U.S. Department of EnergyProject Management:

Communicating Progress – Celebrating SuccessPaul Bosco, PE, PMP, CFM, LEED-AP

Director, Office of Procurement and Assistance Management Director, Office of Engineering and Construction Management

Outline of Presentation

• GAO High-Risk List – Some Background

• Project Success – Are We There Yet?

• Project Metrics – How Are We Doing?– Documenting and Tracking Performance

• Project Management Enhancements

• Challenges Ahead

• Questions/Comments2

3

Contract and Project Management Goal

• Improve contract and project management and alignment to support accomplishment of DOE mission and strategic goals

• Success Metric: – Complete projects within 10% of the original cost

baseline

• Secondary Goal:– Removal from GAO’s High-Risk List

4

Project Success

• Project Success: (For “Capital Asset Projects”)– Project completed within the ORIGINAL approved

scope baseline, and within 10% of the ORIGINAL approved cost baseline at project completion (CD-4), unless otherwise impacted by a directed change.

• Portfolio Success:– 90% of all projects meet project success criteria,

based on a three-year rolling timeline.

5

How are we Doing?Based on 3-Year Rolling Timeline

Capital Asset FY09Actual

FY10Actual

FY11Target

FY11Actual

FY11Post-RCA

Actual

Construction 79% 75% 90% 84% 100%

Cleanup -- 100% 80% 94% 97%

Combined -- -- -- 89% 98%

SC 91% 92% 90% 100% 100%

EM (Const) -- -- 90% 0% N/A

EM (Cleanup) -- 100% 80% 94% 97%

NNSA 75% 68% 90% 75% 100%

Other 67% 0% 90% 83% 100% 6

FY07-09 FY08-10 FY09-110%

20%

40%

60%

80%

100%

(30 / 38)

(6 / 6)

(21 / 28)(26 / 35)

(43 / 44)

(30 / 38) (32 / 41) (64 / 72)

7

How are we Doing?Pre- vs. Post-RCA

(Dem

arca

tion

Date

: O

ctob

er 1

, 200

7)

8

Contract/Project ManagementSecondary Performance Metrics

FY 2011Target

FY 2011Actual Comments

Certified Earned Value Management (EVM) Systems: Post CD-3, 95% of line item projects and EM cleanup projects by FY11 and FY12, respectively.

95%Line Item

85%Cleanup

100%Line Item

88%Cleanup

CD-3 is “Approve Start of Construction/Execution.”[Stats: 34 of 34 and 21 of 24, respectively]

Certified Federal Project Directors (FPDs) at CD-1: By the end of FY11, 95% of projects have certified FPDs no later than CD-1.

95% 97%CD-1 is “Approve Alternative Selection and Cost Range.”• Line item: 98% [63 of 64]• Cleanup: 95% [39 of 41][Stats: 102 of 105]

Certified FPDs at CD-3:By the end of FY11, 90% of projects have FPDs certified at the appropriate level assigned to projects no later than CD-3.

90% 93%CD-3 is “Approve Start of Construction/ Execution.”• Line item: 93% [39 of 42]• Cleanup: 93% [27 of 29][Stats: 66 of 71]

Certified Contracting Staff: By the end of FY11, 85% of the 1102 contracting series will be certified.

85% 83%Contract Specialist series is “1102.”Actual to date: 91%NNSA (93%); EM (91%)

9

Contract/Project ManagementSecondary Performance Metrics

FY 2011Target

FY 2011Actual Comments

Schedule Compliance, Projects < 5 years Duration: By the end of FY11, on a program portfolio basis, 90% of all projects will meet the project schedule metric that follows: from CD-3 to CD-4, for projects less than five years in duration, they will be completed within 12 months of the original CD-3/4 duration.

90% 89%CD-3 is “Approve Start of Construction/ Execution” and CD-4 is “Approve Project Completion.”

[Stats: 59 of 66][Pre-RCA 36/41, Post-RCA 23/25 –92%]

Schedule Compliance, Projects > 5 years Duration: By the end of FY11, on a program portfolio basis, 90% of all projects will meet the project schedule metric that follows: from CD-3 to CD-4, for projects greater than five years in duration, they will be completed within 20% of the original CD-3/4 duration.

90% 20%CD-3 is “Approve Start of Construction/ Execution” and CD-4 is “Approve Project Completion.”

[Stats: 1 of 5 Pre-RCA]

CD-2 Commitment CD-4 Auditable• Scope Accomplished• Key Performance

Parameters Met• Total Project Cost• Completion Date

(Month/Year)• Signed by Acquisition

Executive

• Scope• Minimum Key

Performance Parameters

• Total Project Cost• CD-4 Date (Month/Year)• Signed by Acquisition

Executive

10

Documenting Project Success

Templates Online & OECM Review Draft Memos

Tracking Project PerformanceAgainst Current Project Performance Baseline

Project is expected to meet its performance baseline (PB)

Project is potentially at risk of not meeting element of the PB

Project is highly at risk of requiring a change to the PB

EVMS Indicators:• CPi• SPi• TCPi• EACs• Variances• Trends• % Complete

Assessment Factors:• Data validity• MR & Contingency• Reports• Reviews• Communication• Other information

Overall Project Assessment = EVMS Indicators + Assessment Factors

= +

• Yellow is not bad – provides early warning• DOE is not fixated on “getting to green,” only achieving

project success – meeting our commitments• Assessment is not solely ratio based – Trends are important

11

Significant PM Enhancements

• Established front-end planning maturity objectives

• Clarified project size and structure; program versus project management … “chunking”

• Transformed commitment to funding, budgeting; stabilized funding

• Enhanced management and oversight– Peer reviews for projects >$100M– PARS II central repository for project data – data accuracy

and consistency– ICRs/ICEs for projects >$100M

12DOE O 413.3B Highlights

Great Progress, But…Challenges Remain – Loom Ahead

GAO Meeting of March 5, 2012

• Two Impending GAO Reports (1) Non-Major System Projects; (2) EM Recovery Act

• Preliminary Findings1. SCOPE – SCOPE – SCOPE: “Low Confidence”2. Schedule (CD-4) Completions: Too Generic – Fiscal Year

(“Budget”) End Dates, i.e., FY113. Significant Cost Under-Runs4. PARS-II: Only as Good as the Data Quality

13

14

19401945

19501955

19601965

19701975

19801985

19901995

20002005

2010

2015

estimate

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Fiscal Years

Actual Estimate

Major Challenge(Dollars in Trillions)

15

Major Challenge

19481950

19521954

19561958

19601962

19641966

19681970

19721974

19761978

19801982

19841986

19881990

19921994

19961998

20002002

20042006

20082010

-1,600.0

-1,400.0

-1,200.0

-1,000.0

-800.0

-600.0

-400.0

-200.0

0.0

200.0

400.0 Fiscal Years

National Deficit ($Billions)

16

2007 2008 2009 2010 2011 2012 2013 2014

$ in

bill

ions

Fiscal Year

DOE Appropriations

Budget Request Base Appropriations Recovery Act Appropriations

Source: FY2011 DOE Financial Report and FY12 Appropriations

Estimated

Portfolio Management – Project Prioritization

BudgetTarget

FY11 FY12 FY13 FY14 FY15 FY16 FY17$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Non-Discretionary (e.g., payroll, utilities, etc.)

Operations

Committed Funding Profiles

Budget± 20%Small Projects

Capital AssetProject Backlog

FY13 Budget

“Chunked” Projects

(Notional Data [$1B Budget])

PMI’s “Pulse of the Profession”*

Focus Areas of 2012: (In priority order)

1. Renewed Focus on Talent Management

2. Need for Good Project Portfolio Management

3. Change Management & Risk Management – Even More Important

4. Agile Project Management

5. Focus on Benefits Realization18

*PMI President and CEO: Mark Langley, March 2012

What’s Next? Play to Your Strengths – Disciplined

Implementation

• DOE has improved in project and contract management – our stats provide validation

• Our successes must be credible and documented

• Project management framework is in placehttp://energy.gov/management/office-management/operational-management/project-

management

• Immediate challenge: consistent implementation

• Future Challenge: Program/Portfolio Management

Credible project success is the key!19

20

Questions / Comments