8
Documentation of Project Management Policies and Procedures

INTRODUCTION

The Phase II report (NRC, 1999) noted that DOE did not have adequate policies and procedures for planning and managing projects and that no single authority was responsible for ensuring that project management policies and procedures were followed. It recommended that as a part of its project management system, DOE should issue fundamental policies, procedures, models, tools, techniques, and standards.

The committee noted in its January 2001 letter report that DOE had begun development of more effective project management policies, procedures, models, tools, techniques, and standards (NRC, 2001). In particular, DOE O413.3 has been issued, and drafts of the Program and Project Management (PPM) manual and Project Management Practices (PMP) have been reviewed by the committee (DOE, 2000a, 2000b, 2000c). OECM has advised the committee that because the documents were developed concurrently, there are discontinuities, overlaps, and repetitions that will be resolved in the next revisions. OECM reported that in the next revisions, the order will define policy, the manual will specify procedures, and the practices will provide commentary and examples. OECM is considering publishing the practices as a Web-based information system to be updated frequently. Although the documents are in the process of being revised, the committee believes there is value in providing the following comments and recommendations on the drafts.

OECM is to be commended on the significant progress in getting P413.1 and O413.3 produced and published. In the final analysis, the effectiveness of these or



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Progress in Improving Project Management at the Department of Energy: 2001 Assessment 8 Documentation of Project Management Policies and Procedures INTRODUCTION The Phase II report (NRC, 1999) noted that DOE did not have adequate policies and procedures for planning and managing projects and that no single authority was responsible for ensuring that project management policies and procedures were followed. It recommended that as a part of its project management system, DOE should issue fundamental policies, procedures, models, tools, techniques, and standards. The committee noted in its January 2001 letter report that DOE had begun development of more effective project management policies, procedures, models, tools, techniques, and standards (NRC, 2001). In particular, DOE O413.3 has been issued, and drafts of the Program and Project Management (PPM) manual and Project Management Practices (PMP) have been reviewed by the committee (DOE, 2000a, 2000b, 2000c). OECM has advised the committee that because the documents were developed concurrently, there are discontinuities, overlaps, and repetitions that will be resolved in the next revisions. OECM reported that in the next revisions, the order will define policy, the manual will specify procedures, and the practices will provide commentary and examples. OECM is considering publishing the practices as a Web-based information system to be updated frequently. Although the documents are in the process of being revised, the committee believes there is value in providing the following comments and recommendations on the drafts. OECM is to be commended on the significant progress in getting P413.1 and O413.3 produced and published. In the final analysis, the effectiveness of these or

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Progress in Improving Project Management at the Department of Energy: 2001 Assessment any policies and procedures depend on a commitment by DOE leadership to the task of continuous improvement of DOE project performance using the proven project management methods and techniques set out in these documents. DOE POLICY P413.1 AND ORDER O413.3 Order O413.3 provides direction for program and project management for the acquisition of capital assets within the department. The order supplements P413.1, which established OECM, and provides additional detail on the office’s roles and responsibilities to support the deputy secretary as the secretarial acquisition executive in oversight of capital asset acquisition (DOE, 2000a, 2000d). As a part of the process of implementing Order O413.3, OECM has conducted a number of meetings and workshops to respond to questions and comments and to obtain recommendations for improvements to O413.3 and related documents. The committee has reviewed O413.3 and conducted meetings at which DOE personnel and contractors gave presentations on the implementation of O413.3. The committee observes that O413.3 has proven effective in defining and implementing a number of fundamental and beneficial changes for the department that will improve long-term project performance; however, there are several clarifications, improvements, and adjustments that, while not changing the basic policy, would improve it. The committee therefore offers the following observations: DOE should define the term “baseline,” as used in O413.3, to reflect the exact use of this term by Congress and the departmental obligations to manage projects to baseline values for scope, cost, and schedule. The relationships among the department’s procurement, acquisition, and project management processes need clarification. The integrated project team (IPT) provides a framework for both acquisition and project management processes, but the policies and procedures on the IPT organization and requirements should be clarified and strengthened. O413.3 should make it clear that there are no exceptions to the requirement that each project have a thorough, documented project plan to support every step in its approval process. As recommended in the Phase II report, to increase the uniformity of information across the complex, the policy should require that all projects apply an earned value management system (EVMS) for reporting project performance. The policy should define the department’s EVMS reporting requirements and the cost accounting systems necessary to support EVMS so that they can be applied to all types of projects. Only short projects with total durations of less than 6 months should be excluded from this requirement.

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Progress in Improving Project Management at the Department of Energy: 2001 Assessment DRAFT PROGRAM AND PROJECT MANAGEMENT MANUAL AND DRAFT PROJECT MANAGEMENT PROCEDURES Purpose The purpose of the PPM and PMP should be to describe what is needed to pass through the DOE critical decision planning gates. The committee believes that the documents should add value by defining methods to streamline procedures and improve project performance. The PPM should be prescriptive, while the PMP should provide guidance. The committee observed that the roles of the two draft documents were intermixed. While the documents can provide general guidance, they need to be specific where compliance is intended. Format and Content Overall, the two documents should be formatted to allow easy cross-reference to O413.3 and from one document to the other. There should be a logical organization that would allow project managers to progress through the two documents referring from one to the other and at the conclusion to know what the department requires and what tools to use. The draft PPM provides an overview of the DOE project processes, including the deliverables at decision points and management responsibility and authority, but the detailed information is not organized according to a project delivery process. OECM has indicated that reorganization according to the DOE process as defined in O413.3 is planned. PPM Chapters 7 through 17 appear to follow the Project Management Institute’s (PMI’s) Project Management Body of Knowledge (PMBOK) (PMI, 2000). The committee believes that generic project management information should not be in the documents. The source of this information could be referenced or the PMBOK could be provided along with the DOE documents. These chapters include valuable ideas but these ideas need to be integrated into the DOE processes rather than being listed separately. The same problems are evident in the draft PMP. The draft documents were overwhelming in their detail in some sections; in some instances the information was superfluous and in others misleading. Conversely, some important issues received very little attention in the PPM—for example, the 70 percent of design engineering that is to be accomplished after the preliminary design. Managing the design phase of engineering and controlling changes to the initial performance baseline are of critical importance to the final outcome of the project. The discussion of DOE change control procedures is also inadequate. Some important issues are missing entirely from the draft PMP and PPM. These include team alignment and teamwork procedures for including stakeholder and public participation; project scope definition; and control of scope

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Progress in Improving Project Management at the Department of Energy: 2001 Assessment change. The critical decision information packages in the PMP should be described instead in the PPM, because the critical decision points and documentation packages required by O413.3 are not standard project management practices. The PMP should focus on detailed practices in a manner that assures they are given attention commensurate with their respective significance. Because the PMP is largely generic, common knowledge (much of it replicates the PMBOK, for example), the space it gives to a topic is often inversely proportional to its relevance to DOE. For example, 87 pages are spent discussing value engineering, an important but generally well-understood practice, and only 8 pages are given to planning the project’s acquisition strategy, an issue that is fundamental to the success of a project. Revisions to the draft PMP document should center on the characteristics of successful project performance, how it is achieved, and what constitutes a best project management practice for DOE (see Appendix C in the Phase II report (NRC, 1999)). DOE best practices should be documented to provide a how-to resource rather than a didactic educational resource. Tailoring each practice to DOE’s missions and processes is also very important. Achieving predictable, consistent, repeatable project performance results through standards and prescribed practices is essential. Much of the material presented as general practices represents the authors’ preference. Different authors would have different opinions. It should be made clear which material constitutes DOE policies, procedures, or preferences and which is merely personal advice from the authors. The PPM should describe what outcomes and deliverables DOE management expects. It should establish basic reporting standards, documentation content, use of M&O and M&I contractor services, and organizational structures. It needs to establish clear roles and responsibilities for project and operational managers. The process details should be prescribed with three things in mind: (1) every project will not always have an experienced federal project manager (FPM), (2) not all projects require the same degree of detail in the reports, and (3) simplicity, particularly with respect to communication, is crucial to success. ISSUES IN NEED OF ADDITIONAL DOCUMENTATION Some specific issues that were identified in the Phase II report and which the committee considers to be particularly in need of more focused attention in the policies and procedures documentation are discussed individually below. Value Engineering Value engineering (VE) is required for federal agencies, and a DOE-wide VE program was recommended in the Phase II report and reaffirmed in the committee’s 2001 letter report (NRC 1999, 2001). DOE O414.3 requires VE, but

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Progress in Improving Project Management at the Department of Energy: 2001 Assessment the committee has yet to see any statistics indicating that the use of VE on DOE projects has increased beyond the inconsequential number reported in 1999. The draft PPM and PMP address VE, but the goal of a department-wide organization to support the consistent application of VE for all projects has not been addressed. In general, VE is a well-understood process, but the DOE procedure documents do not specify who should do it, when it should be done, whether it should be a discrete step or a continuous process, whether it should be done once or repeated if there have been design or scope changes, and whether it should be a separate effort or combined with EIRs and/or ICRs. These questions, and others, should be answered in the documentation, and the procedures should clearly require that VE reports be made a part of the project’s baseline review and critical decision process. Change Management The Phase II report included the recommendation that DOE establish a system for managing change that provides traceability and visibility for all baseline changes (NRC, 1999). DOE O413.3 defines levels of authority but defers definition of the thresholds for change control to the project execution plan (PEP) (DOE, 2000a). The PPM states as follows: “Project changes shall be identified, controlled, and managed through a traceable, documented, and dedicated change-control process,” but it also defers definition of the process to the PEP (DOE, 2000b). The committee has observed several instances of baseline change without the documentation of a traceable and verifiable process; however, the projects were initiated before the current policies and procedures were issued. The project change control process is critical to on-time and on-budget performance and remains an ongoing concern of the committee. The committee believes that the change control process should be better defined in the DOE policies and procedures to facilitate change control on all projects. ISO 9000 CERTIFICATION The International Organization for Standardization’s (ISO) 9000 certification is, in essence, a quality assurance function that, in part, compares the actual processes used by an organization with the organization’s documented policies and procedures. The latest version of ISO 9000, adopted in 2000, goes beyond a comparison of documentation and practices to require a continuous process improvement program, as discussed in Chapter 2 and Chapter 5 (ISO, 2000). The Phase II report recommended that DOE offices should obtain and maintain ISO 9000 certification of all its project management activities (NRC, 1999). This recommendation was reaffirmed in the January 2001 letter report (NRC, 2001). The committee recognizes that the PMSOs, especially in DP, and OECM have taken steps to align the actual processes with published procedures. Never-

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Progress in Improving Project Management at the Department of Energy: 2001 Assessment theless, it is highly unlikely that DOE could pass an ISO 9000 audit today. DOE O413.3 has been released, but the implementing PPM and PMP are still in the draft stage and many months overdue. The committee is reliably informed that many DOE project management personnel continue to refer to DOE Order 4700.1, Project Management System; this document may provide excellent advice, but it was superseded in 1995 by DOE Order 430.1, Life Cycle Asset Management, itself now superseded. In short, it is clear that many DOE personnel are engaged in processes that have no officially recognized and documented procedures. It is difficult to see how anyone can be accountable for following processes that are nowhere documented. The committee continues to believe that the process involved in preparing for and obtaining ISO 9000 certification would have direct benefits for the department, and it recommends that the deputy secretary give serious consideration to making ISO 9000 certification a DOE goal. FINDINGS AND RECOMMENDATIONS Finding. The recommendations in the Phase II report to develop and publish a set of policies and procedures for management of DOE projects appear to have been addressed to some extent by the draft PPM and the draft PMP; however, the committee finds that there is a need for additional detail and clarity and elimination of discontinuities, gaps, overlaps, and repetitions. The committee recognizes that OECM is addressing these issues as it develops the next iterations and commends OECM for its leadership role. Recommendation. The PPM and PMP text should be tailored to specific DOE requirements. It should be clear which parts of the text constitute DOE required procedures and which parts reflect general advice on good project management practices. Recommendation. OECM should assure that policies and required procedures add value by streamlining the process and improving project performance. Policies and procedures that do not demonstrably add value should be revised or eliminated. Recommendation. The PPM and PMP should have parallel structures. A complete index and a glossary of terms should be provided for both documents. Recommendation. Examples should be given where they will illustrate the application of procedures and the necessary documentation. Examples should have adequate explanations and represent realistic project situations. Over time, a set of templates and case studies should be built up.

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Progress in Improving Project Management at the Department of Energy: 2001 Assessment Recommendation. OECM should be provided the resources needed to publish improved, revised versions of the PMP and PPM as soon as possible. OECM should be given the authority to authorize case-by-case exceptions when appropriate to ensure that common sense and cost-effectiveness prevail in the retrofitting of procedures to ongoing projects. REFERENCES DOE (Department of Energy). 2000a. Program and Project Management for the Acquisition of Capital Assets (Order O413.3). Washington, D.C.: Department of Energy. DOE. 2000b. Program and Project Management. Draft. Washington, D.C.: Department of Energy. DOE. 2000c. Project Management Practices. Draft. Washington, D.C.: Department of Energy. DOE. 2000d. Program and Project Management Policy for the Planning, Programming, Budgeting, and Acquisition of Capital Assets (Policy P413.1). Washington, D.C.: Department of Energy. ISO (International Organization for Standardization). 2000. ISO 9000:2000. Quality Management Systems—Fundamentals and Vocabulary. Geneva, Switzerland: International Organization for Standardization. NRC (National Research Council). 1999. Improving Project Management in the Department of Energy. Washington, D.C.: National Academy Press. NRC. 2001. Improved Project Management in the Department of Energy. Letter report, January. Washington, D.C.: National Academy Press. PMI (Project Management Institute). 2000. Project Management Body of Knowledge (PMBOK). Newton Square, Penn.: Project Management Institute.