2Business Case Analysis

Business Case Analysis

FCPPM Manual

2Business Case Analysis

NAO 217-104 Overview:

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:

-modernization/replacement/consolidation; or

-repair, including health/safety/environmental compliance.

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

NAO 217-104 Responsibilities:

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

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

Line Office:

-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

Table 2-1 Steps:

BC-1 Identify and Define Project

BC-2Develop Initial Cost Estimate

BC-3Develop/Submit PPBES Documentation

BC-4 Identify Client Representative

BC-5Develop OMB Exhibit 300

BC-6 Identify Project Manager and Integrated Project Team Members

BC-7 Make Project Development Rating Index (PDRI) decision

BC-8 Determine Service Provider

BC-9 Approval to Proceed to Capital Investment Review

2.1OMB Exhibit 300

NOAA will use the OMB Exhibit 300 as its business case analysis format for major construction projects.

This section provides guidance for completion of OMB Exhibit 300 business case analysis to be submitted as part of the annual budget process based on OMB Circular A-11. OMB Circular A-11 establishes policy for planning, budgeting, acquisition and management of capital assets and provides instructions for budget justifications and reporting requirements. Circular A-11 can be accessed for further reference via OMB website at

GENERAL INSTRUCTIONS FOR THE EXHIBIT 300

OCAO will submit a Capital Asset Plan and Business Case Summary, Exhibit 300, for each new and on-going major project included in NOAA's capital asset portfolio.

For new investments, Part I, Sections A and Bmust be completed. Projects in the planning phase (e.g., NOAA’s Selection Phase) will have less detail and specificity than projects moving into the full acquisition or operational phase (NOAA’s Management Phase).

While Exhibit 300s are officially submitted to OMB twice yearly, they should be management tools used within an agency and updated as information becomes available. If a project has not reached the life-cycle phase that would provide a particular part of the business case, the Exhibit 300 should project when the information will be available or when the next decision point will be reached.

Projects that are in operation and use must demonstrate how close actual annual operating and maintenance costs are to the original life-cycle estimate and whether the level or quality of performance/capability meets the performance goals and continues to meet agency and user needs. Note: For construction projects, NOAA will not continue to submit the Exhibit 300 after occupancy, but will monitor operating and maintenance costs as part of its normal facility management responsibility and in accordance with EO 13327 requirements.

COMPLETING THE EXHIBIT 300

Part I: Summary Information and Justification

Section A: Overview (All Capital Assets)

Date of Submission: Self Explanatory.

Agency: Department of Commerce

Bureau: NOAA

Name of this Capital Asset: Use the project title; should be a meaningful, standardized name for the project that is consistently used throughout the supporting documentation.

Unique Project (Investment) Identifier: TBD. The instructions direct usage of the agency ID system. Further clarification to be provided concerning whether DOC has an ID system.

What kind of investment will this be in FY?
Planning ___
Full Acquisition ___
Operations and Maintenance ___
Mixed Life Cycle ___
E-Gov/LoB Oversight ___
For NOAA facilities investments, either Planning or Full Acquisition will normally apply.

What was the first budget year this investment was submitted to OMB?___
(Further clarification to be provided. The submission to OMB would need to be confirmed through DOC.)

Provide a brief summary and justification for this investment, including a brief description of how this closes in part or in whole an identified agency performance gap.
For NOAA, use the same or similar description and justification language as used in other documentation for the investment (e.g., PPBES, budget narratives).

Note: the DOC electronic OMB Exhibit 300 system eCPIC, asks DOC Supplemental questions in this area in addition to the standard OMB Exhibit 300 queries.

DOC Supplemental question: What assumptions were made about this project and why?
DOC Supplemental question: Identify the critical dependencies and constraints of this project.

Did the Agency’s Executive/Investment Committee approve this request?
Yes ___ No ___
(For NOAA, this answer will always be yes.)
a. If “yes”, what was the date of this approval? ______
For NOAA, use the DOC Real Property Review Board date.

Did the Project Manager review this Exhibit? Yes ___ No ___
For NOAA, this answer will always be yes.

Contact information of Project Manager:
Name ______
Phone Number ______
E-mail ______

Has the agency developed and/or promoted cost effective, energy-efficient and environmentally sustainable techniques or practices for this project?Yes ___ No ___

a. Will this investment include electronic assets (including computers)?Yes ___ No ___
b. Is this investment for new construction or major retrofit of a Federal building or facility? Yes ___ No ___

1. If “yes”, is an ESPC or EUSC being used to help fund this investment?
2. If “yes”, will this investment meet sustainable design principles?
3. If “yes”, is it designed to be 30% more energy efficient than relevant code?

(For NOAA, the goal is to answer “yes” to all of these questions. Question 12.a. needs further clarification regarding what is meant by assets. Documentation supporting 12.b. must be under development or available if questioned by OMB.)

Does this investment directly support one of the PMA initiatives? If “yes”, check all that apply:

Human Capital ___
Budget Performance Integration ___
Financial Performance ___
Expanded E-Government ___
Competitive Sourcing ___
Faith Based and Community ___
Real Property Asset Management ___
Eliminating Improper Payments ___
Privatization of Military Housing ___
Research and Development Investment Criteria ___
Housing and Urban Development Management and Performance ___
Broadening Health Insurance Coverage through State Initiatives ___
“Right Sized” Overseas Presence ___
Coordination of VA and DoD Programs and Systems ___

1. Briefly describe how this asset directly supports the identified initiatives.

(For NOAA facility investments, Competitive Sourcing and Real Property Asset Management will generally apply.)

Does this investment support a program assessed using the Program Assessment Rating Tool (PART)? (For more information about the PART, visit www. Whitehouse.gov/omb/part.)
a. If, “yes”, does this investment address a weakness found during a PART review?
b. If “yes”, what is the name of the PARTed program?
c. If “yes”, what rating did the PART receive?

Is this investment for information technology? Yes ___ No ___
For NOAA facilities investments, the answer is No, even though the design criteria inherently incorporates IT features.
If the answer to Question 15 is “Yes,” complete questions 16-23 below. If the answer is “No,” do not answer questions 16-23.
For information technology investments only:

What is the level of the IT Project? (per CIO Council PM Guidance)
Level 1____
Level 2____
Level 3____

What project management qualifications does the Project Manager have? (per CIO Council PM Guidance):

(1) Project manager has been validated as qualified for this investment_____
(2) Project manager qualification is under review for this investment_____
(3) Project manager assigned to investment, but does not meet requirements_____
(4) Project manager assigned but qualification status review has not yet started_____
(5) No Project manager has yet been assigned to this investment_____

Is this investment identified as “high risk” on the Q4 - FY 2006agency high risk report (per OMB’s ‘high risk” memo)? Yes ____ No ____

Is this a financial management system?Yes ____ No ____

a. If “yes,” does this investment address a FFMIA compliance area?
Yes ____ No ____

1. If “yes,” which compliance area: ______
2. If “no,” what does it address? ______

b. If “yes,” please identify the system name(s) and system acronym(s) as reported in the most recent financial systems inventory update required by Circular A–11 section 52. ______

What is the percentage breakout for the total FY2008 funding request for the following?

(This should total 100%)

Hardware_____

Software_____

Services_____

Other_____

If this project produces information dissemination products for the public, are these products published to the Internet in conformance with OMB Memorandum 05-04 and included in your agency inventory, schedules and priorities?
Yes____No____N/A____

Contact information of individual responsible for privacy related questions:
Name ______
Phone Number ______
Title ______
E-mail ______

Are the records produced by this investment appropriately scheduled with the National Archives and Records Administration’s approval?Yes ____ No ____

Section B: Summary of Spending (All Capital Assets)

Provide the total estimated life-cycle cost for this investment by completing the following table. All amounts represent budget authority in millions, and are rounded to three decimal places. Federal personnel costs should be included only in the row designated “Government FTE Cost,” and should be excluded from the amounts shown for “Planning,” “Full Acquisition,” and “Operation / Maintenance.” The “TOTAL” estimated annual cost of the investment is the sum of costs for “Planning,” “Full Acquisition,” and “Operation/Maintenance.” For Federal buildings and facilities, life-cycle costs should include long term energy, environmental, decommissioning, and/or restoration costs. The costs associated with the entire life-cycle of the investment should be included in this report.

Table 1: SUMMARY OF SPENDING FOR PROJECT PHASES(REPORTED IN MILLIONS)
(Estimates for BY+1 and beyond are for planning purposes only and do not represent budget decisions)
PY–1 and earlier / PY
2006 / CY
2007 / BY
2008 / BY+1 2009 / BY+2 2010 / BY+3 2011 / BY+4 and beyond / Total
Planning:
Acquisition:
Subtotal Planning & Acquisition:
Operations & Maintenance:
TOTAL:
Government FTE Costs should not be included in the amounts provided above.
Government FTE Costs
Number of FTE
represented by Costs:

Note: For the cross-agency investments, this table should include all funding (both managing partner and partner agencies). Government FTE Costs should not be included as part of the TOTAL represented.

Note: The eCPIC version of Table 1 is not the same as above. The ePIC first indenture level includes Planning, Acquisition, and Operations & Maintenance sections, but requires Budgetary Resources and Outlays.

The second indenture level consists of Desktop (Seat Management), IT Help Desk, Telecom (Voice Networks), Telecom (Data Networks), DataCenter.

The third indenture level consists of Hardware, Software, Contract Services, IT Security, Facilities, and Other. Data must be entered at this level.

Will this project require the agency to hire additional FTE’s?Yes ____ No ____

a. If “yes,” How many and in what year? ______

If the summary of spending has changed from the FY2007President’s budget request, briefly explain those changes:______

Section C: Acquisition/Contract Strategy (All Capital Assets)

-Complete the table for all (including all non-Federal) contracts and/or task orders currently in place or planned for this investment. Total value should include all option years for each contract. Contracts and/or task orders completed do not need to be included.

Contract or Task Order Number / Type of Contract/Task Order / Has the contract been awarded (Y/N) / If so, what is the date of the award? If not, what is the planned award date? / Start date of Contract/Task Order / End date of Contract/Task Order / Total Value of Contract/ Task Order ($M) / Is this an Interagency Acquisition? (Y/N) / Is it performance based? (Y/N) / Competitively awarded? (Y/N) / What, if any, alternative financing option is being used? (ESPC, UESC, EUL, N/A) / Is EVM in the contract? (Y/N) / Does the contract include the required security & privacy clauses? (Y/N) / Name of CO / CO Contact Information (Phone/email) / Contract Officer Certification Level (Level 1, 2, 3, N/A) / If N/A, has the agency determined the CO assigned has the competencies and skills necessary to support this acquisition? (Y/N)

Note the above table is not meant to be completed in its current display state. eCPIC will ask each question individually for each Task Order. To collect the data in preparation for entry into eCPIC, use the following template:

Contract or Task Order Number: ____

Type of Contract/Task Order: ______

Has the Contract Been Awarded? Yes/No

If so, what is the date of the award? If not, what is the planned award date?

Start Date of Contract/Task Order: _____

End Date: ___

Total Value of Contract/Task Order ($M): $_._M (eCPIC uses $K)

Is this an Interagency Acquisition? Yes/No

Is it performance-based? ___

Competitively awarded? ___

What, if any, alternative financing option is being used? (ESPC, UESC, EUL, N/A)

Is EVM in the contract? ___

Does the contract include the required security and privacy clauses? ___

Name of CO: ______

CO Contact Information: ____

Contract Officer Certification Level (1, 2, 3, NA): ____

If N/A, has the agency determined the CO assigned has the competencies and skills necessary to support this acquisition?

If earned value is not required or will not be a contract requirement for any of the contracts or task orders above, explain why:______

Do the contracts ensure Section 508 compliance?

Yes____

No____

N/A____

a. Explain why:______

Is there an acquisition plan which has been approved in accordancewith agency requirements? Yes ____ No ____

a. If “yes,” what is the date? ______

b. If “no,” will an acquisition plan be developed?______

1. If “no,” briefly explain why:______
For NOAA facilities projects, acquisition planning will be accomplished in accordance with Acquisition and Grants Office guidance.

Section D: Performance Information (All Capital Assets)

In order to successfully address this area of the exhibit 300, performance goals must be provided for the agency and be linked to the annual performance plan. The investment must discuss the agency’s mission and strategic goals, and performance measures must be provided. These goals need to map to the gap in the agency's strategic goals and objectives this investment is designed to fill. They are the internal and external performance benefits this investment is expected to deliver to the agency (e.g., improve efficiency by 60 percent, increase citizen participation by 300 percent a year to achieve an overall citizen participation rate of 75 percent by FY 2xxx, etc.). The goals must be clearly measurable investment outcomes, and if applicable, investment outputs. They do not include the completion date of the module, milestones, or investment, or general goals, such as, significant, better, improved that do not have a quantitative or qualitative measure.

Agencies must use Table 1 below for reporting performance goals and measures for all non-IT investments and for existing IT investments that were initiated prior to FY 2005. The table can be extended to include measures for years beyond FY 2006.

Performance Information Table 1:
Fiscal Year / Strategic Goal(s) Supported / Performance Measure / Actual/baseline (from Previous Year) / Planned performance Metric (Target) / Performance Metric Results (Actual)
2004
2004
2005
2005
2006
2006
2007
2007
2008
2008
2009
2009
2010
2010
2011
2011

(Note: Ensure that the above table documents performance goals and measures for all years in the Summary of Spending Table. Performance goals must be established for each year. Measure of the performance must be shown for all years that the investment is operational.)

For NOAA facilities projects, approved Corporate Performance Measures will be used for compliance with Table 1 above.

All new IT investments initiated for FY 2005 and beyond must use Table 2 and are required to use the Federal Enterprise Architecture (FEA) Performance Reference Model (PRM). Please use Table 2 and the PRM to identify the performance information pertaining to this major IT investment. Map all Measurement Indicators to the corresponding "Measurement Area" and "Measurement Grouping" identified in the PRM. There should be at least one Measurement Indicator for at least four different Measurement Areas (for each fiscal year). The PRM is available at

Performance Information Table 2:
Fiscal Year / Measurement Area / Measurement Grouping / Measurement Indicator / Baseline / Planned Improvement to the Baseline / Actual Results
2006 / Mission & Business Results
2006 / Customer Results
2006 / Processes & Activities
2006 / Technology
2007 / Mission & Business Results
2007 / Customer Results
2007 / Processes & Activities
2007 / Technology
2008 / Mission & Business Results
2008 / Customer Results
2008 / Processes & Activities
2008 / Technology
2009 / Mission & Business Results
2009 / Customer Results
2009 / Processes & Activities
2009 / Technology
2010 / Mission & Business Results
2010 / Customer Results
2010 / Processes & Activities
2010 / Technology
2011 / Mission & Business Results
2011 / Customer Results
2011 / Processes & Activities
2011 / Technology

Section E: Security and Privacy (IT Capital Assets only)