Department of Energy: Actions Needed to Develop High-Quality Cost Estimates for Construction and Environmental Cleanup Projects

The Department of Energy (DOE) spends billions of dollars on construction projects-those that maintain nuclear weapons, conduct research, and process nuclear waste-and projects that clean up nuclear and hazardous wastes at DOE's sites; these projects are largely executed by contractors. DOE has struggled to keep these projects within cost and schedule estimates. GAO was asked to assess (1) DOE's cost-estimating policies and guidance, (2) the extent to which selected projects' cost estimates reflect best practices compiled in GAO's cost-estimating guide, and (3) DOE's recent actions to improve cost estimating. GAO reviewed relevant documents, including support for cost estimates at three major construction projects-those costing $750 million or more-and one environmental cleanup project, and interviewed DOE officials.

The Dept. of Defense (DoD) spends billions of dollars to sustain key business operations intended to support the warfighter. DoD is at high risk because of vulnerabilities to fraud, waste, abuse, and mismanagement and also should have a broad-based transformation needed to achieve greater efficiency, effectiveness, and sustainability. The author provide his views on: (1) actions needed to achieve measurable outcomes in DoD's high-risk areas; and (2) DoD's progress in strengthening its mgmt. approach for business transformation, including establishing the Chief Mgmt. Officer position. Includes info. regarding the high-risk area related to contract mgmt. at the Dept. of Energy's National Nuclear Security Admin. Illustrations.

The Dept. of Energy (DoE) manages over 100 construction projects with estimated costs over $90 billion and 97 nuclear waste cleanup projects with estimated costs over $230 billion. DoE has about 14,000 employees to oversee the work of more than 93,000 contractor employees. This testimony discusses: (1) recent work on contract and project mgmt. within two of DoE's largest program offices -- the Nat. Nuclear Security Admin. (NNSA) and the Office of Environmental Mgmt. (EM); (2) preliminary results of ongoing work on project mgmt. at NNSA's Mixed Oxide Fuel Fabrication Facility project at the Savannah River Site in South Carolina; and (3) actions needed by NNSA and EM to improve contract and project mgmt. Illustrations.