1
Introduction

BACKGROUND

The Department of Energy’s (DOE’s) diverse missions are supported by scores of projects, resulting in annual expenditures of billions of dollars. Consequently, the U.S. Congress has an ongoing concern about project management in DOE and the need to assure American taxpayers that the nation’s resources are effectively and efficiently managed. In response to a directive from the Committee of Conference on Energy and Water Development of the 106th Congress (U.S. Congress, 1999), DOE requested that the National Research Council (NRC) appoint a committee to review and assess the progress made by the department in improving its project management practices. The principal goal of this effort has been to review and comment on DOE’s recent efforts to improve its project management, including a review of the following: specific changes implemented by DOE in order to achieve improvement (e.g., in organization, practices, training); an assessment of the progress made in achieving improvement; and an evaluation of the likelihood that improvement will be permanent. (See Appendix A for the statement of task.)

This oversight and assessment is the third phase of evaluative activities that began in 1997. The first phase was an assessment of the need for independent project reviews (Phase I) (NRC, 1998), which was followed in 1998 by a comprehensive assessment of project management practices (Phase II) (NRC, 1999). The Phase III assessment was planned as a 3-year effort beginning in July 2000 and includes three annual reports, as described below.



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Progress in Improving Project Management at the Department of Energy: 2003 Assessment 1 Introduction BACKGROUND The Department of Energy’s (DOE’s) diverse missions are supported by scores of projects, resulting in annual expenditures of billions of dollars. Consequently, the U.S. Congress has an ongoing concern about project management in DOE and the need to assure American taxpayers that the nation’s resources are effectively and efficiently managed. In response to a directive from the Committee of Conference on Energy and Water Development of the 106th Congress (U.S. Congress, 1999), DOE requested that the National Research Council (NRC) appoint a committee to review and assess the progress made by the department in improving its project management practices. The principal goal of this effort has been to review and comment on DOE’s recent efforts to improve its project management, including a review of the following: specific changes implemented by DOE in order to achieve improvement (e.g., in organization, practices, training); an assessment of the progress made in achieving improvement; and an evaluation of the likelihood that improvement will be permanent. (See Appendix A for the statement of task.) This oversight and assessment is the third phase of evaluative activities that began in 1997. The first phase was an assessment of the need for independent project reviews (Phase I) (NRC, 1998), which was followed in 1998 by a comprehensive assessment of project management practices (Phase II) (NRC, 1999). The Phase III assessment was planned as a 3-year effort beginning in July 2000 and includes three annual reports, as described below.

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Progress in Improving Project Management at the Department of Energy: 2003 Assessment The NRC appointed a committee under the auspices of the Board on Infrastructure and the Constructed Environment (BICE) to undertake the review and assessment of DOE project management. The committee is composed of 10 professionals with diverse experience in academic, government, and industrial settings and extensive knowledge of project management and process improvement. Three members of the committee also participated in the Phase II review and assessment, and one member participated in both Phase I and Phase II efforts. (See Appendix B for biographies of the committee members.) This document is the committee’s third and final annual report. It includes the committee’s assessment of progress in improving project management at DOE as of September 2003 and provides additional discussion of what the committee determined to be key factors affecting DOE project management.1 The body of this report addresses some of the issues raised in the Phase II report (NRC, 1999), and provides a continuation and summation of the assessments published in the committee’s 2001 annual report (NRC, 2001b); 2002 annual report (NRC, 2003); interim letter reports (NRC, 2001a, 2002a); and proceedings of the 2001 forum on the owner’s role in project management and preproject planning (NRC, 2002b). Not all of the findings and recommendations in the previous reports are specifically cited here, although the committee continues to endorse them. This assessment has focused on the program activities in the Office of Environmental Management (EM), the National Nuclear Security Administration (NNSA), and the Office of Science (SC) because they are responsible for the majority of DOE projects. The committee notes that other DOE program offices, such as the Office of Nuclear Energy Sciences and Technology and the Office of Civilian Radioactive Waste, have significant project responsibilities. The committee’s findings and recommendations for disciplined and effective project management address the need for a consistent process and level of performance for all projects undertaken by all program offices in DOE. REVIEW ACTIVITIES Beginning in September 2000, the committee met 14 times to review and assess the data on projects and project management procedures presented by the DOE project managers and representatives of the Office of Management and Budget Evaluation (OMBE), the Office of Engineering and Construction Management (OECM), and the project management support offices (PMSOs) in EM, NNSA, and SC. The committee also met with DOE personnel and DOE contrac- 1   In December 2003, the DOE deputy secretary appointed an associate deputy secretary with responsibilities for capital acquisition and project management. This appointment has been noted where it has an effect on the committee’s assessment.

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Progress in Improving Project Management at the Department of Energy: 2003 Assessment tor personnel in Albuquerque, New Mexico; Berkeley, Oakland, Livermore, and Stanford, California; Oak Ridge, Tennessee; Richland, Washington; and Aiken, South Carolina. Committee representatives also attended project management workshops and awards programs sponsored by OECM, the PMSOs, and non-governmental organizations in 2000 and 2001. Committee representatives have met with the secretary of energy, the deputy secretary, the undersecretaries and assistant secretaries, the director of OMBE, and other DOE senior managers responsible for managing programs, establishing policies, and implementing project management reforms. The committee received input from more than 200 personnel from DOE, contractors, and other government agencies (e.g., the General Accounting Office [GAO] and congressional staff), often on multiple occasions, in order to assess changes in their views and attitudes concerning DOE project management. From personal meetings, briefings, and conference participation, the committee received a wide range of views on how to improve project management in DOE. The committee’s observations, findings, and recommendations are derived in part from comments and suggestions made by DOE personnel and DOE contractors. The committee’s fact-finding efforts from February 2003 through June 2003 are listed in Appendix C. Previous fact-finding efforts are listed in the earlier reports. ORGANIZATION OF THE REPORT This report includes an evaluation of the implementation of recommendations in the Phase II report (NRC, 1999) and the specific changes in organization, management practices, personnel training, and project reviews and reporting since publication of the Phase II report. It provides the committee’s assessment of the progress made in improving project management and the likelihood that improvements will be permanent. The report is organized in three chapters and seven appendixes. Following the Executive Summary and this chapter’s presentation of background information on the initiation and conduct of the study, Chapter 2, “Progress and Opportunities,” describes DOE’s accomplishments in improving project management and the issues that the committee believes need further attention and improvement. The chapter addresses organizational changes, policies, and procedures that have been issued, human capital, cultural change, project planning, risk management, project controls, performance metrics, project reviews, and acquisition and contracting. Guidance for future improvements is provided in the committee recommendations. Chapter 3, “Prognosis for Progress,” addresses the likelihood that project management improvements are sustainable and will continue to improve. The findings and recommendations address the issues that are most critical to the future of DOE project management.

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Progress in Improving Project Management at the Department of Energy: 2003 Assessment The report’s seven appendixes provide additional background information to support the committee’s assessment: the statement of task; biographies of committee members; a list of the fact-finding sessions, briefings, and documents reviewed since the 2002 annual report; a compilation of previous findings and recommendations from Phase II and Phase III reports; a memorandum of April 2000 from the Undersecretary regarding the delegation of acquisition executive authority; a summary of key findings in recent external independent reviews; and correspondence between the DOE Office of Science and the National Academies regarding the 2002 assessment report. REFERENCES NRC (National Research Council). 1998. Assessing the Need for Independent Project Reviews in the Department of Energy. Washington, D.C.: National Academy Press. NRC. 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. 2002a. Progress in Improving Project Management at the Department of Energy, 2002 Interim Assessment. Letter report, May. Washington, D.C.: National Academy Press. NRC. 2002b. 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. U.S. Congress. 1999. House of Representatives, Energy and Water Appropriations Bill, 2000. HR 106-253. Washington, D.C.: Government Printing Office.