U.S. Department of Energy Project Management: Communicating Progress – Celebrating Success Paul 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/Comments 2

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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 FY09 Actual FY10 Actual FY11 Target FY11 Actual FY11 Post-RCA Actual Construction 79%75%90%84%100% Cleanup --100%80%94%97% Combined -- 89%98% SC 91%92%90%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

(21 / 28) (26 / 35) (43 / 44) (30 / 38) (32 / 41)(64 / 72) 7 How are we Doing? Pre- vs. Post-RCA (Demarcation Date: October 1, 2007)

8 Contract/Project Management Secondary Performance Metrics FY 2011 Target FY 2011 Actual 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 Management Secondary Performance Metrics FY 2011 Target FY 2011 Actual 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 Performance Against 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 12 DOE 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 Findings 1.SCOPE – SCOPE – SCOPE: “Low Confidence” 2.Schedule (CD-4) Completions: Too Generic – Fiscal Year (“Budget”) End Dates, i.e., FY11 3.Significant Cost Under-Runs 4.PARS-II: Only as Good as the Data Quality 13

14 Actual Estimate Major Challenge (Dollars in Trillions)

Major Challenge 15 National Deficit ($Billions)

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Portfolio Management – Project Prioritization Budget Target Non-Discretionary (e.g., payroll, utilities, etc.) Operations Committed Funding Profiles Budget ± 20% Small Projects Capital Asset Project 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 Realization 18 *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 place management/project-management Immediate challenge: consistent implementation Future Challenge: Program/Portfolio Management Credible project success is the key! 19

20 Questions / Comments