The Bureau estimates that if it succeeds  with these innovations it can conduct the 2020 Census for $12.5 billion in  constant 2020 dollars. The Bureau’s October 2015 Cost Estimate Does Not Reflect Key Best Practices

Since our January 2012 report in which we reviewed the Bureau’s initial  estimate of the total cost of the decennial census, the Bureau has taken  significant steps to improve its capacity for cost estimating. Despite this progress,  the Bureau’s October 2015 cost estimate for the 2020 Census does not  fully reflect characteristics of a high-quality estimate as described in our  2009 Cost Estimating and Assessment Guide and cannot be  considered reliable. To reflect these characteristics, an organization must meet or  substantially meet each best practice. One reason why our overall assessment is low is because the estimate is  not well-documented. We found the estimate  partially met best practices for this characteristic. In addition, a risk and uncertainty analysis should be  performed to determine the level of risk associated with the estimate. Additionally the Bureau carried out its risk and uncertainty  analysis only for a portion of costs in fiscal years 2018 to 2020, telling us  it scoped it narrowly by design to those 3 years when most of the census  costs—and predominantly variable costs—occur. We found that the  Bureau’s risk and uncertainty analysis (modeled costs) covered $4.6  billion, only about 37 percent of the $12.5 billion total estimated life-cycle  cost, and less than one-half of the total estimated future cost of the  census, which would include fiscal years 2017 to 2023 (see figure 4). The Bureau Identified a Broad Range of Risks, but Did Not Clearly Account for Them in the Cost Estimate

		The Bureau Identified a Broad Range of Risks Potentially Affecting 2020 Census Cost

The Bureau identified 158 different project-level risks for the 2020  Census. The cost estimation team said that it was aware of the risk registers, but  had not consulted them. It also reported not having examined specific  risks directly for accounting in the cost model. Further, taking steps to ensure its cost estimate is reliable  would help improve decision making, budget formulation, progress  measurement, course correction when warranted, and accountability for  results. Yet  this institutional awareness of risk was not fully leveraged in the Bureau’s  cost estimation process. As a result, the Bureau is unable to determine  with confidence what risks the Bureau with its $12.5 billion cost estimate  is prepared to mitigate or address. Improving control over how risk and uncertainty are  accounted for and communicated with the Bureau’s decennial cost  estimation process, such as by implementing and institutionalizing  processes or methods with clear guidance, will improve Bureau and  congressional confidence that the Bureau’s budgeted contingencies are  at appropriate levels. To help ensure the Bureau produces a reliable cost estimate for the  2020 Census, take the following steps to meet the characteristics of a  high-quality estimate:
Comprehensive—among other practices, ensure the estimate  includes all life-cycle costs and documents all cost-influencing  assumptions. It also  provided additional context that we incorporated, as appropriate. The Department of Commerce also noted that while it fully recognizes the  Census Bureau can further improve its process under the Cost Estimating  and Assessment Guide as well as the Standards for Internal Control in  the Federal Government, it stands behind the quantitative integrity of the  current life-cycle cost estimates for the 2020 Census. We reviewed (1)  the extent to which the Bureau's life-cycle cost estimate met our best  practices for cost estimation; (2) the extent to which the Bureau's key cost  assumptions were supported by field tests, prior studies, and other  evidence-based analysis; and (3) the extent to which the Bureau has  identified and accounted for key risks facing the 2020 Census within its  risk and uncertainty analyses of its life-cycle cost estimate.
Why GAO Did This Study

In October 2015, the Bureau estimated that with its new approach it can conduct the 2020 Census for $12.5 billion, $5 billion less than the $17.8 billion it estimated it would cost to repeat the design and methods of the 2010 Census. Reliable cost estimates can help an agency manage large complex activities like the 2020 Census, as well as help Congress make funding decisions and provide oversight.
GAO was asked to evaluate the reliability of the Bureau's life-cycle cost estimate. Among other objectives, this report assesses the extent to which (1) the Bureau's life-cycle cost estimate met GAO's best practices for cost estimation and (2) the Bureau identified and accounted for key risks facing the 2020 Census. To meet these objectives, GAO reviewed documentary and testimonial evidence from Bureau officials responsible for developing the 2020 Census cost estimate. GAO used its cost assessment guide ( GAO-09-3SP ) and Standards for Internal Control in the Federal Government ( GAO-14-704G ) as criteria.

What GAO Found

Since 2012, the U.S. Census Bureau (Bureau) has taken significant steps to improve its capacity to carry out an effective cost estimate; however, its October 2015 cost estimate for the 2020 Census does not fully reflect characteristics of a high-quality estimate and cannot be considered reliable. To reflect these characteristics, an organization must meet or substantially meet four best practices. Overall, GAO found the cost estimate partially met the characteristics of two best practices (comprehensive and accurate) and minimally met the other two (well-documented and credible). One reason why GAO's overall assessment is low is because the estimate is not well-documented. Improving cost estimation practices will increase the reliability of the Bureau's cost estimate, which will in turn help improve decision making, budget formulation, progress measurement, course correction when warranted, and accountability for results.
Best practices state a risk and uncertainty analysis should be performed to determine the level of risk associated with the cost estimate. The Bureau carried out such an analysis only for a portion of estimated costs for fiscal years 2018 to 2020. According to Bureau officials, they scoped the analysis narrowly to those 3 years when most of the census costs occur. GAO found that, as a result, the Bureau's risk and uncertainty analysis (modeled costs) covered $4.6 billion, only about 37 percent of the $12.5 billion total estimated life-cycle cost, and less than one-half of the total estimated cost of the census during future fiscal years.
Note: All figures are in constant 2020 dollars.
The Bureau has risk identification processes, which identify a broad range of risks that could affect the cost of the 2020 Census. Yet this awareness of risk is not leveraged in the Bureau's cost estimation. The cost estimation team did not consult risk registers or examine specific risks directly for inclusion in the cost model or risk and uncertainty analysis. It was not known what risks, if any, had been accounted for in other data in the cost model. As a result, neither the Bureau nor GAO are able to determine with confidence what risks the Bureau is prepared to mitigate or address within its $12.5 billion cost estimate. Improving control over how risk is accounted for will improve confidence that the Bureau's budgeted contingencies are at appropriate levels.

What GAO Recommends

GAO is making three recommendations including that the Secretary of Commerce direct the Bureau to take specific steps to ensure its cost estimate meets the characteristics of a high-quality estimate and improve control over how risk and uncertainty are accounted for in cost estimation. The Department of Commerce agreed with GAO's recommendations and provided additional context that was incorporated, as appropriate.