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~2 DOE Order O 413.3 and the Program and Project Management Manual INTRODUCTION The committee's 2001 assessment (NRC, 2001) noted the issuance of O 413.3 and drafts of the Program and Project Management (PPM) manual and Project Management Practices (PMP) (DOE, 2000a, 2000b, 2002) and indicated that the documents were in the process of being revised. The order defines what is required for DOE project management, while the PPM defines how these requirements are to be achieved. The PMP is intended as commentary and examples of good project management. The order has not been revised, and the committee believes that it is appropriate and necessary for the order to provide consistent direction for DOE project management. A revised draft PPM was issued in February 2002. In March 2002, OECM conducted a review of the Order and the PPM as part of the annual DOE project management workshop and later conducted reviews at two field locations. OECM has issued revised PPM drafts and is continuing to solicit comments. OECM has decided not to reissue the PMP in printed form but to make it and others like it available on CD-ROM and the Internet. The committee fully supports this approach and believes it will create a quicker and more comprehensive outflow of information of value to those execut- ing projects. ANALYSIS OF CURRENT STATUS AND DIRECTION Members of the committee attended the PPM reviews at the project manage- ment workshop and sought additional input on acceptance of the policies and 15

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16 PROGRESS IN IMPROVING PROJECT MANAGEMENT AT THE DOE procedures from both government and contractor personnel who participated in committee meetings. (See Appendix C for a list of people participating in committee discussions.) The committee also had the opportunity to review the February, June, and August 2002 PPM drafts, which contained revisions to the requirements, directions, and guidance for program and project management. The drafts include successive improvements of the document released in October 2000 and generally respond to the recommendations in the committee's 2001 assessment. The revised format and organization make it a clearer and more usable document. Roles, responsibilities, limits of authority, and required con- trols and procedures are better defined but need to be reviewed to assure consis- tency with O 413.3. The PPM also needs to provide a well-defined procedure for tailoring requirements for small, routine, relatively simple projects. The docu- ment has been strengthened in some areas, such as project planning, but addi- tional work is needed in other areas, such as risk management. For the most part, unnecessary material has been removed. During the course of visits to various DOE offices and laboratories, the committee heard comments from several DOE and contractor personnel to the effect that the PPM and O 413.3 were onerous in requiring various submittals and approvals for small and uncomplicated projects. The committee believes that the generic requirements are applicable to all projects exceeding $5 million, as required by O 413.3, and that tailoring the extent and detail of submittals can accommodate the differences in the character, size, and complexity of projects. Also, raising the threshold may be warranted in certain cases for routine projects. Fundamentally, this threshold is set by the appropriate acquisition executive (e.g., the deputy secretary) to achieve the goals of the department. The com- mittee observes that industry owners subscribe to a similar philosophy, by which executive management sets the thresholds for decisions and tailors reporting requirements to the characteristics of the projects and the needs of the organiza- tion (NRC, 2002~. Department-wide Consistency The idea of incorporating O 413.3 into the PPM was discussed at the review sessions. The committee views this idea with alarm, noting that an order is a policy document while a manual is an implementation document. The committee believes that both are necessary, but that they should remain separate documents. The committee noted in its 2001 assessment that consistent performance of DOE projects requires a consistent department-wide approach to project management and project oversight (NRC, 2001~. The 2001 government/industry forum on the owner' s role demonstrated that companies with a consistently high level of project performance had enterprise-wide systems to define project management tools and processes (NRC, 2002~. The committee supports the concept of defining the general principles of what is expected from DOE project managers in the depart-

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DOE ORDER O 413.3 AND THE PROGRAM AND PROJECT MANAGEMENT MANUAL 17 mental order and defining the detailed processes for achieving those objectives in the PPM. The manual should reference the Order and identify minimum process requirements, but it can be flexible in identifying decisions and options that can be addressed in the field. To accomplish the desired project management consis- tency, the Order and the manual need to be closely coordinated and carry com- mensurate authority. In summary, the committee endorses the concept and the approach of the revised PPM. Although it is understood that the document is still a work-in- progress and subject to a formal review process that may require further revisions, the committee believes that the current draft should be issued immediately for interim compliance. FINDINGS AND RECOMMENDATIONS Finding: DOE and DOE contractor personnel expressed some concern that requirements in DOE Order O 413.3 and drafts of the Program and Project Management (PPM) manual and Project Management Practices (PMP) result in excessive and unnecessary effort and cost for projects of less than $20 million; they believed these requirements should not apply to environmental projects and that front-end planning documentation and review requirements are excessive. The committee does not agree with their views but it does believe that require- ments should be tailored to the complexity of the project. Recommendation: DOE should resist efforts that reduce requirements for front- end planning and the critical decision-review process. This resistance is neces- sary to ensure that the process is uniform and that projects selected for execution are consistent with DOE's strategic plan. The requirements should apply to all projects over $5 million and be tailored to the complexity of the project. Finding: The committee has observed examples of both effective and ineffective project management practices at DOE. Order O 413.3 is intended to create a consistent department-wide definition of what is required of DOE project man- agers. OECM is revising the PPM to better define the project management practices to be used to achieve the objectives of O 413.3. The committee believes that the Order is beginning to increase the level of consistency throughout the department. It also believes that a document to define the minimum actions required to implement O 413.3 is necessary. This document needs to carry commensurate authority and be coordinated to develop a consistent DOE approach to project management and project oversight. Recommendation: OECM should accelerate development of the PPM and should issue the current draft immediately to guide interim compliance with

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18 PROGRESS IN IMPROVING PROJECT MANAGEMENT AT THE DOE O 413.3. The Order and the manual should be separate but coordinated docu- ments to create a consistent DOE approach to project management. The Order should continue to define what is required and remain relatively unchanged over time. The manual should continue to be a separate document to specify minimum requirements for compliance to O 413.3. REFERENCES DOE (Department of Energy). 2000a. Program and Project Management for the Acquisition of Capital Assets (Order 0413.3). Washington, D.C.: Department of Energy. DOE. 2000b. Project Management Practices. Washington, D.C.: Department of Energy. DOE. 2002. Program and Project Management. Draft. Washington, D.C.: Department of Energy. NRC (National Research Council). 2001. Progress in Improving Project Management at the Depart- ment of Energy, 2001 Assessment. Washington, D.C.: National Academy Press. NRC. 2002. Proceedings of the Government/Industry Forum: The Owner's Role in Project Manage- ment and Preproject Planning. Washington, D.C.: National Academy Press.