Feasibility of Outsourcing the Management and Operation of the Capitol Power Plant
Highlights
The Capitol Power Plant (CPP), managed by the Architect of the Capitol (AOC), provides heating and cooling for the U.S. Capitol and surrounding facilities. This plant, which provides steam and chilled water year-round for about 16 million square feet of space in 24 facilities, consists of 4 main components--the steam plant, the East Refrigeration Plant, the West Refrigeration Plant, and the administration building. In 2003, CPP awarded a construction contract that involved a major effort both to expand the capacity of the plant to meet the growing heating and cooling needs of the U.S. Capitol and to update plant equipment. The centerpiece of this expansion effort is the West Refrigeration Plant Expansion project, a $100.9 million project scheduled for completion in March 2008. For more than a decade, potential overstaffing at CPP has been a principal concern. In 1996, an AOC engineering consultant for CPP asserted that CPP was overstaffed and recommended reducing staff as a way to deliver CPP services more costeffectively. In 2004, in response to a congressional mandate to assess CPP operations and infrastructure, we recommended that AOC update the consultant's 1996 study and examine the advantages and disadvantages of outsourcing CPP operations. More recently, in response to congressional concerns about CPP staffing levels, we reported on AOC's management of CPP and made recommendations on CPP's staffing levels. In 2005, we recommended that AOC develop an implementation plan for adjusting staff levels based on a 2004 study conducted by another AOC engineering consultant that found staffing levels higher at CPP than at comparable plants. Because AOC has made little progress in reducing CPP staffing levels and examining sourcing options, congressional concerns about the overall management of CPP persist. Accordingly, we were directed to examine the feasibility of AOC's entering into a contract with a private entity for the management and operation of the CPP. In response, this report discusses (1) the actions that CPP has taken since 2004 to reduce operating costs and increase efficiencies and (2) the challenges that AOC will need to address before it can make future sourcing decisions about CPP operations.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Architect of the Capitol | To determine the most efficient manner to operate CPP, the Architect of the Capitol should quantify for the Congress the cost savings and increased efficiencies generated from completed and ongoing actions taken since 2004. |
Closed – Implemented
We found that the Architect of the Capitol's (AOC) Capitol Power Plant (CPP) had taken actions since 2004 to reduce costs and enhance operating efficiencies, but had not fully documented the results of its efforts, or quantified the cost savings or efficiencies gained by those actions. We recommended that the AOC quantify for the Congress the cost savings and increased efficiencies generated from completed and ongoing actions taken since 2004. In June 2008 AOC issued a report titled "Report to Promote the Maximum Efficiency for the Operation of the U.S. Capitol Power Plant." This report included details about a number of implemented and planned improvements designed to provide plant cost savings and increased efficiencies. For example, the report details actions taken to provide the optimum staging of all existing chilled water and steam generation equipment. In addition, the report details cost savings generated by CPP's reduction of natural gas consumption and increase in coal consumption. In future years, AOC plans to document CPP cost savings and increased efficiencies as part of its annual energy report, which will help the AOC and Congress oversee CPP operations and hold CPP officials accountable for their actions.
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| Architect of the Capitol | To determine the most efficient manner to operate CPP, the Architect of the Capitol should complete activities to support future sourcing decisions, including (1) developing a comprehensive staffing plan by completing an equipment inventory and comprehensive workload analysis, determining how the modernization effort will affect future needs, and examining existing staffs' capabilities and (2) establishing procedures and guidelines to guide future sourcing decisions that take into account activities that can be outsourced, staff training in sourcing processes and practices, and legal issues. |
Closed – Implemented
In 2008, we reported that while the Capitol Power Plan (CPP) managed by the Architect of the Capitol (AOC) had taken some actions to reduce costs and enhance operating efficiencies, it had not adequately addressed prior staffing concerns, namely to produce a staffing plan for the Congress and reduce staffing levels in line with our previous recommendations and those of its own consultant. In addition, AOC had not taken the steps necessary to determine whether keeping CPP operations in-house or outsourcing those operations would result in better service delivery. We recommended that AOC complete activities to support future sourcing decisions, including (1) developing a comprehensive staffing plan by completing an equipment inventory and comprehensive workload analysis, determining how the agency's modernization effort will affect future needs, and examining existing staffs' capabilities and (2) establishing procedures and guidelines to guide future sourcing decisions that take into account activities that can be outsourced, staff training in sourcing processes and practices, and legal issues. In 2009, AOC issued a staffing plan for the CPP, based on a comprehensive workload analysis. In 2011, AOC issued a report on the CPP sourcing decision process, which includes a skills inventory of CPP staff, a comprehensive assessment of all CPP functional areas (including equipment), guidelines and approach for sourcing decisions, and an initial competitive sourcing strategy for future sourcing decisions. Developing this formal process for making sourcing decisions will better enable AOC to assess the risks, advantages, and feasibility of outsourcing versus maintaining its operations in-house, and provide CPP with the tools it needs to better inform its future staffing decisions.
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| Architect of the Capitol | To determine the most efficient manner to operate CPP, the Architect of the Capitol should complete activities to, after completing necessary actions, pursue a competitive sourcing strategy. |
Closed – Implemented
In 2008, we reported that while the Capitol Power Plan (CPP) managed by the Architect of the Capitol (AOC) has taken some actions to reduce costs and enhance operating efficiencies, it has not taken the steps necessary to determine whether keeping CPP operations in-house or outsourcing those operations would result in better service delivery. We recommended that, after establishing procedures and guidelines to guide future sourcing decisions, AOC pursue a competitive sourcing strategy. In May 2011, AOC issued a report--developed by a contractor--on the CPP sourcing decision process, which includes procedures, guidelines, and competitive sourcing strategy for future sourcing decisions, as well as recommendations for outsourcing specific activities at the CPP. As of October 2011, AOC had developed a plan to address those recommendations. Developing this formal process for making sourcing decisions will enable AOC to assess the risks, advantages, and feasibility of outsourcing versus maintaining its operations in-house, and provide CPP with the tools it needs to better inform its future staffing decisions.
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