WASHINGTON, D.C. – The U.S. Government Accountability Office (GAO) has removed EM capital asset projects of $750 million or less from its high-risk list because of the nuclear cleanup program’s progress in completing that work.
“This is good news for EM because it marks an important step in our contract and project management improvement strategy,” Senior Advisor for Environmental Management Dave Huizenga said of the GAO’s report released today. “However, we still have work to do.”
GAO updates Congress every two years on its high-risk program, which identifies government operations at high risk due to fraud, waste, abuse and mismanagement, or in need of reform to address economic and other challenges.
In its report, the GAO says it recognizes progress on EM projects of $750 million or less and is shifting the focus of EM's high-risk designation more to major contracts and projects greater than $750 million.
From 2010 to 2012, EM met its goal to complete 50 capital asset projects that cost $750 million or less within 10 percent of their approved cost baselines. The cost of those projects was 18 percent below the baseline cost of $3,371 million.
EM is working proactively with GAO and the Office of Management and Budget to share its actual and planned improvements. EM continues to improve contract and project management to deliver capital projects on time and within cost, and its efforts at EM sites and headquarters have resulted in better performance.
Key EM reforms include implementing policies requiring more front-end planning; ensuring federal project directors and contracting officers are certified at required levels; improving cost estimating; conducting more frequent project reviews; selecting proper contract types; tying fee strategies to final outcomes; and documenting contractor performance. EM has been steadfast in implementing corrective measures and monitoring progress of performance metrics.
EM has restructured projects into smaller, better-defined capital asset projects and non-capital operations activities to provide more focused management and oversight. Approximately 90 percent of design work of capital asset projects must be completed before the baseline is approved. EM policy now requires budgeted baseline contingency and a minimum 80 percent confidence level for performance baselines for capital asset projects. EM also implemented external technical reviews to ensure timely resolution of engineering and technology issues early in project development.
EM has many challenges ahead, including its two large nuclear construction projects, the Waste Treatment Plant (WTP) at the Hanford site and the Salt Waste Processing Facility (SWPF) at the Savannah River Site.