United States Synthetic Fuels Corporation's Project Selection Guidelines Need Clarification

EMD-81-129: Published: Aug 5, 1981. Publicly Released: Aug 5, 1981.

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The project selection guidelines of the Synthetic Fuels Corporation (SFC) provide information on the process for evaluating proposals, the criteria to be used, and their relationship to the requirements of the Energy Security Act. GAO provided SFC with comments and recommendations for clarifying the guidelines and for implementing the selection process.

It appears that the guidelines are consistent with the Energy Security Act. However, GAO found that there is concern that they are so vague that industry sponsors may not have enough guidance to adequately prepare their proposals. It is unclear how SFC will use two levels of review consisting of project evaluation criteria and program-level evaluation criteria to achieve the Act's goals. Projects could compete among themselves as a group, or they could compete within smaller groups but potential sponsors should know the ground rules under which they must compete. Inherent with any two-level selection process is the fact that special care must be taken to ensure process integrity.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: SFC should establish a target date for beginning the review of mature projects. This date should allow adequate time for project sponsors to complete their proposals without unduly delaying the project selection process.

    Agency Affected: United States Synthetic Fuels Corporation

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: To ensure that project sponsors, State and local officials, and the general public have sufficient information to make decisions and to ensure the integrity of the selection process, SFC should clarify the project selection process by describing in greater detail how projects will be reviewed.

    Agency Affected: United States Synthetic Fuels Corporation

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: SFC should clarify how economic assumptions, such as inflation rates, interest rates, and the price of oil and gas, will be standardized so that the financial viability of a project can be assessed and compared with other projects.

    Agency Affected: United States Synthetic Fuels Corporation

  4. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: SFC should maintain detailed documentation at each level of the project selection process.

    Agency Affected: United States Synthetic Fuels Corporation

 

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