Nuclear Waste:

Action Needed to Improve Accountability and Management of DOE's Major Cleanup Projects

GAO-08-1081: Published: Sep 26, 2008. Publicly Released: Sep 26, 2008.

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The Department of Energy (DOE) spends billions of dollars annually to clean up nuclear wastes at sites that produced nuclear weapons. Cleanup projects decontaminate and demolish buildings, remove and dispose of contaminated soil, treat contaminated groundwater, and stabilize and dispose of solid and liquid radioactive wastes. Ten of these projects meet or nearly meet DOE's definition of major: costs exceeding $1 billion in the near term--usually a 5-year window of the project's total estimated life cycle. GAO was asked to determine the (1) extent to which the cost and schedule for DOE's major cleanup projects have changed and key reasons for changes, and (2) factors that may hinder DOE's ability to effectively manage these projects. GAO met with project directors and reviewed project documents for 10 major cleanup projects: 9 above the near-term $1 billion threshold, and 1 estimated to cost between $900 million and $1 billion over the near term.

Nine of the 10 cleanup projects GAO reviewed had life cycle baseline cost increases, from a low of $139 million for one project to a high of nearly $9 billion for another, and life cycle baseline schedule delays from 2 to 15 years. These changes occurred primarily because the baselines we reviewed included schedule assumptions that were not linked to technical or budget realities, and the scope of work included other assumptions that did not prove true. Specifically, the schedules for 8 of the 10 projects were established in response to DOE's 2002 effort to complete cleanup work, which in some cases moved up project completion dates by 15 years or more. For example, to meet the 2012 accelerated completion date for its solid waste disposition project, DOE's Idaho National Laboratory assumed it would process waste at a rate that was more than 50 percent higher than the rate demonstrated at the time it established the baseline. When the laboratory could not meet that processing rate, DOE revised its baseline, adding 4 years and about $450 million to the project. Also, most of the 10 projects had cost increases and schedule delays because the previous baselines (1) had not fully foreseen the type and extent of cleanup needed, (2) assumed that construction projects needed to carry out the cleanup work would be completed on time, or (3) had not expected substantial additional work scope. DOE has not effectively used management tools--including independent project baseline reviews, performance information systems, guidance, and performance goals--to help oversee major cleanup projects' scope of work, costs, and schedule. For example, DOE's independent reviews meant to provide reasonable assurance that a project's work can be completed within the baseline's stated cost and schedule, have not done so for 4 of 10 projects. For one project, the baseline was significantly modified as little as 7 months after it had been revised and validated by the independent review, while other projects have experienced life cycle cost increases of as much as $9 billion and delays of up to 10 years, within 1 to 2 years after these reviews. In addition, although DOE uses several types of reporting methods for overseeing cleanup projects, these methods do not always provide managers with the information needed to effectively oversee the projects or keep Congress informed on the projects' status. For example, sites' proposals for changes to projects' cost and schedule baselines do not always identify possible root causes, and DOE does not systematically analyze the proposals for common problems across its projects. Therefore, DOE may be missing opportunities to improve management across projects. In addition, guidance for key management and oversight functions are spread across many different types of documents and are unclear and contradictory. As a result, project managers do not consistently implement this guidance, which may lead, for example, to problems in effectively managing risks across projects. Finally, DOE recently changed its goals for "successful" cleanup projects, reducing the amount of work and raising the allowable cost increases against the near-term baseline. DOE has initiated several actions to improve project management, but it is too early to determine whether these efforts will be effective.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: So that DOE can better manage its major cleanup projects and more fully inform Congress on the status of these projects, the Secretary of Energy should direct the Assistant Secretary for Environmental Management to consolidate all planned and ongoing program improvements, including those stemming from the Secretary's contract and project management root cause analysis corrective action plan, the Best-in-Class initiative, and the 2007 National Academy of Public Administration report, into a comprehensive corrective action plan that includes performance metrics and completion milestones.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: In response to this recommendation, in August 2009, DOE issued the "Consolidated Acquisition and Project Management Corrective Action Plan," which summarized ongoing program improvements including performance metrics and completion milestones. DOE provided a status report to this plan in June 2010.

    Recommendation: So that DOE can better manage its major cleanup projects and more fully inform Congress on the status of these projects, the Secretary of Energy should direct the Assistant Secretary for Environmental Management to consolidate, clarify, and update its guidance for managing cleanup projects to reflect (1) current policy regarding independent baseline reviews and (2) the results of DOE's determination of the appropriate means for calculating and budgeting for contingency so that project managers can consistently apply it across nuclear waste cleanup sites.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE has taken actions to close both parts of this recommendation. First, DOE's Office of Environmental Management, in 2009 and 2010, reconfigured its cleanup projects into 2 categories--capital asset projects and operating projects. With this reconfiguration, DOE-EM no longer uses the April 2007 protocol referred to in the report (page 36) that was the basis for this part of the recommendation. Second, in response to the recommendation regarding contingency, in May 2010, DOE issued guidance for, among other things, the development and consistent application of government contingency and management reserve.

    Recommendation: So that DOE can better manage its major cleanup projects and more fully inform Congress on the status of these projects, the Secretary of Energy should direct the Assistant Secretary for Environmental Management to expand the content of EM performance reports to describe the implications of current performance for the project's overall life cycle baseline, including the near-term baseline cost and out-year cost estimate, using, when appropriate, valid earned value data that conform to industry standards and GAO-identified best practices.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: In response to this recommendation, in December 2008, DOE implemented a process to produce monthly and quarterly reports that meet the GAO recommendation. These reports include information on, among other things, near-term baseline costs, out-year estimates, and certified earned value data.

    Recommendation: So that DOE can better manage its major cleanup projects and more fully inform Congress on the status of these projects, the Secretary of Energy should direct the Assistant Secretary for Environmental Management to develop an approach to regularly inform Congress of progress and significant changes in order to improve EM's accountability for managing the near-term baseline and tracking life cycle costs. Similar to the Department of Defense's Selected Acquisition Reports, which include annual information on full life cycle program costs, among other things, EM's report, at a minimum should compare estimated near-term and life cycle scope, cost, and schedules with the original and subsequently updated baselines, and provide a summary analysis of root causes for any significant baseline changes.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: In response to this recommendation, in October 2009, DOE issued Standard Operating Procedures for preparing Selected Acquisition Reports for submission to Congress. Consistent with the recommendation, the operating procedures require reporting of current scope, cost, and schedule and baseline changes.

    Recommendation: So that DOE can better manage its major cleanup projects and more fully inform Congress on the status of these projects, the Secretary of Energy should direct the Assistant Secretary for Environmental Management to include in its budget request to Congress life cycle baseline cost estimate information for each cleanup project, including prior year costs, estimated near-term costs, and estimated out-year costs.

    Agency Affected: Department of Energy

    Status: Closed - Not Implemented

    Comments: DOE originally agreed to implement this recommendation. In its June 2010 DARTS report, DOE explained that it would provide the recommended information beginning with its fiscal year 2012 budget request. Its September 2010 DARTS report, DOE explained that its budget request included all requested information except for out-year cost estimates, and that this out-year information could be found on its website. With this rationale, DOE closed the recommendation. This answer is not responsive to our recommendation and we will classify the recommendation as "closed not implemented." The budget request for 2012 does not include the recommended near-term and out-year cost information. DOE's budget request continues to only provide prior year costs, the current year estimated cost, and the overall lifecycle cost. This type of reporting perpetuates the lack of transparency that was noted in our report as contributing to DOE's inability to effectively manage its cleanup projects. We continue to believe that clearly distinguishing between near-term and outyear costs in its annual budget requests would substantially improve the transparency and usefulness of performance information for each ongoing cleanup project.

    Recommendation: Because independent baseline reviews have not always provided reasonable assurance of the stability of projects' near-term baselines or the reasonableness of the life cycle baselines, the Secretary of Energy should direct the Director of the Office of Management to assess the Office of Engineering and Construction Management's current approach and process for conducting baseline reviews of EM cleanup projects to identify and implement improvements that will better provide reasonable assurance that project work scope can be completed within the baselines' stated cost and schedule. The Secretary of Energy should consider including in the assessment process an analysis of past lessons learned and reasons for baseline changes, and an assessment of project affordability when conducting baseline reviews.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE completed several actions in in June 2009 in response to this recommendation. First, DOE Office of Engineering and Construction Management (OECM), which is responsible for conducting external independent reviews (EIR), updated its standard operating procedure (SOP) for EIRs. The SOP now includes lines of inquiry to assess disconnects between baseline requirements and budget/out-year funding as well as assess the affordability of the project within the program's budget profile. OECM is also initiating an EIR feedback process following completion of EIRs to identify continuous improvement opportunities. In addition, DOE 2008 corrective action plan included actions to strengthen EIRs and internal project reviews to ensure project and contract oversight compliance. Finally, OECM began implementing a corporate clearinghouse for contract and project management lessons learned to avoid or mitigate events that lead to poor performance.

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