Recovery Act: Most DOE Cleanup Projects Are Complete, but Project Management Guidance Could Be Strengthened
Highlights
What GAO Found
From October 2009 through March 2012, the number of full-time equivalent (FTE) employees funded by the American Recovery and Reinvestment Act of 2009 (Recovery Act) and working on Department of Energy's (DOE) Office of Environmental Management (EM) cleanup projects peaked at about 11,000 FTEs in the quarter ending September 2010, according to data on the federal government's Recovery Act website. By the second quarter of fiscal year 2012, as projects were completed, FTEs had decreased to about 1,400 FTEs; 12 of 17 sites reported no Recovery Act FTEs; and about $5.6 billion of a total $6 billion in Recovery Act funds had been spent. According to EM data, as of April 30, 2012, 78 of the 112 Recovery Act-funded cleanup projects were complete, and 72 of the 78 projects met DOE's performance standard of completing project work scope without exceeding the cost target by more than 10 percent.
According to EM officials, the completed Recovery Act projects have helped accelerate the cleanup at the sites. GAO, however, found several inconsistencies in how EM set and documented projects' scope, cost, and schedule targets. Without clear scope, cost, or schedule targets in performance baselines, it becomes difficult to assess project performance. For example, in some cases, EM set scope targets differently in different documents and claimed project success even if key performance parameters were not achieved. Current guidance on setting performance baselines is more comprehensive for capital asset projects, such as building or demolishing facilities or constructing remediation systems, than for projects known as operation activity projects, such as operating a groundwater treatment plant. In addition, capital asset projects costing under $10 million are classified as operation activity projects.
Some of EM's long-standing project management problems occurred during its implementation of several Recovery Act projects, primarily insufficient early planning before setting performance baselines. For example, a project to remove wastes from a landfill at one site exceeded its $111 million cost target by $20 million because, after beginning the project, officials determined that the site would need to be excavated to a depth of almost double that planned. In addition, EM's new initiative to reclassify projects as either capital asset or operation activity projects raised concerns about how projects were reclassified. EM does not have a clear policy that sets out under what conditions and how EM should break a capital asset project into smaller, discrete operation activity projects. Project classification is important, however, because some requirements apply only to capital asset projects. EM's guidance for projects classified as operation activity projects under this initiative states that certain approval and reporting requirements will not be applied, and others will be applied as appropriate. Some DOE and other officials expressed concern that projects could be broken into smaller projects to avoid the requirements. For example, a $30 million project, partially funded with Recovery Act funds, was divided into 18 smaller projects, each below the $10 million threshold. The cost for one of these smaller projects eventually doubled--from $8 million to $16 million--but was not reclassified as a capital asset project. EM has been gathering information on lessons learned from Recovery Act projects, some of which could be applied as corrective measures to other EM cleanup work.
Why GAO Did This Study
The Recovery Act aimed to stimulate the economy and create jobs. DOE received $6 billion in Recovery Act funds that it is using to clean up 17 sites contaminated by radioactive and hazardous wastes from decades of nuclear research and weapons production. The cleanup is primarily carried out by contractors. The National Defense Authorization Act for Fiscal Year 2010 requires GAO to periodically report on DOE's Recovery Act-funded EM cleanup projects. In response to this mandate, GAO examined (1) the number of Recovery Act-funded FTEs by quarter; (2) the status and performance of cleanup projects; and (3) project management issues, if any, that arose during project implementation and any lessons learned. In addition, the Recovery Act requires GAO to comment and report quarterly on estimates of jobs funded and counted as measured by the number of FTEs and to conduct bimonthly reviews on the use of the act's funds. GAO examined Recovery Act FTEs, spending, project performance data, and lessons learned from Recovery Act projects; and interviewed DOE and contractor officials. GAO recommends, among other things, that DOE (1) clarify guidance on developing and documenting project performance baselines and (2) issue a policy that sets out the criteria with greater specificity for reclassifying capital asset projects over $10 million into smaller operation activity projects under $10 million. DOE agreed with GAO's recommendations.
Recommendations
GAO recommends, among other things, that DOE (1) clarify guidance on developing and documenting project performance baselines and (2) issue a policy that sets out the criteria with greater specificity for reclassifying capital asset projects over $10 million into smaller operation activity projects under $10 million. DOE agreed with GAOs recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Energy | To help ensure that EM more effectively manages all its projects, the Secretary of Energy should direct the Senior Advisor for Environmental Management and the Director of the Office of Management, as appropriate, to develop and issue a policy that clearly sets out the criteria with more specificity for reclassifying capital asset projects over $10 million into smaller operation activity projects under $10 million in value. |
When commenting on our report, DOE agreed with our recommendation. On September 2, 2014, the EM Principal Deputy Assistant Secretary signed a policy statement on the disaggregation of larger projects into multiple smaller ones. The associated memorandum states DOE developed the policy statement in response to GAO's recommendation.
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| Department of Energy | To help ensure that EM more effectively manages all its projects, the Secretary of Energy should direct the Senior Advisor for Environmental Management and the Director of the Office of Management, as appropriate, to provide the Office of Acquisition and Project Management with information on EM's project classification decisions to ensure that all capital asset projects have been appropriately classified and are managed in accordance with DOE Order 413.3B. |
In November 2020, EM issued a Program Management Protocol to replace EM's 2017 cleanup policy. The protocol establishes requirements for classifying all of EM's cleanup work as either "project activities" or "operations activities." Project activities include both capital asset construction and demolition projects, both of which must adhere to DOE's order governing the management of capital assets. Operations activities include the remainder of EM's work, and include two subcategories of activities: (1) "mission activities," which are cleanup activities with discrete end points and measurable accomplishments that result in a reduction of future liabilities, such as decontamination, decommissioning, and legacy waste processing; and (2) "mission support activities," which are routine or recurring activities to support and enable mission activities, such as providing security. According to EM officials, EM worked with the DOE Office of Project Management (PM) in the context of developing the protocol. We consider this recommendation closed, as DOE's recent actions address the underlying intent of this recommendation.
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| Department of Energy | To help ensure that EM more effectively manages all its projects, the Secretary of Energy should direct the Senior Advisor for Environmental Management and the Director of the Office of Management, as appropriate, to develop guidance to supplement DOE Order 413.3B to explain how EM should develop scope targets--specifically key performance parameters--for capital asset cleanup projects and include specific examples for such parameters to help ensure that scope is always defined in a way that it would help officials and others accurately assess project performance, including cleanup projects. |
When commenting on our report, DOE agreed with our recommendation. On January 31, 2014, the EM Principal Deputy Assistant Secretary approved an expectation memo regarding Development of Key Performance Parameters, which was subsequently distributed to the EM complex. Consistent with our recommendation, the memo included an attachment that provided examples of Key Performance parameters for capital asset projects.
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| Department of Energy | To help ensure that EM more effectively manages all its projects, the Secretary of Energy should direct the Senior Advisor for Environmental Management and the Director of the Office of Management, as appropriate, to clarify guidance for operation activity projects to specify how and when performance baselines (i.e., for scope, cost, and schedule targets), which EM calls key performance metrics for operations activity projects, are to be established and documented to help ensure consistent assessment of performance. |
When commenting on our report, DOE agreed with our recommendation. On April 28, 2014, the EM Principal Deputy Assistant Secretary approved an expectation memo regarding Key Performance Metrics Guidance for Operations Activities, which was subsequently distributed to the EM complex. Consistent with GAO's recommendation, the memo included an attachment that provided Key Performance Metrics Guidance for operations activities, including examples.
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