Intelligent Sustainment and Renewal of Department of Energy Facilities and Infrastructure (2004)

Congress, the U.S. Government Accountability Office (GAO), and the U.S. Department of Energy (DOE) have long been aware of DOE’s aging and deteriorating facilities and infrastructure, and of their threat to the department’s ability to successfully complete its missions (DOE, 2003; GAO, 2003a, 2003b, 2003c, 2001; U.S. Congress, 2001). In 2001, the U.S. House of Representatives Committee on Appropriations directed DOE to contract with the National Research Council (NRC) to evaluate the steps the department is taking to improve its facilities and infrastructure (F&I) management. This report and the preceding preliminary assessment (NRC, 2004; included in this report as Appendix A) are the products of this evaluation.

The evaluation was conducted by the Committee on the Renewal of Department of Energy Infrastructure under the auspices of the NRC’s Board on Infrastructure and the Constructed Environment. The committee has responded to its four-part statement of task through its observations, findings, and recommendations detailed in Chapters 2, 3, and 4 of this report. The overall findings relative to each component of the statement of task are summarized here.

Task 1. Assess DOE’s facilities and infrastructure management practices and initiatives and provide recommendations for areas requiring additional focus.

The Department of Energy has developed and put in place a number of the policies, procedures, and day-to-day practices for facilities management that characterize high-performance organizations. However, the committee finds that

application of these policies and procedures is inconsistent across program offices and sites, hindering the implementation of a unified and effective corporate approach to facilities management. The committee has also identified challenges and opportunities for improving F&I planning and budgeting procedures to make the process more proactive and to improve oversight and quality control.

Task 2. To improve life-cycle performance and mission support, identify or develop “best-practice” tools and techniques for DOE real property asset management in such areas as site planning; maintenance and recapitalization planning; space and land utilization; disposal strategies; information technology applications; and financing, cost allocation, and cost recovery strategies.

Based on F&I management practices and techniques observed in federal government agencies, higher-education institutions, and industry, it is apparent to the committee that there is no single set of practices that can be readily adopted by DOE. Achieving success in facilities management requires an organization to identify the approaches that will work best for its unique circumstances and to apply them consistently throughout the organization. The committee believes that there are many paths to success and has identified examples of solutions to the types of problems and challenges faced by DOE.

Task 3. Develop guidelines for deciding when to repair, renovate, or replace DOE buildings and other facilities based on factors such as agency mission objectives and return on investment.

Determining when to repair, renovate, replace, or surplus a facility is a complex decision driven by mission requirements, facility condition, available funds, and the legal/regulatory framework, among other factors. The committee believes that a life-cycle systems model is appropriate for these decisions and has provided an example that could be tailored to the requirements of DOE.

Task 4. Define performance metrics that integrate budget with expected outcomes and ensure accountability.

Cost-effective facilities and infrastructure management requires reliable and robust performance measures consistently applied in an evaluation framework that reflects corporate goals and missions. The committee has proposed a facilities management system (FMS) composed of methods, procedures, data, software, policies, and decisions that link all facilities management activities. The system combines the asset condition index (ACI) defined by Real Property Asset Management (O 430.1B) (RPAM) with a proposed mission condition index (MCI)

and alternative strategies to identify the option that provides the optimal return on investment.

The consequences of years of failed F&I stewardship of the DOE complex cannot be quickly reversed. Dedicated leadership and committed federal managers and contractors at all levels, as well as the continuing support of Congress, will be required to effectively sustain and recapitalize the department’s real property assets. Long-term improvement will require cultural and organizational changes, improved planning and budgeting procedures, and the development of improved performance measures. The process has begun with the promulgation of departmental policy RPAM, but much remains to be accomplished if DOE is to fully implement a corporate, holistic, performance-based approach to asset management and achieve the ultimate objective of effective and efficient facilities and infrastructure that support the department’s missions.

The committee believes that for an appropriate F&I process to work successfully at DOE, the following issues need to be addressed by senior managers to ensure consistent implementation of the process throughout the department.

Improvement of F&I stewardship at DOE needs to begin with the explicit recognition of the importance of F&I in the department’s strategic plan. The plan should include a definitive statement recognizing the critical role of facilities and infrastructure in mission accomplishment as well as prioritized goals with performance measures and targets, and a time frame and actions needed to accomplish these goals. The strategic importance of F&I should also be visible in the department’s annual budget requests.

In order to create excellence in F&I stewardship throughout the department, the committee believes that DOE needs strong and involved senior leaders, beginning with the deputy secretary; well-defined authority, responsibility, and accountability at all levels of DOE and management and operations (M&O) contractors; and enhancement of a central F&I authority by strengthening the Facilities and Infrastructure Executive Steering Committee (FISC) and the Office of Engineering and Construction Management (OECM). FISC and OECM should be designated and fully authorized to lead the implementation of RPAM, transfer best practices across the department, ensure that DOE and contractor personnel are trained and qualified, and ensure the consistent, disciplined planning, budgeting, and implementation of life-cycle stewardship of F&I. Although the National Nuclear Security Administration (NNSA), the Office of Science (SC), the Office of Environmental Management (EM), and the other program secretarial offices (PSOs) with responsibility for real property assets have different mission requirements, there is a need for consistency in the way information is generated and decisions are made.

The committee has noted that DOE needs more robust, proactive planning and budgeting procedures to ensure an adequate program to sustain and recapitalize its facilities and infrastructure. The committee recognizes the improvements

accomplished by the Facilities and Infrastructure Recapitalization Program (FIRP) of the NNSA and recommends that similar programs be implemented for other program secretarial offices. The committee expects that the recent planning guidance issued by the deputy secretary—establishing a minimum target for spending on F&I sustainment—will help reverse the trend of ever-increasing deferred maintenance and that DOE, with the help of Congress, can establish a program of full sustainment and recapitalization to make DOE facilities effective and efficient now and in the future.

However, FIRP and RPAM rely on the 10-year site plans (TYSPs) to determine short- and long-term budgets for recapitalization without providing adequate guidance for performance measures or targets to support the roll-up of TYSPs into defensible budgets for the programs and the department. The committee suggests that the department consider adapting the facilities sustainment, restoration, and modernization (S/RM) construct developed by the Department of Defense for department-level planning and budgeting.

DOE facilities are government-owned, contractor-operated complexes. The department’s role is thus that of a contract manager. DOE manages contractor performance through performance-based incentive fees. The committee suggests that all M&O contracts include significant incentive fees tied to the stewardship of facilities using metrics that assess performance based on a benchmark of 100 percent sustainment of F&I and on F&I capacity to provide complete support of the site’s mission. DOE’s goal should be for all contractors to earn their full incentive fee for facilities stewardship.

Because DOE’s role is primarily one of oversight, there is a critical need for effective performance measures and quality control systems to ensure that the department’s objectives are achieved. The performance measures currently used by DOE are consistent with industry practices, but the size and complexity of DOE’s F&I require a more complete set of robust measures. The committee has noted examples of organizations that use a suite of measures to achieve this objective and suggest an approach that builds on the current metrics to create an integrated management system that will support F&I management decisions. DOE should also establish goals and performance measures to support a continuous improvement process for F&I management. Regardless of the specific group of measures, the process should include metrics that assess performance for the following aspects of F&I management:

• Costs and benefits of F&I sustainment and renewal

• Customers external to the F&I management organization

• People internal to the F&I management organization

• F&I management processes

DOE (U.S. Department of Energy). 2003. Performance and Accountability Report; Fiscal Year 2003. Washington, D.C.: U.S. Department of Energy.

GAO (General Accounting Office). 2001. Department of Energy Status of Achieving Key Outcomes and Addressing Major Management Challenges (GAO-01-823). Washington, D.C.: U.S. General Accounting Office.

GAO. 2003a. Major Management Challenges and Program Risks Department of Energy (GAO-03-100). Washington, D.C.: U.S. General Accounting Office.

GAO. 2003b. Federal Real Property; Executive and Legislative Actions Needed to Address Long-standing and Complex Problems; Testimony June 5 (GAO 03-839T), Washington, D.C.: U.S. General Accounting Office.

GAO. 2003c. High-Risk Series; Federal Real Property (GAO 03-122). Washington, D.C.: U.S. General Accounting Office.

NRC (National Research Council). 2004. Preliminary Assessment of DOE Facility Management and Infrastructure Renewal. Letter report. February. Washington, D.C.: National Academies Press.

U.S. Congress, House of Representatives, Committee on Appropriations. 2001. Energy and Water Development Appropriations Bill, 2002. House Report 107-112. Washington, D.C.: U.S. Congress.