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THE NATIONAL ACADEMIES
.
Advisers to the Nation on Science, Engineering, and Medicine
Division on Engineering and Physical Sciences
Board on Infrastructure and Constructed Environment
The Honorable Spencer Abraham,
Secretary of Energy
U.S. Department of Energy
1000 Independence Avenue, SW
Washington, DC 20585
500 Fifth Street, NW
Washington, DC 20001
Phone: 202 334 3371
Fax: 202 334 3370
February 27, 2004
Re: Preliminary Assessment of DOE Facility Management and Inliastructure Renewal
Dear Mr. Secretary:
The National Research Council has completed its initial assessment of the
Department of Energy's (DOE's) policies and procedures for managing facilities and
infrastructure renewal and their implementation at selected sites assigned to the National
Nuclear Secunty Administration, Office of Science, and Office of Environmental
Management. The review was ordered by the 107th Congressional Committee of
Conference on Energy and Water Development (House Report ~ 07- ~ 12~.
This preliminary assessment was conducted by the Committee on the Renewal of
Department of Energy Infrastructure under the auspices of the National Research
Council's Board on Infrastructure and the Constructed Environment. The committee's 13
members have expertise in a variety of disciplines, including construction and project
management, corporate and strategic planning, capital programming and budgeting, land
use and site planning, commercial real estate, ant! facility engineering and management.
A list of committee members is appended to this letter. The group incorporates
experience in large-scale strategic planning in the corporate environment, as well as
facility planning and management within government, higher education, and other large
institutions. The committee was established to address the following statement of task:
1. Assess DOE's facilities anct infrastructure management practices and initiatives
and provide recommendations for areas requiring additional focus;
2. Identify or develop "best practice" tools and techniques for DOE real property
asset management in such areas as site planning; maintenance and recapitalization
planning; space and lane! utilization; disposal strategies; information technology
applications; and financing, cost allocation, and cost recovery strategies to improve life-
cycle performance and mission support;
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3. Develop guidelines for deciding when to repair, renovate, or replace DOE
buildings and other facilities based on factors such as agency mission objectives and
return on investment; and
4. Define perfonnance metrics that integrate budget with expected outcomes and
ensure accountability.
This letter report is submitted pursuant to an agreement between DOE and the
National Research Council for an interim report 6 months after initiation of the study.
This interim report is not intended to address all aspects of the committee's assigned
tasks. More specifically, it transmits the committee's preliminary assessment of DOE
facility management policies and procedures and ongoing facility management and
infrastructure renewal activities.
The committee's assessment is based on briefings by DOE headquarters staff in
August 2003 and on site visits conducted in October and November 2003, which included
briefings by DOE and contractor staff at Lawrence Berkeley, Lawrence Livermore, Oak
Ridge, Sandia, and Los Alamos National Laboratories, as well as at the National Nuclear
Security Administration Y-12 site and the Savannah River Site. The committee reviewed
Real Property Asset Management (Order O 430. IB), the DOE-wide Condition
Assessment Survey and Facility ~fonnation Management System database, and site-
specific 10-year plans and facility management tools. The committee appreciates the
cooperation and support of the Of lice of Engineering and Construction Management and
the DOE program offices, site offices, and site contractors referred to above in providing
background information and facilitating the site visits. The committee recognizes that at
most locations DOE and contractor personnel contributed significant time, effort, and
enthusiastic support, thus enabling the committee to address its assigned tasks.
Interim Assessment of DOE Facility Management Policies, Procedures, and
Day-to-Day Practices
In developing its interim assessment, the committee applied seven broad-based
attributes that it believes charactenze the level of maturity and quality of an
organization's policies, procedures, and day-to-day practices for facility management.
These seven attributes are listed below, followed by the committee's initial observations
and assessment.
1. Cultural realization and communication of the strategic role thatfacilities and
infrastructure play in achieving site missions and program objectives.
It has been broadly recognized, both within DOE and among external
stakeholders (e.g., advisory boarcls, contractors, and Congress), that reinvestment in DOE
facilities and infrastructure is generally inadequate to sustain an acceptable level of
performance:
DOE's infrastructure problems and their effect on operations are well known. For
example, DOE noted in its 2000 Strategic Plan that the poor condition of its facilities
adversely impacts the safety, cost, and continuity of research activities and hurts
laboratories' ability to attract and retain highly qualified scientists to work on important
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mission needs. DOE's Inspector General has also reported on the poor condition of the
department's infrastructure, noting that conditions are deteriorating at an "alarming
pace." Facilities in poor condition are costly to maintain and difficult to keep in
regulatory compliance. In a September 2000 report, the Inspector General said that the
deteriorating conditions are causing some Nuclear Weapons Stockpile Stewardship
milestones arid goals to slip, restoration costs to increase, and future nuclear weapons
production work to be at risk. (General Accounting Office, 2003, Major Management
Challenges and Program Risks, Department of Energy, GAO-03-100, p. 25)
Recognition of the strategic importance of facilities anct infrastructure is necessary
to provide the impetus to increase their visibility in operating plans and budgets.
Although DOE's strategic plan (DOE, 2003, Protecting National, Energy, anal Economic
Security with Advanced Science and Technology and Ensuring Environmental Cleanup,
Washington, D.C.: U.S. Department of Energy) states that it should be "providing worId-
class scientific research capacity," an April 2003 report on the Office of Science
laboratory modernization plans indicated that DOE allocates about 0.7 percent of
replacement plant value for maintenance of the science laboratories, as comparer! with
the generally accepted target of 2 percent to 4 percent of replacement plant value (DOE,
2003, Update of the Laboratory Modernization Pearls in the April 2001 Report,
Infrastructure Frontier Report: A Quick Look Survey of the Office of Science Laboratory
Infrastructure). Although the department has begun to acIdress these issues through
policies and procedures such as O 430. IB and the use of department-wide tools (the
Condition Assessment Survey and the Facility formation Management System) to
measure and track maintenance requirements, deferred maintenance, and the need for
recapitalization, a definitive statement regarding the strategic importance of facilities and
infrastructure as a key intermediate objective is absent from the DOE strategic plans or
comparable policy documents.
The committee believes that DOE's efforts to incorporate projected facility needs
and deferrer! maintenance in ~ 0-year comprehensive plans are appropriate, but finds that
the implementation of facility management and infrastructure renewal efforts vanes
widely across programs ant! from site to site. While some programs and sites examined
by the committee recognized facility management problems and took proactive corrective
measures even before O 430. IB was drafted, others are just beginning to develop policies
and procedures to implement the order, and some have not yet initiated meaningful
action. The committee notes that the order was issued September 24, 2003, and while
Al compliance is not required until September 30, 2004, every effort should be made to
expedite the earliest filet compliance with O 430.IB.
2. Shared understanding between headquarters andfield operations thatfacility
and infrastructure management and renewal are linked with site missions in ways
that are clear both to headquarters ant! to field operations.
The committee found that DOE has historically pursued program objectives as a
first priority, a focus that is commendable but that has often resulted in inadequate
Ending for the facilities maintenance and renewal needed to support these ongoing
missions as well as the timely decontamination and demolition of obsolete facilities.
Although most DOE staff and DOE contractors recognize the link between program
3
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mission and facility condition, fending limits and competitive pressure to minimize
overhead costs have led some sites to underfund ffi~fi~Iment of their facility requirements.
In response, the Facilities and Infrastructure Recapitalization Program was
developed to address the backlog of deferred maintenance in the National Nuclear
Security Administration and appears to be working effectively. The program has strong
central direction and is linked to a ~ 0-year comprehensive site plan and 5-year funding
plans. The Facilities and Infrastructure Recapitalization Program is intended to reduce
deferred maintenance to industry norms by 2009 (Office of Management and Budget,
2003, perfonnance evaluation, available online at http://www.whitehouse.gov/omb/
budget/fy2004/pma/facilitiesinfrastructure.pdfl. The committee is concerned, however,
that other DOE program offices do not have similar facility recapitalization programs and
hopes that provisions in the recently deferred energy bill will be reintroduced, leading to
a stable source of Angling for such programs.
A source of predictable, adequate funding is necessary to plan for and implement
facility maintenance and recapitalization to meet DOE's program mission objectives ant!
should be addressed. The committee is also concerned that there are no programs to
adequately address the fills burden of decontamination and demolition of contaminated
excess facilities, such as the Bevatron at Lawrence Berkeley National :Laboratory, Fast
Burst Reactor at Oak Ridge National Laboratory, Van de Graaff accelerator at Los
Alamos National Laboratory, and the Biological Science Building at the National Nuclear
Security Administration Y-12 site a legacy that is not being addressed by the Office of
Environmental Management and that impinges on the sites' functional quality.
3. Clear operationaiguidanceforfield sites that linksfacility management and
infrastructure renewal actions to management 's expectations for achieving
program objectives.
The committee commends DOE for issuing O 430. IB as a comprehensive
description of its expectations for the management of DOE facilities and infrastructure by
DOE site offices and site management and operations contractors. However, the
committee found wide variance in the level of readiness of DOE field of floes to
implement the order. This is probably because the order clescr~bes what is expected but
does not provide direction on how to achieve the desired results. From the committee's
visits, it appears that several sites, Lawrence Livermore and Sandia in particular, have
already integrated major elements contributing to a successfi~l facilities management
program. Other sites have not achieved similar progress. Although the committee
believes that contractors should have some flexibility in implementing O 430.iB, it also
believes that some procedures known to be effective should become standard practice
department-wide. Consistency in implementation of procedures such as condition
assessment and facility planning and management is also needed as a basis for evaluating
performance across the DOE complex. The rollout of O 430. IB has been delegated to
the program offices, and the committee has seen no evidence of a plan for DOE-wide
implementation of O 430.IB.
The committee believes that DOE headquarters shouic} provide implementation
guidelines that incorporate the best practices currently employed at DOE sites and by
other organizations in government and industry. DOE should consider developing a
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facility management manual~ne similar to Project Managementfor Acquisition of
Capital Assets (Manual M 413.3-~), which guides implementation of the program and
project management policy (Order O 413.3) and a training program for facility
managers similar to the Project Management Career Development Program.
4. Consistent integration across programs and sites of corporate goals, site
activities, and the budget process in a manner that balances maintenance ant!
renewal offacilities and infrastructure with the programmatic mission.
The committee observed inconsistency Tom site to site in the integration ot
corporate goals, site activities, and the budget process. Overhead charges seem to vary
from site to site, with one site assessing a fee for the space assigned to a program and
another assessing a fee as a percentage of the payroll costs. The committee believes that
of the two approaches, facility charges based on assigned space are more likely to
promote efficient facility management decisions; however, either approach could be
adjusted to adequately fund facility and infrastructure requirements. On the basis of the
apparent level of under~nvestment in DOE facilities and infrastructure as observed by the
committee, an appropriate balance has generally not been achieved.
5. Formal structures to develop and implement corporate best practices in facility
management and to facilitate the transfer of lessons [earned among programs and
sites.
As noted above, the committee has observed examples of highly effective facility
management and infrastructure renewal at some DOE sites. Congress has authorized
pilot projects to provide models for improving DOE facilities and infrastructure. The
pilot program on site planning and facility maintenance management conclucted by
Lawrence Livermore National Laboratory is one example. The committee believes that
DOE should have a rigorous program to take full advantage of opportunities to transfer
expertise and the application of effective practices and tools to all sites. The size of the
DOE complex provides a unique opportunity to identify and apply at all sites the best of
the best solutions. Common practices applied deparDnent-wide may provide an
opportunity to leverage DOE's size for more cost-effective procurement of facility
maintenance and capital renewal.
The committee learned of informal efforts at some DOE sites to share lessons
learned and best practices, and there was also some indication of infrequent meetings of
facility directors within program offices. However, there was no indication of a formal
process to identify lessons learned and to facilitate the adoption of best practices
department-wide, a process that the committee believes could return large dividends for a
modest investment. The committee notes the success of the excellent Web-basecl
lessons-learned programs for environmental safety and health operations at DOE sites
and believes that facility management and infrastructure renewal could benefit from a
slm1 ar program.
DOE should take a collaborative approach across its sites and programs to
recognize best practices and principles and to promote their adoption at all levels. The
committee observed that DOE sites have a culture that values independence, which when
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coupled with competition among the sites seems to diminish enthusiasm for collaboration
and sharing knowledge. The committee believes that DOE could also benefit from
benchmarking its programs for facility management and infrastructure renewal across
DOE sites and programs and also benchmarking against the performance of similar
programs in other federal agencies ant! in industry.
6. Performance metrics arc! indicators that use consistent and accurate data to
measure meaningful outcomes department-wide.
The committee is impressed by the robustness of the Condition Assessment
Survey and the Facility Infonnation Management System and by the ability of some DOE
sites to integrate these department-wide systems with each site's facility management
systems. However, the committee is concerned about the effectiveness of the quality
control system for condition assessment and data collection in ensuring the accurate and
consistent application of criteria across the complex. The committee is also concerned
about DOE's reliance on the Asset Utilization Index and the Asset Condition Index to
determine facility management performance, because the committee believes that both
indices oversimplify the parameters of effective facility stewardship. Metrics are needed
that show how the investments in DOE facilities support program objectives, as well as
address the cleferred maintenance backlog plus requirements for modernization, plant
adaptation, and compliance with regulatory requirements.
More robust metrics are also needed to assess management of the elimination of
excess facilities. Current metrics track only the floor area of facilities demolished
without taking into account the level of contamination, the impact on the site' or the
impact on the overall program mission. An apparent result has been the demolition of
excess facilities that present little risk' rather than prioritizing and removal of such
facilities on the basis of their impact on the program objectives and the site. Although it
generally supports linking the demolition of excess facilities to new construction, the
committee believes that effective elimination of excess property is focused on achieving
the optimal space required for meeting overall DOE program office or departmental
objectives.
7. Open communication channels, both vertical and horizontal, to convey
guidance and recluce feedback time.
Facility management and infrastructure renewal of DOE sites are controlled by
the site management and operations contractors. At most of the sites visited by the
committee, the contractors' senior managers were actively involved and facility issues
were integrated into management procedures. At some sites, communication includes!
active engagement with program directors and scientists to ensure an appreciation of the
strategic nature of the facilities and the infrastructure. The involvement of personnel at
all levels should be encouraged across the DOE complex.
DOE oversight of contractor performance is undertaken by site offices
communicating directly with and accountable to DOE headquarters. The committee
observed a generally high level of partnering and communication between the facilities'
contractor personnel and DOE site office personnel. The committee believes that such
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close interactions are conducive to efficient operations so long as the roles and
responsibilities of the owner and contractor are clearly understood. DOE site office
personnel assigned to managing facilities and infrastructure are responsible for setting
objectives and providing the means for the contractor to carry them out. The contractor is
responsible for ensuring that the owner's objectives for the site are achieved.
Summary Comments
The success of any organization depends on the quality of its leadership at all
levels. The committee believes that~success in DOE depends on a shared vision and
continuous, consistent leadership Tom DOE headquarters, DOE site offices, and site
management and operations contractors. To create an organization that demonstrates the
attributes of maturity and quality in facility management, DOE will need more than
written policies. It will have to transform policies into a culture that recognizes the value
of facilities and infrastructure to DOE missions. This change in culture will be achieved
with excellence in implementing the seven attributes discussed above.
~ summary, the level of recognition of the importance of facility stewardship ant!
the synergy between the quality of facilities and the achievement of program objectives
are inconsistent across DOE program offices and sites. This disparity is manifested in the
level of intending and passion for facility-or~entec! programs ant} the planning and
managing of facilities for current and future program requirements. The committee's
initial assessment is that DOE has issued policies that if adequately and consistently
supported by meaningful practices and procedures will improve the quality of facility
management and will lead to better allocation of resources for the effective support of
DOE's missions. Successful implementation will require timely and effective leaclership,
communication, and guidance from headquarters, site offices, and management and
operations contractors to ensure consistent stewardship of facilities in DOE. As it
continues its work toward developing its final report, the committee will address
opportunities and methods to facilitate implementation of improved DOE policies ant!
procedures consistently across DOE programs and sites.
The committee appreciates this opportunity to be of service to DOE and looks
forward to assisting the department in its continuing efforts to improve facility
management and infrastructure renewal programs.
Respectfully submitted,
James M. Braus, Chair
Committee on the Renewal of
Department of Energy infrastructure
7
Representative terms from entire chapter:
infrastructure renewal
