Department of Energy: Further Actions Are Needed to Strengthen Contract Management for Major Projects

DOE issued a new major contracts chapter in its Acquisition Guide that references all existing guidance and provides a systematic contracting approach for the management of major projects.

In June 2005, DOE issued Acquisition Guide Chapter 34.1, Project Management and the Acquisition of Major Systems. This chapter clarifies the roles and responsibilities for reviewing contracts prior to award to ensure project management consistency.

DOE conducted comprehensive self-assessments of federal office procurement systems in both fiscal years 2005 and 2006 with additional self-assessments scheduled for fiscal year 2007.

DOE's Acquisition Guide has been updated to include a new chapter entitled "Project Management and the Acquisition of Major Systems." The new chapter, in part, provides guidance for contracting officers to ensure that contractors' accounting and estimating systems are adequate to support the type of contract selected and it has the ability to segregate and track costs. Additionally, the role of contracting officers to assist in, to the extent practicable, the evaluation and certification of contractors' Earned Value Management systems was stressed.

DOE recorded a training presentation on "Using Earned Value Management for Better Contract Administration" and required that all DOE contracting professionals nationwide view this video. The video was made available for viewing on the DOE Procurement Professionals homepage. Additionally, a DVD video of the presentation was sent to all DOE Procurement Directors for viewing by their staffs.

DOE developed a schedule for certification reviews of eight project management systems in FY 2005, which they completed, and has scheduled an additional ten certification reviews for FY 2006. The FY 2005 certification reviews included several systems believed to be using incorrect methods.

DOE's Office of Engineering and Construction Management (OECM) has decided to replace the original Project Assessment and Reporting System (PARS system) with a more advanced PARS Version 2 designed, among other things, to provide the capability of an automated interface with field project management systems. Specifically, OECM's Functional Requirements Document, issued in June 2008, specifies that PARS Version 2 needs to allow senior DOE managers to (1) review the root cause of problems causing projects to re-baseline, (2) increase the accuracy of systems information, and (3) identify estimation and planning shortfalls prior to CD-2 by reviewing the relationship between project funding and scheduling estimations at CD-0 and the baseline established at CD-2.

On August 10, 2005, the Secretary of Energy required that all DOE federal project directors be certified by the Project Management Career Development Program, which includes training in earned value management.

On August 10, 2005, the Secretary of Energy required each program office to (1) provide project management training to all contracting officers, (2) determine its current and future personnel needs regarding project and contract management training, and (3) develop a plan to meet these training needs by the 4th quarter of fiscal year 2006.

In July 2005, DOE incorporated project cost and schedule performance trend data--showing positive and negative trends--into PARS reports to senior managers.

To improve the timeliness of the PARS data that senior DOE managers review, DOE's Office of Engineering and Construction Management (OECM) has decided to replace the original Project Assessment and Reporting System (PARS system) with a more advanced system designed, among other things, to provide the capability of an automated interface with contractors' project management systems at field locations. Specifically, OECM has contracted with Energy Enterprise Solutions to implement this new PARS Version 2 and, in June 2008, issued its PARS Version 2 Functional Requirements Document. The functional requirements specify that the Federal Project Director is responsible for verifying that data on budgeted cost of work scheduled and performed is inputted monthly into PARS through the project's completion, in accordance with Order 413A.

To improve the reliability and usefulness of the project performance data in its Project Assessment and Reporting System (PARS), DOE's Office of Engineering and Construction Management (OECM) has decided to replace the original PARS with a more advanced Version 2 designed, among other things, to provide the capability of an automated interface with contractors' project management systems at field locations. Specifically, OECM has contracted with Energy Enterprise Solutions to implement this new PARS Version 2 and, in June 2008, issued its PARS Version 2 Functional Requirements Document. OECM also has accepted Energy Enterprise Solutions' recommendation to acquire Dekker's PMIS project tracking and reporting COTS software to form the core of the solution.