All DCM projects shall have a Project Cost Plan (also called cost workbook). Project Managers, assisted by the Project Coordinator, have overall responsibility for updating the cost plans on a monthly basis, or as requested by the Project Director, DCM Department Head and/or client. The Project Manager has overall responsibility for accuracy of information in the cost plan. Project cost plans should not be developed in any more detail than is necessary for cost effective planning and management of the project. The Project Cost Plan follows a standard format maintained on the DCM file server.
On a monthly basis, the Project Manager will review budget, actual costs, and other financial information to verify accuracy, and note any variances. Cost plan updates are completed by the second week of each month, and include:
- Verify expenditures.
- Review purchase order tracking.
- Account for committed expenses.
- Project LBNL staffing levels.
- Evaluate contingency.
- Provide accurate and timely forecast of costs-to-go, or forecast of total expected project costs once a month.
- Alert the Project Director, DCM Department Head, and Division Finance Manager of any risks of cost overruns immediately, so that risks can be mitigated and additional funding identified if risks cannot be mitigated.
- Revise the CDA for GPP/IGPP projects if forecast costs change by 10 percent or more of authorized TEC.
The Facilities Finance Group shall:
- Communicate regularly during the month with each Project Manager, to understand risks and opportunities.
- Monitor GPP/IGPP Budget and Reporting (B&R) funds balances on hand.
- Assist the Project Manager in preparing a revised CDA if necessary.
- Prepare and submit requests for revised authorizations to the BSO when necessary.
- Provide assurance reviews for financial information included in project status reports.
- Verify that the remaining balance is adequate to complete the project.
- Initiate corrective action as required if the estimated cost to complete exceeds the funds available.
- Prepare and/or review documents, such as:
- Cost Plan
- DOE Monthly and Quarterly Reports
- Financial Summary (GPP/IGPP/Construction Projects)
6.2.1 Contingency
Project cost contingencies are developed by the Project Manager to cover unforeseen field conditions and errors or omissions. The level of contingency depends upon the level of estimate prepared for the project and consideration of identified risks: scope, schedule, budget, complexity and location. Refer to Appendix D, Cost Estimates.
The Project Manager and/or Project Director are authorized to use the cost contingency for scope changes resulting from unforeseen conditions with Project Director or DCM Department Head approval. The cost contingency shall not be used to finance scope changes desired by the client. Scope changes shall require review, documentation, and approval per the process described in Section 6, Project Monitoring & Controlling.
6.2.2 Safety Allowance
6.2.2.1 Subcontract Clause
At the discretion of the LBNL Project Manager, the construction subcontract may include the following Subcontract Clause on projects less than $1M:
6.2.2.2 Budget for Safety Allowance
At the discretion of the LBNL Project Manager, the PPG/PIF Project Budget Estimate Cover Sheet may include an optional line item under Construction Costs “LBNL Safety Allowance.” The criteria for distribution of this allowance is specified in Division 01 Specification Section 013529, Environment Safety and Health Procedures.
For concurrent small projects, the DCM Department Head will make a determination whether a fund will be established to provide safety recognition to a group of subcontractors (i.e., a Safety BBQ for all subcontractors working on concurrent small projects).
6.2.2.3 Safety Observations and Safety Allowance
The Project Authorizing Individual (AI) and Responsible Individual (RI) shall monitor the Subcontractor’s project for safety compliance in accordance with the Performance and Safety Incentive Award Program per the project subcontract language (refer to Appendix N).
Subcontract safety performance shall be calculated as a “percentage safe”, which will equal the number of “safe conditions” observations divided by the total number of observations (safe and at-risk). The Period of safety performance evaluation shall be at the end of each month (30 day intervals). The LNBL Project Manager may release a pro-rated portion of the Safety Allowance, if the percentage safe is equal to or greater than 96%.
Division of Safety Allowance: For each allowance distribution, the subcontractor shall provide documentation for the previous period, substantiating the expenditure of the allowance and distribution of the allowance (in the form of awards) to the workers. Incentives should be awarded on a weekly basis (e.g., small tools prizes distributed to workers).
6.2.3 Leased Facilities
All capital improvements to leased facilities require DOE approval, and are managed in consultation with the LBNL Office of the Chief Financial Officer. For projects performed at leased facilities, all construction costs shall be tracked and reported separately from lease costs. In order to provide proper accounting and capitalization, construction costs shall use a Facilities PID that is not parented to the lease expense account. Construction costs paid for by third parties (such as a landlord tenant improvement allowance) shall be reported if such information will provide a more accurate representation of the project and be meaningful to users of the report. Reports should clearly state if third party costs are included so that the information is not misleading.
6.2.4 Earned Value Management System (EVMS)
Projects managed under DOE O 413.3B will use the LBNL Earned Value Management System as required, or as determined to be a best practice. The Project Manager will follow procedure LBID-2570 Ernest Orlando Lawrence Berkeley National Laboratory Earned Value Management System (LBNL-EVMS) Description.
