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Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
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3
Prognosis for Progress

INTRODUCTION

In its 3 years of existence, this committee has observed progress in the improvement of project management at the U.S. Department of Energy. During this time, the committee has also identified issues that need continuing attention if DOE is to achieve the level of competence in project management required to fulfill its missions. However, the committee is concerned that the rate of improvement may be too slow and that the momentum for continued improvement of project management may not be sustained. This concern is based on three critical factors: (1) the absence in DOE of a recognized champion for project managers and process improvement—an individual who is at a level of authority to ensure adherence to policies and procedures and the availability of the necessary funding and personnel resources,1 (2) inconsistent project performance, and (3) the slow rate of acceptance and continued pockets of resistance to project management reforms.

1  

Editor’s note: The 2003 assessment is based on information reviewed by the committee through September 2003. In December 2003 the DOE deputy secretary appointed an associate deputy secretary with responsibilities for capital acquisition and project management, a positive step of which readers should be aware as they consider the committee’s comments and recommendations regarding the need for a strong and visible champion of project management issues in DOE.

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

THE PROSPECT FOR CONTINUED IMPROVEMENT

A delegation of the committee met in June 2003 with the heads of the major DOE programs—the Office of Environmental Management (EM), the National Nuclear Security Administration (NNSA), and the Office of Science (SC)—to discuss the status of project management and the prospect for continued improvement in their respective programs. A brief discussion of each meeting follows.

Office of Environmental Management

The assistant secretary noted that EM is in the business of solving problems and that undertaking the right projects depends on establishing an accurate problem definition before defining a solution. These tasks are different from the tasks required to plan typical capital acquisition projects, but the procedures defined by Order O 413.3 are applicable. She also noted that tailoring project requirements and delegation of approval authority in EM will be dependent on demonstrated competency in planning and executing projects. EM supports the development and coordination of a professional training and career development program through a departmental structure.

National Nuclear Security Administration

The administrator noted that NNSA has done much more to improve project management than the committee gave credit for in its 2002 assessment report. The administrator offered the perspective that NNSA has limited resources to complete its mission and needs to avoid duplicating efforts among DOE headquarters, the field, and contractors. NNSA is challenged to get the right people in the right place to undertake a disciplined process of project management. The development of a lessons-learned database is being discussed as a means to benefit from past problems and success. The recovery of the National Ignition Facility (NIF) from its project management problems was cited as one of the successes, which illustrates that the agency can learn to improve project management. The committee noted that one of the major reasons for NNSA’s difficulties in improving project management is the inadequate size and professionalism of the project management staff. The committee also noted that the administrator needs to provide highly visible attention to project performance in order to accomplish these objectives: to show that excellence in project management is expected and important, to communicate his requirements and expectations to DOE personnel and contractors, to hold managers consistently accountable for project performance, to use the advice of expert staff, and, most importantly, to show that competent project management is a priority by providing the resources needed to manage projects and improve the project management process.

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

Office of Science

The director of the Office of Science took strong exception to aspects of the committee’s 2002 assessment of project management at DOE. (See Appendix G for relevant correspondence.)

The positions expressed by the Office of Science during the June 2003 meeting are that O 413.3 should not apply to projects with less than $100 million total estimated cost (TEC), that external independent reviews (EIRs) add no value, that project manager professional certification is not valuable, and that the Project Management Career Development Program (PMCDP) is too prescriptive. The director noted that SC is considered by the international physics community to be a leader in project management.

On the basis of the factual evidence with respect to ongoing problem areas (see Appendix F for a compilation of key EIR findings), the committee finds no support for the contention that projects under $100 million TEC should be exempted from Order O 413.3 reviews or from the requirement for EIRs. And, as noted in previous assessments and reiterated in this one, the committee continues to support project manager professional certification and the PMCDP.

The committee recognizes, and has stated in a number of places, that the highly technical, first-of-a-kind projects undertaken by SC and NNSA require an approach to project management that is different from the approach taken for more routine infrastructure projects; however, the committee believes that DOE’s current policies and procedures define a minimum level of detail needed by DOE for effective project management, and that they should be applied to all projects. The committee also believes that the current provisions for tailoring requirements are sufficient to assure that management procedures are cost-effective. The committee noted in its 2001 assessment that:

The use of techniques and skills that are appropriate to low-uncertainty projects can lead to poor results when applied to high-uncertainty projects with great potential for changes and high sensitivity to correct decisions. For high-risk projects, a flexible decision-making approach is much more successful. (NRC, 2001b, p. 41)

The committee discussed first-of-a-kind and science projects extensively in previous assessments. For example, the 2002 assessment report (NRC, 2003) devotes an entire chapter (Chapter 7, pp. 40-48) and an appendix (Appendix F, pp. 108-111) to this subject. The committee noted in its 2002 assessment report that:

First-of-a-kind projects have been and can be successfully managed and executed by DOE, but they require particular care. The higher degree of uncertainty that attends these projects requires managers who are experienced in dealing with uncertainty and ambiguity. Not all project managers have this ability. The

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

best project managers and management systems more than pay for themselves on first-of-a-kind projects by delivering projects on schedule with little budget overrun. (NRC, 2003, p. 48)

The committee provided the following finding and recommendation regarding the management of first-of-a-kind projects:

Finding: Innovative, cutting-edge, and exceptional risk management abilities are needed by DOE to identify and address the risks in many of its projects. DOE needs to develop expertise and excellence in managing very risky development projects. The DOE complex has the intellectual, computational, and other resources necessary to produce significant improvements in this area.

Recommendation: DOE should develop more expertise and improved tools for risk management. Nontraditional and innovative approaches, tools, and methods should be investigated for their adaptability to DOE project conditions and use in DOE risk management. (NRC, 2003, pp. 47-48)

The committee believes that SC has the capacity to perform excellent project management for all of its projects, but it needs to first recognize the impediments and take action to remove them. The SC director stated in a May 23, 2002, policy memorandum (DOE, 2002) that project management should have the following objectives:

  1. Ensure that projects clearly support program research missions and strategic plans in a cost-effective manner,

  2. Verify that projects are adequately defined and staffed before committing significant resources,

  3. Establish a project baseline in terms of scope, schedule, and cost,

  4. Maintain the project baseline through formal change control, and

  5. Determine a project’s success by measuring performance against the approved baseline. (DOE, 2002, p. 1)

The Project Management Improvements Committee Report attached to the memorandum outlined the actions that SC would take to ensure these objectives are met. The committee applauds this direction and notes that it applies to all projects covered by O 413.3 and should, if fully implemented, improve the management of SC projects.

PROJECT PERFORMANCE

The 2002 and 2003 DOE Project Management Awards demonstrate the contribution of excellent front-end planning practices to successful projects and provide evidence that DOE can do projects well. The committee cited the 2002

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

award recipients in its 2002 assessment (NRC, 2003) and congratulates the following projects, which received awards in 2003:

  • Fissile Materials Disposition, Highly Enriched Uranium Blend Down Project—Secretary’s Excellence in Acquisition Award;

  • Nonproliferation and International Security Center Project—Secretary’s Award of Achievement and the Secretary’s Acquisition Improvement Award;

  • Rocky Flats Field Office, Building 371 Closure—Secretary’s Award of Achievement;

  • Rocky Flats Field Office, Building 771/774 Closure Project—honorable mention;

  • Savannah River Operations Office, K Area Nuclear Material Storage Project—honorable mention;

  • Oak Ridge Operations, EM, Hydrofracture Well Plugging and Abandonment Project—honorable mention;

  • Chicago Operations Office, Tokamak Fusion Test Reactor Decontamination and Decommissioning Project—honorable mention;

  • Oak Ridge Operations, EM, Facilities Revitalization Project—honorable mention; and

  • Environmental Management Waste Management Facility Project—honorable mention.

However, not all DOE projects have performed to the level of those listed above. OECM recently compiled a list of significant adverse findings identified during EIRs performed in FY 2001 and FY 2002 prior to CD-2 baseline validations (see Appendix F). This compilation covers 19 projects with TECs under $100 million, equally apportioned between NNSA, EM, and SC. The purpose of the list is to detect the most pervasive and repetitive problems, as well as trends in problem correction.

The committee analyzed the compilation of key findings and notes a wide variance between projects in the number and the subject matter of the key findings. Only one project received a clean bill of health. EM projects, particularly at the Idaho National Engineering and Environmental Laboratory, and SC projects, particularly at Oak Ridge National Laboratory, exhibited a wide range of deficiencies. The NNSA projects had fewer deficiencies and appeared to be more attuned to the requirements of baseline validation.

In reviewing the list, the committee notes that the major problems are as follows: (1) inadequate project definition, (2) lack of documented rationale for decisions, (3) weak risk assessment and/or risk management plans, (4) haphazardly setting contingency allowances that are not necessarily based on risk, and (5) lack of integrated resource and cost-loaded schedules. These issues have been repeatedly addressed in previous committee reports. The committee con-

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

cludes that apparently not all DOE field organizations are cognizant of or competent in the processes and procedures that should be undertaken between CD-1 and CD-2. This may be due in part to inadequately defined requirements for CD-2.

The quality of project management remains inconsistent from project to project. Although some sites and some projects may perform better than others, the committee was chartered to assess project management across the entire department, not to identify pockets of superior performance. On the basis of the factual evidence it reviewed, the committee finds no basis to support the contention that specific program secretarial offices, sites, or management and organization contractors should be exempted from the requirements of O 413.3. The fact that performance varies across sites, laboratories, and programs is not considered a virtue; rather, it illustrates the ongoing need for establishing consistent policies and procedures, for transferring lessons learned, and for overcoming cultural resistance to communication and cooperation among the competing elements of the DOE complex. As the committee was told by a DOE employee at Oak Ridge, “We recognize no authority outside the Office of Science”—a revealing statement about the attitudes still prevalent in DOE.

These observations lead to the conclusion that DOE project management is not yet a process in full control. However, project management reforms initiated over the past 3 years have been successful in diminishing some of the differences across departmental program offices.

MOMENTUM FOR IMPROVEMENT

The committee believes that since DOE launched its project management reform initiative in 1999, the department has made progress in improving management procedures and project performance. There are no objective performance measures in place by which to document progress, but this conclusion is substantiated by the committee’s observations in this and preceding reports over a 3-year period. Today, the consensus of the committee is that DOE project management has significantly improved in the past 3 years but that the process is far from complete. The committee is concerned that the rate of progress may not be sustainable or fast enough to allow the department to achieve competence, let alone excellence, in project management.

The committee is aware of large private companies that have improved their project management process from poor to excellent in this same amount of time (NRC, 2002). The common factors that drove improvements in these companies are (1) a commitment from top management, (2) a strong, visible champion for project management and process improvement, and (3) a consistent, disciplined process with an emphasis on front-end planning. The case studies presented at the 2001 government/industry forum demonstrated that excellence in project management in industry is achieved only when the chief executive officer (CEO) or chief operating officer (COO) becomes convinced that excellence in project

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

management is essential to the success of the corporate mission, puts the resources and prestige of his or her position behind it, appoints a project management champion reporting directly to the CEO or COO, and becomes directly involved in approvals of project plans from the earliest stages. There is no shortcut or secret method, and it is not glamorous. In these companies, commitment to the corporate position on project management becomes a condition of employment. The committee did not observe this consistent level of commitment throughout DOE.

The NRC 1999 report summarized the status quo for DOE project management as follows:

The fundamental deficiency is DOE’s organization and culture, which do not provide a focus for project management. As a result, the processes used by field offices, operations offices, and their contractors for planning and executing projects are inconsistent; lessons learned about cost estimating techniques, project review processes, change control mechanisms, and performance metrics are not transferred from one project to another; and there is no systematic program for recruiting and training professional project managers and no career path for project management. Related fundamental problems are a general lack of accountability and unclear lines of authority. (NRC, 1999, p. 2)

Unfortunately, despite significant progress in departmental project management policies and procedures, DOE-wide implementation of policies and procedures in 2003 can still be characterized as the old status quo.

The committee observed impediments to sustained, rapid improvement of project management at DOE, which are discussed in the previous chapters. These impediments all are correctable and could have been corrected long ago, so their persistence is an indication of more-deep-seated problems. Congress, DOE senior managers, DOE personnel at all levels, and DOE contractors need to affirm the critical importance of good project management to the success of the enterprise and devote the resources, both human and financial, to continuous improvement in project management. If not, other issues will continue to compete for senior manager and staff time and attention, and initiatives to improve project management may wither and ultimately die.

With the publication of project management policies and procedures (Order O 413.3, Manual M 413.3-1, Project Management Practices) and the establishment of the PMCDP, which must now be implemented and executed, DOE is at a crossroads in project management. If there is visible recognition by senior management of accomplishments and strong support for continued process improvement, DOE can ultimately achieve and sustain an acceptable level of competence in project management. However, if DOE senior management does not visibly demonstrate a continual interest in actively working to assure implementation of process improvements, DOE is likely to revert to the quality of project management observed in 1999.

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

DOE senior management has shown the ability to step in to resolve deadlocks, but this is short-term firefighting. As stressed by the administrator of NNSA, senior managers have many other demands on their time and cannot spend much of it on project management. Unfortunately, at this time the signals from DOE senior managers are mixed—this report and its predecessors have shown that DOE management has not fully committed to applying the resources necessary for success. The committee is convinced that permanent improvement in project management at DOE requires both continual leadership from senior management and a recognized project management champion with adequate authority who can and does spend full time on improving project management.

The committee has observed that permanent improvement in DOE project management is impeded by high personnel turnover, inadequate numbers of project personnel, and inadequate training of project management personnel. Since its January 2001 letter report (NRC, 2001a), the committee has urged DOE to institute a career development program to improve personnel retention, to expand the inadequate staff of professional project managers (project directors), and to institutionalize best practices by implementing policies and procedures. Because change in leadership at DOE is inevitable, the project management champion must strive to institutionalize improvements in the organization, policies, procedures, and project management culture throughout the department.

Therefore, the committee believes that it is critical to the continued improvement of project management in the department to have a project management champion with the authority to assure that the project management viewpoint is expressed in all decisions as well as to guide, support, and develop a professional project management staff across the department, with the ultimate goal of achieving and sustaining excellence in DOE project management (see footnote on page 41).

FINDINGS AND RECOMMENDATIONS

Finding. DOE has recognized its fundamental deficiencies in project management and initiated reforms to improve procedures. DOE has made significant progress in issuing policies and procedures, but the implementation process is not complete. For example, Manual M 413.3-1, Project Management for the Acquisition of Capital Assets, was issued only in March 2003, and it has not yet been fully implemented. Substantial additional effort will be needed to create and sustain a culture that includes excellence in project management and project performance.

Recommendation. DOE should continue the course set by Policy P 413.1, Order O 413.3, and Manual M 413.3-1 to guide the planning and execution of projects. Senior managers should take visible and meaningful action to reaffirm the current direction and to assure that resources are provided for managers and their support

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

staff at all levels so that they have the tools and knowledge needed to effectively implement policies and procedures.

Finding. The NRC report Improving Project Management in the Department of Energy included a set of findings and recommendations as a guide for improving project management at DOE (NRC, 1999). The 2001 and 2002 assessment reports provided additional guidance on specific aspects of project management that are critical to improving project performance (NRC, 2001b, 2003). (See Appendix D for a compilation of findings and recommendations.)

Finding. The committee has seen significant progress in the development of policies and procedures to implement the committee’s prior recommendations; however, these policies and procedures have not yet been fully implemented. The committee has also identified specific areas that need additional improvement.

Recommendation. The committee continues to endorse the recommendations in its previous reports. DOE should continue to use these reports and recommendations as a guide to completing the changes needed to continue improving project management.

Recommendation. DOE’s current policies and procedures with respect to project management should be maintained, and steps should be taken to improve them over time. Senior management should take visible actions to assure that project management policies and procedures are implemented correctly and consistently department-wide. Requirements should be tailored to the size and complexity of projects, but exemptions for projects or sites should not be considered until such decisions can be supported by a record of excellence in project management and until project performance is established.

Finding. The 1999 NRC report recommended that efforts to improve project management should be led by an office of project management and noted that, to be successful, it needed to be a top-down management initiative with the full support of managers at all levels of the department (NRC, 1999). The project management support offices, the Office of Engineering and Construction Management, and the Office of Program Analysis and Evaluation were created to fill this need and have produced significant accomplishments. Continued improvement will require strong-willed leadership, a focus on results, stability of processes and procedures, accountability with consequences, and a serious expenditure of resources to make the needed changes. The committee is convinced that permanent improvement in project management at DOE requires both continual leadership from senior management and a recognized project management champion with adequate authority who can and does work full-time on improving project management.

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×

Finding. The committee has observed that permanent improvement in DOE project management is impeded by high personnel turnover, inadequate numbers of project personnel, and inadequate training of project management personnel. Since its January 2001 letter report (NRC, 2001a), the committee has urged DOE to institute a career development program to improve personnel retention, to expand the inadequate staff of professional project managers (project directors), and to institutionalize best practices by implementing policies and procedures. Because change in leadership at DOE is inevitable, the project management champion should strive to institutionalize improvements in the organization, policies, procedures, and project management culture throughout the department.

Recommendation. The DOE deputy secretary is the department’s chief operating officer and chief acquisition executive. As such, the deputy secretary has been given the responsibility for assuring that projects are effectively planned and executed. To perform these functions, the deputy secretary either should be the champion for project management improvement or should appoint someone to perform this role, reporting to the deputy secretary (see footnote on page 41).

Recommendation. The DOE program heads for the Office of Environmental Management, the National Nuclear Security Administration, and the Office of Science have been delegated authority as acquisition executive for projects under $400 million and are responsible for project management and performance for their respective program offices. To perform these functions, the program heads should visibly and actively promote and defend efforts to improve project management capabilities and their consistent application throughout the department.

REFERENCES

DOE (Department of Energy). 2002. Memorandum from Raymond Orbach, Subject: Office of Science Direction on Project Management. May 23.


NRC (National Research Council). 1999. Improving Project Management in the Department of Energy. Washington, D.C.: National Academy Press.

NRC. 2001a. Improved Project Management in the Department of Energy. Letter report, January. Washington, D.C.: National Academy Press.

NRC. 2001b. Progress in Improving Project Management at the Department of Energy, 2001 Assessment. Washington, D.C.: National Academy Press.

NRC. 2002. Proceedings of Government/Industry Forum: The Owner’s Role in Project Management and Preproject Planning. Washington, D.C.: National Academy Press.

NRC. 2003. Progress in Improving Project Management at the Department of Energy, 2002 Assessment. Washington, D.C.: The National Academies Press.

Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 41
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 42
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 43
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 44
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 45
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 46
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 47
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 48
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 49
Suggested Citation:"3 Prognosis for Progress." National Research Council. 2004. Progress in Improving Project Management at the Department of Energy: 2003 Assessment. Washington, DC: The National Academies Press. doi: 10.17226/10931.
×
Page 50
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In 1997, Congress, in the conference report, H.R. 105-271, to the FY1998 Energy and Water Development Appropriation Bill, directed the NRC to carry out a series of assessments of project management at the Department of Energy (DOE). This report, the 2003 Assessment, is the final one in that series. It presents an examination of DOE's progress in improving program management over the past three years including the Department's response to the recommendations of the previous assessments in this series. In addition to assessing DOE’s progress, the report also describes opportunities for further improvement and gives a prognosis for future developments.

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