United States A0 - General Accounting Office Washington, D.C. 20548 Resources, Community, and Economic Development Division B-276766 April 30, 1997 The Honorable George E. Brown, Jr. Ranking Minority Member Committee on Science House of Representatives Subject: Deuartment of Energv: Onnortunitv for Enhanced Oversight of Major Svstem Acauisitions Dear Mr. Brown: On March 6, 1997, we testified before the Subcommittee on Energy and Environment, Committee on Science, on the Department of Energy’s (DOE) performance in completing its largest and most signiscant projects, referred to as major systems. The costs of these projects exceed $100 million.’ At that hearing, we reported that from 1980 through 1996,31 of DOE’s 80 major systems were terminated prior to completion, after expenditures of over $10 billion; 15 of the projects were completed, but most of them were finished behind schedule and with cost overruns;2 and the remaining 34 ongoing projects were also experiencing schedule slippages and/or cost overruns. As requested, we are providing you with information on how the Federal Acquisition Streamlining Act of 1994, the Clinger-Cohen Act of 1996 (formerly the Federal Acquisition Reform Act of 1996 and the Information Technology Management Reform Act of 1996), and the Office of Management and Budget (OMB) circular A-11 can help address DOE’s problems in completing these projects within approved budgets and schedules. There are no quick, easy solutions to keeping DOE’s major system acquisitions on schedule and within budget. However, these initiatives could help. On March 24, 1997, we briefed your staff on information contained in this report. ‘Denartment of Energy: Imnroving Management of Maior Svstem Acauisitions (GAO/T-RCED-97-92, Mar. 6, 1997). 2Cost overruns are increases in a project’s original cost estimate. GAO/RCED-9?-146R Oversight of DOE’s Major Systems B-276766 In summary, title V of the Federal Acquisition Streamlining Act of 1994 is designed to foster the development of (1) measurable cost, schedule, and performance goals and (2) incentives for acquisition personnel to reach these goals. Subtitle B, which applies to civilian agencies, provides that agency heads are to establish cost, schedule, and performance goals for acquisition programs and annually report on the progress in meeting these goals. These goals are to include achieving, on average, 90 percent of the established cost and schedule goals without reducing the performance or capabilities of the items being acquired. Subtitle B also requires that agency heads manage employees in acquisition positions (including their education, training, and career development) by relating their evaluations, pay, and promotions to their performance in helping achieve cost, schedule, and performance goals. Furthermore, the Clinger-Cohen Act of 1996 provides for the establishment of policies and procedures for the management, education, and training of the civilian acquisition workforce. The career development of this workforce is to include the identiEcation of appropriate career paths, mandatory education and training in the critical duties and tasks of these career paths, and an enhanced system of performance incentives to encourage agencies to specify in their budget justification documents the funding levels requested for educating and training the acquisition workforce. Under the act, the funds appropriated for this purpose may not be used for any other purpose. Finally, OMB, on July 16, 1996, issued circular A-11, which includes new guidance for agencies to use in the planning, budgeting, and acquisition of fixed assets, such as land, buildings, and equipment. One purpose of this guidance is to ensure that agencies’ acquisition plans support the agencies’ mission statements, long-term goals and objectives, and annual performance plans developed under the Government Performance and Results Act of 1993. As we reported in November 1996,3we believe that these changes in procurement law could help the Department recruit additional contracting staff and improve the technicaI capabilities of its existing staff. Hence, these changes could help to address a long-standing department&l problem. The enclosure provides you with information on the legislation and OMB’s guidance. We performed our analysis of the Federal Acquisition Streamlining Act of 1994, the Clinger-Cohen Act of 1996, and the OMB circular during March 1997 in accordance with generally accepted government auditing standards. 3Demu-tment of Eners: O~~ortunitv to Imnrove Manaoement of Maior Svstem Acauisitions (GAORCED-97-17, Nov. 26, 1996). 2 GAOIRCED-97-146R Oversight of DOE’s Major Systems B-276766 We will make copies of this report available to others upon request. If you have any questions or need additional information, please call me at (202) 512-3841. Major contributors to this report include Jeffrey E. Heil and Robert M. Antonio. Sincerely yours, Enclosure 3 GAOIRCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I PRESENTATION SLIDES WI Legislation and OMB Circular Legislation and circular provide for l the submission of information to the Congress on major systems l improvements in the acquisition workforce that manages major systems GAOIRCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I GAs3 Submission Under Federal Acquisition Streamlining Act of 1994 Requires executive agencies to achieve, on average, 90 percent of cost and schedule goals without reducing performance or capability of major and nonmajor systems Requires the heads of executive agencies to act on systems that are significantly behind schedule, over budget, or not in compliance with performance or capability requirements Requires the Office of Federal Procurement Policy to submit an annual report to the Congress on progress made by agencies in implementing this policv 5 GAO/RCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I GM Submission Under Clinger-Cohen Act of 1996 Requires OMB to l develop, as part of the budget process, a process for analyzing, tracking, and evaluating risks and the results of major capital investments in executive agencies’ information systems l submit a report to the Congress, at the time of budget submission, on the net program performance benefits of these major capital investments and their relationship to agencies’ goals GAO/RCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I GQ Submission Under Clinger-Cohen Act of 1996 Requires the heads of executive agencies to, among other things, l design and implement a process for maximizing the value and assessing and managing the risks of information technology acquisitions l establish goals for improving their agency’s operations through the effective use of information technology l prepare a report, to be included with the annual budget submission to the Congress, that shows the agency’s progress in achieving goals GAOIRCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I GAO Submission Under OMB Circular A-I 1, Part 3 OMB’s purpose is to l coordinate the collection of agency data for the OMB reports to the Congress required by title V of the Federal Acquisition Streamlining Act of 1994 and the Clinger-Cohen Act of 1996 l ensure agencies’ acquisition plans support mission statements, long-term goals and objectives, and annual performance plans developed under the Government Performance and Results Act of 1993 GAO/RCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I w Submission Under OMB Circular A-1 1, Part 3 Under the circular, fixed assets include l the construction, major rehabilitation, and purchase of fixed assets, such as land, buildings, or equipment, including information technology owned by the government l DOE’s defense and nondefense assets 9 GAO/&ED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I MO Submission Under OMB Circular A-1 1, Part 3 Agencies are required to l request full funding for fixed assets l just@ fixed assets in accordance with missions, long-term strategic goals and objectives, and annual performance plan l submit baseline cost, schedule, and performance goals for fixed assets 10 GAOLRCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I G&-D Improved Management of Acquisition Workforce The Federal Acquisition Streamlining Act of 1994 requires OMB, in consultation with other departments and agencies, to l establish policies and procedures for agency heads to designate acquisition positions and manage employees in the designated acquisition positions l provide an enhanced system of incentives for the encouragement of excellence 11 GAOLRCED-97-146R Oversight of DOE’s Major Systems ENCLOSURE I ENCLOSURE I QQ Improved Management of Acquisition Workforce The Clinger-Cohen Act of 1996 requires l agency heads, after consultation with the Office of Federal Procurement Policy, to establish policies and procedures for managing their acquisition workforce l the Office of Federal Procurement Policy to issue policies to promote uniform implementation of these requirements (141037) 12 GAO/RCED-97-146R Oversight of DOE’s Major Systems . Ordering Information The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Orders by mail: U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 or visit: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by ca3ling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day,.GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from. the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. For information on how to access GAO reports on the INTERNET, send au e-mail message with “info” in the body to: email@example.com or visit GAO’s World Wide Web Home Page at: http&Qww.gao.gov United States General Accounting Office Washington, IX. 20548-0001 - Official Business Penalty for Private Use $300 Address Correction Reqnested
Department of Energy: Opportunity for Enhanced Oversight of Major System Acquisitions
Published by the Government Accountability Office on 1997-04-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)