Department of Energy:

Opportunity to Improve Management of Major System Acquisitions

RCED-97-17: Published: Nov 26, 1996. Publicly Released: Dec 11, 1996.

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Victor S. Rezendes
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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) ability to complete its major system acquisitions within originally estimated cost and time schedules, focusing on: (1) DOE's performance in completing its major system acquisitions; (2) key factors that hinder the timely, cost-effective completion of the acquisitions; and (3) DOE efforts to improve its performance.

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.

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