Further Improvements Needed in the Department of Energy for Estimating and Reporting Project Costs

Gao ID: MASAD-82-37 May 26, 1982

GAO examined Department of Energy (DOE) policies, procedures, and practices for estimating the costs of major systems and the accuracy of information provided to Congress. The GAO survey focused on the Transient Reactor Test Facility Upgrade and the Program Support Facility projects.

GAO found problems with the cost estimating practices, particularly the lack of sufficient guidelines provided to contractors for preparing cost estimates or to DOE project officials for reviewing cost estimates. Specifically: (1) decisions were based on cost estimates prepared before the projects were sufficiently defined; (2) the inflation rates used were too low; (3) the provisions for risk were not realistic; and (4) the documentation supporting cost estimates was not adequate. GAO also found problems in reporting cost changes to Congress. When estimated project costs exceed appropriated funds, project scope has been reduced or costs have been categorized differently without fully notifying Congress.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Donald E. Day Team: General Accounting Office: Mission Analysis and Systems Acquisition Division Phone: (202) 275-3468


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