Improving Project Management in the Department of Energy (1999) / Chapter Skim
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Executive Summary
Executive Summary
Pages 1-9
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DOE currently spends billions of dollars annually and plans to construct more than $20 billion worth of defense, energy research, environmental management, fissile materials disposition, and other projects in the next five years. In recent years DOE's budget has been dominated by the monumental task of environmental restoration and waste management to repair damage caused by the production of nuclear weapons in the past.
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review and assess the processes used by DOE and its contractors to identify project requirements, develop scopes of work, execute and manage designs, prepare cost estimates, select contract types, and execute and manage environmental restoration, waste management, and construction projects; (2) assess the level of oversight and experience of personnel in field offices and at DOE headquarters; (3)
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This program of reform is set out in the recommendations, culminating in the recommendation that an office of project management be established to implement these reforms and drive cultural changes in DOE. To be effective, the proposed project management office must include the staff necessary to support the project managers and must provide consistent methods and systems for cost estimation, risk analysis, contracting, incentives, change control, progress reporting, and earned value management.
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As a part of its project management system, DOE should issue fundamental policies, procedures, models, tools, techniques, and standards; train project staff in their use; and require their use on DOE projects. DOE should develop and support the use of a comprehensive project management system that includes a requirement for a comprehensive project management plan document with a standard format that includes a statement of the project organization covering all participating parties and a description of the specific roles and responsibilities of each party.
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Finding. DOE often sets project contingencies too low because they are often based on the total estimated cost of a project rather than on the risk of performing the project.
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DOE's failure to develop project management skills in its personnel is a fundamental cause of poor project performance. DOE has shown little commitment to developing project management skills, as indicated by the lack of training opportunities and the absence of a project management career path.
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Various DOE program offices are also developing the capability of conducting internal independent project reviews. Recommendation.
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Recommendation. DOE should strengthen its commitment to contract reform focusing on the assessment and quantification of project uncertainties, the selection of the appropriate contract type and scope for each job, and increased use of performance-based incentive fees rather than award fees to meet defined project cost and schedule goals.
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Department-wide project management functions should be assigned to the project management office, and the director of this office should have the authority and the resources to set and enforce reporting requirements for all projects. Other responsibilities, such as property and asset management, should be assigned to existing DOE headquarters offices.
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