Over the past 3 years, we have reported on significant problems with NNSA’s and EM’s ability to manage major projects within cost and schedule targets. Two of these reports examined the performance of DOE’s largest construction projects—nearly all of these projects are managed by NNSA or EM—and EM’s largest nuclear waste cleanup projects. The estimated cost of completing these construction projects is about $27 billion, and the estimated cost of completing these cleanup projects is about $100 billion. In summary, these reports documented that the cost increases and schedule delays that have occurred for most of these projects have been the result of inconsistent application of project management tools and techniques on the part of both DOE and its contractors. These reports identified issues, including inadequate systems for measuring contractor performance, approval of construction activities before final designs were sufficiently complete, ineffective project reviews, and ineffective development and integration of the technologies used in these projects. Regarding DOE’s largest construction projects, we reported in March 2007 that 8 of the 10 major NNSA or EM construction projects we reviewed had exceeded the initial cost estimates for completing these projects—in total, DOE added nearly $14 billion to these initial estimates. We also reported that 9 of the 10 projects were behind schedule—in total, DOE added more than 45 years to the initial schedule estimates. These projects included: the MFFF, the Pit Disassembly and Conversion Facility, the Tritium Extraction Facility, and the Salt Waste Processing Facility at the Savannah River Site; the Waste Treatment and Immobilization Plant at the Hanford Site; the Highly Enriched Uranium Materials Facility at the Y-12 National Security Complex in Tennessee; the National Ignition Facility at the Lawrence Livermore National Laboratory in California; and the Depleted Uranium Hexafluoride 6 Conversion Facilities at DOE sites in Kentucky and Ohio. Cost increases ranged from $122 million for the Tritium Extraction Facility to $7.9 billion for the Waste Treatment and Immobilization Plant, and schedule delays ranged from almost 2 years for the Highly Enriched Uranium Materials Facility to over 11 years for the Pit Disassembly and Conversion Facility, with seven projects having schedule delays of 2 years or more. Although external factors, such as additional security and safety requirements, contributed to cost growth and delays, we found that cost growth and schedule slippage in many of the DOE projects we reviewed occurred principally because of ineffective project management oversight on the part of DOE and poor project management on the part of DOE’s contractors. We also found that, while DOE requires final project designs to be sufficiently complete before beginning construction, it has not systematically ensured that the critical technologies reflected in these designs have been demonstrated to work as intended prior to the start of construction. For example, we found that NNSA’s National Ignition Facility project had over $1 billion in cost overruns and years of schedule delays, in large part because of poor management of the development and integration of the technologies used in the project’s designs. The requirements for the National Ignition Facility—the use of 192 high-power laser beams focused on a single target in a “clean room” environment—had not been attempted before on such a large scale. According to the NNSA project director, early incorrect assumptions about the original facility design and the amount of work necessary to integrate the technologies and assemble the technical components contributed to about half of the project’s cost increases and schedule delays. In addition, we found that EM’s Salt Waste Processing Facility project at the Savannah River Site had cost overruns and project delays, in part due to inadequate communication between officials on site and at DOE headquarters. This project, which is designed to treat radioactive waste from activities at the Savannah River Site, was originally scheduled to begin operating in 2009 but has been delayed twice and is not now projected to begin operations until as late as November 2013. We found that the Defense Nuclear Facilities Safety Board had expressed concerns in June 2004, 5 months after the preliminary design was started, that the facility design might not ensure nuclear wastes would be adequately contained in the event of earthquakes. However, project managers did not address these concerns for 17 months and continued to move forward with the existing project design. According to the DOE project director, better and more timely discussions between site officials and headquarters to decide on the actions needed to adequately address these safety and security requirements might have hastened resolution of the problem, and up to 1 year of design rework might have been avoided. Project delays added $180 million to the total project cost. EM officials now require a more rigorous safety analysis earlier in the decision-making process. In regard to EM’s largest cleanup projects, in September 2008, we reported that 9 of the 10 major EM cleanup projects had experienced cost increases and schedule delays—in total DOE estimated that it needed an additional $25 billion to $42 billion to complete these cleanup projects over the initial cost estimates and an additional 68 to 111 more years than initially estimated. These projects included: the solid waste stabilization and disposition project at the Idaho National Laboratory in Idaho; the nuclear facility decontamination and decommissioning project at the Oak Ridge Reservation in Tennessee; the nuclear material stabilization and disposition project and the radioactive liquid tank stabilization and disposition project at the Savannah River Site in South Carolina; the soil and water remediation project at the Los Alamos National Laboratory in New Mexico; and the nuclear material stabilization and disposition project, the solid waste stabilization and disposition project, the soil and water remediation project, and the radioactive liquid tank stabilization and disposition project at the Hanford Site in Washington. Cost increases ranged from $139 million for the Los Alamos soil and water remediation project to more than $9 billion for the Hanford radioactive liquid tank stabilization and disposition project. Schedule delays ranged from 2 years for the Hanford nuclear material stabilization and disposition project to 15 years for two additional projects at the Hanford Site—the solid waste stabilization and disposition project and the soil and water remediation project. We found that these changes arose primarily because the initial baseline estimates for these projects made schedule assumptions that were not linked to technical or budget realities. Also, most of the 10 projects had cost increases and schedule delays because the previous baselines (1) had not fully foreseen the type and extent of cleanup needed, (2) assumed that construction projects needed to carry out the cleanup work would be completed on time, or (3) had not expected substantial additional work scope. We also found that DOE had not effectively used management tools—including independent project baseline reviews, performance information systems, guidance, and performance goals—to help oversee major cleanup projects’ scope of work, costs, and schedules. For example, the initial schedule estimate for a solid waste disposition project at DOE’s Idaho National Laboratory was influenced by an EM-wide effort to accelerate the office’s cleanup work by creating new, earlier completion dates for key cleanup projects and for closing entire sites to reduce the public health and environmental risks posed by the waste at these sites. To meet its 2012 accelerated completion date, the laboratory assumed its waste treatment plant could process waste at a rate that was more than 50 percent higher than the rate demonstrated at the time EM established the baseline. Because the plant had only recently begun operating, project staff lacked confidence that they could meet the processing rate. Moreover, the independent team reviewing the baseline reported that the rate was optimistically high. Nevertheless, EM proceeded with the initial baseline and attempted to meet the optimistic rate by providing the contractor with performance incentives, which proved ineffective. When the waste treatment plant did not meet that processing rate, EM revised its baseline, deferring 4 years of cleanup work, which added about $450 million to the project. In addition, we found that cost increases and schedule delays occurred because EM project officials did not accurately anticipate site or safety conditions. For example, an EM project at the Oak Ridge Reservation in Tennessee to decontaminate and decommission approximately 500 facilities and remediate 160 sites experienced cost increases of $1.2 billion and a 9-year delay in its completion date from 2008 to 2017. These occurred because project officials did not accurately anticipate the site conditions or the types of work activities necessary to safely conduct the work, despite multiple estimates generated by the contractor, DOE, and the Army Corps of Engineers. In this case, a 1940s-era building was far more contaminated and deteriorated than first estimated. As a result, DOE changed its cleanup plan and implemented a more extensive—and therefore more expensive—approach to tearing down the building. In addition, after a worker fell through a weakened floor, the contractor had to reinforce the building’s structure so that contaminated equipment could be removed safely. In addition to the findings in these two reports, we have issued other reports over the past 3 years that also found similar project management problems with NNSA and EM. We issued eight other reports that found poor scheduling practices, incomplete cost estimates, poor communication between DOE headquarters and its field locations, and other issues related to ineffective project management. In January 2007, we reported that management problems within NNSA persisted, in part, because NNSA and DOE had not fully agreed on how NNSA should function within the department as a separately organized agency. This lack of agreement resulted in organizational conflicts that have inhibited effective operations. We also identified the following areas where additional management improvements were needed: (1) regarding project management, we found that NNSA had not developed a project management policy, implemented a plan for improving its project management efforts, or fully shared project management lessons learned between its sites; (2) regarding program management, we found that NNSA had not identified all of its program managers or trained them to a certified level of competency; and (3) regarding financial management, we found that NNSA had not established an independent analysis unit to review program budget proposals, confirm cost estimates, and analyze budget alternatives.