Chapter 1
General Policy and Responsibilities

Approved by Douglas Fleming
Revised 06/10

Work Process M. Cost-Benefit Analysis

Conduct a cost-benefit analysis. What will implementation cost? What are the benefits? How will the new or changed program/policy be implemented? Who are the groups that will be affected? What specific support system (IT, etc.) is needed?

  1. Cost to implement: Estimate time to perform the new or revised program requirements and then use an “average” charge-out rate for all staff time. Consider the following:
    1. Training: What training will be needed? Will periodic retraining be necessary? How many staff members must be trained? How long will the training take?
    2. Tools: Will new IT tools be needed or will existing tools need to be modified? Will new forms be needed? What are the estimated costs?
    3. Procedures: What effort will be needed to develop new Laboratory-level procedure(s)? Will modification be needed to working level procedures?
    4. LBNL staff time: What actions will be necessary by the users, how long will those actions take, how often will those actions be necessary, and how many staff members will be involved?
    5. Will new staff be needed to execute portions of the process? Will additional SMEs be needed to support the execution of the program requirements? Will additional time for existing SMEs be allocated to support the new or revised program? What duties need to be transferred, and how will those duties be performed?
    6. Other costs: For example, will new or modified postings or warning signs be needed?
  2.  Benefit to Lab: Consider:
    1. Compliance
    2. Safety or environmental protection benefit
    3. Avoidance of fines and penalties
    4. Avoidance of cost associated with shutdowns

Cost-Benefit Analysis Guidance

Cost Estimation

There are various categories of cost. These categories are dependent on the type of requirement, the complexity of the requirement, and the method chosen for implementing the requirement. The following tables provide some suggested areas to consider in making cost estimates for implementation. These are not intended to be all inclusive nor the minimum necessary in all cases.


TRAINING

Type of training

Choices include:

  • Classroom
  • Computer-based
  • Reading assignment
  • Briefing
  • On-the-Job
  • One-on-one consulting

NOTE: More than one type of training may be appropriate in some cases. For example, both classroom training and an OJT briefing prior to performing work.

Duration of training

How long: in hours: will the training take an individual to complete?

Number of staff to be trained

How many staff will need the training?  Who else will need training?  Will managers of staff need training?

Will there be periodic retraining?

How often will training be needed?

 


Tools and Aids

What type of tools will be needed to support implementation?

Consider:

  • Manual forms
  • Automated forms
  • Computer software (e.g., CMS)
  • Data bases
  • Ongoing collection & reporting of data

Estimated time to develop tool(s).

How many hours will be needed to develop the tools identified?  Cost of off-the-shelf software (if available). Cost to modify existing forms, software, etc.

How many staff members will need to use the tool?

 

Estimated time for a staff member to use the tool?

How long (in hours) will it take for a staff member to use the tool? 

How often will the staff member need to use the tool(s)?

How many times in a year would a staff member working in this area need to use the form, tools, software, etc.?

What is the cost of maintaining the tool(s)?

Estimate hours to maintain tools in subsequent years. Included cost of software modifications and bug fixes.

 

Procedures

Number of working-level procedures to be developed or modified.

 

Time to modify or develop each.

 

Is there a required review or modification frequency?

 

 

Postings and signage Are any posting needed or do current postings need to be modified?

How many postings are there or do there need to be?

number

Can they be purchased?

Cost of purchase.

Do they need to be designed and printed?

Time in hours:

  • Designing posting
  • Printing

How long will it take to post?

Can it be done as part of another regular duty (inspection or survey)?  Will it require a special campaign?

Do the postings require regular upkeep, maintenance, or revision?

 

 

Besides the areas listed above, are any other actions needed by the staff who must implement this requirement/program?  If so, what are they?  How long will it take?  How often will it be necessary?  How many staff members may be affected?

Staffing Needs: Will additional staff be needed to implement?

How many staff members will be needed?

Types of staff:

  • Full-time
  • Part-time
  • Temporary
  • Consultants

What types of staff are needed?
  • ES&H professionals
  • Administrative in line organization
  • Data base administrators
  • Programmers
  • Other?

Will this require additional time from staff? If so, will it impact time available for other tasks?

 

Benefits

Consider the risks that were identified as part of determining the Significance Level of this program. How will the selected approach change, control, mitigate, or eliminate those risks?  Prepare a brief narrative that describes how the risks associated with this program will change. Use the following table to guide your thinking.

Category of Benefit

Describe how the risk is reduced. How will the changed or new program achieve the following benefits?

Compliance
  • Increased compliance with requirements (fewer assessment findings)

Incidents and accidents
  • Reduced likelihood of occurrence
  • Less severe incidents and accidents
  • Prevention of accidents

Injuries or illnesses
  • Reduced likelihood or occurrence
  • Less severe
  • Prevention of injuries or illnesses

Spills and releases
  • Reduced likelihood of occurrence
  • Less severe spills and releases
  • Spill prevention

Cost avoidance
  • Reduced or no fines and penalties
  • Fewer or no work stoppages
  • Reduced or no facility shutdowns

Perception
  • Potential increase in community awareness of safety programs
  • Reduced incidents where ORPS reporting would be necessary
  • Addresses an issue that may be perceived as unsafe.

 Summary

Prepare a table that summarizes and contrasts the costs and the benefits. Make a final statement regarding how the benefits justify the cost.

Cost Summary

Benefit Summary

List each applicable category of cost and provide the time (or funding) necessary to accomplish. For example:

  • Training will require 500 staff hours in classroom.
  • New postings will cost $3000 to procure and 100 staff hours to post.
  • All new xyz materials brought on the LBNL site must be entered into a data base requiring 10 minutes per entry (estimated 450 such materials are brought on site each year) totaling 75 hours per year.
  • All new xyz equipment procured for use by LBNL staff must be inspected before use or installation. Each inspection requires 45 minutes (annual cost 450 hours). Existing xyz equipment must be inspected prior to 12/31/2011 through use of a consulting contract of $150,000.

List each applicable category of benefit and how the risk associated with that benefit will be reduced, controlled, mitigated, or eliminated.

  • The number of noncompliant conditions in this area will be reduced to near zero resulting in fewer findings and corrective actions.
  • The likelihood of injuries associated with working on ladders will be reduced by . . . .
  • The severity of ergonomic injuries associated with working on computers will be reduced minimizing lost time due to such injuries.
  • The potential for a spill reaching the environment beyond the LBNL site boundary will be eliminated.
  • This change should reduce the number of work stoppages by 25% because of increased availability of IH staff.

Final Statement: This program change will result in improved compliance at the working level reducing audit findings and the subsequent corrective actions. In addition, injuries associated with this type of activity will be fewer and when they do occur likely less sever. The cost of 2500 hours and $75,000 for software will be offset within the first two years by the reduction of findings and decreased injuries.

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