EM CAPITAL PORTFOLIO
EM is tasked with solving the large scale, technically challenging risks and hazardous conditions posed by the world’s largest nuclear cleanup. Current nuclear cleanup activities are located at 16 remaining sites covering more than two million acres in 11 states, and employing thousands of Federal and contractor employees, including scientists, engineers, and hazardous waste technicians.
The EM portfolio of programs, projects, and activities is the largest and most diverse when compared to other DOE organizations with major contracts and projects.
EM has been continually improving processes and procedures to more effectively manage the cost and schedule performance of capital asset projects. As a result of these project management improvements, the U.S. Government Accountability Office (GAO) has removed EM from its High Risk list for projects less than $750 million. EM remains committed to maintaining and strengthening these improvements in project and contract management to reduce EM’s vulnerability to fraud, waste, and abuse and to fully meet the GAO’s criteria for removal from the High Risk list.
Click for a map of where EM has been or is currently responsible for cleaning up sites across the United States: Sites/Locations
EM CAPITAL ASSET PROJECTS
EM capital asset projects are managed in accordance with the priorities of DOE Order 413.3B, Program and Project Management for the Acquisition of Capital Assets. The purpose of this Order is to:
- Provide the Department of Energy (DOE) Elements with program and project management direction for the acquisition of capital assets with the goal of delivering projects within the original performance baseline (PB), cost and schedule, and fully capable of meeting mission performance, safeguards and security, and environmental, safety, and health requirements unless impacted by a directed change; and,
- Implement Office of Management and Budget (OMB) Circulars to include: OMB Capital Programming Guide, which prescribes requirements and leading practices for project and acquisition management; A-123, Management’s Responsibility for Internal Control, which defines management’s responsibility for internal control in Federal agencies; and A-131, Value Engineering, which requires that all Federal agencies use Value Engineering (VE) as a management tool.
EM capital asset projects are also managed in accordance with the July 2017 policy titled “Requirements for Management of the Office of Environmental Management’s Cleanup Program.” This policy emphasizes delivery of the EM Cleanup Program at the authorized scope, cost and schedule with a priority on maintaining safety, security, and environmental and health expectations.
Click for the list of current EM capital asset projects. Capital assets are land, structures, or major equipment, which are used by the Federal Government and have an estimated useful life of two years or more. A capital asset project is defined as a project with start and end points required in the acquisition of capital assets. Capital asset projects include the environmental remediation of land to make it useful. They exclude activities such as repair, maintenance and surveillance, or minor alterations that are part of routine operations and maintenance functions. Built on interdependent activities that are planned to meet a common objective, a capital asset project focuses on attaining or completing a deliverable within a predetermined cost, schedule and technical scope baseline.
The EM capital asset projects fall into the following two categories:
- Line-Item Construction Projects: A distinct design, construction, betterment or fabrication activity, effort or project for which Congress will be requested to authorize and appropriate specific funds (capital and/or operating), and where the resulting asset (structure, equipment, facility, product, system or plant) has an estimated useful life of two years or more. A full-scale test asset or other pilot/prototype asset primarily constructed for experimental or demonstration purposes, but planned to continue to operate beyond the experimental or demonstration phase is included in this definition.
- Cleanup Projects: This category includes capital asset projects greater than $10 million or the minor construction threshold being executed for site cleanup with operating expense funding. This includes the capital phase of environmental restoration (i.e., soil and water remediation) and facility decommissioning and demolition.
As of November 7, 2018, EM’s portfolio of active capital asset projects consists of 17 line-item construction projects and 21 clean-up projects which have a rough order-of-magnitude cost of $62.4 billion (high end of cost estimate range). This includes 10 projects that are under the $50 million threshold for reporting in PARS. The total dollar value of these projects is $245 million.
The capital asset projects are managed through various Critical Decision (CD) Stages:
|Active Capital Asset Projects at Each CD Stage (as of November 7, 2018)|
|CD Stage||Name of CD Stage||#|
|CD-0||Approve Mission Need||8|
|CD-1||Approve Alternative Selection and Cost Range||11|
|CD-2||Approve Performance Baseline||0|
|CD-3A||Approve Long Lead Procurement||1|
|CD-3||Approve Start of Construction or Execution||18|
The EM program considers the following attributes for capital asset projects prior to establishing performance baselines (at CD-2):
- Time Horizon: Minimize the time horizon and risk to the maximum extent possible. Ideally, execution should take no more than four (4) years starting from CD-3.
- Funding Profile: Develop each project’s funding profile to support the optimum project schedule; fully fund when appropriate, and deliver projects quickly.
- Segregate by Building or Group Similar Types of Facilities: Segregate nuclear from non-nuclear work; utility systems/buildings from general use facilities; fixed price work from cost reimbursable work.
- Phase Projects: Execute well-defined, lower-risk, complete and usable projects first, allowing additional time to advance designs on more complex and/or technical projects. Project phases should not impede one another.
- Span of Control: Ensure that the planned scope and pace of work is matched to the capacity and capabilities of the management team.
- Segregate Projects by Geographic Area: Occasionally, projects involve separate geographic locations with different site conditions, construction workforce environments, and regulatory and political pressures.
- Workforce Phasing: Phase construction and environmental remediation projects within the program to take advantage of “leap-frogging” trades (i.e., concrete workers moving from one project to the next).