Transcript Slide 1

GAO Cost Estimating and Assessment Guide:
Review of DOE Cost Estimating Policy and Procedures
GAO-10-199
GAO-10-784
by Jennifer Echard
October 2010
The Department of Energy (DOE) spends
billions of dollars on construction projects

Those that maintain nuclear weapons, conduct research,
and process nuclear waste
Projects that clean up nuclear and hazardous wastes at
DOE’s sites
These projects are largely executed by contractors.

GAO Reports on DOE



GAO-10-199 Actions Needed to Develop High-Quality Cost
Estimates for Construction and Environmental Cleanup Projects

GAO-10-784 Recovery Act: Most DOE Cleanup Projects Appear to Be
Meeting Cost and Schedule Targets, but Assessing Impact of Spending
Remains a Challenge
2
GAO Criteria
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
A high-quality cost estimate is
credible, well- documented,
accurate, and comprehensive.
GAO Cost Assessment Guide GAO09-3SP
3
GAO Criteria (cont)


Credible: when it has been cross-checked with
independent cost estimates, the level of confidence
associated with the point estimate has been identified, and
a sensitivity analysis has been conducted--that is, the
project has examined the effect of changing one
assumption related to each project activity while holding all
other variables constant in order to identify which variable
most affects the cost estimate;
Well-documented: when supporting documentation is
accompanied by a narrative explaining the process,
sources, and methods used to create the estimate and
contains the underlying data used to develop the estimate.
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GAO Criteria (cont)
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Accurate: when it is not overly
conservative or too optimistic and based on
an assessment of the costs most likely to
be incurred; and:
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Comprehensive: when it accounts for
all possible costs associated with a project,
is structured in sufficient detail to ensure
that costs are neither omitted nor doublecounted, and the estimating teams'
composition is commensurate with the
assignment.
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12 Steps for Quality Estimate
1. Define estimate's purpose, scope, and
schedule
2. Develop the estimating plan
3. Define the program
4. Determine the estimating approach
5. Identify ground rules and assumptions
6. Obtain the data
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12 Steps for Quality Estimate (cont)
7.
8.
9.
10.
11.
12.
Develop the point estimate and
compare it to an independent cost
estimate
Conduct sensitivity analysis
Conduct risk and uncertainty analysis
Document the estimate
Present the estimate to management
Update the estimate to reflect actual
costs and changes
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GAO-10-199: Actions Needed to
Develop High-Quality Cost
Estimates for Construction and
Environmental Cleanup Projects
8
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 identified in GAO’s costestimating guide, and
(3) DOE’s recent actions to improve cost
estimating.
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Approach
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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.
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Conclusions
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DOE Lacks a Cost-Estimating Policy and Its
Guidance Is Outdated and Incomplete;
The Four Project Cost Estimates We
Reviewed Were Not High-Quality;
DOE Has Begun Taking Actions to Improve
Its Cost Estimating.
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Objective 1: DOE’s cost
estimating policies and guidance
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Methodology


For the first objective, we analyzed the
policies and guidance in effect across DOE
and compared them with the best practices
identified in GAO's cost-estimating guide.
We also interviewed several project
managers to identify the policies and
guidance they followed when overseeing
their contractors' work in generating their
cost estimates.
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Findings
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DOE has not had a policy that establishes standards
for cost estimating in place for over a decade.
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Its guidance is outdated and incomplete.
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DOE’s only cost-estimating direction resides in its
project management policy that does not indicate
how cost estimates should be developed.
DOE’s outdated cost-estimating guide assigns
responsibilities to offices that no longer exist and
does not fully include most of the best practices
from government and industry in GAO’s costestimating guide.
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Effects of not having a policy:
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Makes it difficult for the department to oversee the
development of high-quality cost estimates.
A cost- estimating policy would establish roles and
responsibilities for those preparing, reviewing, and
updating all types of cost estimates, including
independent cost estimates.
A policy would also identify when different cost
estimates would be conducted, while also serving as a
mechanism for providing standard cost-estimating
procedures to agency officials and contractors.
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Objective 2: The extent to which
selected projects’ cost estimates reflect
best practices identified in GAO’s costestimating guide
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Summary
The cost estimates for the four projects we reviewed did not exemplify the
four characteristics of high-quality cost estimates as established by best
practices—credible, well-documented, accurate, and comprehensive.
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All four estimates lacked credibility
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DOE did not:
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All four estimates were only partially documented
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projects did not ensure that the contractors thoroughly documented the details of how
they developed the estimates.
All four estimates lacked accuracy
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Sufficiently identify the level of confidence associated with the estimates,
adequately examine the effects of changing key assumptions on the estimates, or crosscheck the estimates with an ICE—an estimate created by an entity with no vested interest in
the project.
Were not based on a reliable assessment of costs most likely to be incurred.
None of the four estimates were comprehensive
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three of the estimates did not include costs associated with the full life cycle of the
projects, and the estimating teams’ expertise and compositions did not reflect best
practices.
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Methodology
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For the second objective, we reviewed the most
recent total project cost estimates from each of four
selected DOE projects,
Three major construction projects
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Science's National Synchrotron Light Source-II at Brookhaven
National Laboratory in New York,
NNSA's Uranium Processing Facility at Y-12 National Security
Complex in Tennessee, and
EM's Salt Waste Processing Facility at the Savannah River
Site in South Carolina
One environmental cleanup project, EM's
decontamination and decommissioning project for
the Y-12 National Security Complex in Tennessee
(EM Cleanup at Y-12).
We compared the methods used to develop these
estimates with cost- estimating best practices.
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4 projects
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Uranium Processing Facility (UPF)
Salt Waste Processing Facility
(SWPF)
National Synchrotron Light Source
II (NSLS-II)
Nuclear Facility Decontamination
and Decommissioning at Y-12
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(EM Cleanup at Y-12)
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Findings
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The cost estimates of the four projects we reviewed
lacked credibility because DOE did not:
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Sufficiently cross-check the projects' cost estimates with ICEs,
Use best practices when identifying the level of confidence associated with
the estimates, or
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Adequately analyze project sensitivities.
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More specifically, DOE did not conduct ICEs for three of
the four projects (NSLS-II, UPF, and EM Cleanup at Y-12).
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Instead, these three projects received independent cost reviews as part of
external independent reviews or independent project reviews.
An independent cost review is less rigorous than an ICE because it
addresses the cost estimate's high-value, high-risk, and high-interest
aspects without evaluating the remainder of the estimate.
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Findings (cont)

None of the four projects conducted a sensitivity
analysis, further undermining their estimates'
credibility.
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By conducting this analysis, the variable that most affects the
cost estimate becomes more obvious, thereby allowing project
managers to develop risk mitigation steps specific to that
variable.
For the one project we reviewed that was at such an early stage
of development--Uranium Processing Facility--not conducting a
sensitivity analysis meant that project managers were not able
to give decision makers an understanding of the impacts on
project cost of, for example, varying the square footage of the
building.
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Findings (cont)
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The four estimates we reviewed lacked complete documentation.
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For example, three of the four projects did not generate a narrative summary
explaining the process, sources, and methods used to create the estimates,
and outlining clearly and concisely the cost estimate results, including
information about cost drivers and high-risk areas.
As a result, since the documentation lacked important details and
information, someone unfamiliar with the project could not easily recreate or
update it.
None of the four projects systematically included the underlying data
on which the estimates were based in the documentation sets.
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This caused the estimate's credibility to suffer because the rationale
supporting the specific costs was not clear.
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More specifically, at the EM Cleanup at Y-12 project, while the project team
created notebooks containing supporting documentation for the estimate that
included detailed descriptions of how each cost was derived, these notebooks
did not consistently contain evidence of the source data--for example, quotes
from vendors or historical data from another project--used for each
calculation.
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Findings (cont)
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The four projects' estimates lacked comprehensiveness
because the teams who generated the estimates were
not comprised in accordance with best practices.
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Although each of these teams was led by or included some
experienced and trained cost analysts, the teams were
generally made up of scientists and engineers who did not
appear to have such experience or training.
Further, it was the contractors' staff--not federal staff-who developed the cost estimates for all four of the
projects we reviewed.
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Findings (cont)

The four project cost estimates we reviewed lacked accuracy
because they were not based on a reliable assessment of costs most
likely to be incurred.
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For example, two of the projects—UPF and NSLS-II—did not always use
appropriate estimating methodologies.
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Further, NNSA's technical independent review of the UPF estimate echoed
this sentiment, stating that the project's cost estimate range was
unsupported in part because it was prepared with significant detail despite
the fact that there had been no design of technical systems or of the
building on which to base these details.
In addition, three of the four project estimates—SWPF, NSLS-II, and
UPF—did not use adequate data to estimate the projects' costs.

According to best practices, basing an estimate largely on valid and useful
historical data is a key step in developing a sound cost estimate; however,
these three estimates were not primarily based on relevant historical
actual costs.
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Objective 3: DOE’s recent actions to
improve cost estimating
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Methodology
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For the third objective, we reviewed
documentation of proposed and
recently implemented DOE actions and
evaluated it against the best practices
in our cost-estimating guide.
We also interviewed department-level
management officials, including NNSA,
and officials from EM and Science.
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Findings
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DOE recently initiated a number of actions at the
department-wide level to improve its cost estimates, the
first of which was to establish the Office of Cost Analysis
(OCA) in 2008. OCA has started implementing a number
of actions that are designed to improve cost estimating.
DOE established OCA in order to improve the
department's cost-estimating capabilities and better
ensure that its project cost estimates are reliable by
providing a new independent cost-estimating function
for the department.
Recommendations
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GAO is making recommendations to improve DOE’s
cost estimating. Among other things, GAO recommends
that DOE
(1) ensure its new policy and guide fully reflect costestimating best practices, in part by requiring
independent cost estimates (ICE) for its major projects,
(2) create a centralized independent cost-estimating
capability, and
(3) conduct ICEs for those major projects that have not
received one.
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DOE Response
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Recommendation 1: The Secretary of Energy should issue the
department's forthcoming cost estimating policy and
guidance as soon as possible to ensure that DOE and its
contractors generate cost estimates in accordance with best
practices.

DOE Response: The Department concurs with GAO's
recommendation. DOE will issue its updated policy, requirements
and guidance in the revision to DOE Order 413 3A, Program and
Project Management for the Acquisition of Capital Assets, Order
415.X, Cost Estimating for DOE Programs and Projects and
companion Guides
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The policy and guidance documents will reflect best practices
noted by GAO in its Cost Estimating and Assessment Guide.
Additionally, the policy and guidance documents will clarify roles
and responsibilities for cost estimating and assessment within the
Department.
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DOE Response
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Recommendation 2: The Department's forthcoming cost-estimating
policy and guidance should require that independent cost estimates
be conducted for major projects at milestones 1, 2, and 3.
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Note Milestones I, 2, and 3, as defined by GAO, refer to Alternative
Selection and Cost Range, Performance Baseline, and Start of
Construction, respectively
DOE Response: The Department partially concurs with GAO's
recommendation. The Department's pending cost estimating order (415
X) will require independent cost estimates for major projects prior to
approval of Alternative Selection and Performance Baseline (milestones 1
and 2).

These independent cost estimates will be consistent with the project
phase. For milestone 1, the Department will identify a cost range using
parametric cost methods (or extrapolation from actual costs for similar
projects when available). For milestone 3—start of construction—DOE will
conduct an independent cost estimate if warranted by risk and
performance indicators or required by senior officials.
DOE Response

Recommendation 3: GAO recommends that the Secretary of
Energy create a centralized cost-estimating capability by
combining the functions that the Office of Cost Analysis (OCA)
and the Office of Engineering and Construction Management
(OECM) have in common.

In centralizing the cost estimating functions in one office, GAO
recommends that the Secretary consider the organizational
structure recently adopted by the Department of Defense (DOD),
where the cost-estimating office reports directly to the Secretary
and Deputy Secretary.
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DOE Response: The Department concurs with GAO's recommendation.
DOE will centralize its cost estimating functions and will consider the
organizational structure adopted by the Department of Defense.
Specific organizational roles and responsibilities will be defined in the
Department's pending cost estimating order.
DOE Response

Recommendation 4: The Secretary of Energy should direct the Office of
Cost Analysis to conduct an independent cost estimate for each major
project that has not received one, including three of the four projects
that GAO reviewed (Note. The three projects refer to the NSLS II, UPF,
and EM Cleanup at Y-12).

DOE Response: The Department partially concurs with GAO's recommendation
The Department will conduct independent cost estimates for the projects
reviewed by GAO as appropriate for the next project milestone.
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UPF: The Department will perform an independent cost estimate for this project prior
to establishing the Performance Baseline (anticipated in mid to late 2010);
NSLS-II: This project has started construction. The Department will continue to
monitor cost, schedule and performance for this project on a quarterly basis, and will
perform an independent cost estimate only if there are significant performance issues;
Y-12: This project has started remediation. As with NSLS-II, the Department will
evaluate performance of this project and will only perform an independent cost
estimate if there are significant performance issues. Additionally, for the Salt Waste
Processing Facility project reviewed by GAO, the Department will continue to monitor
cost, schedule and performance for this project on a quarterly basis, and will perform
an independent cost estimate only if a performance baseline change is required.
GAO-10-784 Recovery Act: Most DOE
Cleanup Projects Appear to Be Meeting Cost
and Schedule Targets, but Assessing Impact of
Spending Remains a Challenge
July 2010
Background
The American Recovery and Reinvestment Act of 2009
(Recovery Act) was enacted on February 17, 2009.
The purposes of the act


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are to preserve and create jobs,
to promote economic recovery, and
to provide investments to increase economic efficiency by
spurring technological advances in science and health.
The cost of the Recovery Act was Initially estimated to be
$787 billion
Department of Energy (DOE) received appropriations of
$6 billion to expand and accelerate its efforts to clean up
numerous contaminated sites across the country.
7/18/2015
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Background
The contaminated sites contain
•
•
•
nuclear reactors;
chemical processing buildings; and
plants, laboratories, and maintenance facilities once used to manufacture
thousands of nuclear warheads.
Cleanup activities include
•
•
•
•
•
•
treating and permanently disposing of radioactive and chemical waste;
disposing of spent nuclear fuel;
removing contaminated soil;
treating contaminated groundwater;
packaging and shipping solid wastes infused with synthetic radioactive
elements like plutonium and americium for permanent disposal to a deep
geologic repository;
and eliminating excess facilities.
DOE has estimated that the cost of this cleanup may approach $300
billion.
7/18/2015
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Background
Recovery Act funding, which DOE intends to spend over 2.5
years, substantially boosts the Office of Environmental
Management’s annual appropriation of between $6 and $7
billion for cleanup.
DOE designated the bulk of this new funding—almost 80
percent—to speed cleanup activities at four large sites:




7/18/2015
Hanford Site in Washington State;
Idaho National Laboratory in Idaho;
Oak Ridge Reservation in Tennessee; and
Savannah River in South Carolina.
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Audit Objectives
7/18/2015
1)
How did DOE select projects for Recovery Act
funding and how did it develop cost and schedule
targets?
2)
What is the status of Recovery Act projects
and the extent to which the projects are
achieving cost and schedule targets and
performance measures?
3)
What are the key challenges DOE has faced in
carrying out these projects and its efforts to
address them?
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Audit Scope & Selection
Methodology

To better understand how cost and schedule estimates
were developed and to assess the reliability of estimates
for these projects, we selected a nonrandom sample of
four of the costliest projects.
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

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two projects involving demolition of facilities,
a project to remediate soil and groundwater, and
a project to package and dispose of waste
Two projects were located at the Hanford Site and the
other two were at the Savannah River Site.
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Savannah River Site:


The Savannah River Site was constructed in the early 1950s to
produce tritium and plutonium for use in nuclear weapons.
Historically the site has supported

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

7/18/2015
five nuclear reactors,
two chemical separation plants,
a heavy-water extraction plant,
a nuclear fuel and target fabrication facility,
a tritium extraction facility,
and waste management facilities.
Although the site no longer produces plutonium, some of its
missions continue, such as the extraction of tritium for nuclear
warheads.
The site received $1.6 billion under the Recovery Act, which is
funding 14 projects.
Overall, Recovery Act projects at Savannah River are expected to
accelerate transuranic waste disposal by 4 years, and the
decommissioning of the nuclear facilities by at least 5 years.
39
Savannah River - P&R Area completion general plant
projects and operations
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
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7/18/2015
“P&R Area” refers to the P and R reactors, two of the site’s
first nuclear production reactors, which started operating in
1953 and 1954, respectively.
The buildings and associated infrastructure, have remained
unused since the facilities ceased operations in 1964 (R
reactor) and 1988 (P reactor).
The scope of the Recovery Act project includes
decommissioning the two reactors, as well as removing the
railroad tracks.
The project also includes remediation of contaminated soil
under the tracks.
The project is expected to advance completion of the P and
R area cleanup by 5 to 6 years.
40
Savannah River - Accelerated
transuranic waste disposition
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7/18/2015
The purpose of this project is to accelerate the
characterization, packaging, and disposal of 4,200
cubic meters of transuranic waste from the site’s
former production of nuclear weapons.
The waste will then be shipped to DOE’s Waste
Isolation Pilot Plant for permanent disposal.
In addition, the project’s current scope includes
repackaging of 800 cubic meters of transuranic waste
into smaller containers in preparation for shipment.
The project is expected to be completed in September
2012, at a cost of $304 million.
41
Savannah River Site:
Overall Findings

Cost Estimates met most of the criteria.
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
Schedules met most of the criteria
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Schedules had activities with large amounts of float
attached
EVM program was certified and met data reliability
criteria
MOST IMPORTANTLY, the EVM system was linked to the
schedule software which was linked to the cost estimate
database

7/18/2015
Did not have Independent Cost Estimate Completed
As actual data was completed, the schedule and cost
estimates were updated
42
Savannah River Site:
Detailed Findings
7/18/2015
43
Savannah River Site: Cost Findings
Characteristic
Comprehensive
Well
documented
Accurate
Credible
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Overall Assessment
(Not Met / Minimally
Met /Partially Met /
Substantially Met /Fully
Met)
Fully Met
Substantially Met
Substantially Met
Substantially Met
Best Practice
Individual Assessment
(Not Met / Minimally Met
/Partially Met /
Substantially Met /Fully
Met)
Step 2: Develop the estimating plan
Fully Met
Step 4: Determine the estimating structure
Fully Met
Step 5: Identify ground rules and assumptions
Substantially
Step 1: Define the estimate’s purpose
Fully Met
Step 3: Define the program characteristics
Substantially
Step 5: Identify ground rules and assumptions
Substantially
Step 6: Obtain the data
Substantially
Step 10: Document the estimate
Fully Met[
Step 11: Present estimate to management for
approval
Partially
Step 7: Develop the point estimate and compare it
to an independent cost estimate
Substantially
Step 12: Update the estimate to reflect actual
costs and changes
Fully Met[
Step 8: Conduct sensitivity analysis
Partially
Step 9: Conduct risk and uncertainty analysis
Fully Met
Step 7: Develop the point estimate and compare
it to an independent cost estimate
Substantially
44
Savannah River Site:
Cost Findings

Fully met: Steps 1,2,4,9,10,12

Substantially Met: Steps 3, 5, 6,7
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
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Partially Met: Steps 8 and 11
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7/18/2015
Had a WBS that was standardized across DOE
Listed most of the ground rules/assumptions but did
not document what assumptions were based on
Cost estimate documentation did not address
sensitivity analysis.
GAO was not provided with documentation of a
briefing to management.
45
Savannah River Site: Transuranic Waste
Schedule Findings
Best Practice
7/18/2015
Overall
1. Capturing all activities
Compliant
2. Sequencing all activities
Mostly Compliant
3. Assigning resources to all
activities
Compliant
4. Establishing the duration of all
activities
Mostly compliant
5. Integrating schedule activities
horizontally and vertically
Vertical is Compliant
Horizontal is mostly compliant
6. Establishing the critical path for
all activities
Compliant
7. Identifying float between
activities
Partially compliant
8. Conducting a schedule risk
analysis
Compliant
9. Updating the schedule using
logic and durations to determine
dates
Partially Compliant
46
Savannah River Site:
P&R Schedule Findings
Best Practice
7/18/2015
Overall
1. Capturing all activities
Compliant
2. Sequencing all activities
Mostly Compliant
3. Assigning resources to all
activities
Compliant
4. Establishing the duration of all
activities
Mostly compliant
5. Integrating schedule activities
horizontally and vertically
Vertical is Compliant
Horizontal is mostly compliant
6. Establishing the critical path for
all activities
Compliant
7. Identifying float between
activities
Partially compliant
8. Conducting a schedule risk
analysis
Compliant
9. Updating the schedule using
logic and durations to determine
dates
Compliant
47
Savannah River Site:
P&R Schedule Findings
 Fully
Met: Step 1,3,5,6,8,9
 Mostly
Met: Step 2 and 4
There were a few soft constraints
 19% of activities had durations longer than
44 days
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 Partially
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Met: Step 7
Some activities had long float periods
48
Savannah River Site:
Transuranic Waste Schedule


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7/18/2015
Fully Met: Step 1,3,5,6,8
Mostly Met: Step 2 and 4
 There were a few constraints
 64 activities had durations longer than 100
days
Partially Met: Step 7,9
 Some activities had long float periods
 There was minimal evidence that the
schedule was updated regularly
49
EVM Findings:
 EVM
data reliability check was conducted
and program passed
 EVM
data was only available for 2 months
so no independent calculations were
conducted by GAO
7/18/2015
50
Back up
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51
Uranium Processing Facility
52
Uranium Processing Facility

NNSA is planning to build the Uranium Processing
Facility in order to ensure the long-term viability,
safety, and security of its enriched uranium.


The project is expected to consolidate all of NNSA's enriched
uranium operations at Y-12 into a single, modern facility with
new technologies and safeguards, replacing current
operations that are located in deteriorating facilities that do
not meet modern safety and security standards.
The effort is expected to support the nation's nuclear
weapons stockpile and nonproliferation activities, and provide
fuel for navy reactors.
53
Uranium Processing Facility

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Preliminary Cost Range: $1.4 billion to 3.5 billion.
Status: Critical Decision 1 approved on July 25, 2007;
the first of multiple Critical Decision 2 milestones is
projected for September 2010.
Project timeline: CD-1: 7/07;

CD-2/3 Site prep and long lead procurement: 9/10;
CD-3: 10/13;

CD-4 completion: 9/18.

54
Uranium Processing Facility
Characteristic
Comprehensive
Well documented
Accurate
Credible
Overall Assessment
(Not Met / Somewhat Met
/Partially Met / Mostly
Met /Fully Met)
Partially Met
Partially Met
Somewhat Met
Somewhat Met
Best Practice
Individual Assessment (Not
Met / Somewhat Met
/Partially Met / Mostly Met
/Fully Met)
Step 2: Develop the estimating plan
Partially
Step 4: Determine the estimating structure
Mostly
Step 5: Identify ground rules and assumptions
Partially
Step 1: Define the estimate’s purpose
Mostly
Step 3: Define the program characteristics
Mostly
Step 5: Identify ground rules and assumptions
Partially
Step 6: Obtain the data
Somewhat
Step 10: Document the estimate
Partially
Step 11: Present estimate to management for approval
Partially
Step 7: Develop the point estimate and compare it to
an independent cost estimate
Somewhat
Step 12: Update the estimate to reflect actual costs and
changes
Somewhat
Step 8: Conduct sensitivity analysis
Not Met
Step 9: Conduct risk and uncertainty analysis
Partially
Step 7: Develop the point estimate and compare it to
an independent cost estimate
Somewhat
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National Synchrotron Light
Source II
56
National Synchrotron Light
Source II

National Synchrotron Light Source (NSLS)-II is a
next generation electron synchrotron light source
intended to replace the current, 27- year-old
NSLS-I facility.


It is designed to deliver ultra-high brightness radiation-10,000 times brighter than NSLS-I--and will help meet
the nation's need for a high brightness, medium energy
X-ray source.
The Office of Science intends for the light source to serve
a large and diverse scientific user community, including
nanoscale imaging for energy, biology, medicine,
chemical, and environmental research.
57
National Synchrotron Light
Source II



Total Project Cost: $912 million.
Critical Decision 3 approved on January
9, 2009; construction is scheduled to be
completed in fiscal year 2015.
Project timeframe:




CD-1: 07/07;
CD-2: 01/08;
CD-3 construction: 01/09;
CD-4 completion: 06/15.
58
National Synchrotron Light
Source II
Characteristic
Comprehensive
Well documented
Accurate
Credible
Overall
Assessment
(Not Met /
Somewhat Met
/Partially Met /
Mostly Met /Fully
Met)
Partially Met
Partially Met
Somewhat Met
Somewhat Met
Best Practice
Individual
Assessment (Not
Met / Somewhat Met
/Partially Met /
Mostly Met /Fully
Met)
Step 2: Develop the estimating plan
Partially
Step 4: Determine the estimating
structure
Mostly
Step 5: Identify ground rules and
assumptions
Partially
Step 1: Define the estimate’s purpose
Partially
Step 3: Define the program
characteristics
Mostly
Step 5: Identify ground rules and
assumptions
Partially
Step 6: Obtain the data
Step 10: Document the estimate
Step 11: Present estimate to
management for approval
Partially
Somewhat
Partially
Step 7: Develop the point estimate and
compare it to an independent cost
estimate
Somewhat
Step 12: Update the estimate to reflect
actual costs and changes
Somewhat
Step 8: Conduct sensitivity analysis
Somewhat
Step 9: Conduct risk and uncertainty
analysis
Partially
Step 7: Develop the point estimate
and compare it to an independent cost
estimate
Somewhat
59
Salt Waste Processing Facility
60
Salt Waste Processing Facility


This project will construct a facility to treat large
quantities of waste from reprocessing and other
liquids generated by nuclear materials production
operations at the Savannah River site, converting it
into a stable form for eventual disposal in a
geological repository.
Approximately 37 million gallons of this waste are
being stored on an interim basis in 49 underground
storage tanks at the site--of this, about 34 million
gallons are salt waste slated for treatment at the
new facility.
61
Salt Waste Processing Facility



Total Project Cost: $1.34 billion.
Status: Critical Decision 3 approved on
January 2, 2009; construction is expected to
be completed in October 2015.
Project timeline: CD-0: 06/01;




CD-1: 10/04;
CD-2/3A: 09/07;
CD-3B: 01/09;
CD-4 completion: 10/15.
62
Salt Waste Processing Facility
Characteristic
Comprehensive
Overall Assessment
(Not Met / Somewhat
Met /Partially Met /
Mostly Met /Fully Met)
Partially Met
Well documented
Partially Met
Accurate
Credible
Partially Met
Somewhat Met
Best Practice
Step 2: Develop the estimating plan
Step 4: Determine the estimating structure
Step 5: Identify ground rules and
assumptions
Step 1: Define the estimate’s purpose
Step 3: Define the program characteristics
Step 5: Identify ground rules and
assumptions
Step 6: Obtain the data
Step 10: Document the estimate
Step 11: Present estimate to management
for approval
Step 7: Develop the point estimate and
compare it to an independent cost estimate
Step 12: Update the estimate to reflect actual
costs and changes
Step 8: Conduct sensitivity analysis
Step 9: Conduct risk and uncertainty analysis
Step 7: Develop the point estimate and
compare it to an independent cost estimate
Individual Assessment
(Not Met / Somewhat
Met /Partially Met /
Mostly Met /Fully Met)
Partially
Mostly
Mostly
Mostly
Mostly
Mostly
Somewhat
Somewhat
Partially
Partially
Mostly
Not Met
Partially
Partially
63
EM Clean Up at Y-12
64
EM Clean Up at Y-12

This project involves the cleanup of the Y-12 National
Security Complex, a significant source of environmental
contamination.




construction and operation of on-site landfills and the Environmental
Management Waste Facility disposal facility;
decontamination and decommissioning of contaminated facilities,
including the Alpha 4 Facility; soil, sediment, scrap, and burial ground
remediation;
and environmental monitoring of soils and water sources to assess the
effectiveness of cleanup actions.
Much of the project's scope will be transferred to EM's
Integrated Facility Disposition Project, a large project
encompassing decontamination and decommissioning and
remediation of soil and groundwater at Y-12 and the
neighboring Oak Ridge National Laboratory.
65
EM Clean Up at Y-12

Near-term Baseline (NTB): $338 million.

Total life cycle cost: $1.1 to 1.2 billion.


Status: Critical Decision 2/3 approved on
February 13, 2008; NTB period is from
fiscal year 2008-2012.
Project timeline: CD-2/3 for NTB: 02/08;


End of NTB: 09/12;
CD-4 completion: 9/22.
66
EM Clean Up at Y-12
Characteristic
Comprehensive
Best Practice
Mostly Met
Step 2: Develop the estimating plan
Mostly
Step 4: Determine the estimating structure
Mostly
Step 5: Identify ground rules and assumptions
Well documented
Step 3: Define the program characteristics
Credible
Partially
Partially Met
Step 1: Define the estimate’s purpose
Accurate
Individual Assessment (Not Met /
Somewhat Met /Partially Met / Mostly Met
/Fully Met)
Fully
Mostly
Step 5: Identify ground rules and assumptions
Step 6: Obtain the data
Partially
Partially
Step 10: Document the estimate
Partially
Step 11: Present estimate to management for approval
Partially
Partially Met
Step 7: Develop the point estimate and compare it to an
independent cost estimate
Partially
Step 12: Update the estimate to reflect actual costs and
changes
Mostly
Somewhat Met
Step 8: Conduct sensitivity analysis
Step 9: Conduct risk and uncertainty analysis
Step 7: Develop the point estimate and compare it to an
independent cost estimate
Somewhat
Partially
Somewhat