2010 Census: Costs and Risks Must be Closely Monitored and Evaluated with Mitigation Plans in Place
Published: 2006-06-06T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The decennial census is a constitutionally mandated activity, with immutable deadlines. It produces data used to allocate about $200 billion yearly in federal financial assistance, reapportion the seats of the House of Representatives, and provide a profile of the nation's people to help guide policy decisions. The U.S. Census Bureau (Bureau) estimates the 2010 Census will cost $11.3 billion, making it the most expensive census in the nation's history, even after adjusting for inflation. Based primarily on GAO's issued reports, this testimony addresses the extent to which the Bureau has (1) developed detailed and timely cost data for effective oversight and cost control, (2) reduced nonresponse mail follow up costs, and (3) produced risk mitigation plans to address identified challenges.
section_title: What GAO Found
paragraphs: The Bureau's most recent life-cycle cost estimate for the 2010 Census does not reflect the most current information from testing and evaluation nor provide complete information on how changing assumptions may affect cost. As GAO reported in January 2004, the Bureau derived its initial cost estimate by considering the cost of the 2000 Census along with certain assumptions that drive costs, such as staffing needs, the nonresponse rate for mailing back the census questionnaire, census worker productivity and pay rates, and inflation; however, GAO's ongoing work has found that the most recent (September 2005) estimate does not incorporate current information on certain 2001 assumptions. For example, the 2004 Census Test suggests some assumptions about staffing and space associated with new technology have changed. Specifically, Bureau evaluations indicate that more staff at the local census office was needed to support the use of the new hand-held mobile computing device (MCD) and additional storage space was needed for the MCDs. Since 2000, the Bureau has reengineered the decennial census and has begun new initiatives to reduce nonresponse follow up costs. Key to the Bureau's steps to reduce the costs of nonresponse follow up is successfully using the MCDs to eliminate millions of paper questionnaires and maps. Importantly, the Bureau must first resolve the MCD's technological challenges. During 2004 and 2006 tests, the MCDs had significant reliability problems. For example, in the 2004 test the MCDs experienced transmission problems, memory overloads, and difficulties with the map ping feature. Bureau officials have contracted the design and implementation for a new MCD that will not be ready until the 2008 Dress Rehearsal. If after the Dress Rehearsal the MCD is found not to be reliable, the Bureau could be faced with the remote but daunting possibility of having to revert to the costly paper-based Census used in 2000. The Bureau does not have risk mitigation plans to address certain identified challenges to a cost-effective census. Most notably, the Bureau does not have a plan to assess additional resources that may be needed to update the address and map file for areas affected by hurricanes Katrina and Rita. Moreover, the Bureau has not yet assessed whether new procedures will be necessary nor whether local partners will be available to assist in updating address and map data. Updating address files to reflect the changes caused by the hurricanes will be formidable, in part because, according to Red Cross estimates, nearly 525,000 people were displaced in a 90,000 square mile area. Another risk to be mitigated stems from the need to closely monitor the performance of about $1.9 billion in contracts. The Bureau has agreed to take steps to mitigate some of those risks. For example, the Bureau has said it will enhance the ability of key contract project offices to better manage contracts through such actions as developing mitigation plans with milestones for key activities and regularly briefing senior managers.

section_title: Letter
paragraphs: Thank you for the opportunity to be here today to discuss the life-cycle  costs of the 2010 Census as well as the actions that the U.S. Census Bureau  (Bureau) is taking to contain those costs. The Bureau estimates the 2010  Census will cost $11.3 billion, which would make it the most expensive  census in our country’s history, even after adjusting for inflation. Since the  2000 Census, we have monitored how the Bureau has incorporated lessons  learned from the 2000 Census into its planning for the next decennial  census, as well as its cost and design. My overall point today is that the  decennial’s cost and risks must be closely monitored and evaluated, with  mitigation plans in place to help ensure that accurate results are delivered  on time and within projected costs. Based primarily on our issued reports,  this testimony addresses the extent to which the Bureau has (1) developed  detailed and timely cost data for effective oversight and cost control, (2)  reduced nonresponse mail follow-up costs, and (3) produced risk  mitigation plans to address identified challenges, such as assessing the  resources that may be needed to update address files and maps in areas  affected by hurricanes Katrina and Rita. I will also present the preliminary  results of ongoing work—on which we plan to issue a report later this  month—on the Bureau’s efforts to build a complete and accurate address  list, the foundation of a successful census.
As you know, Mr. Chairman, the decennial census is a crucial,  constitutionally mandated activity undertaken by the Bureau. The stakes  for a successful census are very high. The data that the census produces  are used to reapportion the seats of the U.S. House of Representatives;  realign the boundaries of the legislative districts of each state; allocate  about $200 billion dollars each year in federal financial assistance; and  provide a social, demographic, and economic profile of the nation’s people  to guide policy decisions at each level of government. Further, businesses  use census data to target new services and products and to tailor existing  ones to demographic changes.
Mr. Chairman, I would like to commend the subcommittee for calling  today’s hearing, as past experience has shown that strong and continuing  congressional involvement—especially while there is still time to make  cost-effective decisions and influence the direction of the decennial  census—is essential to the decennial’s ultimate success. Today’s hearing is  particularly timely because the Bureau is currently holding the 2006  Census Test in the central portion of Travis County, Texas, and at the  Cheyenne River American Indian Reservation and Tribal Trust Lands in  South Dakota, where the Bureau is evaluating key operations and  equipment it plans to employ for the full enumeration in 2010. After this  test, the Bureau will have only one more opportunity to assess its census- taking-procedures—a “Dress Rehearsal” scheduled for 2008. Moreover,  after the Dress Rehearsal, the Bureau will begin to transition from  preparatory to operational activities, leaving little room for delays or  design changes, which at that point could significantly increase the cost of  2010 Census.
Importantly, for decades we have been reviewing the national  enumeration on behalf of Congress. Over the years, through a series of  reports and testimonies, we have acquired broad institutional knowledge  that gives us a historical view of the census. I want to highlight several  broad themes that have emerged from our work.
First, completing the decennial census is a monumental undertaking, and  the Bureau recognizes that streamlined and efficient operations are critical  for the census’ cost-effectiveness. The Census’ sheer size and complexity  make it a risky and fragile enterprise. The 2000 Census, for example,  involved the hiring of more than 500,000 enumerators on a temporary  basis, opening 511 local census offices nationwide and 24,000  questionnaire assistance centers, processing 1.5 billion sheets of paper,  and in 10 weeks following up with 42 million nonrespondent households.  The size of the census means that small problems can magnify quickly, and  big problems could be overwhelming. For example, 60 seconds might  seem like an inconsequential amount of time, but in 2000, if enumerators  had spent just 1 minute more at each household during nonresponse  follow-up, it could have added almost $10 million to the cost of the census,  assuming a pay rate of around $13 per hour (wages ranged from $8.25 to  $18.50 per hour for enumerators in 2000, depending on location).
Second, sound risk management is important to a successful census  because many risks are interrelated, and a shortcoming in one operation  could cause other operations to spiral downward. For example, a low mail  response rate would drive up the follow-up workload, which in turn would  increase staffing needs and costs. (Of course, the reverse is also true,  where a success in one operation could have a number of positive  downstream impacts.) Rigorous up-front planning and testing, and where  needed, risk mitigation plans are the best ways to stave off these  problems. In the 2000 Census, the Bureau successfully planned and  mitigated risk in recruiting and hiring workers by using management  information systems capable of tracking key operations with real-time  measures. To recruit the vast army of people needed to fill the ranks of its  workforce for the 2000 Census, the Bureau set a recruitment goal of 2.4  million qualified applicants. Because the Bureau tracked the progress local  census offices were making in meeting their individual goals, it was able to  mitigate risk by quickly raising pay rates and taking other actions at those  offices where recruitment was lagging. In the end, the Bureau exceeded its  recruitment goal by 100,000 people.
Third, the census is conducted against a backdrop of immutable deadlines,  and the census’ elaborate chain of interrelated pre- and post-Census Day  activities are predicated upon those dates. The Secretary of Commerce is  legally required to (1) conduct the census on April 1 of the decennial year,  (2) report the state population counts to the President for purposes of  congressional apportionment by December 31 of the decennial year, and  (3) send population tabulations to the states for purposes of redistricting  no later than 1 year after the April 1 census date. To meet these legally  mandated reporting requirements, census activities need to take place at  specific times and in the proper sequence. Bureau officials have recently  stated, and we agree, that the design and plans being implemented are too  far down the road and time is too short to allow for significant  adjustments. In fact, as Census Day approaches, the tolerance for any  operational delays becomes increasingly small. Indeed, considerable risk  and cost increases could accompany design changes that occur late in the  decade. This requires the Bureau to have risk-based mitigation plans in  place now to ensure that 2010 Census operations are ready and that few, if  any, changes to the fundamental design happen after the 2008 Dress  Rehearsal.
Based on the Bureau’s desire to address the issues associated with the  2000 enumeration, in designing the 2010 Census the Bureau had four goals  in mind: (1) increase the relevance and timeliness of data, (2) reduce  operational risk, (3) increase coverage and accuracy, and (4) contain  costs. To achieve these goals, three components—all new operations—are  important to the Bureau’s plans for 2010:    enhancing procedures for its address list (the MAF—Master Address  File) and the associated geographic information system (the  TIGER®—Topologically Integrated Geographic Encoding and  Referencing database),  replacing the census long-form questionnaire with the American  Community Survey (ACS), and    conducting a short-form only decennial census that is supported by  early research and testing.
My remarks today are based primarily on reports that GAO issued from  2002 through May 2006 on the planning and development of the 2010  Census. These reports are listed in appendix I. We analyzed Bureau  documents and data and interviewed key Bureau officials regarding the  2004 and 2006 Census Tests. In that regard, we visited the Texas and South  Dakota test sites; Queens, New York; and several counties in rural south- central Georgia, where an earlier field test was held in 2004. During these  visits we observed the address canvassing operation—where workers go  door to door verifying addresses and updating maps as part of the  Bureau’s effort to build a complete and accurate address list, and we  observed the nonresponse follow-up operation—where enumerators  collect information from those households that do not return their initial  questionnaire. We conducted our work in accordance with generally  accepted government auditing standards.
subsections: section_title: The Bureau’s $11.3 Billion Cost Estimate for 2010 Census Lacks Timely and Complete Data
paragraphs: The Bureau’s $11.3 billion life-cycle cost estimate for the 2010 Census  lacks timely and complete supporting data. The supporting data of the  estimate is not timely because it does not contain the most current  information from testing and evaluation. Also, the supporting data of the  estimate is not complete because it does not provide sufficient information  on the how changing assumptions could affect cost.
subsections: section_title: Cost for Each Decennial Census Continues to Significantly Increase
paragraphs: In January 2004, we reported that the Bureau’s cost projections for the  2010 decennial census continue an escalating trend. As noted above, the  Bureau now estimates the 2010 Census will cost $11.3 billion, making it the  most expensive in history, even after adjusting for inflation. Although  some cost growth can be expected, in part because the number of housing  units—and hence the Bureau’s workload—has become larger, the cost  growth has far exceeded the increase in the number of housing units. The  Bureau estimates that the number of housing units for the 2010 Census  will increase by 10 percent over 2000 Census levels. At the same time, as  shown in figure 1, the average cost per housing unit for 2010 is expected to  increase by approximately 29 percent from 2000 levels (from $56 per  housing unit to $72 per housing unit in 2000 inflation-adjusted dollars).
The risk exists that the actual, final cost of the census could be  considerably higher. Indeed, the Bureau’s initial cost projections for  previous censuses proved to be too low because of such factors as  unforeseen operational problems or changes to the fundamental design.  For example, the Bureau estimated that the 2000 Census would cost  around $4 billion if sampling was used, and a traditional census without  sampling would cost around $5 billion. However, the final price tag for the  2000 Census (without sampling) was over $6.5 billion, a 30 percent  increase in cost. Today’s climate of large federal deficits and other fiscal  challenges requires holding the decennial’s costs as low as possible, while  promoting an accurate, timely census.
section_title: 2010 Cost Estimate Lacks Timely and Complete Information
paragraphs: Despite a history of cost increases, the Bureau’s most recent cost estimate  is not based on timely and complete information. Table 1 shows the  Bureau’s latest revised estimate that was released in September 2005.  Based on this table, the bulk of the funds will be spent between fiscal  years 2007 through 2013.
As we stated in our January 2004 report, in June 2001, the Bureau derived  its 2010 cost estimate by using the actual cost of the 2000 Census  combined with assumptions about cost drivers, such as (1) staffing needs,  (2) enumerator productivity, (3) pay rates for census workers, (4) the  nonresponse rate for mailing back the questionnaires, and (5) inflation.  However, the most recent life-cycle cost estimate does not incorporate  current information about those 2001 assumptions. One key assumption,  that has not been updated pertains to the use of a new technology— specifically, new hand-held, GPS-enabled mobile computing devices  (MCDs)—that would be important to the success of the 2010 census by  automating and streamlining address canvassing, nonresponse follow-up,  coverage measurement, and payroll operations. The Bureau anticipated  that the use of MCDs would facilitate reductions in administrative and  support costs in the Bureau’s field offices, including a 50 percent  reduction in clerical and administrative local census office staff costs and  a 50 percent reduction in space at each local census office. However, the  Bureau’s existing assumptions about the use and reliability of the MCD  were not updated to reflect information from the 2004 test, which showed  that assumptions about staffing and space associated with the new  technology had changed since the June 2001 estimate. The Bureau’s  evaluations about those test results indicate that more help desk staff at  the local census office were needed to support the use of the MCD, and  additional storage space was needed for the devices. However, the Bureau  did not use this information when revising its cost estimate in 2005  because, according to Bureau officials, they conduct field tests for  operational purposes only—not to inform the cost estimates. In our view,  revising cost estimates on the most recent information—including test  results that are pertinent to cost assumptions—can assist the Bureau and  external decision makers to oversee costs and make necessary resource  allocations to help ensure a successful, cost-effective, census.
The Bureau’s cost estimate lacked complete information, such as a  sensitivity analysis regarding assumptions that could affect cost drivers.  OMB Circular A-94 provides guidelines for cost-benefit analysis of federal  programs and recommends that agencies develop a sensitivity analysis for  major projects with significant uncertainty, like the decennial census. The  circular provides a method for determining how sensitive outcomes are to  changes in assumptions. In January 2004, we reported that the Bureau  could provide more robust information on the likelihood that the values  the Bureau assigned to key cost drivers could differ from those initially  assumed and be timelier—previously the life-cycle cost estimate had been  provided at 2-year intervals. The Bureau’s latest life-cycle cost document  does not contain a sensitivity analysis on assumptions that impact cost; it  did, however, indicate that the life-cycle cost would be updated annually.
Having transparent information about cost estimates is especially  important because decennial costs are sensitive to many key assumptions.  In fact, for the 2000 Census, the Bureau’s supplemental funding request for  $1.7 billion in fiscal year 2000 primarily involved changes in assumptions  related to increased workload, reduced employee productivity, and  increased advertising. Given the cost of the census in an era of serious  national fiscal challenges, it would be beneficial for the Bureau and  Congress to have sensitivity information about the likelihood—high,  medium, or low—that certain assumptions would drive costs. By providing  this information, the Bureau would better enable Congress to consider  funding levels in this uncertain environment.
Our January 2004 report also highlighted the challenge that the Bureau  would have in containing the cost of the 2010 Census. To increase the  transparency of the census’ life-cycle costs for Congress, we  recommended that Office of Management and Budget (OMB) establish  triggers that would signal when the annual 2010 Census costs and/or life- cycle 2010 Census costs exceeded some predetermined amount. We also  recommended, among other things, that OMB ensure the Bureau analyzes  the sensitivity of the cost figures to specific assumptions. However, OMB  disagreed with our recommendation, because it said it already has internal  procedures within its budget reviews to monitor 2010 Census costs. OMB  shared our view that the costs and risks associated with the 2010 Census  must be carefully monitored and evaluated throughout the decade. OMB  also agreed that it is essential to understand the key cost drivers and said  that it is working with the Bureau to ensure that the Bureau develops high- quality, transparent life-cycle cost estimates.
In addition, we recommended in our 2004 report that the Bureau develop a  comprehensive project plan that would be updated as needed to (1)  include milestones for completing key activities; (2) itemize the estimated  cost of each component; (3) articulate a clear system of coordination  among project components; and (4) translate key goals into measurable,  operational terms to provide meaningful guidance for planning and  measuring progress. Some, but not all, of this information is available in  various documents, and to be useful, it would need to be pieced together.  As a result, we recommended that the Bureau combine this information  into a single, comprehensive document. The Bureau disagreed with our  recommendation, although it said it would develop such a plan  nonetheless and provide it to GAO, Congress, and other stakeholders. The  Bureau has not yet issued such a document.
section_title: Bureau Has Taken Steps to Reduce Nonresponse Follow- up Costs, But Challenges with Technology Remain
paragraphs: Since 2000, the Bureau has reengineered the decennial census and has  begun to implement new initiatives. These include (1) using a short-form- only census questionnaire; (2) automating field operations; and (3) using a  targeted second mailing to households that fail to respond to the initial  census questionnaire, instead of sending an enumerator to visit houses  that have not responded. These initiatives could reduce the workload and  cost of nonresponse follow-up. While these initiatives show promise, the  Bureau will need to address technological challenges with the MCD that  will be used to collect data for nonresponse follow-up.
The Bureau is finding it increasingly difficult to locate people and get them  counted in the census. As in previous censuses, the major cost for the 2010  Census is what the Bureau calls “field data collection and support  systems,” accounting for over half of the life-cycle costs of the decennial  census.
First, the Bureau plans to contain the cost of nonresponse follow-up by  increasing mail response through a short-form-only census. The overall  mail response rate has been declining steadily since 1970. In the 1980  Census, the mail response rate was 75 percent, 3 percentage points lower  than it was in the 1970 Census. In the 1990 census, the mail response rate  dropped to 65 percent and, in 2000, appeared to be leveling off at about 64  percent. Contributing to this decline is the public’s unwillingness to  complete the long form. Specifically, the response rates in 1990 and 2000  to the short form have been higher than the response rate to the long form.  Bureau data suggest a 1 percent increase in the mail response rate would  result from conducting a short-form-only census.
Secondly, by using the MCD, the Bureau plans to automate field data  collection to contain the cost of nonresponse follow-up. The MCD allows  the Bureau to automate operations and eliminate the need to print millions  of paper questionnaires and maps used by census workers to conduct  address canvassing and nonresponse follow-up, as well as managing field  staff’s payroll. As stated above, the benefits of using the MCD have been  tested in the 2004 and 2006 tests. For example, during the 2004 Census  Test, the MCD allowed the Bureau to successfully remove over 7,000 late  mail returns from enumerators’ assignments, reducing the total  nonresponse follow-up workload by nearly 6 percent. The ability to  remove late mail returns from the Bureau’s nonresponse follow-up  workload reduces costs, because census workers no longer need to make  expensive follow-up visits to households that return their questionnaire  late, after the mail-back deadline. If the Bureau had possessed this  capability during the 2000 Census, it could have eliminated the need to  visit nearly 773,000 late-responding households and saved an estimated  $22 million (based on our estimate that a 1 percentage point increase in  workload could add at least $34 million in direct salary, benefits, and  travel costs to the price tag of nonresponse follow-up). Moreover,  operations that traditionally had to be done in sequence, such as  nonresponse follow-up and then verifying the housing unit status for  addresses marked vacant, can now be performed simultaneously by using  the MCD, which may shorten the time needed for local census offices to  stay open.
However, the Bureau’s ability to collect and transmit data using the MCD  is not known and, at this point, constitutes a risk to the cost-effective  implementation of the 2010 Census. During the 2004 test of nonresponse  follow-up and the 2006 test of address canvassing, the MCDs experienced  significant reliability problems.
During the 2004 Census Test, the MCDs experienced transmission  problems, memory overloads, and difficulties with a mapping feature—all  of which added inefficiencies to the nonresponse follow-up operation.  During the 2006 Census Test, for address canvassing, the device was slow  to pull up and exit address registers, accept the data entered by the census  workers, and link map locations to addresses for multiunit structures.  Furthermore, the MCDs would sometimes lockup, requiring workers to  reboot them.
Census workers also found it difficult to transmit an address and map  location that were identified for deletion. Because the Bureau could not  fix this problem, workers returned to the local census office so  technicians could address the problem. The MCD’s global positioning  system (GPS) receiver, a satellite-based navigational system to help  workers locate street addresses and collect coordinates for each structure  in their assignment area, was also unreliable. Some workers had trouble  receiving signals, and when a signal was available, the receiver was slow  to find assignment areas and correct map locations, according to Bureau  officials. The Bureau extended the operation 10 days and still was unable  to complete the job, leaving census blocks in Austin, Texas and on the  Cheyenne River Reservation, South Dakota, unverified.
The Bureau has acknowledged that the MCD’s performance is an issue but  believes it will be addressed through a contract awarded on March 30,  2006, to develop a new MCD. However, the new MCD will not be tested  until the 2008 Dress Rehearsal, and if problems do emerge, little time will  be left to develop, test, and incorporate refinements. Given that, it will be  important that the Bureau have a risk mitigation plan in place to help  ensure the successful testing of the MCD at the Dress Rehearsal. In our  May 2006 report, we highlighted the tight time frames to develop the MCD  and recommended that systems being developed or provided by  contractors for the 2010 Census—including the MCD—be fully functional  and ready to be assessed as part of the 2008 Dress Rehearsal. The  Department of Commerce, the Census Bureau’s parent agency, noted in its  comments on our draft report that the Bureau provided competitors for  the contract with information about the design, requirements, and  specification for the 2006 test in the request for proposals. Commerce also  noted that the Bureau would share preliminary results from the 2006 test  with the firm that was awarded the contract, upon the availability of those  results. The Bureau, however, did not specify when preliminary results  would be available. However, if after the 2008 Dress Rehearsal the MCD is  found not to be reliable, the Bureau could be faced with a remote but  daunting possibility of having to revert to the costly, paper-based census  used in 2000.
Finally, a targeted second mailing to households that fail to respond to the  initial census questionnaire could reduce the workload and cost of  nonresponse follow-up. According to Bureau studies, sending a second  questionnaire could yield a gain in overall response of 7 to 10 percent from  non-responding households. In reports, we have highlighted how a second  mailing could boost the mail response rate by several percentage points,  which in turn would result in considerable savings by reducing the number  of costly personal visits enumerators would need to make to non- responding households. The Bureau has never before included this  operation as part of a decennial census and over the decade has been  testing its feasibility.  The targeted second mailing is a part of the 2006  test, the results of which will allow the Bureau to identify and resolve any  operational issues; to demonstrate a more refined plan as part of the 2008  Dress Rehearsal; and, ultimately, to increase the likelihood that the second  mailing will produce the desired cost savings and other benefits in 2010.
section_title: Bureau Lacks Risk Mitigation Plans for Certain Challenges
paragraphs: Recent work that we have conducted has identified several challenges  that, if not properly managed, could increase the cost of the 2010 Census.  As the Bureau moves from testing to demonstrating the design in the Dress  Rehearsal, it will be important for the Bureau to have risk mitigation plans  in place to reduce the severity of challenges to a cost-effective census.  These challenges include (1) overseeing contractors responsible for  conducting key census-taking operations, (2) successfully updating  address and map files, and (3) assessing the resources that will be needed  to update the address files and maps for areas affected by hurricanes  Katrina and Rita.
subsections: section_title: Increased Reliance on Contractor Support for the 2010 Census Introduces Risk
paragraphs: The Bureau is relying extensively on contractors to supply mission-critical  functions and technologies for the 2010 Census. The Bureau estimates that  they will spend $1.9 billion, or nearly 17 percent, of the Bureau’s overall  decennial costs to award seven major contracts for the 2010 Census. To  date, the Bureau has awarded three of its seven major contracts. These  three contracts support (1) MAF/TIGER modernization; (2) the  development and operation of the Decennial Response and Integration  System (DRIS)—a system planned to integrate paper, Internet, and  telephone responses; and (3) the Field Data Collection Automation  (FDCA) program—a system designed to provide field staff with the  equipment and infrastructure needed to collect census data.
Contractors can help the Bureau address the challenges it faces as it plans  for and implements the 2010 Census, especially as it becomes increasingly  difficult for the Bureau to count the nation’s population with its in-house  staff and capabilities. The contractors that the Bureau relied on to perform  major decennial activities during Census 2000 generally performed well.  However, increased reliance on contractors entails certain management  challenges, including the oversight of contractors to ensure that they meet  the Bureau’s needs in an effective, economical, and timely manner. For  example, according to the Department of Commerce Office of Inspector  General, the Bureau did not have sufficient program management staff to  efficiently acquire systems and manage complex, high-dollar contracts  during Census 2000. As a result, the cost of the Bureau’s data capture  system increased from $49 million to $238 million by the end of that  decennial.
As we noted in our May 2006 report, the Bureau has not yet awarded four  other major contracts for the 2010 Census, but has already pushed back  the award dates of two of the remaining contracts because of changes in  its acquisition approach. The Bureau’s tight schedule for systems  development and testing as well as the interdependence of decennial  systems could affect its ability to develop fully functional and sufficiently  mature systems that can be demonstrated in concert with other operations  during the 2008 Dress Rehearsal. We previously reported that during the  1998 Dress Rehearsal for the 2000 Census, a number of new features were  not test-ready; as a result, the Bureau said it could not fully evaluate them  with any degree of assurance as to how they would affect the census.  These late design changes and untested systems resulted in additional  costs to the census.
Closely monitoring major contracts continues to be important. In March  2006, we testified that while project offices responsible for the DRIS and  FDCA contracts had carried out initial acquisition management activities,  neither office had the full skill sets needed to effectively manage the  acquisitions. For DRIS, the Bureau’s project office had established  baseline requirements, but the Bureau had not validated the requirements  and had not implemented a process for managing them. Also, the project  office had identified the project’s risks but had not written mitigation  plans or established milestones for completing key risk mitigation  activities. As for FDCA, the Bureau again had specified baseline  requirements but had not validated them. While, the project office had  begun to oversee the contractor’s performance, it had not determined  which performance measures it would use, and the office had not  implemented a risk management process. Until these basic management  activities are implemented, both systems could face increased risks of cost  overruns, schedule delays and performance shortfalls. We have made  recommendations addressing those issues, such as developing mitigation  plans with milestones for key activities and regularly briefing senior  managers. The Bureau has agreed to complete these activities as soon as  possible.
As part of its effort to allow respondents to use the Internet during the  decennial census, the Bureau proposed to develop the use of the Internet  under the DRIS contract. However, in May 2006, Bureau officials informed  us that the Internet response option was no longer a contract requirement  and that they are uncertain whether Internet response would be an option  for the 2010 Census. The removal of the Internet from the DRIS contract is  an unexpected change, because just 3 months earlier in our March 2006  testimony, we reported that the DRIS contract was expected to process  Internet responses for the 2010 Census.
High-level Bureau officials explained that they made the decision to  remove the Internet from the contract partly because of the potential risks  associated with computer security attacks. In addition, according to a  Bureau official, the Bureau’s testing to date showed nothing to indicate  that offering an Internet response option would improve overall response  rates or save any money. According to Bureau officials, if the Internet  response option is included in the design, it will be developed in-house by  Bureau staff. Bureau officials emphasized that they only have one chance  every 10 years to collect this information; moreover, any public perception  of an unsecured Internet Web site could result in residents not responding  to the census, and in the long term could cost more than if the Internet had  not been used. It should be noted that there are security techniques to  address Internet attacks, and other federal agencies use the Internet to  successfully meet many missions. According to a Bureau official, the  Bureau believes it made a sound business decision by removing the  Internet from the DRIS contract requirements. Further, the official told us  that the Bureau did not develop a formal business case document on this  decision.
section_title: Address and Mapping Challenges Pose a Risk to a Cost-Effective Census
paragraphs: To contain decennial costs, long-standing and emerging issues related to  the Bureau’s address lists and maps need to be addressed. A complete and  accurate address list is the cornerstone of a successful census because it  identifies all households that are to receive a census questionnaire and  serves as the control mechanism for following up with households that fail  to respond. Although the Bureau went to great lengths to build a complete  and accurate MAF for the 2000 Census, of the 116 million housing units  contained in the database, the Bureau estimates it incorrectly included 2.3  million housing units and missed another 2.7 million housing units. In light  of these and other problems, the Bureau concluded that enhancements to  MAF/TIGER were necessary to make census data more complete and  accurate.
The Bureau has conducted research and testing to help resolve each of the  problems experienced in the 2000 Census, including addresses that were  duplicated, missed, deleted, and incorrectly located on a map (a problem  known as “geocoding error”). For example, the Bureau is researching  ways to capture missed addresses for housing units that were hard to  find—often associated with apartments in small multiunit structures.  However, some deadlines for completing research are not firm, while  other deadlines that have been set continue to slip. As a result, it is not  known whether the research and evaluation efforts underway will be  completed in sufficient time to allow the Bureau to develop new  methodologies and procedures for improving the MAF by June 2007—the  Bureau’s announced deadline for determining the baseline for all program  requirements.
In addition, one major research effort using software to identify duplicate  addresses (an estimated 1.4 million duplicate addresses were removed  during the 2000 Census) did not work and will not be used in 2010. As a  result, duplicate addresses may still be a problem for the 2010 MAF, and if  not detected, can result in increased cost when nonresponse enumerators  attempt to collect data from a duplicate address incorrectly listed in the  MAF.
New issues surrounding the schedule of address activities have emerged.  One such issue revolves around the planning and development of the 2010  Census amid tight and overlapping schedules for updating addresses and  map files. For example, Bureau officials estimate that TIGER maps for 600  to 700 counties of 3,232 counties in the United States will not be updated  in time to be part of local update of census address (LUCA)—the Bureau’s  program to give local, state, and tribal government officials the  opportunity to review the address lists and maps and suggest corrections.   LUCA participation is important because local knowledge contributes to a  more complete and accurate address file. Not having the most current  TIGER maps could affect the quality of a local government’s review and  could potentially increase the cost of conducting the census. For example,  to the extent LUCA participants are not able to use the maps to identify  duplicate and nonexistent addresses, and if subsequent address operations  also fail to identify those same addresses, then nonresponse follow-up  enumerators would make unnecessary and costly attempts to locate these  incorrectly included addresses.
section_title: Bureau Does Not Have a Plan to Assess Resources Needed to Update Address and Map Files in Areas Affected by Hurricanes Katrina and Rita
paragraphs: The Bureau does not have a plan to assess additional resources that may  be needed to update the address and map file for areas affected by  hurricanes Katrina and Rita. The task of updating Census address files to  reflect the changes caused by the hurricanes will be formidable and  possibly costly, as much has changed to the landscape since the 2000  Census. On August 29, 2005, hurricane Katrina devastated the coastal  communities of Louisiana, Mississippi, and Alabama. A few weeks later,  hurricane Rita hit the border areas of Texas and Louisiana. Damage was  widespread. For example, the Red Cross estimated that nearly 525,000  people were displaced as a result of hurricane Katrina and approximately  90,000 square miles were affected. In some places, entire communities  were obliterated. Homes were declared uninhabitable, and streets,  bridges, and other landmarks were destroyed.
For the 2010 Census, locating housing units and the people who reside in  them will be critical to accurate population counts of places hit by the  hurricanes, especially since it is estimated that hundreds of thousands of  people have—either temporarily or permanently—migrated to other areas  of the country. The Bureau anticipates that by 2009, residents will have  decided whether to return to the region. However, Bureau officials have  not provided information regarding the basis of this conclusion. Given the  magnitude of the area, population, and infrastructure affected, it would be  prudent for the Bureau to begin assessing whether new procedures will be  necessary, determining whether additional resources may be needed, and  identifying whether local partners will be available to assist the Bureau in  its effort to update address and map data, as well as other census-taking  activities. Without having done a resource analysis, the Bureau remains  uncertain about whether additional funds will be needed to help locate  and count residents affected by the hurricanes.
In summary, the 2010 Census is an expensive but vitally important  undertaking, the success of which is needed to meet the information  requirements of policymakers at all levels of government, as well as  business interests, and academic researchers. The Bureau responded to  concerns about the accuracy, completeness, and cost-effectiveness of the  2000 Census by reengineering the heretofore paper-based processes used  in all previous censuses.
At the same time, the projected life-cycle cost of $11.3 billion makes the  next decennial census the most expensive in our history, and many factors  can cause the 2010 Census to be more expensive. It is important to  consider that some factors that may increase the costs of the census— such as counting more people than ever who do not speak English or who  live in alternative, hard-to-find housing—are inherent in the characteristics  of the population that needs to be counted. Largely, demographically  related cost factors will continue to exist, regardless of actions taken by  the Bureau, and must be treated as givens by Bureau planners. Still, other  factors that can cause cost increases can and should be mitigated. While  needed, the reengineering introduced by the Bureau presents new  challenges and increased risks. The Bureau needs to ensure that its new  MCDs work as designed, and that contractors perform according to  requirements, on schedule, and at cost. Moreover, the Bureau still needs to  fully resolve preexisting issues related to the accuracy and completeness  of the address list.
Overall, we have long recognized that redesigning massive enterprises  entail risks and uncertainties. Such risks and uncertainties need to be  managed through the use of adequate planning and risk management by  Bureau management. Such tools also serve the oversight requirements of  external stakeholders—most notably Congress, which is being asked to  authorize and appropriate more funds than ever to pay for the census.
In January 2004, recognizing the cost escalation risks of the 2010 Census,  we concluded that the Bureau’s plans for 2010 lacked the needed  budgetary supporting detail, supporting analysis, and other information,  making it difficult for Congress and us to oversee the Bureau’s operations  and assess the feasibility of the Bureau’s design and the extent to which it  would lead to greater cost-effectiveness. While the Bureau has made  progress in planning and designing the 2010 Census, the Bureau will need  to continue to take steps to manage and mitigate risks for a  comprehensive, accurate, and cost-effective population count in 2010.
That concludes my statement, Mr. Chairman. I would be pleased to  respond to any questions you or other members of the Subcommittee may  have.
section_title: Contacts and Acknowledgements
paragraphs: For questions regarding this testimony, please contact Brenda S. Farrell,  on (202) 512-6806, or by email at farrellb@gao.gov Individuals making  contributions to this testimony include Betty Clark, Robert Goldenkoff,  Ernie Hazera, Shirley Hwang, Krista Loose, Lisa Pearson, Scott Purdy,  Cynthia Scott, and Tim Wexler.
section_title: Appendix I: Related Products by GAO
subsections: section_title: GAO Products
paragraphs: 2010 Census: Census Bureau Generally Follows Selected Leading  Acquisition Planning Practices, but Continued Management Attentions  Is Needed to Help Ensure Success. GAO-06-277. Washington, D.C.: May 18,  2006.
Census Bureau: Important Activities for Improving Management of Key  2010 Decennial Acquisitions Remain to Be Done. GAO-06-444T.  Washington, D.C.: March 1, 2006.  2010 Census: Planning and Testing Activities Are Making Progress.  GAO-06-465T. Washington D.C.: March 1, 2006.
Information Technology Management: Census Bureau Has Implemented  Many Key Practices, but Additional Actions Are Needed. GAO-05-661.  Washington, D.C.: June 16, 2005.  2010 Census: Basic Design Has Potential, but Remaining Challenges  Need Prompt Resolution. GAO-05-09. Washington, D.C.: January 12, 2005.
Data Quality: Census Bureau Needs to Accelerate Efforts to Develop and  Implement Data Quality Review Standards. GAO-05-86. Washington,  D.C.: November 17, 2004.
Census 2000: Design Choices Contributed to Inaccuracies in Coverage  Evaluation Estimates. GAO-05-71. Washington, D.C.: November 12, 2004.
American Community Survey: Key Unresolved Issues. GAO-05-82.  Washington, D.C.: October 8, 2004.  2010 Census: Counting Americans Overseas as Part of the Decennial  Census Would Not Be Cost-Effective. GAO-04-898. Washington, D.C.:  August 19, 2004.  2010 Census: Overseas Enumeration Test Raises Need for Clear Policy  Direction. GAO-04-470.Washington, D.C.: May 21, 2004.  2010 Census: Cost and Design Issues Need to Be Addressed Soon. GAO- 04-37. Washington, D.C.: January 15, 2004.
Decennial Census: Lessons Learned for Locating and Counting Migrant  and Seasonal Farm Workers. GAO-03-605. Washington, D.C.: July 3, 2003.
Decennial Census: Methods for Collecting and Reporting Hispanic  Subgroup Data Need Refinement. GAO-03-228. Washington, D.C.: January  17, 2003.
Decennial Census: Methods for Collecting and Reporting Data on the  Homeless and Others Without Conventional Housing Need Refinement.  GAO-03-227. Washington, D.C.: January 17, 2003.  2000 Census: Lessons Learned for Planning a More Cost-Effective 2010  Census. GAO-03-40. Washington, D.C.: October 31, 2002.
The American Community Survey: Accuracy and Timeliness Issues.  GAO-02-956R. Washington, D.C.: September 30, 2002.
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