EM’s major cleanup projects involve efforts to clean up sites where  nuclear weapons were produced and production waste stored. III  for detailed information on the life cycle baseline costs for the 10 projects  we reviewed.) Major Cleanup Projects Experienced Billions of Dollars in Additional Costs and Schedule Delays, Primarily because Initial Baselines Were Overly Optimistic

Nearly all the cleanup projects we reviewed have had cost increases and  schedule delays in the life cycle baseline, as much as $9 billion for one  project, and schedule delays of as much as 15 years for two projects. These cost increases and schedule delays occurred primarily because the  previous baselines for these projects had schedule assumptions that were  not linked to technical or budget realities, and other assumptions also  proved to be overly optimistic. As the table shows, estimated costs increased from a minimum of $139  million for one project to more than $9 billion for another project. Table 2 shows that 8 of the 10 projects we reviewed experienced delays in  scheduled project completion, ranging from 2 years to 15 years. For example:    Solid waste stabilization and disposition project at Idaho. To meet its  accelerated completion date of 2012—down from 2018—DOE’s Idaho  National Laboratory assumed its Advanced Mixed Waste Treatment Plant  could process nuclear waste at a rate of about 8,500 cubic meters per  year—more than 50 percent faster than the rate of about 5,400 cubic  meters per year demonstrated when DOE established the baseline. To reflect this more realistic rate, DOE subsequently revised its baseline,  adding 4 years to the project schedule and increasing costs by about $450  million. Primarily because  project officials did not accurately anticipate the site conditions or the  types of work activities necessary to safely conduct the work—despite  multiple estimates generated by the contractor, DOE, and the Army  Corps—this project’s costs increased by $1.2 billion and significant  amounts of work were delayed, extending the completion date by 9 years,  to 2017. DOE Has Not Effectively Used Available Management Tools to Help Control Major Cleanup Projects’ Scope of Work, Costs, and Schedule

While DOE has several mechanisms in place to help manage cleanup  projects, including independent reviews, performance information  systems, guidance, and performance goals, it has not always used them to  effectively manage major cleanup projects’ scopes, costs, and schedules. As the  panel predicted, the project’s actual processing rate after its baseline was  validated was slower than expected. Within 7 months of OECM’s  validation of the near-term baseline, project officials proposed modifying  it. Specifically,  (1) proposals for baseline changes do not consistently identify reasons for  proposed changes or possible root causes that contributed to problems,  (2) use of EVM data does not consistently conform to industry standards  or GAO’s best practices, (3) quarterly reports do not always describe the  impact of contractor performance on near-term or life cycle costs and  schedules, and (4) reports to Congress on the status of and changes to  major cleanup projects are limited to a small snapshot in time and do not  provide information necessary for effective oversight. DOE Guidance for Management and Oversight Functions Is Unclear and Not Implemented Uniformly across Sites

EM’s key policies for managing its cleanup projects—including developing  project baselines, managing risk, and planning for contingency funding— are not consolidated but spread across various guidance documents and  memos and provide contradictory and confusing information. According to DOE officials, it is addressing some of these guidance issues. Because independent baseline reviews have not always provided  reasonable assurance of the stability of projects’ near-term baselines or  the reasonableness of the life cycle baselines, we recommend that the  Secretary of Energy direct the Director of the Office of Management to  take the following action:    Assess the Office of Engineering and Construction Management’s current  approach and process for conducting baseline reviews of EM cleanup  projects to identify and implement improvements that will better provide  reasonable assurance that project work scope can be completed within  the baselines’ stated cost and schedule. Other staff contributing to the report are listed in appendix V.

Appendix I: Scope and Methodology

To determine the extent to which the cost, schedule, and scope baseline  estimates for the Department of Energy (DOE) Office of Environmental  Management’s (EM) cleanup projects have changed and the key reasons  for these changes, we identified 10 major cleanup projects at 5 DOE sites. In addition, to include those projects that could  potentially become major projects because of cost growth, we reduced the  threshold to $900 million and identified another project, the Richland  nuclear material stabilization and disposition project, which is estimated  to cost between $900 million and $1 billion over the near term. To identify the factors that may hinder DOE’s ability to effectively manage  these cleanup projects, we spoke with DOE project directors and  contractor officials and reviewed project management documents for the  10 major cleanup projects we had identified. The project will remediate contaminated groundwater.
Why GAO Did This Study

The Department of Energy (DOE) spends billions of dollars annually to clean up nuclear wastes at sites that produced nuclear weapons. Cleanup projects decontaminate and demolish buildings, remove and dispose of contaminated soil, treat contaminated groundwater, and stabilize and dispose of solid and liquid radioactive wastes. Ten of these projects meet or nearly meet DOE's definition of major: costs exceeding $1 billion in the near term--usually a 5-year window of the project's total estimated life cycle. GAO was asked to determine the (1) extent to which the cost and schedule for DOE's major cleanup projects have changed and key reasons for changes, and (2) factors that may hinder DOE's ability to effectively manage these projects. GAO met with project directors and reviewed project documents for 10 major cleanup projects: 9 above the near-term $1 billion threshold, and 1 estimated to cost between $900 million and $1 billion over the near term.

What GAO Found

Nine of the 10 cleanup projects GAO reviewed had life cycle baseline cost increases, from a low of $139 million for one project to a high of nearly $9 billion for another, and life cycle baseline schedule delays from 2 to 15 years. These changes occurred primarily because the baselines we reviewed included schedule assumptions that were not linked to technical or budget realities, and the scope of work included other assumptions that did not prove true. Specifically, the schedules for 8 of the 10 projects were established in response to DOE's 2002 effort to complete cleanup work, which in some cases moved up project completion dates by 15 years or more. For example, to meet the 2012 accelerated completion date for its solid waste disposition project, DOE's Idaho National Laboratory assumed it would process waste at a rate that was more than 50 percent higher than the rate demonstrated at the time it established the baseline. When the laboratory could not meet that processing rate, DOE revised its baseline, adding 4 years and about $450 million to the project. Also, most of the 10 projects had cost increases and schedule delays because the previous baselines (1) had not fully foreseen the type and extent of cleanup needed, (2) assumed that construction projects needed to carry out the cleanup work would be completed on time, or (3) had not expected substantial additional work scope. DOE has not effectively used management tools--including independent project baseline reviews, performance information systems, guidance, and performance goals--to help oversee major cleanup projects' scope of work, costs, and schedule. For example, DOE's independent reviews meant to provide reasonable assurance that a project's work can be completed within the baseline's stated cost and schedule, have not done so for 4 of 10 projects. For one project, the baseline was significantly modified as little as 7 months after it had been revised and validated by the independent review, while other projects have experienced life cycle cost increases of as much as $9 billion and delays of up to 10 years, within 1 to 2 years after these reviews. In addition, although DOE uses several types of reporting methods for overseeing cleanup projects, these methods do not always provide managers with the information needed to effectively oversee the projects or keep Congress informed on the projects' status. For example, sites' proposals for changes to projects' cost and schedule baselines do not always identify possible root causes, and DOE does not systematically analyze the proposals for common problems across its projects. Therefore, DOE may be missing opportunities to improve management across projects. In addition, guidance for key management and oversight functions are spread across many different types of documents and are unclear and contradictory. As a result, project managers do not consistently implement this guidance, which may lead, for example, to problems in effectively managing risks across projects. Finally, DOE recently changed its goals for "successful" cleanup projects, reducing the amount of work and raising the allowable cost increases against the near-term baseline. DOE has initiated several actions to improve project management, but it is too early to determine whether these efforts will be effective.