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Cost Estimation

Implementing the Triad affects the way cost estimation is performed.

The Triad approach provides project flexibility through dynamic work strategies. Consequently the exact scope of field activities will not be completely pre-specified in Triad-based work plans. This fact complicates programmatic cost estimation for individual characterization and remediation activities.

Cost estimation is one product of the Triad systematic planning process. The systematic planning process is described in greater detail in the section entitled Systematic Planning. The focal point of systematic planning is the development and maintenance of a conceptual site model (CSM). The CSM performs several important functions for cost estimation. The CSM describes site conditions as they are most likely to exist, based on current site knowledge. As such, the CSM is the foundation for "best estimate" cost numbers for all site-related characterization and remediation activities. However, the CSM also identifies the uncertainty associated with site understanding. Uncertainty in the CSM is directly tied to uncertainty in cost estimation (e.g., What volume of soil is contaminated above cleanup guidelines and so will require remediation? How will contaminated groundwater respond to alternative remedial actions?). CSM uncertainty evaluation directly supports the development of contingency plans and determining their cost implications. The CSM provides the basis for designing data collection programs to reduce decision-making uncertainty if necessary. That includes data collectin programs to better refine cost estimates where the associated cost estimate uncertainty is unacceptable.

Cost estimation in support of Triad programs will produce best estimates of expected costs, just as a more traditional approach would. However, Triad cost estimation should also provide upper bounds on what the potential costs might be for proposed activities based on a contingency analysis of the uncertainties present in the CSM. For example, the design of an excavation to address soil contamination may estimate that 5,000 cubic yards of soil will most likely require removal to meet cleanup objectives. An analysis of the uncertainty associated with those volume estimates (which are presumably based on historical data sets) might determine that the removal of as much as 30,000 cubic yards of soil could be required to complete the task.

Upper bound calculations cap project cost uncertainties for specific Triad-based activities. Upper bound cost calculations are important for selecting the appropriate contractual vehicle for service procurement and for determining whether the level of cost uncertainty is acceptable. Contractual vehicles will be discussed in more detail later in this section. Relatively small project cost and scope uncertainties lend themselves to fixed price contracts. Relatively large project cost and scope uncertainties may make fixed price contracts undesirable. Project cost and scope uncertainties that are too large to be programmatically comfortable may indicate the need for additional data collection activities to reduce scope and cost uncertainty to acceptable levels prior to finalizing project plans.

Brownfields sites are often good examples of unacceptable cost uncertainty. For many of these sites it is the uncertainty associated with environmental liabilities that prevent their redevelopment, not the known extent of contamination problems. In such cases, Triad-based data collection programs can be designed to cost-effectively reduce liability (and consequently cost) uncertainty to levels that allow local authorities and/or private developers to confidently make economically and financially viable reuse decisions.

Contingency planning is tightly linked to cost estimation under the Triad. Contingency planning identifies alternative project outcomes based on an analysis of the uncertainty associated with the CSM, evaluates the implications of those outcomes, and develops plans for addressing those outcomes if they should occur. A contingency may be as simple as requiring additional sampling or different analytical methods for particular samples based on data collection results. It may be as complicated as switching remediation strategies based on site conditions that are encountered while work is underway. Cost estimation for individual contingencies contributes to the calculation of upper bound cost estimates for a project as a whole.

The uncertainty presented by upper bound cost estimates may be unacceptable from a program management perspective. In these cases, additional data collection may be warranted to control cost uncertainty before project work proceeds. An example for soil or sediment contamination is remediation cost uncertainty produced by poorly defined contaminated volume estimates. Triad-based data collection programs can be particularly effective at filling this kind of data gap since contaminants of concern and action levels are usually well-defined by this stage of the process and decision-making is yes-no (i.e., either a location contains contaminants above criteria or not). In this case, data collection can be designed with a volume uncertainty goal in mind, and proceed until that goal is achieved.

Demonstrations of method applicability can also play a role in sharpening cost estimates for Triad-based activities. The primary goals of demonstrations of method applicability are to document measurement technology performance and fine-tune standard operating procedures to match site-specific conditions. A related product, however, is much better information about the site-specific costs that would be expected from a full-scale deployment of a particular technology at a site. These demonstrations can also be important for determining technology-specific deployment details that would feed a later request for proposals (RFP).

Triad-based cost estimation is best done through unitized project costing. Unitized cost estimation identifies costs for logical units of effort (e.g., the per foot cost of direct push sample collection, or the per acre cost of non-intrusive geophysical surveys). Elemental unit cost estimates (e.g., per sample collection or analytical costs) can be aggregated into more complex units (e.g., the cost of closure sampling for each final status survey unit at a site). Costs may be unitized by time (costs for a mobile laboratory per day), by function (costs per sample), or by activity (costs per cubic yard of soil that is excavated, shipped, and disposed). Costs that are unitized by time often also include a minimum production rate expectation (e.g., costs of a gamma walkover survey per day, assuming a scan rate of at least two acres per day).

The way unitized costs are organized into more complex aggregates will be site and activity-specific. Aggregation should reflect the way activities at the site are expected to be organized. They will be tightly linked to the CSM for the site, and, as with cost estimation itself, are a product of the systematic planning process. Because the CSM is constantly evolving for a site as more is learned about site conditions, unitized costs and associated cost estimates will need to be monitored and periodically updated as well.

For contingency purposes, unitized rates may be required for several different options for any particular activity. For example, the preferred option for obtaining subsurface soil samples may be a direct-push technology, but there also may be concerns about direct-push refusal or sample loss under site-specific conditions. Those concerns would warrant having alternative options available if necessary, such as a hollow stem auger or sonic drilling capabilities. The unitized rates for those systems, however, would be different and would need to be accounted for.

Related to contingency planning, unitized rates should take into account costs for extra capacity, if required. The unitized rate for a fixed, well-defined piece of work may well be significantly less than a unitized rate that includes stand-by options that need to be available because of scope uncertainties but not necessarily utilized. This can be an important consideration for Triad-based programs if there is significant uncertainty going into a project about the expected performance of particular components or the ultimate scope of work, and there is a need to have stand-by options available. Developing unitized rates that internalize contingency costs for competing alternatives can be an effective way to provide a cost-basis for comparing alternatives when uncertainty exists about component performance or ultimate work scope.

In addition to the effects of contingency planning, there are other factors important to consider for Triad cost estimation, particularly when estimating the costs associated with real-time measurement systems. Field-deployable real-time measurement systems typically are cheaper on a per measurement or analysis basis than their standard, fixed-laboratory analytical counterparts. However, care must be taken in the cost estimation process to obtain accurate and complete unitized cost estimates. Factors to consider include:

• QA/QC Requirements. Field deployable method costs are usually estimated on a time basis, with per sample costs dependent on throughput. The level of QA/QC required affects per sample costs in two ways. Higher levels of QA/QC reduce sample throughput, which will increase per sample costs. Higher levels of QA/QC also come with their own associated costs, which are passed along on a per sample basis, further elevating per sample costs. For most standard fixed-laboratory methods, QA/QC is standardized and its costs already captured in quoted sample analysis costs. QA/QC requirements for field deployable methods are not standardized. For this reason it is important for cost estimation that the level of required analytical QA/QC be identified and factored into the cost estimation process.



• Vendor/Service Provider Participation. Some level of vendor/service provider participation while vetting technologies as part of the systematic planning process can be extremely useful for cost estimation purposes. For some innovative field deployable methods, use may not be sufficiently wide-spread so that generic cost numbers are available. Potential vendors or service providers may be the only source of this information. Even for those methods that are more commonly available, site-specific method modification requirements may result in site-specific unitized costs estimates. Vendors or service providers may be the best resource for generating those numbers. Vendors may also identify field activity sequencing issues that have logistical and cost implications.



• Demonstrations of Method Applicability. For some field-deployable methods there may be the need for investments in gaining regulatory acceptance for the technology. An example would be the need for a demonstration of method applicability study at a site. If required, those costs should be included in the cost estimation process when considering alternative real-time measurement techniques.

Application of a Triad approach to hazardous waste site characterization and remediation is expected to result in significantly lower life-cycle project costs, compressed schedules, and improved decision-making. At times this may be at the expense of higher initial costs associated with the Triad's systematic planning process and technology acceptance needs.

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