The Bureau’s cost projections for the 2010 decennial census continue an escalating trend, with the 2010 Census currently estimated to cost approximately $13.7 billion to $14.5 billion. At a March 2008 hearing, Commerce and the Bureau stated that the FDCA program was likely to incur significant cost overruns and that a redesigning effort was under way to try to get the decennial census back on track. In early April, the Secretary of Commerce chose from among several alternatives for redesigning the FDCA program, and elected an option that involves dropping the HHCs from the nonresponse follow-up operation. Additionally, he decided that the Bureau would reduce deployment of field technology infrastructure by the contractor and have the contractor provide HHCs for address canvassing and develop the information system for controlling field operations. The Bureau has estimated that, with the redesign option, the total life cycle cost estimate for the 2010 Census will be from $13.7 billion to $14.5 billion. Prior to this recent, major redesign of the FDCA program, the Bureau had estimated the life cycle cost of the 2010 Census to be $11.8 billion (in constant 2010 dollars). As shown in figure 1, this estimate of $11.8 billion represented a more than tenfold increase over the $1 billion spent on the 1970 Census. Although some of the cost increase could be expected because the number of housing units—and hence the Bureau’s workload— has increased, the cost growth far exceeded this increase. Factors contributing to the increased costs include an effort to accommodate more complex households, busier lifestyles, more languages and greater cultural diversity, and increased privacy concerns. The Bureau estimated that the number of housing units for the 2010 Census will increase by almost 14 percent over 2000 Census levels (from 117.5 million to 133.8 million housing units). At the same time, the average cost per housing unit for 2010 was expected to increase by approximately 26 percent over 2000 levels, from $69.79 per housing unit to $88.19 per housing unit (see fig. 2). The bulk of total life cycle funds for the 2010 Census has yet to be spent. As shown in table 1, which reflects the Bureau’s life cycle cost estimate for the 2010 Census that was released in September 2007, the majority of spending will occur from fiscal year 2009 through fiscal year 2013. In reengineering the 2010 Census, the Bureau has four goals: to (1) improve the relevance and timeliness of census long form data, (2) reduce operational risk, (3) increase the coverage and accuracy of the census, and (4) contain costs. To achieve these goals, three new components are key to the Bureau’s plans for 2010: modernizing and enhancing the nation’s road map through the MAF/TIGER enhancement program, which includes realigning the TIGER map to take advantage of global positioning system capabilities, modernizing the processing system, and expanding geographic partnerships; replacing the census long form questionnaire with a more frequent sample survey, the ACS; and conducting a short-form-only census using automation to collect census data. Prior to 2010, the decennial census collected data using both a short and long form questionnaire: the short form counted the population, and the long form obtained demographic, housing, social, and economic information from a 1-in-6 sample of households. The ACS is a nationwide survey that is replacing the decennial long form in the reengineered 2010 Census. The ACS, which was first implemented in 2005, collects detailed characteristics data every year throughout the decade using a large household survey. The ACS has allowed the Bureau to simplify the 2010 Census since it will now only involve the short form. In June 2001, the Bureau issued a document describing the process for reengineering the 2010 Census, which included a life cycle cost estimate for the 2010 decennial census, projected at $11.28 billion. Since June 2001, the Bureau has updated the life cycle cost estimate for the reengineered 2010 Census and issued formal documents describing the estimate in June 2003, September 2005, June 2006, and September 2007. In February 2008, the Bureau’s Budget Estimates as Presented to Congress, Fiscal Year 2009 included a new life cycle cost estimate for the 2010 Decennial Census of $11.546 billion, an increase of $20 million over the previous year’s estimate. As described above, in April 2008, the Secretary of Commerce testified that the current estimate for the 2010 Census is from $13.7 billion to $14.5 billion. The 2001 through 2007 life cycle cost documents issued by the Bureau illustrate that the costs of the three components—the ACS, MAF/TIGER modernization, and short-form-only census—fluctuated slightly over that period. The total life cycle costs ranged from a low of $11.2546 billion in the September 2005 and June 2006 documents to a high of $11.5264 billion in the September 2007 document. Figure 3 depicts how the estimated life cycle cost for the 2010 Census fluctuated in Bureau documents from 2001 to 2007. This year, however, the Bureau estimates that the life cycle cost of the census will increase by up to $3 billion—dwarfing all previous increases. In January 2004, we reported that the Bureau’s approach had the potential to achieve the first three goals for reengineering the 2010 Census, although reducing operational risk could prove to be difficult because each of the three components actually introduced new risks, and the Bureau would be challenged to control the cost of the 2010 Census. To manage the 2010 Census and contain costs, we recommended in our 2004 report that the Bureau develop a comprehensive, integrated project plan for the 2010 Census that should include itemized estimated costs of each component, including a sensitivity analysis, and an explanation of significant changes in the assumptions on which these costs are based. In response, the Bureau provided us with the 2010 Census Operations and Systems Plan, dated August 2007. This plan represented an important step forward at the time. It included inputs and outputs and described linkages among operations and systems. However, it did not include sensitivity analysis, risk mitigation plans, a detailed 2010 Census timeline, or itemized estimated costs of each component. With the redesign, this plan will need to be updated. The Bureau’s life cycle cost estimate for the 2010 Census is not adequately documented. The Bureau could not provide adequate documentation to support the costs of two of the three components of the total life cycle cost estimate, the ACS and MAF/TIGER components, which together accounted for close to 20 percent of total life cycle costs in the 2007 life cycle cost estimate. Figure 4 shows the three major components of the total life cycle cost of $11.5 billion as of August 2007. Costs for the ACS and MAF/TIGER are estimated outside of the cost model that is used for the 2010 short form census. According to Bureau officials, they were not able to locate specific documentation for how the Bureau first calculated the costs for those components of the 2010 Census life cycle cost estimate in 2001, although they explained that experienced staff derived the estimates based on professional expertise, similar surveys, comparative costs for similar projects, and other factors. We requested documentation that supported the assumptions for the initial 2001 life cycle cost estimate as well as the updates, but Bureau officials were unable to demonstrate that support existed. The Bureau did not provide detailed documentation for data sources and significant assumptions used in estimating the cost of the short form 2010 Census. For example, the Bureau’s first document describing the life cycle cost estimate for the 2010 Census, which was issued in June 2001, includes a number of assumptions for expected areas of savings that would be achieved by the reengineered design. One assumption is that the follow-up workload for the Local Update of Census Addresses (LUCA) program will be reduced by 25 percent as a result of updating the address list throughout the decade and using HHCs to reduce time and travel costs. However, the document does not fully describe how the 25 percent reduction was calculated or what the associated savings might be. Similarly, the Bureau did not provide detailed documentation for the updated life cycle cost estimate for the 2010 short form that was issued in 2003, which includes several changes to assumptions. For example, the Bureau describes how increases of $128 million have been made to the life cycle cost estimate based on new requirements, including the need for more research on ways to reduce duplicate enumerations, more testing and development on how to identify and enumerate special places/group quarters, and additional efforts to research and test methods for enumerating Americans overseas. However, the document does not describe how the $128 million increase was derived, the costs associated with each of the new requirements, or the data sources and calculation methods used. Cost estimates are well documented when they can be easily repeated or updated and can be traced to original sources. The documentation should explicitly identify the primary methods, calculations, assumptions, and sources of the data used to generate each cost element. The estimating process should be described and an explanation provided for why particular methods and data sets were chosen and why these choices are reasonable. All the steps involved in developing the estimate should be documented so that a cost analyst unfamiliar with the program could re- create it with the same result. In addition, documentation for the cost estimate should reflect changes in technical or program assumptions or new program phases or milestones. Officials acknowledged that the Bureau does not have a centralized location in which to keep detailed documentation to support the assumptions and decision-making process. Further, Bureau officials stated that there is no written documentation of the process used by management to agree upon particular assumptions for use in the life cycle cost estimate, and that there is no systematic documentation regarding management decisions to make changes to the cost model or life cycle cost estimates. According to an official, changes to the cost model have not always been well documented, and sometimes a decision memo is created to justify a change but not always. Best practices call for management approval of the cost estimate.