NAO 217-104: Facility Capital Planning and Project Management Policy

Issued: 05/05/05; Effective: 04/27/05; Reviewed Last: In Process

SECTION 1. PURPOSE.

.01 This Order prescribes the National Oceanic and Atmospheric Administration (NOAA) policy for facility capital planning and project management. It establishes a coherent and consistent process for the selection of capital investments for construction and repair and for the management of approved facility construction and repair projects. This Order also authorizes the development of the Facility Capital Planning and Project Management Manual.

.02 This Order is intended to ensure NOAA's investments in facility construction and repair projects are (a) aligned with NOAA's Strategic Plan and mission objectives and (b) managed in accordance with established project management processes and practices to promote the successful completion (as measured in terms of budget, schedule, and scope) of such projects.

.03 The policy set forth in this Order:

establishes a NOAA-wide investment review and prioritization process and aligns the process to support final investment decisions under NOAA's Planning, Programming, Budgeting and Execution System (PPBES);
ensures effective coordination between Line Offices (LO) and Staff Offices (SO) and the Office of the Chief Administrative Officer (OCAO) through integrated project teams (IPTs) throughout the life-cycle of major projects;
requires the application of standard project management processes and practices;
establishes specific decision points and decision criteria over the life-cycle of the project;
standardizes the cost-estimating process for major projects, and promotes the use of comprehensive life-cycle costing to ensure the full costs (including planning, design, construction, project management, operations and maintenance (O&M), and disposal) of projects are identified in planning, programming, and budgeting assumptions; and
ensures compliance with Office of Management and Budget (OMB) Circular A-11, relevant Department of Commerce (DOC) requirements, and General Services Administration (GSA) regulations.

SECTION 2. SCOPE.

.01 This Order applies to all major investments by NOAA in facility construction and repair. Investments may be in the form of modernization, replacement, consolidation, and/or repair (including for health/safety/environmental compliance). The Order pertains to DOC-owned or leased sites, as well as to NOAA-occupied GSA-owned or leased space. This Order applies to facilities acquired through other agencies such as the GSA, the Army Corps of Engineers (ACOE), or the Navy Facilities Engineering Command (NAVFAC). Sites proposed for occupancy by NOAA on other Federal Agency or state property also are covered by this Order.

.02 The Order applies to construction grants to the extent necessary to ensure they are managed properly and federal dollars are spent in accordance with applicable laws and regulations. However, grants are not subject to the review process outlined in this Order. Separate guidance concerning construction grants will be included in the Facility Capital Planning and Project Management Manual (hereafter, "the Manual").

SECTION 3. POLICY.

.01 NOAA facility construction investments (projects) are classified as either major or minor, depending on the Total Project Cost (TPC). Major projects are subject to a more rigorous set of approval and management requirements than minor projects. Minor projects are expected to apply the same principles as for major investments, but are not subject to the same reporting requirements. Reporting requirements applicable to minor investments will be covered in the Manual.

.02 Facility construction and repair projects undergo two major life-cycle phases.

The Selection Phase includes:

Business Case Analysis
Capital Investment Review
Scoping

The Management Phase includes:

Planning and Design
Construction and Occupancy
Operations and Maintenance (O&M)

a. Selection Phase.

1. All proposed major and minor investments in facility construction and repairs shall be reviewed under NOAA's integrated capital investment planning process. Major investments are defined as those whose TPC (see definition in Section 6. of this Order) exceeds the DOC threshold requirements for notification and approval. These thresholds are adjusted annually (for example, the FY05 level for DOC-owned space is $2.36M). For NOAA's purposes, the threshold for facility construction and repair projects in leased space is one-half the threshold for DOC-owned space. Major Projects whose life cycle costs exceed $250M are subject to NOAA's requirements management program for major acquisitions. The Deputy Under Secretary may designate other projects as subject to requirements management based on importance to the agency's mission. (An NAO covering NOAA's requirements management program is currently under development.)

2. Specific requirements for planning, programming, budgeting, executing, and reporting progress on minor projects will be addressed in the Manual.

(a) Business Case Analysis.

(1) A business case analysis shall be prepared and submitted for each major investment proposed over the period covered by the NOAA 5-Year Plan. The OMB Exhibit 300 (hereafter, "Exhibit 300"), as supplemented by specific NOAA guidance, shall be the format used to document the business case analysis. Since, at this early phase, a full Exhibit 300 cannot be completed, a modified Exhibit 300 shall be completed as the initial business case analysis submission. (The Exhibit 300 supplements the prospectus required by RPMM section 3.3.1.) Each proposed major investment shall be categorized as follows:

(i) modernization/replacement/consolidation; or

(ii) repair, including health/safety/environmental compliance.

(2). The business case analysis concludes with the project's initial submission to OCAO of the modified Exhibit 300.

(b) Capital Investment Review.

(1) All proposed major investments shall be assessed by the NOAA Facilities Investment Management Board (FIMB) against the following selection criteria:

(i) alignment with and support of NOAA's Mission, Goal, and Strategic Plan Objectives;

(ii) positive return-on-investment (qualitative/quantitative benefits at acceptable costs within acceptable timeframes); and

(iii) risk assessment (at an acceptable level of risk).

(2) The Capital Investment Review concludes with inclusion in the NOAA Program and DOC Step One Notification.

(1) Modernization/replacement/consolidation investments initially approved under the Capital Investment Review process shall have the following analyses conducted:

(i) project requirements definition (required for siting analysis and space/A&E/design analyses);

(ii) initial siting analysis;

(iii) National Environmental Policy Act (NEPA) process;

(iv) Initial Architecture & Engineering (A&E) studies; and

(v) concept design.

(2) The Scoping segment concludes with the selection of the site, negotiation/acquisition of the property, and preparation of the prospectus and revised Exhibit 300 for the project. The FIMB consideration/approval will be based on the prospectus and Exhibit 300. Combined with the favorable FIMB outcome, the prospectus and Exhibit 300 are forwarded to DOC to obtain DOC Step Two Approval.

b. Management Phase.

Following DOC Step Two Approval, the project moves from the Selection phase into the Project Management Phase.

(a) Planning and Design.

(1) The architecture and engineering contract is awarded, and the formal planning and design of the building/facility are completed during this phase. The project cost and schedule are updated and a revised Operation and Maintenance (O&M) cost estimate is developed during this phase.

(2) Planning and Design concludes with the completion of the 100 percent Design, the 100 percent Estimates, and the delivery of final drawings and specifications.

(b) Construction and Occupancy.

The development/construction contract is signed. Construction actions are completed during this phase. Acquisition of furniture, fixtures, and equipment (FF&E) is initiated. All logistics related to occupancy are completed as well as resolution of contractor "punch list" items. The O&M plan is finalized. Construction and Occupancy concludes with completion of the Move-In.

(c) Operations and Maintenance (O&M). The O&M plan developed during construction is implemented during this phase and the post occupancy evaluation report completed. The real property disposal process is initiated to declare any vacated property as excess.

.03 NOAA Facilities Master Plan. The NOAA Chief Administrative Officer is responsible for developing and maintaining the NOAA Facilities Master Plan. It includes major investments approved by the FIMB. The Facility Master Plan:

identifies proposed major facility investments five to ten years into the future;
provides the current status of existing major construction projects;
includes the current NOAA Real Property Inventory; and
provides an up-to-date summary of condition assessments of NOAA facility assets, including progress made in ensuring facilities are maintained so as to provide a safe, and operationally ready, working environment for NOAA employees.

SECTION 4. AUTHORITIES.

.01 Principles of Federal Appropriations Law, Second Addition, Volume IV(GAO-01-179SP) - Chapter 16, Section H., Disposal.

.02 OMB Circular A-11 (http://www.whitehouse.gov/omb/circulars_a11_current_year_a11_toc/), Preparation and Submission of Budget Estimates.

SECTION 5 RESPONSIBILITIES.

Responsibilities are specifically linked to Life-Cycle phases. The CAO is responsible for maintaining the NOAA Facility Master Plan. Assignment of responsibility clarifies the leadership role for the associated set of activities. CAO responsibilities may be further re-delegated by the CAO within the OCAO organization or to the LO for specific construction projects. Further re-delegation does not preclude the need for compliance with the provisions of this Order, and implementing guidance contained within the Manual.

a. Selection Phase.

1. Business Case Analysis responsibilities.

(a) CAO:

Issues specific facilities supplemental guidance in support of PPBES processes
Prepares the OMB Exhibit 300 with LO input
Ensures quality of all OMB Exhibit 300s for facilities
Categorizes proposed major investments as modernization/replacement/consolidation or repair, including health/safety/environmental Prepares Basis of Estimate with LO input
Appoints a Senior Project Manager and identifies Integrated Project Team members
Determines, in consultation with the LO, whether an independent review is warranted for the candidate project
Works with the Program Planning and Integration (PPI) to ensure the Annual Guidance Memorandum includes adequate guidance for the facilities program

(b) Goal and Sub-goal Leads and Program Managers:

Responds to annual guidance via the Program Baseline Assessment phase of the PPBES process
Coordinates emerging program requirements with LO representatives and OCAO

Submits initial modified OMB Exhibit 300 for proposed investments
Provides input to OCAO for preparation of the OMB Exhibit 300
Appoints a Client Representative to represent the LO in defining program requirements and making project decisions
Ensures Assistant Administrator (AA)-level approval for any projects to be submitted to the CAO for Capital Investment review
Provides input to PPBES Mission Goal/PPBES Program Managers for the development of the Program Baseline Assessment phase of the PPBES process

2. Capital Investment Review responsibilities.

(a) CAO:

Makes capital investment recommendations to the FIMB as part of the PPBES process
Updates the OMB Exhibit 300, as necessary, to reflect latest cost and schedule information
Prepares analyses and briefing materials for the FIMB
Schedules and coordinates the FIMB decision point briefing
Prepares the DOC Step One Notification package
Seeks and obtains DOC and OMB approvals
Performs Risk Assessment in conjunction with the Senior Project Manager and the LO Client Representative
Performs economic analysis using The Automated Prospectus System (TAPS) or equivalent
Performs OMB Circular A-11 Capital Lease Scoring Analysis, as required Oversees the development of macro-level requirements
Forms the Integrated Project Team
Maintains the official project file containing FIMB, DOC, and OMB approvals

(b) Line Office:

Provides input to the OCAO for developing macro-level project requirements
Assists the CAO in briefing the FIMB
Ensures AA-level approval in accordance with LO policy

Provides initial review of proposed investment priorities

3. Scoping responsibilities.

(a) CAO:

Coordinates timely preparation of an A/E Program Study, Statement of Work (SOW), and other Scoping Phase deliverables, as applicable
Coordinates with Acquisition and Grants Office (AGO) to provide procurement support to the LO to comply with National Environmental Policy Act (NEPA) requirements
Develops prospectus and updates the OMB Exhibit 300, as necessary, to reflect latest cost and schedule information
Develops Quality Assurance Plan for project
Prepares the DOC Step Two Approval package Seeks and obtains DOC and OMB approvals
Prepares detailed requirements analysis (Program Study) with LO input
Performs real property acquisition functions for the LO, to include tentative and final Lease/Acquisition Agreements
Determines whether Interagency Agreements or Memoranda of Understanding are needed for the candidate project; develops draft versions of these documents in conjunction with the sponsoring LO; and coordinates NOAA (and as required DOC) review and clearance of these documents
Prepares analyses and briefing materials for the FIMB
Schedules and coordinates the FIMB decision point briefing
Works with the AGO Contracting Officer to develop the Acquisition Strategy for the project with input from the LO

(b) Goal and Sub-goal Leads and Program Managers:

Ensures project requirements developed by the LO support program requirements

Supports the OCAO in preparation of an A/E Programming Study SOW and, if applicable, other Scoping Phase deliverables
Provides input to the detailed Project Requirements Analysis (Program Study)
Provides input to A/E Design SOW
Assists the CAO in preparing for and briefing the FIMB
Develops preliminary Information Technology (IT) infrastructure requirements, including network design
Coordinates requirements for NOAA IT enterprise architecture standards with the Office of the Chief Information Officer
Ensures AA-level approval in accordance with LO policy

(d) Facility Investment Management Board:

Approves projects for advancement to DOC Step Two Approval

b. Management Phase.

1. Planning and Design responsibilities.

(a) CAO:

Prepares the Design SOW
Coordinates award of A/E design contracts with AGO or other appropriate contracting authority if awarded through another agency
Prepares the Construction Management and Administration SOW
Performs Contracting Officer Representative (COR) function for the A/E design contract
Prepares O&M cost estimate
Reports cost, schedule, and performance data via Earned Value Management or other applicable monthly reports

(b) Line Office:

Ensures AA-level approval in accordance with LO policy
Provides input to OCAO in the design review process

2. Construction and Occupancy responsibilities.

(a) CAO:

Coordinates award of contracts for construction, management, and administration with the AGO or appropriate contracting authority if awarded through another agency
Reports cost, schedule, and performance data via Earned Value Management or other applicable monthly reports
Supports the LO in procurement of FF&E
Executes Quality Assurance Plan, including quality assurance and site visit reviews
Prepares the final O&M Plan
Prepares Commissioning and Acceptance Plans
Prepares Leadership in Energy and Environmental Design (LEED) packages
Disposes of excess assets

(b) Line Office:

Provides input, as necessary, to OCAO for procurement actions
Provides input to OCAO regarding preparation of the final O&M Plan
Develops/coordinates Move-In Plans

3. Operations and Maintenance (O&M) responsibilities.

(a) CAO:

Ensures compliance with DOC Real Property Management Manual's Chapter 9, Management of Buildings and Grounds
Oversees completion of Punch List items

(b) Line Office:

Completes Post Occupancy Evaluation Report
Executes O&M Plan

SECTION 6. DEFINITIONS.

The following definitions apply to terms used in this Order.

a. Facilities Investment Management Board. The NOAA Facilities Investment Management Board (FIMB) has been established to meet the requirements of OMB Circular A-11; specifically, "A cross-functional executive review committee acting for or with the Agency Head must be responsible for managing the agency's entire capital asset portfolio, making decisions on the best allocation of assets to achieve strategic goals and objectives within budget limits." The FIMB's charter, membership, and responsibilities will be included in the Capital Planning and Project Management Manual. The FIMB role is filled by the NOAA Executive Panel (NEP); and NOAA Executive Council (NEC), as appropriate. Since the NEP and NEC also are responsible for supporting planning, programming, and budgeting decisions under the PPBES process, the NEP and NEC are involved in the investment review and investment selection phases of the process. The FIMB will formally convene on a recurring basis to consider and approve projects for advancement to DOC Step Two Approval.

b. Construction Cost. This includes only those costs directly related to the physical delivery of a completed facility. It represents those costs required to build or complete the construction of a facility or structure, and includes costs of the following: site preparation; all general contractor and associated subcontractor work; tenant build out; landscaping; utility and IT infrastructure connections; inflation; and contingencies. It does not include costs of equipment, furniture, other personal property, moving, or disposal of the vacated facility.

c. Facility Construction. Any new or replacement structure, or the renovation, rehabilitation, upgrade, and capital improvement of a structure designed to house employees, materials, and equipment or used to support government vessels, aircraft, or vehicles. The term applies to both permanent and temporary construction, to expansion of an existing structure, and to construction grants. The definition of "facility construction" includes the following types of structures: office buildings, laboratories, warehouses, residences, storage buildings, hangars, docks and piers, and modular buildings.

d. Total Project Cost. The Total Project Cost (TPC) is the total of all costs required to plan for, design, construct, and occupy a given facility. Included are costs covering:

in-house labor and related expenses (such as travel) required to develop and manage the project through to completion and occupancy, and includes engineering, administrative, and procurement activities directly required to support the project;
contracted services related to the project, including contingencies, but not limited to special studies, preliminary planning, preparation of Environmental Assessments (EA) or Environmental Impact Statements (EIS), design, construction scheduling and management, site preparation, utility acquisition, telecommunications and network systems, construction, as built drawings, commissioning, inspections, construction management, post construction support, development of training and operations procedures and manuals;
real property acquisition, including surveys, appraisal, title search, and closing costs;
Government Furnished Equipment (GFE) and furnishings, such as generators, cooling units, and systems furniture;
environmental mitigation;
an independent review;
site work in preparation for disposal of existing property, such as for repairs or renovation and hazardous materials mitigation; and
moving and relocation associated with occupancy of new or significantly renovated buildings, or for lease acquisitions covered under this Order.

e. Major Investment (Projects). Investments subject to DOC approval thresholds for estimated construction cost. These thresholds are adjusted annually for inflation. Major Investment thresholds may be modified downward at the discretion of the NOAA CAO or the CAO's designee. Such adjustments might be appropriate in situations involving the relocation of significant numbers of employees, projects with significant political or environmental sensitivity, or projects of great importance to the agency's mission.

f. Minor Investment (Projects). Investments involving new facilities or enhancements/ additions/expansions to existing facilities below the DOC approval thresholds for major projects, but with a TPC greater than $300,000. Minor projects are not subject to the requirements of this Order, but must meet a less stringent set of management and reporting requirements (included in the Manual). Projects involving deferred maintenance or repairs, modifications to bring existing facilities into compliance with Americans with Disabilities Act (ADA) or facility standards, or safety or environmental compliance mitigation with TPC below the DOC approval thresholds but greater than $300,000, shall be considered as candidates for corporate facility repair, maintenance, and safety (FMRS) funding. Such projects are subject to project management and reporting requirements (included in the Manual).

g. Integrated Project Team. The management method adopted by NOAA to effectively plan and manage major investment projects is the Integrated Project Team (IPT). All approved major investments shall have an IPT assigned/matrixed to support the project. The IPT is headed by a Senior Project Manager who is supported by architects, engineers, and/or other individuals with appropriate skills to effectively plan and manage the project. The Senior Project Manager is responsible for ensuring the project meets the needs of the LO and the requirements of this NAO from concept through construction and occupancy. The LO shall identify a Client Representative to represent the program requirements. Other integrated project team members may include realty staff, acquisition staff, project engineers, space planners, and telecommunications specialists, depending on specific project requirements and complexity. Specific roles of the Senior Project Manager and Client Representative are as stated in the following sub-definitions.

1. Senior Project Manager. The individual in the CAO organization responsible for overseeing the management of the project, with additional responsibilities for client relations, project feasibility and analysis, alignment with strategic planning assumptions, and overall budget management. This individual has ultimate accountability, as delegated by the CAO, for project success and direction. This individual is responsible for managing the construction or renovation project, including scheduling, workflow planning, resource allocations, budgeting, and reporting.

2. Client Representative. The senior individual, designated by the LO Assistant Administrator or Deputy Assistant Administrator, to represent the LO in defining project requirements and in making project decisions.

h. Operations and Maintenance. Cyclical activities are necessary to maintain and allow the building systems and the facility to remain in good functional repair, including building operations, maintenance, preventative repairs, cleaning, repairs, and equipment replacement.

SECTION 7. NOAA Facility Capital Planning and Project Management Manual.

.01 The OCAO has initiated action to develop the Manual. The Manual will augment and supplement guidance related to capital planning and project management. Project requirements will be highlighted in the Manual and will have the same force and effect as this Order.

.02 The Manual will be issued, updated, and maintained by the OCAO. The Manual will adhere to the requirements of NOAA Administrative Order (NAO) 200-3, the NOAA Administrative Order Series, as listed in Section 5.02, "Handbooks and Manuals." Representatives of each LO and other affected parties will be afforded prior review of proposed changes or additions to the Manual.

.03 Distribution of the Manual will be accomplished both in paper and electronic form. The paper version will be issued in a loose-leaf form to allow for ease of updating, and updates will be distributed using sequentially numbered transmittal sheets over the signature of the CAO or the Director, Project Planning and Management. The OCAO will maintain a list of officials and organizations that will receive a printed copy of the Manual. The electronic version will be maintained by the OCAO.

SECTION 8. EFFECT ON OTHER ISSUANCES.

This Order supersedes NAO 217-104, Approval of New Building Construction Projects, dated June 22, 1993, and NAO 217-107, NOAA Facilities Council, dated April 2, 1997.

Signed,

Under Secretary of Commerce for
Oceans and Atmosphere

Office of Primary Interest:
Office of the Chief Administrative Officer
Project Planning and Management Organization