Idaho National Laboratory Business Systems and Pro Page: 45 of 56
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" Eliminate the application of Common Support on Common Support, which raises issues on
compliance with Cost Accounting Standards (CAS) 410(a)1. Our recommendation is to consider
eliminating the application to all indirect cost pools and applying to final cost objectives only.
" Service centers - review to ensure that only two service centers are needed, as it seems likely this is
too few. Moving all of the service centers to G&A may not drive the appropriate behavior since the
possibility of misuse is greater because the client/user is not charged directly for the services they
receive (i.e., this breaks the 'user pays' philosophy). Our experience is that service centers, when
deemed appropriate, drive proper decision making and resource allocation decisions.
" Standard Labor Rates - although we understand how the proposed model works, and the benefit of
going to such great lengths to appease internal customers, the model is overly complex by attempting
to incorporate over 200 work disciplines. We also have some concern as to whether the grouping is
compliant with Cost Accounting Standards (CAS) 418-50. We recommend implementation be put on
hold until a simple and manageable model is agreed to by the EC, with the understanding that there
will be winners and losers in the process but changes get incorporated into the planning process to
mitigate current year impacts.
" Variance policy - consider establishing a policy where acceptable variance thresholds are established
for organizational management and service center pools, with lab level pools managed in aggregate
based on materiality to final cost objective level. In conjunction, change the management of
overheads from a total 'revenue' view to having each pool owner responsible for cost, recovery, and
variance which has the result of increasing coordination and integration across organizations.
Currently the pools owners are only responsible for cost, which can lead to fluctuating rates, and
managing from a total revenue standpoint is complicated by recycled overheads.
" Review the current Space chargeback model as it does not appear the outcome of the current model
incentivizes effective space management. Currently only office space is charged direct to the
organizations with Lab space managed centrally in G&A (excluding nuclear space).
" Consider implementing an overhead 'stack' view that eliminates recycled overheads with a focus on
net recovery from Final Cost Objectives. This view will aid in financial reporting, decision making,
modeling, and will increase transparency to both the EC and the DOE Site Office.
" Review current pricing strategy. Based on FY11 Budget Officers data, the INL is the cheapest Lab for
Subcontracts and amongst the lowest for Materials. A shift of burdens to 3rd party would provide
flexibility within the Labor Multiplier for strategic investments while keeping the Lab competitive on
3'd party cost.
We strongly encourage the Lab to take its time in implementing any further revisions to the cost
model with the goal in mind that they will live with the next version for a period of time to gain much
needed continuity and consistency.
BUSINESS SYSTEMS
The INL's system strategy has been to implement the "best of breed" system for the particular
business area. This strategy has seen INL implement a mix of commercial off the shelf (COTS) solutions
(PeopleSoft, Oracle, and Asset Suite) and homegrown solutions. The main advantage of this strategy is
the functionality of each system is the best fit for the business process. The main disadvantage is the loss
of integration that would occur if the systems were all on the same software package. We met with
several IM and Business professionals and in our discussions several themes emerged in the business
systems area.35
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Hensley, Susan. Idaho National Laboratory Business Systems and Pro, report, June 1, 2013; Idaho Falls, Idaho. (https://digital.library.unt.edu/ark:/67531/metadc832781/m1/45/: accessed March 28, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.