals. Layers of authority between the project manager and the responsible Program Secretarial Officers are kept to a minimum. Figures I-5 and I-6 denote the process and phasing of MSAs. Figure I-7 provides the key events in the acquisition process. See Attachment I-3 for MSA procedures.

In order to effectively carry out DOE’s missions, the acquisition process requires that DOE management: (1) Express needs and program objectives in DOE mission terms to encourage innovation and competition in creating, exploring, and developing alternative energy system options and design concepts. (2) Conduct initial activities in the system acquisition process to allow competitive exploration. of alternative energy system options in response to mission needs. (3) Establish clear lines of authority, responsibility, and accountability for management of MSAs. (4) Maintain a capability to: (a) Review, monitor and evaluate total project costs, schedule, and performance during the acquisition process and provide assessments for consideration at key decision points or when significant baseline variances occur. (b) Estimate life cycle costs during system design, concept evaluation and selection, full-scale development, facility conversion, and production to ensure appropriate tradeoffs among investment costs, operating costs, schedules, and performance. (c) Use independent cost estimates of the cost of the project for the applicable phase of the acquisition process, total project cost, life cycle cost for comparison purposes. (5) Report on the accomplishment and status of the acquisition process. Of particular importance is reporting potential cost, schedule, or performance threshold breaches before corrective actions are foreclosed. Vertical line denotes change Major System Acquisition--Phase Transition Decision Points Figure I-6 DOE 4700.1 Chg 1 6-2-92 I-31 PROJECT PLANNING FOR MAJOR SYSTEM ACQUISITIONS OR MAJOR PROJECTS. Three documents are required during the project approval and execution processes: the Justification of Mission Need, the Project Plan, and the project management plan. During the development of these documents, particular attention must be paid to the following, not necessarily exclusive, concepts: 5. a. b. Management Information. Management information should be limited in all areas of activity to information essential for effective control. Normally, the information required by management for decision-making is obtained from the same data bases used by the contractor. A realistic work breakdown structure is developed for each project as a framework for planning and assignment of responsibilities, contracting and reporting progress. Use of Government or Non-Profit Organizations. Government laboratories, federally funded research and development centers, educational institutions, and other non-profit organizations that submit alternative major system design concepts for consideration shall not participate in the evaluation process on those systems. Care must be taken not to place DOE management and operating contractors, Government laboratories, and federally funded research and development centers in competition with private industry, and further, to assure that inappropriate assignments of work are not made to such DOE management and operating contractors, Government laboratories, and federally funded research and development centers when such work is more appropriate and better suited for performance by the private sector. If further exploration of an alternative system design concept is deemed appropriate, that concept may be made available to industry to propose on the continued development stages. (1) Departmental operations offices, energy technology centers, and laboratories may be assigned development tasks to complement a major system development.

(2) DOE energy technology centers and laboratories may be used as technical arms of the project management office, especially in matrix management organizations. Typical assignments may include actions such as studies, analyses, technology developments, risk and cost reduction efforts, and development test and evaluation. Affordability. The Program Secretarial Officer will initially describe the magnitude of resource commitment required to acquire a system in the Justification of Mission Need and, subsequently, in the Project Plan. At Key Decisions 1 and 2, affordability considerations will be used as a factor in determining the selection of alternative concepts. At Key Decisions 3 and 4, favorable decisions may not be made unless the system’s project acquisition and operating costs are available. Timeliness. Potential savings in acquisition time should be balanced c. d. against cost and technical risks or national urgency. When technical and cost risks are low, or when the urgency to develop an alternative energy system exceeds high technical and costs risks, the cognizant Vertical line denotes change I-32 e. f. g. DOE 4700.1 Chg 1 6-2-92 Program Secretarial Officer should recommend, with caution, minimizing acquisition cycle time. This may be accomplished by omitting a phase of the acquisition process or by overlapping or combining activities within a phase. Competitive Concept Development. Alternative solutions to the mission need shall be obtained competitively unless the Acquisition Executive has approved pursuing a single concept. Even when pursuing a single concept, competition shall be employed in development of the concept. The widest range of acquisition alternatives to satisfy the mission need shall be considered. At a minimum, solicitations shall outline the need in mission terms; identify schedule objectives and constraints; and present project system cost objectives. Cost Estimates. The validity of conclusions reached at each decision point depends upon the quality and consistency of cost, schedule and technical estimates presented in proposed changes to the updated project plan. Broad intervals of uncertainty and of risk must be expected early in the acquisition process, with smaller intervals developed as the project matures and uncertainty and risk decrease. (See Chapter IV. ) Cost Participation. Cost participation is a generic term denoting any situation in which the Government does not fully reimburse the performer for all allowable costs necessary to accomplish the project. The term encompasses cost sharing, cost matching, cost limitation, participation in kind, and similar concepts. (1) In research, development, and demonstration projects for which there is a reasonable expectation that the performer will receive present or future economic benefit as a result of performance, it is Departmental policy to obtain cost participation. (2) (3) Cost participation should begin at the inception of a project with the Government and the performer each bearing a percentage of each dollar of allowable costs, including any overrun costs, as they are incurred. Net income, if any, should be shared in proportion to the accumulated investment of the parties at the time of accrual. Failure to reach agreement on cost participation from project inception may be sufficient reason for project cancellation.

Specific cost participation arrangements must be determined on a project-by-project basis. The concept of sharing risks and benefits equally over the life of the project should be the basis for such a determination. The actual share may be adjusted for relevant business, technical, and risk factors, particularly as the project proceeds through its life cycle. Effective competition will be the ultimate evaluation tool in determining whether proposals accurately reflect the risks and benefits anticipated by the offerors. Management responsibilities and authorities generally should reflect the relative proportion of funding from each party during the phase being executed. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 I-33 (4) Since most cost participation projects span several years, funding of the Government’s share of construction costs should be sought to demonstrate the Government’s intent to complete the project. Budgets and program plans should be based on equal share concept adjusted for relevant business, technical, and risk factors. Vertical line denotes change Key Decisions in the Acquisition Process for Construction or Development Projects Figure I-7 DOE 4700.1 3-6-87 I-35 1. 2. 3. PART E - OTHER PROJECTS INTRODUCTION. Other projects are not subject to the policy of OMB Circular A-109. However, other projects of significant value should adhere to the same management conditions and practices as larger projects to the extent prac- ticable. The program Secretarial Officer, program manager, or the Head of the Field Element is responsible for proper application of PMS, choosing manage- ment practices commensurate with the size, scope and complexity of the pro- ject. OTHER PROJECT DECISIONS. a. Decisions on other projects should be made by the program Secretarial Officer, the program manager, the Head of the Field Element, or the pro- ject manager. The authority should be delineated, typically in a respon- sibility matrix. b. In a manner similar to key decisions, there should be an affirmative determination to: (1) Begin a project; (2) Commence Title II, or Final/Detailed Design; (3) Start construction, or enter full scale development; and (4) Operate or produce (as necessary.) c. In addition, major resource commitments also should be made only following an affirmative decision. OTHER PROJECT MANAGEMENT PROCESS. a. The process for managing other projects is similar to that used in managing large projects: (1) There must be proper coordination of line, staff, and contractor organizations; (2) The project must be related to a mission area assignment, to a mission need, and to Departmental goals; and (3) Making major resource commitments without adequate project definition must be avoided. I-36 b. DOE 4700.1 3-6-87 Similarly, the progression of projects is the responsibility of a single person having clear lines of authority and communications with respect to the project. This individual will be responsible for planning, acquisi- tion, environmental impact, execution, and transition as these areas relate to the project. DOE 4700.1 Chg 1 6-2-92 Attachment I-1 Page I-37 ENERGY SYSTEM ACQUISITION ADVISORY BOARD PROCEDURES 1. PURPOSE. The purpose of the Energy System Acquisition Advisory Board (ESAAB) is to assist the Acquisition Executive in the decision-making process for MSAs and selected MPs. The ESAAB process is also utilized for site selection determinations. In such circumstances, the ESAAB membership and procedures are as described in paragraph 4, below.

2. MEMBERSHIP AND RESPONSIBILITIES. a. Members of the ESAAB. (1) The Deputy Secretary/Under Secretary serve as the Acquisition Executive for their respective program areas by direction from the Secretary of Energy. The Acquisition Executive chairs the ESAAB and has approval authority for MSAs and selected MPs. (2) The Assistant Secretary for Environment, Safety, and Health advises the Acquisition Executive on: (a) Environmental acceptability and readiness of the project to proceed; and (b) Environmental needs for ensuring phases. (3) The General Counsel advises the Acquisition Executive on: (a) Acquisition and construction issues; (b) Licensing plan assessment; (c) Legislative or executive action impact assessment; (d) Patent issues; and (e) Environmental requirements. (4) The Chief Financial Officer advises the Acquisition Executive on: (a) Budget formulation and execution status; (b) OMB and congressional concerns and positions; and (c) Other financial management issues. (5) The Director of Administration and Human Resource Management advises the Acquisition Executive on: (a) Real estate management policy and procedures; Vertical line denotes change Attachment I-1 Page I-38 DOE 4700.1 Chg 1 6-2-92 b. c. d. (b) Facilities and maintenance management; (c) Site development planning; (d) Utilities management; (e) Value engineering; and (f) Personnel issues. (6) The Director of Procurement, Assistance and Program Management advises the Acquisition Executive on: (a) Adequacy of portions of (b) Procurement (c) Conformance the acquisition strategy, including the related the project plan; and contractual policy assessment; to and implementation of project management system policies and procedures; and (d) Results of independent cost estimates in support of key decisions or the Executive Change Control Process. Members to the ESAAB, for selected projects, include the Director of Energy Research, Assistant Secretary for Nuclear Energy, and the Director of Nuclear Safety. These members will provide an independent assessment to the Acquisition Executive of potential concerns/issues at its current phase and ensuing phases. The Acquisition Proponent. The acquisition proponent will normally be the Program Secretarial Officer whose MSA or selected MP is being presented for decision. The acquisition proponent is responsible for: (1) Conducting the pre-ESAAB review; (2) Providing to the ESAAB Secretariat a draft of proposed changes to the project plan and related documentation for executing the project; and (3) Providing the final updated project plan to the board Secretariat after decisions have been made for review and approval by the Acquisition Executive. ESAAB Secretariat. The Associate Director for Program/Project Management & Control serves as the ESAAB Secretariat, providing: (1) Staff support to the Acquisition Executive and board members for ESAAB and ESAR presentations (e.g., schedules, agenda, pre- briefings and presentation requirements); Vertical line denotes change DOE 4700.1 Chg 1 Attachment I-1 6-2-92 3. e. f. Page I-39 (2) Independent cost, schedule and technical assessments and analyses of project planning, baseline changes, key decisions, expanded decision points, other significant decisions, and budgetary commitments; and (3) Project management policy implementation activity and assessments.

Other Assistant Secretaries and Heads of Headquarters Elements may be asked to participate as advisors when appropriate. Other officials such as the cognizant DOE Field Office manager may be invited to serve as advisors to the acquisition proponent. The project manager will normally present the issues, except for Key Decision O, and recommended decision for consideration to the board. The program manager might present a portion of the briefing focusing on the broader program considerations and issues, while the project manager stresses the status of the project and problems/issues at the project level. Other special reports may be presented by either, as appropriate, such as the results of an independent cost estimate or technical review. ESAAB PROCEDURES. The Acquisition Executive may choose to make a decision and issue a board memorandum without a formal board meeting. Dispensing with the formal meeting shall be considered when the preliminary review to a scheduled meeting indicates that there are not substantial issues which would require a meeting. In this case, an action memorandum will be prepared and submitted by the acquisition proponent stating the factors in support of the decision requested. This action memorandum will be coordinated with board members, advisors and others indicated by the Chairman before it is forwarded for decision. Following approval by the Acquisition Executive, the Secretariat will document the decision and the actions and/or agreements that may have resulted from the process. a. Scheduling of Energ y System Acquisition Advisory Board Meetings. (1) A decision/review schedule will be developed and maintained current by the ESAAB Secretariat for those projects which require a board review because of an acquisition phase decision, siting decision, problems, or other project developments that merit management attention. The decision/review schedules will be distributed to program offices monthly. (2) Upon approval by the Acquisition Executive, formal scheduling of reviews will be accomplished by the ESAAB Secretariat. (3) Unscheduled board meetings may also be called at the request of the Acquisition Executive or a Program Secretarial Officer. These requests will be made through the ESAAB Secretariat. Vertical line denotes change Attachment I-1 Page I-40 DOE 4700.1 Chg 1 6-2-92 (4) The steps outlined below provide normal working times and responsibilities for the activities prior to and immediately following an ESAAB: Board Schedule. Calendar Days Relative Responsible to Office Meeting a. b. c. d. e. f. g. h. i. Draft submission to ESAAB members of Justification of Mission Need, Project Plan or other appropriate baseline documentation Pre-ESAAB meeting (Dry-run) Program Dry-run presentation comments provided to Program Office Final draft of Justification of Mission Need, Project Plan or other appropriate baseline documentation Presentation charts submitted to OP/PM and ESAAB membership Board briefing books/materials prepared Acquisition Executive pre-brief ESAAB presentation Board decision memorandum for Acquisition Executive’s approval Project documentation reflecting board decisions provided for Acquisition Executive’s approval and issuance. Program Program OP/PM Program Program OP/PM OP/PM Program OP/PM OP/PM 60 days 20 days 15 days 10 days 10 days 7 days 5 days O days +15 days +30 days

b. ESAAB Preparation. It is essential that the presenters address the significant issues and problems that are associated with the project; that these issues and problems be fully coordinated well in advance with cognizant staff and program officials; and that the Acquisition Executive and the sponsoring Secretarial Officer receive concise prebriefings to assure that an informed decision or review will occur. (1) Project Presentation Review. A draft of the project presentation shall be provided to the Office of Program/Project Management and representatives for the board members by the cognizant Program Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 Attachment I-1 Page I-41 Secretarial Officer. The draft presentation will be reviewed for conformance to DOE orders and policies and to identify any remaining issues for discussion at the Pre-ESAAB meeting. The draft presentation shall address, as minimum, the following administrative actions: (a) (b) (c) Peer Group Review. The program shall receive a current written statement of project endorsement for the Acquisition Executive from their respective peer groups. This action shall be completed prior to the Pre-ESAAB meeting. Inspector General/General Accounting Office Check. The program shall make the necessary contacts to determine the current audit activity on the project and provide a written statement on the status to the Acquisition Executive. This action shall be completed and reviewed at the Pre-ESAAB meeting. Congressional Briefings. The program shall notify the appropriate congressional committee staffs on project status and determine interest or support. A written statement on the congressional committee(s) response/position must be completed following the Pre-ESAAB meeting and provided to the Acquisition Executive prior to the ESAAB. This action applies to Key Decisions 2 and 3. (2) Pre-ESAAB Meeting (Dry-Run). The program and project managers will schedule and conduct a “dry-run” of the developed presentation for the sponsoring Secretarial Officer for review and resolution of issues prior to the ESAAB meeting. The Office of Program/Project Management and board member representatives should also be invited to participate in a final exchange of ideas, assure compliance with Department policy/procedures, discuss and resolve outstanding issues, determine the status of any independent cost estimating requirements (where applicable), cover the status of administrative actions, and set a schedule for remaining actions. At the conclusion of the “dry-run,” a recommendation shall be made to the Acquisition Executive by the Office of Program/Project Management on the readiness of the project to proceed with the scheduled ESAAB meeting based on the completeness of material and administrative actions presented at the “dry-run.” (3) Acquisition Executive Prebrief. A prebriefing is conducted by the Office of Program/Project Management for the Acquisition Executive to assist in his preparation for the board meeting. The objectives of this prebriefing are to acquaint the Acquisition Executive with a brief background and description of the project, provide an independent assessment of remaining issues/problems to be presented, clarify any technical and management items and provide a final status on administrative actions so as not to consume too much time during the formal meeting. In addition, an independent assessment of the project and issues will be presented with recommended solutions. Any

Vertical line denotes change Attachment I-1 Page I-42 DOE 4700.1 Chg 1 6-2-92 3. 4. feedback from the prebrief shall be provided immediately by the Office of Program/Project Management to the cognizant Program Secretarial Officer. ESAAB Memorandum. The board Secretariat shall prepare a memorandum summarizing the results of the meeting. a. b. The memorandum will specify decision(s) reached, actions assigned, results of special studies and assessments, limitations associated with approvals, resource levels which may be used for budgetary and organizational planning, constraints on systems development and definition, schedules for accomplishing action items, and the time frame for the next meeting. A summary of the approved cost, schedule and technical baselines will be attached to the memorandum. The Secretariat will coordinate the proposed memorandum with the members and advisors prior to forwarding it to the Acquisition Executive. Dissenting views will be included in the package. Signatures of each board member will be obtained on the final document. SPECIAL ESAAB FOR SECRETARIAL SITE SELECTION DECISIONS. a. Responsibilities. (1) (2) (3) (4) (5) (6) (7) The ESAAB will be responsible for approving project site selection decisions. Program outlay offices will notify the Office of Program/Project Management when initiating conceptual design on any project which involves a site selection determination option. The Office of Program/Project Management will maintain a list of such projects and will advise the Acquisition Executive of the schedule for the upcoming decisions. The Office of Program/Project Management will include an evaluation of siting considerations in the checklist used in the project validation process. Site selection criteria will be established and approved, and site characterization studies and evaluations will take place during the early design phase of the acquisition process. A site selection decision will occur at the earliest appropriate time during advanced development or preliminary design, although, in some cases, site selection may not be feasible until Key Decision 2, Start of Engineering Development or Detailed Design. The Office of Program/Project Management will assist program organizations in preparing for ESAAB site selection meetings. Paperwork and administrative burdens associated with these presentations will be minimized. Presentations will focus on issues and ensure adequate coverage of all viable options. Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 Attachment I-1 Page I-43 5. b. Procedures. The site selection decision process is as follows: (1) The ESAAB will be convened to enable the Acquisition Proponent to present background information related to the project and the siting considerations. (2) Detailed discussion of the various siting options, including the pros and cons of each, will be conducted. (3) The Acquisition Proponent will present specific recommendations for a siting decision. Supporting and/or opposing views of ESAAB members will then be considered, after which the ESAAB Chairman will make the siting decision(s). ESAAB INVOLVEMENT FOLLOWING SPECIAL INDEPENDENT SCIENTIFIC OR TECHNICAL REVIEWS OF PROJECTS AND PROGRAMS. a. b. Purpose. When directed by the Acquisition Executive, a special independent scientific or technical review will be performed if circumstances are presented that could potentially influence a project or program from continuing in an effective manner. If the findings of such a review will result in significant program or project redirection, the ESAAB will be included in the decision-making process.

Responsibilities. (1) The Program Secretarial Officers have the responsibility for technical reviews of their programs or projects and will advise the Acquisition Executive of events which could “trigger” an independent scientific or technical review of any of their programs or projects. (2) The scientific advisor, when requested by the Acquisition Executive, will organize independent panels to conduct scientific or technical reviews of the project and will work with the Office of Program/Project Management and Control to fully integrate the cost, schedule and technical aspects into the review and subsequent recommendations. Technical reviews will be conducted in a manner which minimizes disruption and delays in the accomplishment of ongoing projects. (3) The Office of Program/Project Management and Control will: (a) Review each new or proposed MSA and MP in order to assure that high risk technical issues are identified and ensure that a meaningful technical baseline is included in the project plan. (b) Apprise the scientific advisor whenever a potential requirement for a review appears to be indicated. Vertical line denotes change Attachment I-1 DOE 4700.1 Chg 1 Page I-44 (through I-46) 6-2-92 (c) Independently track programs and projects and advise the Acquisition Executive, of events that could “trigger” an independent technical review. (d) Arrange for a presentation to the ESAAB after appropriate coordination with the Program Secretarial Officers concerning review of the cost, schedule and technical status. The cognizant Program Secretarial Officers will be provided the opportunity to discuss the independent review at the ESAAB meeting. c. Events Which Will “Trigger" Independent Reviews. In addition to the normal review of the project at the key decision points, certain events could “trigger” an independent review. Examples of such events are: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Significant program redirection. Technical problems such as original technical goals or criteria not achievable. Basic assumptions on which the project was based have changed. Advent of a better technology significantly impacting the project’s mission. Changed external conditions, markets, economics, etc. Significant funding constraints. Lessons learned from other similar projects. Recommendations from scientific advisor. Requested by the Acquisition Executive. Regulatory redirection when obtaining permits. Vertical line denotes change 6-2-92 DOE 4700.1 Chg 1 Attachment I-2 Page I-47 GUIDELINES FOR PREPARATION FOR ESAAB MEETINGS 1. 2. 3. GENERAL. These guidelines have been prepared to aid program and project managers in their preparation of presentation materials for ESAAB meetings. Attached is a set of sample charts. They may be augmented by such additional charts that the managers feel are needed to illustrate project systems, problems, issues, or other pertinent factors. Presentation materials should be minimized to the extent practical. COMPOSITION. Each presentation will be organized as followings: a. Introduction and purpose of meeting; b. Description of project; c. Background; d. Objectives and baseline; e. Organization; f. Readiness to proceed; g. Problems/issues/items of concern; and h. Summary of key points and next steps. CHARTS. The discussion that follows describes the information to be included on the viewgraph charts. All charts shall use standard DOE notation, as applicable.

a. Chart 1, Title Page. Indicate the official name of the project, the name of the acquisition proponent, and the name of the presenters. State the ESAAB decision that will be requested at the meeting. b. Chart 2, Project Technical Process. Show a recent photograph or artist’s conception of the project. Use a technical process flow chart or similar graphic to summarize how the facility or machine is expected to function. A history of project related events and a detailed technical description should be avoided due to time constraints. The ESAAB members and advisors should be briefed by their respective staffs or may request a briefing by the Office of Program/Project Management and Control. c. Chart 3, Program/Project Objectives and Technical Baseline. State the key program and project objectives. The relationship between the program and project objectives should be clear. Show the basic technical baseline requirements for the project. Vertical line denotes change Attachment I-2 DOE 4700.1 Chg 1 Page I-48 6-2-92 d. e. f. g. h. i. Chart 4, Baseline Project Summary Schedule - All Years. To provide an overview of project activity, display the baseline schedule for the life of the project. Include all Acquisition Executive decision points, other critical decisions and events, major milestones including ES&H milestones that may impact the project’s critical path, and critical path for project implementation. Chart 5, Baseline Resource Plan. (1) This chart shall show the funding authority available and anticipated. Show both cumulative obligations and costs planned by fiscal year over the life of the project. Actual costs and obligations shall be shown against these plans. All costs and obligations shall be denoted in current-year dollars for the year of expenditure. (2) This chart shall address the total project cost and identify the industry share, if appropriate. It shall also target the total estimated cost for design and construction. Chart 6, Project Organization. Show the participating organizations and their responsibilities in the form of an organization chart. This is the opportunity to depict the manner in which the project is being managed. Laboratory/contractor/partner responsibilities should be included. Also show, in a separate box, a summary of the DOE staffing, both on-board and planned. Chart 7, Readiness to Proceed. In a very brief, bullet style manner, summarize progress, accomplishments and performance to date. Include the most significant rationale for readiness to proceed and separately list the subjects of any substantive problems, issues, and/or items of concern that will be shown on the subsequent charts. Chart 8, Problems/Issues/Items of Concern. Succinctly state the problem, issue, or item of concern, list the corrective actions taken to date, the additional corrective actions required (with dates), and an assessment of the impact on the project. Prepare a separate chart for each topic to be discussed in this section. Supplement each of these charts, as necessary, with whatever illustrative material is apprormiate to present the problem, issue, or item of concern in a fully informative manner. Chart 9, Summary of Key Points and Next Steps. This chart highlights the key points from the presentation, restates the decision requested, and identifies the next actions planned following the requested decision by the Acquisition Executive. Vertical line denotes change Chart 1

U.S. Department of Energy Energy System Acquisition Advisory Board Project ABC ESAAB Decision Requested: ● Authority to Initiate Construction Presented by: Donald D. Doe Project Manager Richland Operations Office May 12, 1984 Fuels and Materials Examination Facility Attachment I-2 Page 1-51 Doe 4700.1 3-6-87 DOE 4700.1 3-6-87 Attachment I-2 Page I-52 Fiscal years Attachment I-2 P a g e I - 5 4 chart 7 ● Project Status: Problem: Schedule Delay – Weather DOE 4700.1 3-6-87 MAJOR SYSTEM ACQUISITION PROCEDURES . 1. PURPOSE. TO describe how the Department carries out a major system acquisi- tion. The acquisition process is accomplished by the following steps (see Figure I-8, page I-61). a. Evaluation of Mission Needs. (1) (2) (3) Program Secretarial Officers conduct mission analysis to identify mission needs and any alternative energy system options and design concepts which are based on national planning documents, strategy papers, or other energy policy and program-related data. A mission need may result from a deficiency in existing capabilities or the decision to establish new capabilities in response to a feasible technological opportunity. Mission needs are independent of any particular system or technological solution. Where more than one Departmental Element is involved, roles and responsibilities of each component will be assigned by the Acquisition Executive. Two or more organizational elements may be permitted to sponsor alternative energy system options and design concepts in order to foster innovation and competition. When required to satisfy mission responsibilities, contributions will be made to the technology base by the conduct, support, or spon- sorship of research; system design concept studies; proof of concept work; exploratory subsystem development; and tests and evaluations. b. Exploration of Alternative Systems. ( 1 ) Intended benefits to be derived from major system acquisitions shall be optimized by competitive exploration of alternative system design concepts and tradeoffs of capability, schedule, and cost. Care should be exercised during the initial steps of the acquisition process not to conform mission needs or project goals to any known systems or products that might foreclose consideration of alternatives. (2) Alternative system design concepts will be solicited from a broad base of qualified firms through the competitive procurement process. In order to achieve the most preferred system solution, emphasis will be placed on innovation and competition. To this end, participation of smaller and newer businesses should be encouraged. Concepts will be solicited primarily from private industry, and, when beneficial to the Government, foreign technology and equipment may be considered.8 I Attachment I-3 DOE 4700.1 Page 1-60 (3) (4) (5) (6) (7) (8) 3-6-87 Requests for alternative system design concept proposals will explain . the mission need, schedule, cost, capability goals, and operating constraints. Each offeror will be free to propose his or her own technical approach, cost and capability goals. In the conceptual and early development stages, contractors shall not be restricted speci- fically by detailed Government specifications and standards.

Federal laboratories, federally funded research and development cen- ters, educational institutions, and other not-for-profit organiza- tions shall also be considered as potential sources for competitive system design concepts. Ideas, concepts, or technology developed by Government laboratories or at Government expense may be made available to private industry through the procurement process or through other established procedures. Industry proposals may be submitted on the basis of these ideas, concepts, and technology, or on the basis of feasible alternatives which the proposer considers superior. Research and development efforts shall emphasize early competitive exploration of alternatives as relatively inexpensive insurance against the premature or preordained choice of a system that may prove to be either more costly or less effective. During the period of identifying and exploring alternative system design concepts, contracts covering relatively short time periods at planned dollar levels will be used. Parallel short-term contracts are awarded for those concepts selected for further exploration to expand on the concepts and reduce technical uncertainties in each system. Timely technical reviews of alternative system design con- cepts will be made to effect the orderly elimination of the least attractive concepts. When the system is being developed for Departmental use, contractors shall be provided with operational test conditions, mission perfor- mance criteria, and life cycle cost factors that will be used in the evaluation and selection of the system(s) for full-scale development and production. In addition, relevant operational and support experience will be provided to assist participating contractors in developing performance and other requirements for each alternative system design concept as test and tradeoffs are made. Development of subsystems that are intended to be included in a major system acquisition shall be restricted to less than fully designed hardware (full-scale development) until the subsystem is identified as part of a system candidate for full-scale development. Exceptions may be authorized by the Acquisition Executive if the subsystems are long lead time items that fill a recognized generic need, or if they have a high potential for common use among several existing or future systems. DOE 4700.1 3-6-87 Attachment I-3 Page I-61 (9) Selections from competing system design concept proposal shall be based on a review by a team of experts, preferably from both inside and outside the responsible development organization. c. Title II or Detailed Design. (1) Advancement to a competitive test/demonstration phase may be approved by the Acquisition Executive when DOE’s mission needs, program objec- tives, and project goals are reaffirmed, and when alternative system design concepts are selected. (2) Development of a single system design concept that has not been com- petitively selected should be considered only if justified by urgency of need or by the physical and financial impracticability of demonstrating alternatives. Proceeding with the development of a noncompetitive (single concept) system may be authorized by the Acquisition Executive. Strong DOE project management and technical direction should be used for these systems. (3) Major system acquisitions will be structured and resources planned to demonstrate and evaluate competing alternative system design concepts that have been selected. Exceptions may be authorized by the Acquisition Executive if demonstration is not feasible.

d. Full-Scale Demonstration, Development or Construction. (1) (2) Full-scale demonstration or development, including limited produc- tion, may be approved by the Acquisition Executive when DOE’s mission need, program objectives, and project goals are reaffirmed, and com- petitive demonstration results verify that the chosen system design concept(s) is sound. Selection of a system(s) and contractor(s) for full-scale demonstration/development and production/operation shall be made on the basis of: (a) System performance measured against current DOE mission need, program objectives, and project goals; (b) An evaluation of estimated acquisition and ownership costs; and (c) The factors as contractors is demonstrated management, fi- nancial, and technical capabilities to meet project objectives. Attachment I-3 DOE 4700.1 Page I-62 3-6-87 (3) The project manager will monitor system tests and contractor progress . in fulfilling system performance, cost, and schedule commitments. Significant actual or forecast variances shall be brought to the attention of the contractor for corrective action. e. Production or Operation. Full production/operation may be approved when the Department’s mission need, program objective, and project goals are reaffirmed, and when system performance has been satisfactorily tested, independent of user organizations, and evaluated in an environment that assures achievement of objectives under expected operational conditions. DOE 4700.1 Chg 1 6-2-92 CHAPTER II STRATEGIC PLANNING, PROJECT PLANNING AND BUDGETING 1. 2. 3. . II-1 PART A - PROJECT INITIATION AND PLANNING DOCUMENTATION INTRODUCTION. This chapter discusses both strategic planning and project planning and budgeting. The terms “strategic planning” and “project planning” may be most easily differentiated by discussing who has responsibility and accountability for each and at what point in time a departure is made from one to the other for a specific program or project. STRATEGIC PLANNING. The Department is committed to the preparation of strategic plans and annual updating of these plans to maintain them current. This strategic planning will assure that energy, health, safety, environment, technology, and economics are molded into a mutually supportive framework. The plans will provide the capability for integrating horizontally across the entire range of DOE programs to bring plans and programs into line with near (1 to 5 years), mid (5 to 10 years), and long-term (15 to 20 years or longer) objectives of the Department. a. Responsibilities. Program Secretarial Officers shall be responsible and accountable to the Secretary for the preparation and annual updating of Department strategic plans, Multi-Year Program Plans, and Crosscut Plans for which they have been assigned responsibility. b. Annual Cycle. Each annual strategic planning cycle is focused on the fiscal year, 3 years beyond the start of the planning cycle (the budget cycle is 1 year forward from issuance of OMB guidance). The strategic planning annual cycle is depicted in Figure II-1. c. Guidance. Guidance on strategic planning is available from the Office of Domestic and International Energy Policy.

PROJECT PLANNING DOCUMENTATION. Project planning documentation is necessary to establish approved project scope and technical performance requirements, schedules, resource plans, levels of responsibility and authority, organizational interfaces, implementation plans, and accountability. The documentation is needed to assure the execution of the project within the approved technical, cost, and schedule baselines. The key documents required by the Project Management System (PMS) are shown below and in Figure II-2. Detailed outlines and approvals for project planning documentation for Major System Acquisitions (MSA) and major projects are included in Attachments II-1 through II-6. Planning documentation of other projects should be similar in coverage and quality, although reduced in quantity to reflect the magnitude of the project and field organization Procedures. Vertical line denotes change II-2 DOE 4700.1 Chg 1 6-2-92 ACTIVITY TIMING 1. Secretarial Policies and On Going Strategies 2. Secretarial Planning Guidance Annually in August Issued 3. Strategic Plans by Program Completed Annually by Secretarial Officers mid-September 4. Review and Approval of Annually in September/October Strategic Plans by the Secretary 5. Multi-Year Program Plans Completed Annually by mid-December 6. Program Guidance to Field Annually in late December 7. Identification of Planning Annually in January/February Issues 8. Secretarial Decisions and IRB Annually in March/April Guidance 9. Crosscut Plans Completed Annually by mid-July Figure II-1 Chronology of Events in the Annual Strategic Planning Cycle Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 II-3 JUSTIFICATION OF PROJECT PLAN PROJECT MISSION NEED (INCLUDING MANAGEMENT CHARTER) PLAN MAJOR SYSTEM REWIRED PER REWIRED PER REQUIRED PER ACQUISITION ATTACHMENT II-1 ATTACHMENT II-2 ATTACHMENT II-4 MAJOR PROJECT REQUIRED PER REQUIRED PER REQUIRED PER ATTACHMENT II-1 ATTACHMENT II-2 ATTACHMENT II-4 OTHER PROJECTS $15-50 MILLION APPROVED DATA RECOMMENDED PER REQUIRED PER SHEET OR WPAS1/ ATTACHMENT II-2 ATTACHMENT II-5 TOTAL PROJECT COST (TPC) OTHER PROJECTS APPROVED DATA RECOMMENDED PER REQUIRED PER $5-15 MILLION TPC SHEET OR WPAS ATTACHMENT II-2 ATTACHMENT II-5 OTHER PROJECTS APPROVED DATA APPROVED DATA REQUIRED PER UNDER $5 MILLION SHEET OR WPAS SHEET OR WPAS ATTACHMENT II-5 GENERAL PLANT GROUPED ON GROUPED ON OPTIONAL GENERIC PROJECTS SINGLE DATA SHEET SINGLE DATA SHEET ONLY Figure II-2 Project Management System Documentation Vertical line denotes change DOE 4700.1 Chg 1 6-2-92 II-4 a. b. Justification of Mission Need. A Justification of Mission Need must be submitted for Acquisition Executive approval at Key Decision O, for projects anticipated to be designated as MSAs, and to the cognizant Program Secretarial officer for approval on major projects. The Justification of Mission Need and the Short Form Project-Data Sheet must be approved prior to starting conceptual design. Other projects are justified and approved on the basis of a project data sheet. The cognizant Program Secretarial Officer may require a Justification of Mission Need for significant other projects (e.g., $15-$50 million). For projects currently well beyond Key Decision O, a Justification of Mission Need is not required. Attachment II-1 details the contents and procedures for developing the Justification of Mission Need. A copy of the approved Justification of Mission Need shall be attached to the Key Decision O Decision Memorandum of Record and shall be reviewed at each ESAAB meeting.

Project Plan. The project plan, which includes the project charter, is a summary of the dimensions of the project to be executed, including objective, schedule, resources, priority, controlled milestones, and environmental requirements. For MSAs, the project plan is a contract between Headquarters and the project office for execution. For major projects, the project plan is an agreement between the program office and project office for execution with the project office reporting directly to the cognizant program office. The project plan documents the initial cost, schedule and technical project baselines defined in the CDR, and is updated, as required, throughout the life of the project to ensure current project baselines. It is prepared as required documentation to obtain approval to include the project in the congressional. budget and for Key Decision 1, Approval of New Start. The project plan is an evolving document which covers the project from its initiation through its completion. Guidelines for preparing project plans are contained in Attachment II-2. (1) (2) Major System Acquisitions and Major Project Approval. Project plans require approval by the Acquisition Executive for MSAs and major projects. (The cognizant Program Secretarial Officer serves as the Acquisition Executive for major projects.) The plan identifies Acquisition Executive and Program Level decision points and other milestones, as appropriate. Changes to this document are permitted only in accordance with formal change control procedures. Other Project Approval. There is no requirement for a Headquarters approved project plan for other projects. However, the Program Secretarial Officer may require such a plan where significant resources are involved. Where there is not a requirement, the circumstances do not obviate the need for such a plan. For other projects, the project data sheet has many of the Vertical line denotes change 6-2-92 D0E 4700.1 Chg 1 II-5 (through II-8) ingredients of a project plan and may serve that purpose with minor additional information. Field organizations should establish their own procedures for project plan content and approval. (3) Standard Baselines Formats. Attachment II-2 provides requirements and guidance for preparation of technical, schedule and cost baselines in project plans. (4) Changes to the Project Plan. Because the project plan reflects Acquisition Executive approval, it is essential that the plan be maintained current. Attachment II-3 provides project plan change control requirements and guidelines. c. Project Management Plan. The Project Management Plan (PMP) is the document which sets forth the plans, organization, and systems that shall be utilized by those responsible for managing the project. The PMP is developed by the project manager and concurred with by the Program Secretarial Officer and approved by the Head of the Field Element. Guidance for preparation of a PMP is provided in Attachment II-4. Vertical line denotes change DOE 4700.1 3-6-87 II-9 PART B - WORK BREAKDOWN STRUCTURE 1. INTRODUCTION.

a. Much of the planning, execution, and control of DOE projects revolves around the work breakdown structure (WBS). DOE/MA-0040, of October 1981, provides detailed guidance on WBS implementation. The WBS is a graphic representation that completely defines the project by relating elements of work to each other and to the end product. It is the prime tool which DOE uses in performance of its project responsibilities. A complete guide to the development and use of the WBS is contained in DOE/MA-0040. Figure II-3 illustrates a typical WBS. The individual products specified in the WBS are termed “elements.” Each element is a discrete portion of the WBS, comprising either an item of hardware, service, or data. Descending levels provide increasingly detailed definition of the end objective. The number of levels depends on the scope and complexity of the individual project and the degree of control it warrants. The top three levels of the WBS for a project are typically subdivided as below. These three levels are frequently called a summary WBS, or a Project Summary WBS (PSMBs). (1) Level one contains only the project end objective. The product at this level shall be identifiable directly to elements of the DOE Budget and Reporting Classification Structure. (2) Level two contains the major product segments or subsections of the end objective. Major segments are often defined by location or by purpose served. (3) Level three contains definable components, or subsets, of the level- two major segments. b. WBS Dictionary. The WBS Dictionary lists and defines the WBS elements. It is prepared initially by the DOE project manager and then expanded by supporting contractors. It consists of two parts: Part I is an index which lists WBS elements extended in accordance with the guidance contained herein, and Part II contains individual entries to describe each WBS element and the effort associated with it. The WBS Dictionary shall be revised to reflect changes and shall be maintained in a current status throughout the life of the project. 2. PREPARATION OF A WORK BREAKDOWN STRUCTURE. The project manager is responsible for preparation of the project WBS. This WBS in summary form is then included in the solicitation documents for contractor information. Contractors, in turn develop a contract WBS to conform to their support of the project. This flow of activity is illustrated in Figure II-4. Figure II-3 Work Breakdown StructureTypical DOE Project Management Responsibility Contractors Responsibility (1 or More) Figure II-4 Evolution of the Project Work Breakdown Structure II-12 DOE 4700.1 3-6-87 3. USES OF THE WORK BREAKDOWN STRUCTURE. A WBS shows the relationship of all elements supporting the project and provides a sound basis for technical cost and schedule control. Each level of the structure is closely related to a management sphere within the project, providing the framework for relating time and cost summaries to appropriate levels of contractor and DOE managers. A WBS provides both a basis and an integrating mechanism, for managing key functions of the project. Use of the WBS to support management control is described below: a. b. c. d. e. f. Planning and Budgeting. The WBS technique provides a formal structure which identifies all the products and relates all the work effort required to meet the project objective. By breaking the total product and effort into successively smaller entities, DOE can ensure that all required prod- ucts are identified to the WBS (and hence, charged to the effort) and actually contribute to the work objective. Figure II-5 illustrates the relationships among work, schedule, and budget integration.

Funding. The information derived from WBS performance reporting and pro- jections can assist in establishing, justifying, and allocating project funds for the next and future fiscal years. Since the work and cost con- tent, management priority, and status of each WBS element are defined, a baseline exists for planning, controlling, and accounting for project funds. Cost Estimating. The WBS technique provides a systematic approach to cost estimating that ensures relevant costs are not omitted. An estimate derived by WBS elements helps the Departmental project manager to monitor, coordinate, and control the various project activities that DOE and the contractors are conducting. Scheduling. The WBS provides a framework for collecting schedule infor- mation by WBS elements to establish overall and detailed schedules. The impact of schedule changes may be readily assessed when a WBS is used because each element’s start and completion date is integrated with the other elements’ schedules. This allows expedited review and approval by the Department of contractor proposed schedule changes. Performance Measurement. The WBS technique accomplishes the objective of work definition and provides the basis for performance measurement with a product orientation. It also facilitates work measurement at levels which meet specific management needs. Configuration Management. Configuration management is the task of managing, controll ing, and reporting the planned and actual design of the physical characteristics of items throughout their intended life. The WBS may be extended sufficiently to identify elements selected for this pur- pose. It is not necessary that the WBS level identified for project control purposes (e.g., contract reporting) be the same as that used for configuration management. DOE 4700.1 3-6-87 II-13 DOE 4700.1 3-6-87 II-14 g. Integrated Logistic Support. Integrated logistic support is a composite of all support elements necessary to assure the effective and economical support of a system for its life cycle. These elements include logistical support activities such as the maintenance plan, facilities, support and test equipment, spares and repair parts, transportation and handling, technical data, and training. The WBS logistic elements should provide the capabilities to support the prime system and its components. The ele- ments shall reflect the lead time planning needs of the site or test facility. h. Test and Evaluation. A WBS may provide specifically for testing systems, subsystems, and components. A test and evaluation element shall be used to obtain or validate test performance data. This element shall cover the detailed planning, conduct, support, data reduction, and reports from the testing. Since testing requires the participation of organizational ele- ments responsible for accomplishing development, reliability, and qualifi- cation tests, appropriate supporting elements need to be included. i. Systems Engineering. The WBS may be used initially to lay out system functions in the systems engineering discipline. Following design and the development of a specification tree, the WBS shall be revised to reflect the end product. Throughout systems engineering, the WBS shall be updated to reflect current status of the end product. DOE 4700.1 Chg 1 6-2-92 II-15 1. 2. PART C - PROJECT BUDGET PROCESS

INTRODUCTION. Providing adequate resources to develop, acquire, and operate a project is first a design constraint and secondly a determination of the Department’s planning and budgeting process. The budget decisions shall be consistent with project baselines decisions derived requirements contained in the project management system. Figure II-6 displays the chronology of events leading to appropriation of funds. PROCEDURES. Integration of decisions concerning project resource availability in the planning and budgeting process involves the following procedures: a. Field Budget Call. A field budget call shall be issued by the Chief Financial Officer in mid-to-late January incorporating any budget planning decisions that have been made by the Secretariat. Prior to including a project in the budget, a conceptual design shall be completed in accordance with Attachment V-8. Also, any planned conceptual designs which are expected to exceed $1 million shall be completed and submitted to Headquarters in accordance with Attachments V-9 and V-10. Project Data Sheets shall be developed and submitted for new project efforts and ongoing project efforts which require additional funding. This documentation, and the conceptual design report shall be used to validate the project and to defend the project in the internal review budget. b. Project Validation. Shortly after the field call is issued, the Office of Program/Project Management shall issue procedures and a checklist to be used with the information received in the field budget submission to conduct project validations. In April and May, the Office of Program/Project Management, in coordination with the program offices, shall assess new projects over $5 million and ongoing projects requesting additional funding. The validation process evaluates the projects for readiness to proceed into the Department’s budget process and examines the planning, development, and baseline of a project to ensure that the funds requested are commensurate with the project’s anticipated scope and schedule. Normally, the project must be validated prior to inclusion in the internal review budget. c. Internal Review, Office of Management and Budget, and Congressional Budgets. These reviews and budgets are described in detail in DOE Project documentation shall be updated according to decisions made in each review. The Conceptual Design Report, Justification for Mission Need, and Project Data Sheet are the mainline documents used to defend the project within the Department. Outside DOE (i.e., OMB and Congress) only the Project Data Sheet is used. Therefore, it is vital that the document be accurate and up-to-date for each review. Detailed instructions for preparing the data sheets are contained in DOE 5100.3. 5100.3. Vertical line denotes change II-16 DOE 4700.1 3-6-87 3. FIELD WORK PACKAGE PROPOSAL AND AUTHORIZATION SYSTEM. a. Specific DOE contractors, primarily management and operations contractors, process their budget submissions through the use of the Field Work Package Proposal and Authorization System (WPAS). This system establishes a formal procedure for budget development, authorization, and monitoring for those contractor so specified. b. The major emphasis of WPAS is to group associated R&D tasks and activities into work packages for the purpose of DOE approval and control. A work package might include several proj