The Department of Energy has run into substantial cost
and schedule overruns on many of its major projects —
$400 million and up — largely due to contract management
problems, the Government Accountability Office has
reported.
It said the department could use performance incentives
to control costs and schedules by developing guidance
and assigning responsibility for reviewing a contract’s
project management provisions prior to award.
Because DoE has awarded nearly half of the 33 major
projects GAO studied that use a schedule or other
performance incentive, but not “an associated cost
incentive or constraint,” it makes it possible for a
contractor to receive full fees while over-running costs
as long as it meets schedule baselines, according to
GAO-05-123.
Further, it said DoE “has relied on un-validated
contractor data to monitor contractors’ progress in
executing major projects and to award fees for performance.”
After a self-assessment of contract administration in
2002, Energy determined that field personnel relied too
much on contractor accounting systems, and data collected
by contractors to assess contractor performance, “without
significant validation of those data” and the problem
could be continuing, GAO said.
It recommended that DoE require contracting officers to
receive training to assess whether contractor project
management systems are adequate and produce good data
to measure progress.
