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DOE’s Role as Project Owner

Robert G. Card, Undersecretary U.S. Department of Energy

DOE’s core competency is big projects. When we have a problem with them, the very essence of our niche in the government is undercut.

But I would also point out that the department has had 40 plus years to get where it is. It is a very mature and resilient system. It will not be changed with anything less than a 6 × 6. A 2 × 4 or a splinter of regulation will not do the job.

One thing that is problematic for DOE is deciding what is a project and what is not. Clearly, if we build something, we call that a project. But DOE’s largest program is in tearing things down, not building things. I would submit that DOE has a lot of projects going on that people don’t treat as projects. And they are being delivered in a less desirable way because of that. So one of the first orders of business is scoping out and mapping what the business is about and what is a project and what is not. Where should project management tools be applied and where should they not?

I am looking at an array of management initiatives at DOE, starting with safety, that mostly hinge on one thing: What is the role of DOE in its interface with the contractor? I think one of the areas where DOE has given mixed signals, both internally and with the contractors, is in its interface with the contractor. In my view, DOE should think of itself more as a developer and an investor, not as a project manager. When it thinks of itself as a project manager, it wants to go in and control the project. When I did work for the three companies presenting today, I never had a member of one of those companies involved in the level of detail about how I was going to get the work done that I do with DOE.

When I worked for these companies, they spent a lot of time deciding what they were going to buy and in establishing the requirements and specific metrics



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Proceedings of Government/Industry Forum: The Owner’s Role in Project Management and Preproject Planning 2 DOE’s Role as Project Owner Robert G. Card, Undersecretary U.S. Department of Energy DOE’s core competency is big projects. When we have a problem with them, the very essence of our niche in the government is undercut. But I would also point out that the department has had 40 plus years to get where it is. It is a very mature and resilient system. It will not be changed with anything less than a 6 × 6. A 2 × 4 or a splinter of regulation will not do the job. One thing that is problematic for DOE is deciding what is a project and what is not. Clearly, if we build something, we call that a project. But DOE’s largest program is in tearing things down, not building things. I would submit that DOE has a lot of projects going on that people don’t treat as projects. And they are being delivered in a less desirable way because of that. So one of the first orders of business is scoping out and mapping what the business is about and what is a project and what is not. Where should project management tools be applied and where should they not? I am looking at an array of management initiatives at DOE, starting with safety, that mostly hinge on one thing: What is the role of DOE in its interface with the contractor? I think one of the areas where DOE has given mixed signals, both internally and with the contractors, is in its interface with the contractor. In my view, DOE should think of itself more as a developer and an investor, not as a project manager. When it thinks of itself as a project manager, it wants to go in and control the project. When I did work for the three companies presenting today, I never had a member of one of those companies involved in the level of detail about how I was going to get the work done that I do with DOE. When I worked for these companies, they spent a lot of time deciding what they were going to buy and in establishing the requirements and specific metrics

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Proceedings of Government/Industry Forum: The Owner’s Role in Project Management and Preproject Planning about that. Then, to a large extent, at that point they turned the contractor loose. DOE has spent relatively less time thinking about performance metrics and what it wants to buy, and relatively more time in day-to-day management of the contractor, which leads to issues about scope control, change management, and other things. Then, all of a sudden, a few months later the project is different than it used to be and nobody has really been keeping track. Another key thing is for the organization to understand when it is behind something and when it isn’t. DOE has had a long track record of starting $100 million plus projects and not getting them done. Some of these projects are thrust onto the agency. We get a lot of help from Capitol Hill, which says, “We would like you to do this project.” Yet I can almost guarantee you if the DOE organization hasn’t decided a project is of utmost importance, it will be gummed to death over time. Probably when its sponsor retires from office, the project will just fall off the end of the table, much to the chagrin of contractors who have been eagerly proposing on said project. I think it would be good for the department to have some way of communicating with Congress to say whether we need to do a given project and determine if we are going to be behind it or not. Another example is when a sponsoring entity inside the organization comes up with something and then initiates it under the cheap-to-study-but-too-expensive-to-build mode. If you look at the environmental programs in the early 1990s, an overwhelming number of these fit into that array. It is very cheap to say, “I want to build a vitrification plant.” It is very expensive to actually build one. Almost every DOE site had a vitrification plant planned for it, and it was a very painful process extricating DOE from that way of thinking. So we have to do a better job of controlling the planning activities to make sure that we are not planning for projects or budgeting for projects that we realistically can’t afford and don’t have a funding mechanism for. We have just revised our oversight structure and put all of our non-Inspector-General-related safety and security oversight into one entity that reports to the Secretary. We have agreement that headquarters oversight should be on DOE in the field, not on the contractor. This means that we should only be sampling the contractor to see if the DOE contract management organization is in fact behaving appropriately in its relationship with the contractor. The problem we have had up until now is we have lots of oversight and it tends to focus on the same thing. It goes right down to the shop floor and doesn’t address systemic management issues between the shop floor and my level. So I am anxious to see how a whole array of different behaviors may unfold through the change of that role.

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Proceedings of Government/Industry Forum: The Owner’s Role in Project Management and Preproject Planning Robert G. Card was sworn in as undersecretary on June 5, 2001. As undersecretary, he is responsible for DOE operations in energy, science, and environment. Prior to his selection as undersecretary, Mr. Card was president and CEO, Kaiser-Hill Company LLC. In that role he was responsible for the $7 billion, 5,000-employee cleanup and closure of the Energy Department’s Rocky Flats, Colorado, site. The plant was formerly one of the nation’s five primary nuclear weapons production sites. Mr. Card also served as a director and senior vice president at CH2M HILL Companies Ltd., which had revenues of about $2 billion and was one of the world’s larger science, engineering, construction, and operations firms. The corporation had major practices in the areas of energy and environment, water, transportation, and industrial manufacturing. Prior to the Rocky Flats assignment, Mr. Card served as group executive, Environmental Companies, responsible for the energy and environmental business, which was the firm’s largest business practice. This business served a variety of customers, including the federal government, electric utilities, oil and gas companies, and other industries. Mr. Card completed the Program for Management Development at Harvard Business School and received an M.S. in environmental engineering from Stanford University and a B.S. in civil engineering from the University of Washington.