Effectiveness and Efficiency of Defense Environmental Cleanup Activities of DOE's Office of Environmental Management Report 1 (2021) / Chapter Skim
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Pages 1-13
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These activities are managed by the DOE Office of Environmental Management (EM) , which, in fiscal year 2020, had budget authority of over $7 billion for cleanups and site services that are performed by contractors.
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Later, EM used cost-type contracts that had more specific work scope and performance-based awards and fees.2 In 2000 DOE implemented two "closure contracts" at the Rocky Flats Plant in Colorado and the Fernald site in Ohio directed toward a defined end state with large monetary incentives for the contractor to achieve that end state in the most efficient and expeditious manner. During the study, DOE explained that in the future large contracts will be implemented under a new end-state contracting model (ESCM)
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, Office of Environmental Management, Department of Energy, "EM Program History and Overview," presentation to the committee, February 24, 2020, Washington, D.C.
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Completion of cleanup activities at the remaining 17 sites will take many decades (and 11 of the EM sites are colocated with operating DOE facilities that will not be closing in the foreseeable future) , and so project completions and site closures will no longer suffice as the principal program performance metric.
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2018. Office of Environmental Management Policy for Management of Capital Asset Projects with Total Project Cost Equal to or Less than $50 Million.
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The remaining three quarters of them include activities to which EM is not applying Order 413.3B: EM activities that are implemented outside the order include site services, demolition of buildings, and waste disposal operations, as well as environmental remediation under $50 million, noted above. The committee found that the narrow interpretation of the applicability of Order 413.3B, relative to the OMB Capital Programming Guide for capital asset projects, is a major factor contributing to this situation.
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EM's protocol for demolition projects states, "Disaggregation of site program work into smaller, discrete work activities is encouraged as it provides better project definition and clarity, is more manageable, reduces time horizons and risks, and is consistent with the project management best practices found in DOE Order 413.3B." A multiplicity of projects transfers a greater burden for program and project management to EM; increases responsibilities with respect to interface management; creates a growing level of risk in the "white space" between individual projects (i.e., omissions) ; partitions risks which were demon strated to be best aggregated on both the Rocky Flats Plant and the Fernald site; and limits the scope for innovations in project delivery and the opportunity for accruing meaningful incentives by the contractor.
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EM currently includes a measure of SPI in its EVMS system that is based on dollars expended, not time. Because it is the key measure of schedule performance, it is important to calculate SPI based on time, not dollars, using the ratio of scheduled time of work performed (STWP)
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The percentage of actively tracked projects using certified EVM systems is even smaller (required for capital investment projects greater than $100 million)
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In the IDIQ approach, comprised of task orders, EM would disproportionately weigh many small projects toward their overall performance. Estimates at completion based on the cost-performance index are a floor to actual final cost given that program cost performance rarely improves as the program proceeds to its completion.
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In its own management analysis, EM has identified important ongoing efforts including "defining requirements in measurable outcomes" and "using objective performance measures focusing on outcomes to balance considerations of cost control, schedule achievement, and technical performance." The committee concurs with the imperative of outcomes-based completion contracting and agrees with the need to build on past, successful initiatives such as Rocky Flats and Fernald completion contracts. EM has advanced the ESCM as a new and improved vehicle for achieving outcomes-based completion contracting.
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The committee believes that the current contract procurement process can be adapted by awarding larger task orders that define one or more intermediate end states, thereby reducing residual risk to EM. Larger task orders could increase the opportunity for contractor innovation and provide for focused oversight at a higher level within EM.
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The committee examined subjective and objective performance assessment summaries and resulting fees as presented in "scorecards" posted on applicable DOE field office websites, particularly for contracts awarded at the Hanford site. After reviewing the evaluation of performance with Hanford cleanup contracts, DOE-EM's rating of contractor performance does not appear to be consistent through years for a specific contract or across contracts in a specific year.
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