Project Reviews and Validations
External Independent Review (EIR) Procedures
Introduction
Under DOE M 413.3-1, Project Management for the Acquisition of Capital Assets, the Office of Engineering and Construction Management (OECM) must perform a Performance Baseline External Independent Review (EIR) prior to Critical Decision (CD) 2. This Manual also requires OECM to perform a Construction/Execution Readiness EIR for all Major System projects prior to CD-3.
The EIR Standard Operating Procedures (SOP) discuss all elements of EIRs including review scope, review process, Corrective Action Plans, and OECM’s Performance Baseline Validation Process.
The intent of the SOP is to make clear the OECM expectations for both the CD-2 and CD-3 EIR, and thereby facilitate the project planning process. In particular, OECM expects that the Scope of Review and Required Documentation sections will be very helpful to Programs/Projects in their preparation for External Independent Reviews.
Budgeting and Planning
Appropriate funding of EIRs is essential for the development of a responsive and effective EIR program. Accordingly, by June 30th of the year in which the budget is being developed (e.g. June 30, 2004, for Budget Year FY 2006), the Project Management Support Organization (PMSO) or Program must provide the OECM Projects Team an estimate of the number of EIRs expected to be required during the budget year by the following break-out: Major Systems, Non-Major Systems greater than $20 million, and Non-Major Systems less than $20 million.
During the execution year, the PMSO or Program shall provide OECM, at the beginning of each quarter, a 12-month look-ahead that lists by project the projected dates EIRs will be required. OECM will use this list to identify EIR contractors, and make preliminary site visit arrangements.
Applicability and Purpose of External Independent Reviews
The applicability and purpose of the EIR varies somewhat depending on whether the review is a Performance Baseline Review or a Construction/Execution Readiness Review. Each is discussed below.
Applicability and Purpose of EIRs for Performance Baseline Reviews (in support of CD-2)
EIRs must be conducted for all Capital Asset Projects greater than $5 million prior to CD-2. This requirement applies regardless of whether the project is capital or expense funded. An EIR (usually a limited EIR) may also be required to validate a new baseline resulting from a Performance Baseline Deviation. The purpose of the Performance Baseline EIR is to support validation of the Performance Baseline by OECM, and to provide reasonable assurance that the project can be successfully executed. The Performance Baseline EIR and Performance Baseline validation provides confirmation to the Deputy Secretary, the Chief Financial Officer, OMB, and Congress that the project scope and key performance parameters are well defined and the project can be completed for the Total Project Cost (TPC) and schedule associated with the Performance Baseline. In general, the Performance Baseline at CD-2 should be considered as "cast in concrete." Programs/Projects should not expect to deviate from the Performance Baseline as a result of subsequent contract awards.
Although detailed resource loaded schedules, in general, provide the underpinning for sound project planning and development of technically defensible Performance Baselines, it is well understood that the cost and scheduling details will change to some extent following award of contract (i.e. contractors may find it more efficient to perform work in a different sequence). Nevertheless, the TPC, project completion date, key performance parameters, and overall scope are not expected to change -- nor should they change if the project has been well planned in terms of defining the work to be done, scheduling the work, and estimating the cost of the work.
Applicability and Purpose of EIRs for Construction or Execution Readiness Reviews (in support of CD-3)
EIRs must be conducted prior to CD-3 for all Major System Projects, i.e. projects with TPCs greater than $400 million or designated by the Deputy Secretary. The purpose of the EIR performed prior to CD-3 is to assess the readiness for construction or execution and to confirm the completeness and accuracy of the Performance Baseline established earlier at CD-2. In addition to the review elements for the Performance Baseline, this EIR focuses on the final drawings and specifications and construction/execution planning.
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