Department of Energy

From 1980 through 1996, the Department of Energy (DOE) conducted 80 projects that it designated as major system acquisitions. DOE has completed 15 of these projects--most of them behind schedule and over budget. Three of the completed projects have yet to be used for their intended purpose. Thirty-one other projects were terminated before completion, after expenditures of more than $10 billion. The remaining 34 projects are ongoing. Cost overruns and "schedule slippages" continue to plague many of these ongoing projects. GAO believes that four key factors underlie these problems: unclear or changing missions, incremental funding of projects, a flawed system of incentives for both DOE employees and contractors, and too few DOE staff with the appropriate skills to oversee contractors' operations. In recent years, DOE has undertaken several initiatives that are helping to improve the agency's overall management. Although not all of these efforts may improve the management of DOE's major system acquisitions, GAO believes that their implementation offers an excellent opportunity for DOE to address the key factors.

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.