J.G. Nelson, Senior Management Consultant, The Delphi Groupe, Inc.
Kruzic, Decommissioning Project Manager, PMP, Advisian
Morton, Senior Principal Consultant – Decommissioning, Polestar Technical Services
Wilkinson, Senior Program Manager, P.E., The Delphi Groupe, Inc.
This 3-part series will explore a list of the ‘Top 10’ lessons learned including the typical situation, importance, impacts(s), different perspectives (contractor, owner, and stakeholder), along with recommendations for each of the ‘Top 10’ lessons learned in decommissioning planning. After all, planning is the earliest and best opportunity to positively influence scope definition, safety, cost, and schedule.
Once an asset nears the end of its useful and productive life, options for the final phase of the facility’s lifecycle are evaluated. If it is not converted or refurbished, then deactivation (i.e. idling/safe shutdown) and decommissioning (D&D) begin in earnest. Suddenly the asset has become a liability, costing the company money without any revenue in return. There is tremendous pressure to not only begin decommissioning, but accelerate it as quickly as possible to reduce/eliminate the risk(s), transfer, reduce, or remove the legacy liability completely. Therefore the overwhelming tendency for many owners/operators is to rush quickly into decommissioning to avoid unnecessary costs or demonstrate progress to stakeholders and the community. In many cases, this transition occurs too quickly without taking the necessary time to properly execute D&D planning. This is driven by good intentions, desires, and pressures, such as keeping existing employees gainfully employed, using operational funds to initiate decommissioning, and demonstrating deactivation and decommissioning in order to change the mindset of employees and stakeholders. However, quick acceleration of decommissioning exposes the dangers of lack of planning which leads to loss of stakeholder confidence, comprising safety performance, and increased cost and schedule. Decommissioning activities pose inherently different risks than operations and maintenance and must be planned.
The following are specific outcomes that should be obtained from decommissioning planning:
- Clearly defined end points and an agreed upon, demonstrable, and achievable end state
- Solid project-ized organizations with well-defined roles and responsibilities – a fully aligned project team
- Detailed scope of work / work plans with integrated safety
- Leveraging the experience of experienced decommissioning professionals in the planning and oversight
- Accurate materials/waste inventories and waste minimization/management plans and strategies
- Accurate and defensible cost estimate and baseline, and approved budget, with appropriate level of contingency
- Realistic and achievable schedule
- Characterization plan and/or sufficient characterization for identifying and addressing ES&H concerns, determination of the best waste removal methodology, and clearly defining waste disposition pathways (and associated waste acceptance criteria)
- Clear understanding of project risk with active and effective mitigations strategies and management in-place, including strategies for opportunities
- Quantified risk factors for inclusion in the cost estimate and schedule
- Stakeholder buy-in, concurrent and ongoing local engagements, and frequent/open communications
- Integrated safety performance – zero lost-time accidents or incidents
In order to setup your decommissioning project for success, the following ‘Top 10’ lessons learned and best practices, not in any prioritized order, will have the most impact on the outcome of your decommissioning project:
- Aligning stakeholder expectations
- Understanding context – site knowledge and procedures
- Early, detailed, and strategic planning – scope definition
- Project organization, prioritization, and sequencing
- Characterization for materials removal and waste management
- Risk assessment and management
- Materials/waste management
- Change management
- Use of rigor, experience, and tools
- Commitments management
By acknowledging these lessons learned and recommendations in the early planning stages, you’ll be able to set your project to achieve safe and successful delivery, avoiding unnecessary costs, risks, and delays, and ensuring that you meet the expectations of the stakeholders.
1. Aligning Stakeholder Expectations
As an outside company is brought in to plan and/or execute the facility decommissioning. the first opportunity we may have to clearly understand the scope is when operational personnel prepare and issue a formal request for proposal (RFP) that provides the technical scope of work (TSW). However concise the TSWs are at that time, they commonly are still be vague in areas, open-ended, subject to interpretation based on the frame of reference of the reader may not clearly define the boundaries of what is out-of-scope, and rely on numerous assumptions – known and unknown. In many cases shutdown or deactivation may be in progress at the time of the RFP development, so conditions are constantly changing.
Participation in the tender process endeavours to clarify the TSW and its implied or understated expectations of the owner and/or customer through site visits, submitting formal and informal questions, and clearly documenting the planned execution strategies and assumptions in our proposals. However, this is often not enough since interaction with the stakeholders during RFP preparation is typically very limited or controlled. Therefore, when this is a problem, the challenge is to quickly and succinctly identify and understand these expectations, both internal and external, immediately after contract award when communication pathways are established.
Alignment of these d expectations, both written and unwritten, before the contract signing is critical to a well-planned managed project, staying within scope and budget, identifying and managing changes, and completing the project objectives. Ultimately, both customer and contractor desire to complete the project successfully, however the definitions of success can vary. Understanding the customer expectations helps to define what success is and significantly improves the likelihood of achieving it. Often times, the customer may have multiple or different expectations from internal stakeholders. In addition, contractors may have their own external expectations to consider. Also, the customer and contractor may have different corporate cultures and value drivers which need to be understood.
Alignment with the customer expectations is essential and the earlier they are addressed the likelihood and magnitude of issues, delays, frustrations, re-work, and additional costs will be reduced. Change notices will happen, but clear scopes of work, expectations, and conditions will avoid the tense negotiations of scope changes and/or legal and liability ramifications, . A clear understanding of expectations and outcomes ensures that both customer and contractor communicate openly, support each other in achieving a common objective, and complete the project to mutual satisfaction both the final endstate, safe performance, and financial success. The time invested performing early stakeholder alignment will pay for itself.
Alignment is achieved through documentation of discussions and communications with the stakeholders during the planning process, which includes the RFP and contract. The following methods have proven to be successful:
- Early decommissioning planning, prior to shutdown, will help define many aspects of both deactivation and decommissioning
- Conduct an early alignment workshop/framing session with the customer with specific objectives and outcomes identified
- Capture and communicate expectations formally to the customer and internally to the project team
- Provide an outline of deliverables with proposed content and obtain concurrence that this is the content and level of detailed required – an equivalent example of a deliverable (i.e. decommissioning plan, waste management plan, work package, detailed cost estimate, etc.) provides a go-by
- Identify and communicate what is considered out of scope or what will not be provided
- Capture and document technical, cost, schedule, and overall basis and assumptions – provide for early concurrence
- Identify, review, and manager significant project risks and proposed mitigations
During the planning process, stakeholder input, review, and concurrence of the plans, approaches, and strategies is essential. This happens throughout the project both formally and informally. Project documentation requires customer reviews, input and concurrence at both the draft and final stages of development. Customer/owner input is critical to ensure technical, quality, logistical, site, and programmatic concerns and expectations are met. In addition, the reviews will bring to light specific customer issues that need to be resolved. Logistical issues will also be identified and addressed. This is also an opportunity for mutual education on new or existing methods, technologies, and approaches. Stakeholder reviews and input are absolutely critical to final acceptance of the deliverable and to ongoing reputation. These reviews provide opportunities to improve quality and uncover potential concerns. They also provide another ‘cold-eyes review’ to identify potential items that may not be readily apparent to the preparer due to their closeness of the document. Stakeholder reviews may also include others beside the primary customer, often including but not limited to supporting organizations, programs, corporate stakeholders, the public, etc.
The customer/owner typically has key process knowledge and company-specific requirements that needs to be integrated into the planning documentation. The customer is ultimately paying for the documentation and project and has specific expectations (known and unknown) that need to be met. These should be clearly identified and agreed-upon upfront to apply the first major lessons learned.
In order to have an effective stakeholder input, review, and concurrence process, the following are recommended:
- Early outline of planning documentation content and established review protocols (submission and resolution) and acceptance criteria
- Preliminary reviews focusing solely on process and technical (non-formatting)
- Formal clarifications when ambiguous
- Frequent meetings to communicate and discuss concerns and options
- Draft reviews for key areas (methodology, approach, hazards) early enough to be able to address in final draft
- Formal stakeholder review and disposition forms/worksheets that focus comments on critical issues
- Identify alternatives and potential changes to scope
- Defined change management process
- Consider an independent reviewer to resolve disagreements
Working closely with your stakeholders will provide alignment on success and clear expectations of individual endpoints and the final endstate, ultimately improving the quality and acceptability of the deliverables and improve the project planning.
Cameron Sinclair, founder of Small Works and co-founder of Architecture for Humanity, stated ‘A true architect is not an artist but an optimistic realist. They take a diverse number of stakeholders, extract needs, concerns, and dreams, then create a beautiful yet tangible solution that is loved by the users and the community at large.’ We can be the architects of our projects to create value for our stakeholders and align their expectations to create and perform a solution that achieves the objectives of our stakeholders.
2. Understanding Context – Site/Plant Knowledge and Procedures
When contractors go into a new project, on a new site, in a new facility, we bring with us our technical experience and lessons learned from previous and relevant projects. We tend to view the new project in this same framework. The customer/owner has selected a contractor based on this experience; however, each project, site, facility, or corporation is unique in one or many areas and thus represent different challenges. This is further exacerbated when the similar type of work is being performed in a different region or country. Different cultures, values, mindsets, and previous site/plant history will be encountered. These projects, sites, and facilities may have different operating procedures and work control processes, as well as waste management strategies and QA requirements. Sites and plants still under operating license agreements will be subject to additional rigor and control in comparison to those with a decommissioning license or different regulatory environment.
Become knowledgeable with the current site/plant procedures and process as early on as possible in a project. Not only does this information needed to be digested, but the impacts on the current proposed methodologies and deliverables need to be understood. Contractors may assume that specific processes exist – they may or may not, and if they do, then the level of rigor can vary which can increase or decrease the cost and time required to perform planning, technical reviews, change management, etc.
The impacts as to this understanding of site/plant procedures and processes can be negative or positive. A lack of flexible work procedures to rely on can drive the need to develop detailed work procedures and protocols to be included in work plans. This may require additional work and research to align with specific industry protocols for the specific task or activity. Where flexible work procedures exist, the detailed planning and project organization can use these for both methodology and execution. In cases where site records or documentation is not available, this will drive increased investigation and characterization activities. It may also require additional or higher levels of personal protective equipment (PPE) to guard against unknown hazards. Where there is a wealth of site knowledge, this can be leveraged to reduce characterization, PPE requirements, project contingency, and expedite work planning and execution.
In order to better understand the context and current site conditions and processes, the following actions are recommended:
- Owners define and provide site procedures and work control processes that affect decommissioning during the RFP process, where possible, or early after project award, recognizing that they should be different that during operations
- Contractors request and understand site procedures and work control processes, that affect decommissioning, during the RFP process to accurately bid and schedule work
- Conduct early alignment sessions to capture and document site and plant process knowledge
- Identify skill of the craft / routine activities that can utilize existing procedures where available or develop flexible procedures that can be applied repeatedly during the project and future projects
By better understanding the site, plant, or facility, project risks can be better defined and controlled and project documentation can be tailored to address the areas of highest concern, both of which will lead to increased customer and stakeholder confidence and ensure the contractor can perform the work to the customer/owner’s expectations.
Our source of knowledge is our previous experience. Anton Chekhov, a Russian physician, playright and author who is considered to be among the greatest writers of short stories in history, stated ‘Knowledge is of no value unless you put it into practice.’ Let’s leverage and utilize the knowledge of our current site, plant, facility resources with decommissioning professionals to better plan, understand risks, understand facility conditions, and to perform the project. Power is gained by sharing knowledge, not by hoarding it.
3. Early, Detailed, and Strategic Planning – Scope Definition
Early and strategic planning is the best opportunity to positively influence and impact the scope, cost and schedule of a D&D project or portfolio. Strategic planning involves integrated planning with other site and facility operations, projects and programs. Looking for potential impacts and synergies will be valuable in the early stages. In addition, prioritizing and sequencing legacy liability programs, portfolios of decommissioning projects, including environmental restoration, can provide cost and schedule benefits and identify possible conflicts/impacts. Early planning will ideally leverage site knowledge and allow the planning team to get out in front of the project execution. It may allow the necessary time to develop specific procedures to facilitate decommissioning, establish waste acceptance criteria and disposition pathways, or connect with stakeholders for concurrence on approach for new or unfamiliar decommissioning activities, such as controlled explosive demolition.
Detailed and strategic planning will:
- Define the scope of work clearly and crisply – effectively determining and defining success to the regulator, community, customer, and corporation.
- Demonstrate progress toward achieving the desired end state
- Identify and fill knowledge and data gaps
- Provide time for sufficient site characterization (and laboratory analysis) to support material removal/demolition and waste determinations
- Enable more accurate waste volume estimates and forecasts, including required quantities and types of containers
- Generate greater level of accuracy in cost estimating, resulting in higher confidence and reduced contingency
- Provide more realistic schedules
- Decrease uncertainty and increase confidence
- Integrate your decommissioning project into a larger decommissioning, environmental, or legacy liability program
Activities performed during early, detailed and strategic planning that will greatly enhance the likelihood of success for your project include:
- Development of a workforce reduction/reskilling plan and training
- Site and waste characterization
- Determine detailed endpoints that demonstrate achievement of the agreed upon interim or final endstate
- Identify strategic opportunities to reduce costs
- Assessment of risks and early actions to address risks of high concern
- Prioritization and sequencing of projects, for a larger decommissioning program or portfolio
- Develop the cost estimates and schedules for each phase of the D&D project/program
An individual decommissioning project should also be viewed as part of a larger decommissioning, environmental, or legacy liability program or portfolio, comprised of numerous (tens to hundreds) of projects and may also be influenced by site or ongoing operations. Strategic planning provides the opportunity to see how the project fits into the larger picture, for prioritization, sequencing, and optimization in a bigger decommissioning program or portfolio. This strategic planning can optimize decommissioning projects and use of resources, increase footprint reduction, reduce risks and demonstrate risk reduction, reduce surveillance and maintenance costs, reduce the overall lifecycle and associated costs, and provide opportunities for acceleration.
Risk reduction of liability programs needs to be measured, tracked, accelerated, and demonstrated. Projects or sites must be prioritized and a short and long-term strategy developed. Numerous factors (including risks, hazards, and conditions) must be considered when developing short and long-term risk and cost reduction strategies for project/site closure to systematically and effectively accelerate the reduction of liabilities. Key prioritization factors (i.e. considerations) can be grouped into 4 main categories:
- Health, Safety, Security and Environmental (HSSE)
Strategic planning needs to consider key constraints, such as annual budgets, project durations, availability dates for projects/facilities/land, existing milestones and commitments, predecessor and successor project limitations, associated and concurrent projects, existing utilities, and enabling facilities that must be built or operational before other facilities or lands can be removed or used, respectively. When these factors are considered, the projects in the portfolio/program can be evaluated and sequenced to produce an optimized schedule that reflects the values of the stakeholders. Business rules may also be determined and used during this process. A prioritization and sequencing process and model is valuable to enable rapid and accurate evaluation and re-evaluation of the priorities and sequence (i.e. schedule) as conditions and constraints change throughout the years or with the implementation of a liability program.
Over 10 years ago, my colleagues and I developed a prioritization and sequencing risk model, process, and tool that was used for a number of large legacy liability programs with numerous facility decommissioning and environmental remediation projects at sites in North America. The process included development, weighting, and vetting multiple risk-based factors with direct stakeholder input. The repeatable prioritization process yielded an objective, risk-based and technically defendable process for prioritization and sequencing a portfolio of projects that gained concurrence from all stakeholders, including federal and state governments, local communities, and corporate stakeholders. It also allowed for additional perspectives to be considered. The model developed an optimized sequence of projects to enable significant maintenance cost reduction, waste generation forecasting, and footprint reduction forecasts. Updated as required, this legacy portfolio/program prioritization, sequencing, and optimization tool provided a solid basis to develop and validate legacy liability program risk and cost reduction strategies, as well as was able to demonstrate risk reduction to stakeholders. A defined process and tool, to perform prioritization, sequencing, and optimization of your legacy liability program can provide significant savings and value that typically can be realized in the first year and can providing lasting value, cost avoidance, and accelerated risk and liability reduction in the years ahead.
‘Success doesn’t just happen, it is planned for (Anonymous).’ Winston Churchill wisely stated ‘Those who fail to plan, plan to fail.’ Alan Lakein, a well-known author on time management, surmised ‘Planning is bringing the future into the present so that you can do something about it now.’ Let us take the time and effort to do the early, detailed, and strategic planning so our short term successes contribute to the long-term goals and objectives.
4. Organization of Projects and Project Activities
Decommissioning projects need to be setup and organized for success. This means the organizational structure for resource roles, responsibilities, accountabilities, and authorities as well as the work breakdown structure (WBS) for both work execution and cost and schedule performance reporting. Once established and communicated, this allows the benefits of early planning and organization to be felt throughout the project. Project activities should be identified within a project work breakdown structure [WBS] organized chronologically by phases with significant and interim milestones, and put into a project schedule. An example of the major categories of a typical decommissioning project WBS consists of:
- Project management
- Utilities Isolation (i.e. enabling works)
- Designated substances / hazardous materials removal
- Equipment removal
- Soil excavation/remediation
- Waste management
- Site demobilization
- Project close-out
- Other Direct Costs (ODCs)
Additional WBS levels should be used to provide further activity and schedule definition.
A well-defined WBS also helps in capturing costs and progress for each phase and each activity. Capturing costs in an organized fashion against the baseline will improve future D&D cost estimates as well as provide benchmarking and accurate unit rates; however, this is often mishandled during the execution of high pace projects. Capturing progress for discrete packages of work enable project managers to show progress while managing float and reporting. The proper organization and sequencing of project activities can ensure tasks are performed in an optimal order and avoid schedule conflicts.
For all projects, organizational definition will be required. In addition, identification of interfaces and points-of-contact with procurement, supply chain, subcontractors, supporting organizations, and stakeholders will be essential for contracting, obtaining support personnel, and two way communication with stakeholders. Proper organization will help ensure controlled reporting and communication. Project organization begins with a solid organizational chart that ensures clear roles, responsibilities, accountabilities and authorities (R2A2). The organization chart should be accompanied by a clear R2A2 document and/or Responsibilities and Accountabilities Matrix (RAM). This will ensure communication, direction, and guidance is clear throughout the project. A general decommissioning project organization is represented below:
Improper project organization, for resources, management, or performance, can create chaos, cause stakeholders to lose trust and confidence, can limit use of the data in the future, can create project team conflicts, and show false representation of project progress. These issues can make it difficult to demonstrate progress or achievement for payment milestones and can lead to significant surprise cost impacts toward the end of the projects.
‘Being organized is being in control (Anonymous).’ Calvin Coolidge, the 30th President of the United States, noted that ‘The only difference between a mob and a trained army is organization.’ Our resources are empowered and our strengths magnified with proper project organization.
Check back next week for Part 2 of this 3-part series.