Progress in Improving Project Management at the Department of Energy
2003 Assessment
THE NATIONAL ACADEMIES PRESS
WASHINGTON, D.C.
www.nap.edu
THE NATIONAL ACADEMIES PRESS
500 Fifth Street, N.W. Washington, DC 20001
NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
This study was supported by Contract Number DEAM01-99PO8006 between the U.S. Department of Energy and the National Academy of Sciences. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the authors and do not necessarily reflect the views of the organizations or agencies that provided support for the project.
International Standard Book Number 0-309-09180-2 (book)
International Standard Book Number 0-309-53122-5 (PDF)
Additional copies of this report are available from the
National Academies Press,
500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu
Copyright 2004 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America
THE NATIONAL ACADEMIES
Advisers to the Nation on Science, Engineering, and Medicine
The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering.
The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine.
The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council.
COMMITTEE FOR OVERSIGHT AND ASSESSMENT OF U.S. DEPARTMENT OF ENERGY PROJECT MANAGEMENT
KENNETH F. REINSCHMIDT, Chair,
Texas A&M University, College Station
DON JEFFREY BOSTOCK,
Lockheed Martin Energy Systems (retired), Oak Ridge, Tennessee
DONALD A. BRAND,
Pacific Gas and Electric Company (retired), Novato, California
ALLAN V. BURMAN,
Jefferson Solutions, Washington, D.C.
LLOYD A. DUSCHA, U.S.
Army Corps of Engineers (retired), Reston, Virginia
G. BRIAN ESTES,
Consulting Engineer, Williamsburg, Virginia
DAVID N. FORD,
Texas A&M University, College Station
G. EDWARD GIBSON, JR.,
University of Texas, Austin
THEODORE C. KENNEDY,
BE&K, Inc., Birmingham, Alabama
MICHAEL A. PRICE,
Project Management Institute, Newtown Square, Pennsylvania
Staff
RICHARD G. LITTLE, Director, Board on Infrastructure and the Constructed Environment
MICHAEL D. COHN, Program Officer
DANA CAINES, Financial Associate
PAT WILLIAMS, Senior Project Assistant
BOARD ON INFRASTRUCTURE AND THE CONSTRUCTED ENVIRONMENT
PAUL GILBERT, Chair,
Parsons Brinckerhoff Quade & Douglas, Seattle, Washington
MASSOUD AMIN,
University of Minnesota, Minneapolis
RACHEL DAVIDSON,
Cornell University, Ithaca, New York
REGINALD DesROCHES,
Georgia Institute of Technology, Atlanta
DENNIS DUNNE,
California Department of General Services, Sacramento
PAUL FISSETTE,
University of Massachusetts, Amherst
WILLIAM HANSMIRE,
Parsons Brinckerhoff Quade & Douglas, San Francisco, California
HENRY HATCH,
U.S. Army Corps of Engineers (retired), Oakton, Virginia
AMY HELLING,
Georgia State University, Atlanta
SUE McNEIL,
University of Illinois, Chicago
DEREK PARKER,
Anshen+Allen, San Francisco, California
DOUGLAS SARNO,
The Perspectives Group, Inc., Alexandria, Virginia
HENRY SCHWARTZ, JR.,
Washington University, St. Louis, Missouri
DAVID SKIVEN,
General Motors Corporation, Detroit, Michigan
MICHAEL STEGMAN,
University of North Carolina, Chapel Hill
WILLIAM WALLACE,
Rensselear Polytechnic Institute, Troy, New York
ZOFIA ZAGER,
County of Fairfax, Fairfax, Virginia
CRAIG ZIMRING,
Georgia Institute of Technology, Atlanta
Staff
RICHARD G. LITTLE, Director, Board on Infrastructure and the Constructed Environment
LYNDA L. STANLEY, Executive Director, Federal Facilities Council
MICHAEL D. COHN, Program Officer
DANA CAINES, Financial Associate
PAT WILLIAMS, Senior Project Assistant
Preface
The National Research Council’s Committee for Oversight and Assessment of U.S. Department of Energy Project Management has completed its assigned tasks. It was chartered in 2000 in response to continuing concern in the U.S. Congress over the Department of Energy’s (DOE’s) processes and procedures for managing projects. The chair expresses his appreciation to the committee members for their time, hard work, persistence, and commitment to the interests of DOE and the nation.
In its 3 years of operation, this committee has crisscrossed the country to gain input from DOE and contractor personnel at DOE offices and laboratories, as well as headquarters. The committee has had the cooperation of a wide range of DOE personnel, from the secretary through project directors and support staff in the field. It has also had input from a number of DOE contractors and from the DOE Energy Facilities Contractors’ Group. The committee appreciates the time and effort of these people in providing their perspectives and insights on the issues facing DOE project management and on ways to improve DOE project performance.
The findings and recommendations of the committee in its three annual reports and two interim reports are derived in large part from the candid comments of more than 200 personnel from DOE and its contractors. The committee appreciates particularly the input from the many people in DOE who are committed to improvements in the organization’s project management.
The work of this committee is a continuation of the efforts of the Committee to Assess the Policies and Practices of the Department of Energy to Design, Manage, and Procure Environmental Restoration, Waste Management, and Other
Construction Projects (Phase II committee), and it has used its predecessor’s findings and recommendations as benchmarks for measuring progress. The findings and recommendations in the Phase II report, Improving Project Management in the Department of Energy,1 and the previous annual reports and interim letter reports of this committee continue to be valid. Those previous reports should be read in conjunction with this report to obtain a compete view of the status of DOE’s project management, DOE’s accomplishments, and the problems that still need to be resolved.
This report assesses progress in improving project management at DOE during the past 3 years, which is enough time to effect significant changes in project management. Corporations have done it in less. However, as discussed in this report, DOE has not fully committed to the steps that private corporations have had to take in order to achieve project management excellence. This report recognizes DOE’s accomplishments in promulgating policies and procedures and the problems that remain to be resolved if these policies and procedures are to be implemented. In particular, some senior DOE executives have pointed out that they do not have the time to spend on project management. That may be, and the committee appreciates the competing demands on these executives’ time. But if senior management does not have the time to devote to projects and does not delegate the authority to people who do, then projects are not the core priority at DOE.
This assessment is based on the belief that, for project management improvements to be effective over the long run, project management and project management improvement need a champion reporting directly to the deputy secretary of DOE. Findings and recommendations on this issue go back to the 1999 Phase II report cited above. The prognosis for progress hinges on the premise that unless or until the role of project management champion is identified at a level that demonstrates the will of DOE management to effect significant cultural change, the likelihood that project management improvements will be effective or permanent is slight.
In this report, the committee recognizes the efforts made by DOE project directors and others at various sites to solve project management problems and to handle changes created by resource deficiencies through training, internships, procedure development, and other steps at the field level. Unfortunately, although such actions have positive impacts locally on specific projects, they are too few and too isolated to stimulate widespread change within the DOE culture. Thus, the report notes that even though some process improvements have been accomplished, there is much more to be done to improve project management practices.
In December 2003, after the committee’s work on this report was substantively complete, the deputy secretary confirmed the department’s commitment to improving project management by creating the position of associate deputy secretary, reporting directly to the deputy secretary, with responsibilities for capital acquisition and project management. This action is a substantial step toward addressing the committee’s recommendations in this report and in previous reports that DOE should have a department-wide champion for project management reporting to the deputy secretary. The committee trusts that this initiative by the deputy secretary will help achieve the permanent institutionalization of the improvements in project management made during the period of the committee’s existence and will help ensure additional needed, ongoing improvements.
Kenneth F. Reinschmidt, Chair
Committee for Oversight and Assessment of U.S. Department of Energy Project Management
Acknowledgment of Reviewers
This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report:
Philip R. Clark, Nuclear Corporation (retired),
Angelo Giambusso, Stone & Webster (retired),
Fletcher H. (Bud) Griffis, Polytechnic University,
Henry J. Hatch, U.S. Army Corp of Engineers (retired),
Martha Krebs, U.S. Department of Energy (retired),
Alan Schriesheim, Argonne National Laboratory (retired), and
Richard N. Zare, Stanford University.
Although the reviewers listed have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Charles B. Duke (NAE), Xerox Research and Technology. Appointed by the National Research Council, he was responsible for
Acronyms and Abbreviations
AEP
acquisition execution plan
ANL
Argonne National Laboratory
BCWS
budgeted cost of work scheduled
CD-0
critical decision 0, approval of mission need
CD-1
critical decision 1, approval of system requirements and alternatives
CD-2
critical decision 2, approval of project baseline
CDF
Collider Detector at Fermi Laboratory
CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act
CII
Construction Industry Institute
COO
chief operating officer
COR
contracting officer’s representative
CPI
cost performance index
DoD
U.S. Department of Defense
DOE
U.S. Department of Energy
DUS
dynamic underground stripping
EIR
external independent review
EM
Office of Environmental Management
ESAAB
Energy Systems Acquisition Advisory Board
ES&H
environmental safety and health
EVMS
earned value management system
FFRDC
Federally Funded Research and Development Center
FNAL
Fermi National Accelerator Laboratory
FYNSP
Future Years’ Nuclear Security Plan
GAO
General Accounting Office
GFS&I
government-furnished services and items
ICE
independent cost estimate
ICPP
Integrated Construction Program Plan
ICR
independent cost review
INEEL
Idaho National Engineering and Environmental Laboratory
INTEC
Idaho Nuclear Technology and Engineering Center
IPR
internal project review
IPT
Integrated Project Team
LANL
Los Alamos National Laboratory
LBNL
Lawrence Berkeley National Laboratory
LLNL
Lawrence Livermore National Laboratory
M&O
management and operations
NA-54
NNSA Office of Project Management and Systems Support
NASA
National Aeronautics and Space Administration
NIF
National Ignition Facility
NNSA
National Nuclear Security Administration
OECM
Office of Engineering and Construction Management
OH
Ohio Field Office
OMB
Office of Management and Budget
OMBE
Office of Management and Budget Evaluation
OPC
other project costs
ORNL
Oak Ridge National Laboratory
PA&E
Office of Program Analysis and Evaluation
PARS
Project Assessment and Reporting System
PBC
performance-based contracting
PDRI
Project Definition Rating Index
PEP
Project Execution Plan
PMCDP
Project Management Career Development Program
PMP
Project Management Practices
PMSO
project management support office
PNNL
Pacific Northwest National Laboratory
PSO
Program Secretarial Office
SC
Office of Science
SLAC
Stanford Linear Accelerator Center
SNL
Sandia National Laboratories
SPI
schedule performance index
SRO
Savannah River Operations
SRS
Savannah River Site
TEC
total estimated cost
TPC
total project cost
TYCSP
Ten Year Comprehensive Site Plan
UT
University of Tennessee
VE
value engineering