Improving Project Management in the Department of Energy (1999) / Chapter Skim
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Appendix A Evidence of Problems With DOE Project Performance
Appendix A Evidence of Problems With DOE Project Performance
Pages 81-96
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Appendices
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, statistical models, and database of industrial projects used for comparison all varied from study to study, some common themes emerged. The studies focused on four factors: cost performance, or the absolute cost of DOE projects compared to cost for projects by industry and other government agencies, normalized for comparability cost overruns, or the relative increase of DOE project costs compared to the ong~nal budgets schedule performance, or the absolute time duration of DOE projects compared to the duration of projects by industry and other government agencies, normalized for comparability schedule slippages, or the relative increase of DOE project durations compared to the original schedules Project Costs and Cost Overruns Combining the results of the Project Performance Study of November 30, 1993 (IPA, 1993)
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The committee reviewed documents produced by a variety of organizations: · reports by the General Accounting Office (GAO) · reports by the DOE Office of Inspector General · independent external reviews of DOE projects · statistical analyses by Independent Project Analysis, Inc., for DOE .
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is to promote effective, efficient, and economical operations of DOE programs through audits, inspections, investigations, and other reviews. The OIG has continually advised DOE headquarters and field office managers of the significant issues affecting project performance.
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. In 1997 OIG reviewed the Cost-Reduction Incentive Program with Westinghouse Savannah River Company and found that most of the savings identified by the program could not be attributed to innovative changes in work methods or processes.
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The schedules for some of the subprojects were "extremely conservative," and cost estimates for many of the more routine demolition and construction activities were "very high." Too many layers of management were involved in approving "small, straightforward projects." The reviewers found that 8 of the 12 subprojects lacked adequate justification for proceeding (questionable economic benefits, reduced operational flexibility, or failure to take account of changing circumstances) (Foster Wheeler Environmental Corporation, 1998a)
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. The review of the Nuclear Materials Safeguards and Security Upgrades Project at LANL found that although a detailed schedule risk analysis was performed as part of the critical decision review process, risks such as construction performance and the potential impacts of ongoing changes to the project management process at LANL had not been taken into account.
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(IPA) : Project Performance Study, November 30,1993 (IPA,1993~; Project Performance Study, Waste Management Addendum, December 1995 (IPA, 1995~; and Project Performance Study Update, April 1996 (IPA, 1996~.
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, they also overran their initial cost estimates by about 45 percent, indicating that DOE either has a problem controlling costs or a problem estimating costs. The Project Performance Study Update in April 1996 (IPA, 1996)
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2~. Scope adjustments are likely to bias project costs upward, on the average, even if the original cost estimates were unbiased because its easier to add reasons to spend any underruns.
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an average of 48 percent more than the same designs executed by the private sector," eleven percentage points of this 48 percent premium could be eliminated if the average DOE project definition index were equal to the average for the private sector. That is, a WM project that would cost $10 million in the private sector would cost DOE $14.8 million, but this could be reduced by $1.1 million if the DOE project definition were equal to the average project definition in the private sector.
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2) , and documented savings from value engineering were less than 3 percent of project costs.
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Hanford Waste Vitrification Project A Project RiskAnalysis of the Hanford Waste Vitrification Plant (IPA, 1990) , was prepared in June 1990 by IPA for the DOE Office of Program Management.
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. The project results included a faulty design, excessive cost overruns, and poor cost performance relative to comparable projects performed by other organizations....
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1998a. External Independent Review: Stockpile Management Restructuring Initiative Project, DOE Pantex Facility.
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Gottschlich, area manager, Independent Project Analysis, Inc., to the Committee to Assess the Policies and Practices of the Department of Energy to Design, Manage, and Procure Environmental Remediation, Waste Management, and Other Construction Projects, August 3, 1998, National Research Council, Washington, D.C. IPA (Independent Project Analysis, Inc.)
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