GAO Report Released: Department of Energy: Observations on Project and Program Cost Estimating in NNSA and the Office of Environmental Management

Recently, the Government Accountability Office (GAO) released a report, titled Department of Energy: Observations on Project and Program Cost Estimating in NNSA and the Office of Environmental Management GAO-13-5140T (May 8, 2013). The details of the 24-page report, available here, are discussed below:

Why GAO Did This Study

DOE's [National Nuclear Security Administration] NNSA and [Office of Environmental Management] EM ensure the safety, security, and reliability of the U.S. nuclear weapons stockpile and address environmental cleanup of Cold War sites. Together, NNSA and EM have outlined plans that could commit American taxpayers to $450 billion in programs and projects over decades to address their missions. NNSA and EM oversee contracts for the execution of both projects, including capital asset acquisitions, and programs central to the achievement of their missions. GAO has reported on the status of DOE's projects and programs and has repeatedly identified cost overruns as compared with cost estimates. A realistic cost estimate provides a basis for both an accurate budget and effective resource allocation. In a time of fiscal constraint, Congress needs high-quality cost information upon which to make decisions about NNSA's and EM's projects and programs.

This testimony focuses on GAO's (1) prior findings and preliminary observations from ongoing work on cost-estimating practices for NNSA's and EM's capital asset projects, and (2) prior findings and preliminary observations from ongoing work on cost-estimating practices for NNSA's operating programs. It is largely based on prior GAO reports issued from January 2010 to February 2013. For its ongoing work, GAO reviewed DOE policies, orders, and guidance and interviewed DOE, NNSA, and contractor officials.

GAO is making no new recommendations. DOE continues to act on the recommendations GAO has made to improve cost estimating. GAO will continue to monitor implementation of these recommendations.