Waste Management Project Contingency Analysis
The purpose of this report is to provide the office of Waste Management (WM) with recommended contingency calculation procedures for typical WM projects. Typical projects were defined as conventional construction-type activities that use innovative elements when necessary to meet the project objectives. Projects involve treatment, storage, and disposal of low level, mixed low level, hazardous, transuranic, and high level waste. Cost contingencies are an essential part of Total Cost Management. A contingency is an amount added to a cost estimate to compensate for unexpected expenses resulting from incomplete design, unforeseen and unpredictable conditions, or uncertainties in the project scope (DOE 1994, AACE 1998). Contingency allowances are expressed as percentages of estimated cost and improve cost estimates by accounting for uncertainties. The contingency allowance is large at the beginning of a project because there are more uncertainties, but as a project develops, the allowance shrinks to adjust for costs already incurred. Ideally, the total estimated cost remains the same throughout a project. Project contingency reflects the degree of uncertainty caused by lack of project definition, and process contingency reflects the degree of uncertainty caused by use of new technology. Different cost estimation methods were reviewed and compared with respect to terminology, accuracy, and Cost Guide standards. The Association for the Advancement of Cost Engineering (AACE) methods for cost estimation were selected to represent best industry practice. AACE methodology for contingency analysis can be readily applied to WM Projects, accounts for uncertainties associated with different stages of a project, and considers both project and process contingencies and the stage of technical readiness. As recommended, AACE contingency allowances taper off linearly as a project nears completion.
- Research Organization:
- Federal Energy Technology Center Morgantown (FETC-MGN), Morgantown, WV (United States); Federal Energy Technology Center Pittsburgh (FETC-PGH), Pittsburgh, PA (United States)
- Sponsoring Organization:
- US Department of Energy (US)
- OSTI ID:
- 10667
- Report Number(s):
- DOE/FETC-99/1100; TRN: US0103797
- Resource Relation:
- Other Information: PBD: 31 Aug 1999
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
COST ESTIMATION
CALCULATION METHODS
RECOMMENDATIONS
RADIOACTIVE WASTE PROCESSING
RADIOACTIVE WASTE STORAGE
RADIOACTIVE WASTE MANAGEMENT
RADIOACTIVE WASTE DISPOSAL
LOW-LEVEL RADIOACTIVE WASTES
ALPHA-BEARING WASTES
HIGH-LEVEL RADIOACTIVE WASTES
MIXTURES
HAZARDOUS MATERIALS