NNSA Recognized Certain Indicators of Cost and Schedule Problems after Strengthening Its Oversight in 2010 and 2011

Prior to 2011, NNSA project staff had failed to recognize and fully resolve  certain cost and schedule problems that indicated that the MOX project  would not be completed on time or within its approved cost estimates. Furthermore, NNSA staff did not recognize the extent to which  decreased productivity by the contractor created future cost increases and schedule delays or resolve the issue. These changes to DOE’s and NNSA’s  oversight of the MOX project contributed to the decision to terminate the  project. According to  NNSA officials, as a result of this requirement, NNSA began conducting  peer reviews of the MOX project in 2011. After NNSA’s project peer reviews  and the MOX contractor’s proposed update to the project’s cost and  schedule estimate showed the significant likelihood of additional cost  growth and schedule delays, NNSA proposed slowing down construction  of the MOX facility in 2013 and ultimately terminated the project in  October 2018. DOE Has Requirements for Documenting and Sharing Lessons Learned, but They Do Not Ensure Consistent or Timely Documentation or the Evaluation of Corrective Actions

As outlined in DOE Order 413.3B, DOE requires that project management  staff document and share project management lessons learned on capital  asset projects like MOX but does not require that all project management  lessons learned from capital asset projects be documented consistently  or shared in a timely manner. Moreover, DOE Order 413.3B does not  require the evaluation of the results of corrective actions taken in  response to lessons learned that are identified during the course of  capital asset projects such as the MOX project to ensure that the  problems experienced are resolved department-wide. DOE’s Lessons-Learned Requirements for Capital Asset Projects Do Not Ensure Consistent or Timely Documentation and Sharing or the Evaluation of Corrective Actions

DOE Order 413.3B requires project management lessons learned for  capital asset projects to be documented throughout the life of a project  but does not specifically require lessons learned to be documented and  saved in a consistent manner or shared routinely or in a timely manner. By developing requirements that clearly define how and where  all project management lessons learned should be documented and  saved to make them readily accessible across the department, such as in  a database, DOE—including NNSA—could improve the agency’s existing  lessons-learned process. Conclusions

DOE and NNSA made changes that strengthened oversight of large  capital asset projects. By developing requirements  for sharing project management lessons learned from the beginning of a  project routinely and in a timely manner to improve DOE’s ability to  identify and evaluate problematic practices and positive experiences,  DOE—including NNSA—could help improve the success of future capital  asset projects and avoid the problems the agency encountered on the  MOX project. Recommendations for Executive Action

We are making the following three recommendations to DOE:
The Secretary of Energy, in coordination with DOE’s Office of Project  Management and NNSA’s Office of Acquisition and Project  Management, should develop requirements that clearly define how  and where project management lessons learned for capital asset  projects should be documented and saved to make them readily  accessible across the department. GAO staff who made major contributions to  this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our report examined (1) when the National Nuclear Security  Administration’s (NNSA) project management oversight processes  recognized cost and schedule problems at the Mixed Oxide Fuel  Fabrication Facility (MOX) project and the actions the agency took to  address them and (2) the extent to which the Department of Energy  (DOE) requires that project management lessons learned from MOX and  other projects be documented and shared. Also in February 2007, responsibility for the MOX contract was officially transferred to the  Savannah River Site Office.
Why GAO Did This Study

The MOX project, located at DOE's Savannah River Site in South Carolina and overseen by NNSA, experienced significant cost increases and schedule delays following the start of construction in 2007. After spending nearly $6 billion, NNSA terminated the project in October 2018. While DOE and NNSA have made some recent progress, they have historically struggled to complete, within their original cost and schedule estimates, other major construction projects intended to help maintain the nuclear security complex.
GAO was asked to review issues related to oversight of the MOX project. This report examines (1) when NNSA's project management oversight processes recognized cost and schedule problems at the MOX project and the actions the agency took to address them and (2) the extent to which DOE requires that project management lessons learned from MOX and other projects be documented and shared. GAO reviewed agency documents, visited the MOX project, and interviewed DOE and NNSA officials and representatives of the MOX contractor.

What GAO Found

The Department of Energy's (DOE) National Nuclear Security Administration (NNSA) has strengthened its oversight of the Mixed Oxide Fuel Fabrication Facility (MOX) project since 2011 and, as a result, began recognizing cost and schedule problems. The project, begun in 1997, was intended to dispose of large quantities of weapons-grade plutonium no longer required for national security. Prior to 2011, NNSA's project staff failed to recognize signs that the project would not be completed on time or within its approved cost. An independently conducted analysis, prepared in 2014 in response to a GAO recommendation, determined that NNSA staff did not recognize early problems because they were inexperienced in project management. To strengthen oversight, NNSA in late 2010 and 2011 began actions, such as conducting additional reviews and transferring oversight of the project to a newly established office specializing in project management. NNSA continued to identify the contractor's performance problems, such as the lack of credible, reliable cost and schedule data. These continued problems contributed to NNSA's decision to terminate the project.
DOE requires that project staff document and share project management lessons learned on capital asset projects like the MOX project, but not all lessons are to be documented consistently or shared in a timely manner. GAO found that DOE's and NNSA's offices document project management lessons learned differently and that not all of the documented lessons learned are readily accessible to other staff. Additionally, GAO found that DOE does not require that project staff share lessons learned for capital asset projects until the start of construction, which can occur many years after the start of the project. Under key practices, such lessons should be stored in a logical, organized manner, be easily retrievable, and be submitted in a timely manner (see fig.). By developing requirements that clearly define how and where project management lessons learned should be documented and requiring that the lessons be shared in a timely manner, DOE could improve its lessons-learned process and help improve the success of future capital asset projects. Also, for capital asset projects, DOE does not require the evaluation of the results of all corrective actions to respond to lessons learned to ensure that problems are resolved, consistent with key practices. By developing requirements to evaluate the effectiveness of corrective actions, DOE could better verify whether the actions had the intended outcome.

What GAO Recommends

GAO is making three recommendations, including that DOE and NNSA develop requirements for defining how and where project management lessons learned for capital asset projects should be documented and shared routinely and in a timely manner, and for evaluating the effectiveness of corrective actions taken in response to lessons learned. DOE agreed with GAO's recommendations.