National Oceanic and Atmospheric Administration b. b. C. d. c. f. g. Economic Analysis Batteries. Booz Allen used a cost of $250,000 for an uninterrupted power supply consisting of wet cell batteries providing 750 KVA of power for 30 minutes to the raised floor ADP space. Note that only the ADP space was used to determine emergency power requirements, based on the assumption used by industry that if commercial power were interrupted for an extended period of time (for example, as the result of a natural disaster or civil disturbance), the non-essential staff would not be working, and only the ADP functions, which have national and world-wide customers, would need to operate. Planning and Programming. This represents the effort of NOAA or its contractor during the initial planning phases of the project, to further define requirements, space and equipment needs, adjacency requirements, and building configurations. The effort was estimated at 6 percent of the construction cost, and is shown, equally divided, in FY 1996 and FY 1997. Building Design. The fee for architectural and engineering design is limited to 6 percent of construction costs under federal regulations. This amount is shown in FY 1997, the year the design contract would be signed, and is equal to 6 percent of the total construction (1995 costs). Interior Design. This effort is required to design the interior building spaces and the systems furniture layout, and select the interior finishes. It is separate from the design and engineering of the building shell, and would be awarded separately by NOAA. It is estimated to be 2 percent of the total construction cost. Project Management. This represents the effort of NOAA or its contractor during construction of the building, in oversight and coordination of the many tasks which must completed on time. The effort is estimated to be 6 percent of total construction, divided equally, into FY 1998 and FY 1999. Construction Costs. This is shown in FY 1998, the year the construction contract would be awarded. It uses the cost estimate in 1995 dollars, escalated to 1998. Security. Since no design requirements had been identified, Booz Allen included an estimate of $500,000 in the construction cost estimate for installation of a security system. This value was confirmed by NOAA's security office. All costs were escalated at 3 percent per year to the year in which they will occur. Booz Allen & Hamilton Inc. Page 2-5 National Oceanic and Atmospheric Administration 3. ANALYSIS 3.1 Present Value Economic Analysis The costs associated with Scenario One are shown in Exhibit 2.1, and the Present Value of the Scenario is $97,555,684. The costs shown in Exhibit 2.1 are escalated by 3.0 percent per year to the year in which they appear. For example, the construction cost estimate was calculated based on 1995 cost data, but was escalated to 1998, the estimated year in which a construction contract would have to be awarded in order to have the building completed and ready for occupancy by FY 2000. All costs were discounted at the rate of 7.1 percent, to adjust them to the present value. This is the discount rate used by GSA. The sequencing of these budget items is based on a design period of one year and a construction period of 24 months. As noted, occupancy of the new building is planned to coincide with the expiration of the lease for the WWB, in April 2000. The life cycle costs are shown in Exhibit 2.1. Most of the costs would be concentrated in the early years of the project, primarily as a result of the appropriation for design and construction. Total life cycle cost is $229,393,000. Scenario One would require that Congress approve appropriations for the design, construction and supervision of the Center. Design costs are estimated to be $3.8 million in 1995. The total amount for building design, interior design, construction, equipment, furniture and accessories, telecommunications, and relocation is estimated to be $86.9 million in 1998, and would be included in NOAA's portion of the Department of Commerce FY 1997 budget. The cost for project management, estimated to be $3.8 million in 1995, would be added to NOAA's annual budgets for FY 98 and FY 99, as shown in Exhibit 2.1. Funding for furnishings in the amount of $6.8 million would be needed in FY 1999. This is based on NOAA's estimated cost of $4,500 per work station for the 1397 building population, in 1995 dollars, and are included above. The costs associated with Scenario One are shown in Exhibit 2.1, and graphed in Figure 2-1. The effect of the one-time appropriation can be seen in the graph. Booz Allen & Hamilion Inc. Page 2-6 Beginning in FY 2000, NOAA would recognize only maintenance, electricity and security costs. Maintenance costs were estimated to be $4.15 per square foot, an industry standard provided by project developers. Electricity costs were estimated to be $2.50 per square foot per year. This figure was obtained from an analysis of current NOAA electricity costs in the facilities presently occupied which are intended to relocate to the new Center. The 5 percent discount received from PEPCO was applied to the electricity costs. As a result, Life cycle savings would be $634,134. Security costs were based on a cost of $500,000 in FY 1995, provided by NOAA. All these costs were escalated by 3 percent per year, to yield the cost in each of the years studied. At the time this analysis was prepared, in 1995, the completion of the Operations and Research Center was being planned to coincide with the expiration of the lease on the World Weather Building in April 2000. Thus, NOAA had a five-year time period in which orderly, systematic planning needs to occur. Since the project is in the very early planning phase, it is not reasonable to consider the detailed level of events which will occur two or more years from the present. Thus, the schedule shows major events and sequence dependencies. Booz Allen & Hamilton Inc. 45-126 97-9 Page 2-7 |