This presentation was delivered by Alastair Laird at the 2013 APM Scottish Conference

1. Prepared by Alastair Laird
Project Time and Cost
Delivering Nothing
Efficiently
an EVMS journey
Decommissioning Challenges
Industrial Reality, APM Edinburgh

2. AGENDA
• Overview of UK Nuclear Decommissioning
• Problem Solving (Tables) - Issues
- Value for Money Challenge
• EVMS Journey

3. Overview
3
Nuclear Decommissioning Authority (NDA)
• Non-Departmental Public Body established in
2005
• Remit to clean up the civil public sector
nuclear legacy
• Sites and facilities built from 1940’s onwards
• Annual funding of ~£2.8Bn
• Head Office based in West Cumbria
• Total M&O staffing circa 16,000
• Has responsibility for all civil nuclear
decommissioning & Waste Management for
most of the older civil power and R&D
support sites – former BNFL & UKAEA sites.

4. M&O Nuclear Contracting Model
4
1 Ownership of SLC shares
2 Nuclear Decommissioning Authority (NDA) Maintenance & Operations Contract
3 Parent Company Agreement
4 Payment of dividends generated by SLC
5 Statutory Consultation
6 Regulatory Oversight of SLC / Licensing / Authorisation

5. Decommissioning Overview
Typical Nuclear Site Cycle
5
BUILD NEW
SITE
PROJECT
7 YEARS
GENERATION
OPERATIONAL
40 YEARS
DEFUELING
OPERATIONAL
PROJECT
3 YEARS
BUILD ILW
(WASTE)
FACILITIES
& STORE
6 YEARS
WASTE
RETRIEVAL,
PASSIVATION &
STORAGE
OPERATION
6 YEARS
INITIAL
DEPLANTING
AND
DEMOLITION
PROJECT
6 YEARS
CARE &
MAINTENANCE
50 YEARS
FINAL SITE
CLEARANCE
PROJECT
10 YEARS

6. Project / Portfolio / Programme?
Sites All Shutdown

Ageing Facilities

Legacy Hazards

Funding Constraints

Site staff mainly
Operators
6

7. Strategy
7
• Who wants to fly first?
• What to do when food is scarce?
• Planning scenarios?
• Integrated programmes options?

8. Magnox (Power Station) Example
8
Magnox Optimised Decommissioning Programme (2011)
MODP is a single integrated Baseline
Strategic Programmes of Work (10 Sites, 22 Reactors)
• PONDS Decommissioning
• FED (Fuel Element Debris) Treatment
• ILW Management
• Plant & Structures
• Graphite Disposal
• Restructuring and Hotel Cost Challenge
Operating Plan
• Operational life extension
• Defueling Optimisation
Quiescent State (Care and Maintenance)
• Each site can be different
• End states - funding & ‘hotel cost’ burden and need for phasing
• Transition Planning
• Lead and lag concepts – site pairings and technology selection options
10 (2005)
2 (2008)
M&O (Site)
Contracts
1 (2011)

9. Sellafield – Reprocessing Legacy
9

10. Scope
Theory
• Framework for EVMS
• WBS, Organizational Structure, and Responsibility Assignment Matrix
• Schedule Baseline and Cost Estimate Development
• WBS reporting levels & Control Accounts
• Performance Measurement Baseline
• Forecasting of EAC
• Performance Management
Practice
• UK Nuclear Decommissioning
• Multiple site scenario
• Funding Constraints
• Stakeholders
10

11. EVMS - Intro
• E
Earned
• V
Value
• M
Management
• S
System
Earned
Work Completed / Cost Spent
Value …for Money
Expected Performance
Delivery against Targets/Estimates
Management Metrics / Targets
Schedule Performance Management
Cost Performance Management
Systems of control and calculation
Basis of Scheduling
Basis of Cost Estimating
WBS / Control Accounts
Trending/Reporting
Change Control
11

12. EVMS - Intro
12
• What is Earned Value Management?
– It is a methodology for driving performance from an integrated set of policies,
procedures, and practices to support program and complex project management as a
decision enhancing tool.
– It is a critical component of risk management.
– Works mainly with complex programs - cost reimbursable type
– An EVMS helps integrate the project work-scope, cost, and schedule into a single
performance measurement baseline (PMB).
• EVMS reliably tracks:
– Planned Value, or budgeted cost for work scheduled (BCWS),
– Earned Value , or budgeted cost for work performed (BCWP), and
– Actual cost of work performed (ACWP).
• EVMS provides performance measures - against the PMB.
• EVMS provides trend analysis and forecast capability of estimated cost at
completion (EAC).
• EVMS provides a sound basis for variance analysis and corrective action planning.

13. EVMS – Do we need it?
13
• By comparison, Earned Value Management has three data sources:
– the budget (or planned) value of work scheduled
– the actual value of work completed
– the “earned value” of the physical work completed
• Why Use EVMS? It permits management to determine:
– Where have we been?
– Where are we now?
– Where are we going?

14. EVMS Framework
14
• The Inputs to the EVMS consist of:
– Work Breakdown Structure (WBS)
– Organisational Breakdown Structure (OBS)
– Performance Measurement Baseline (PMB)
– Baseline Cost Estimate
– Baseline Schedule
– Cost/Resource Control Plan
– Change Control

15. EVMS Framework
15
Earned Value Formulas:
• Planned value = BCWS = budgeted cost for work scheduled
= what was planned to be done
• Earned value = BCWP = budgeted cost of work performed
= what was done at budget rates
• Actual cost = ACWP = actual cost of work performed
= what was paid for the work
• BAC = BCWScum. = budget at completion
= original budget plus changes

16. EVMS Framework
The Variance Formulas:
• CV = EV-AC = BCWP-ACWP = cost variance
• SV = EV-PV = BCWP-BCWS = schedule variance
• CV% = (EV-AC)/EV= (BCWP-ACWP)/BCWP= cost variance, %
• SV% = (EV-PV)/PV = (BCWP-BCWS)/BCWS= schedule variance, %
• VAC = BAC-EAC = variance at completion
16
Cost Variance (CV)
If the result is POSITIVE “Under run”
If the result is NEGATIVE “Over run”
Schedule Variance (SV)
If the result is POSITIVE “On Schedule”
If the result is NEGATIVE “Behind Schedule”
Cost Variance (CV%)
Shows what percentage cost varies from what has been
earned to date
Schedule Variance (SV%)
Shows what percentage schedule varies from what has
been planned to date
Cost Performance Index (CPI) = BCWP/ACWP
If result is less than 1.0, cost is GREATER than budgeted
If the result greater than 1.0, cost is LESS than budgeted
Schedule Performance Index (SPI) = BCWP/BCWS
If result is less than 1.0, project is “BEHIND” schedule
If the result greater than 1.0, project is “AHEAD of schedule

17. EVMS/PMB Graphic
17

18. WBS
WBS – Work Breakdown Structure
• A WBS is a way of organising a project into groups of activities or tasks
that are inter-related to achieve a specified scope of work and objective.
• The WBS is used to develop the project baseline cost estimate and
schedule, and to establish controls aligned to the objective.
• The WBS, like cost estimates and schedules are living, changing tools to
reflect project scope changes as they occur.
• Pictorially, a WBS is drawn to look like a company organization chart but
function in an entirely different way.
• The WBS Dictionaries (scope statements) are written descriptions of what
is being delivered at WBS control account levels
• WBS supports BENCHMARKING & Consistency
18

19. WBS - Example
19

20. WBS - Example
20

21. Cost Control
21
• The RAM shows the
integration of the
WBS and OBS
against each task.
• This is the point
where the Project
Manager assigns
Control Accounts
for the Work
Packages
OBS – Organisational Breakdown Structure
• A similar hierarchal breakdown structure for the organisations responsible
for delivering the WBS
RAM – Responsibility Assignment Matrix
WBS
OBS

22. Baseline Cost & Schedule
22
• The process of developing a Schedule and Cost Baseline is interactive.
• The schedule affects the costs, and the costs affect the schedule.
• Risk and uncertainty also needs factored into both cost and schedule.
• Numerous cost estimating methodologies and applications.
• One integrated example is the International Structure for
Decommissioning Costs (ISDC). ISDC uses a standard WBS format and
content which ensures all aspects of a decommissioning project will be
included. Same with PCWBS in UK.
• Accuracy/estimating uncertainty is very important in determining
contingency/management reserve.
– The AACEI has established cost estimate classifications of accuracy based on the
level of information available to the estimator, and the estimating methodology
used (AACEI, “Cost Estimate Classification System,” Recommended Practice 18 R-97)

23. PMB
23
• The PMB is the level where earned value is determined from the sum of
Distributed (defined scope) and Undistributed (known but undefined
scope) Budgets
• The Distributed Budget is the sum of all Control Accounts.
PMB – Performance Measurement Baseline
• Control accounts are key as
they are used to establish the
level at which to report the
performance of the Work
Packages

24. Forecasting
24
EAC – ESTIMATE AT COMPLETION
• The EAC is the actual cost to date plus an objective estimate of costs for
remaining authorised work.
• There are multiple ways and varying degrees of detail to calculate EAC.
• The following are the typical EAC formulas used, which will be described
in the following slide:
– EAC = AC + ETC
– EAC = (AC/EV) x (BAC)
– EAC = BAC/CPI
– EAC = AC + [(BAC-EV)/CPI]
BAC – BUDGET AT COMPLETION
• The Budget at Completion (BAC) is the sum of all budgets allocated to a
project scope
• The Project BAC must always equal the Project Total PV.

25. Change Control
25
• Triggers include:
– Excessive Contingency Drawdown
– Significant Variances
– Adjustments - which are equitable across client and contractor
– Scope or agreed strategy change
– Technology decision points
– Sanction/approval gates
– Funding change
• The Project Manager, working with the Control Account
Manager(s) and the Contractor would determine what changes
were necessary to bring the project back under control.
• All Change Control of the major elements (WBS, OBS, RAM,
Control Accounts, Work packages, etc need to be documented
and approved.
• Poor performance is not a basis for change control.

26. Performance Reporting
26
• Management of an EVMS program must include:
– Integrated Baseline Reviews
– Change Control
– Transparent Contingency/Management Reserve drawdown
– Monthly/Quarterly Reporting
• Integrated Baseline Reviews conducted within c. 6 months of
contract signing, and repeated annually at a minimum
• The Owner and Contractor need to agree on control account levels
and acceptable reporting formats (NEA - ISDC, UK - PSWBS etc)
• Other things to remember with EVMS:
– EVMS should be senior management mandated - highest echelons of the
organisation need to understand and drive client behaviours
– Contractor EVMS systems should be certified
– Control account Managers and PMs should be suitably trained

27. Uncertainty & Risk
27
• Baselines are Characterised by ‘base data’ with addition of three
point estimating methodologies to determine more likely outcomes
from impact of EU and discrete risk.
• Low probability high impact events need to be carefully considered.
• Part science / part art.
• Risk/Issues are sometimes included as scope (as base BCWS).
• Opportunities are sometimes included as scope (as base BCWS).
• Uncertainty related costs can be allowed to creep into the cost
estimates (as base BCWS).
• Overall ‘P50’ planning concept is however sound – eg NDA Project
Controls Procedure PCP09.

28. Uncertainty & Risk - Waste
28
Decommissioning Waste Quantities
&
Waste Retrieval & Disposal
Operational Waste Quantities
PMB Programme Drivers:
• Need for more Cost Planning Certainty
• (High) Legacy Hazard reduction (UK, US & France)
• Local Stakeholder & Regulatory led
• Need to maximise use of national assets – eg LLWR Drigg / L’Aube
• Funding
Inventory
Uncertainties
Packing Density Uncertainty
Waste Acceptance Uncertainties
Waste Treatment Options
Waste Container Options
Interim Storage Options and Uncertainty
Final Disposal Options and Uncertainty
Orphan Waste Streams?
Legacy Waste Characterisation Generates a set of Risks and Assumptions

29. BDP/FDP/PMB (Baseline)
29
• Essential to have a plan, a baseline, a position of understanding
– Scope
– Schedule
– Cost
• Uncertainty & Risk
• Several benefits of having ‘decent’ cost estimates
– Liability Number
– Financial Planning
– Affordability
– Work off curve
– Measure delivery & efficiency (VfM)
• Operational throughputs c.f. Targets
• Capital programme delivery through EVM
– Supports new investment
• FDP planning
• Benchmarking
• And then ….Let the market decide.

30. UK National Liability
30
How did we get here? What happens next?
Escalation
Inflation 
versus
Work Done 
versus
Independent 
Challenge on
a) Cost estimating
b) Contingency
c) Staffing/hotel costs
d) Scope
versus
Impact of Competitions 
Graph reproduced
From NDA Annual
Report and Accounts
(Moneyoftheday)
Add c. £10Bn for GDF
life-cycle costs
2012 NAO report
suggests Sellafield
site alone is £67.5Bn.

31. 31
Any Questions?
Contact us: www.ptcinc.com
alastair.laird@ptcinc.com