During the period 1980 through 1996, DOE conducted 80 different MSAs. All of these acquisitions have suffered from a lack of advance planning and ineffective management oversight that has led to cost overruns and schedule slippages. As agreed with the Chairman’s office, this report (1) assesses DOE’s performance in completing its MSAs, (2) identifies key factors that hinder the timely, cost-effective completion of the acquisitions; and (3) determines what DOE is doing to improve its performance. DOE’s Limited Success With Its MSAs

Since 1980, DOE has conducted 80 projects that it designated as MSAs. Most of the completed projects were not finished on schedule, and many of the ongoing MSAs were behind schedule. High Rate of Project Terminations

Since 1980, 31 MSAs were terminated prior to completion. Project cost overruns have occurred for other reasons. 4.) These actions could help DOE address some of the key factors leading to major cost overruns and schedule slippages for its MSAs. DOE Management Initiatives

We believe that DOE’s difficulties in completing MSA projects, or of completing them on time and within original cost estimates, are a result of the key factors that we discuss in chapter 3—constantly changing missions, incremental funding of MSAs, lack of effective incentives, and shortages of employees with contracting and oversight skills. DOE currently has undertaken several initiatives to improve the management of its operations.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) ability to complete its major system acquisitions within originally estimated cost and time schedules, focusing on: (1) DOE's performance in completing its major system acquisitions; (2) key factors that hinder the timely, cost-effective completion of the acquisitions; and (3) DOE efforts to improve its performance.

What GAO Found

GAO found that: (1) from 1980 through 1996, DOE conducted 80 projects that it designated as major system acquisitions; (2) DOE has completed 15 of these projects, and most of them were finished behind schedule and with cost overruns; (3) 31 other projects were terminated prior to completion after expenditures of over $10 billion; (4) cost overruns and schedule slippages continue to occur on many of the ongoing projects; (5) the four key factors underlying the cost overruns, schedule slippages, and terminations include unclear or changing missions, incremental project funding, a flawed incentive system for DOE employees and contractors, and lack of sufficient DOE personnel with the appropriate skills to effectively oversee contractor operations; and (6) DOE has implemented several initiatives that are helping to improve its overall management, but all of these initiatives may not improve DOE's management of its major system acquisitions.