Audit Report: DOE-OIG-19-47

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September 6, 2019

Kesselring Site Engine Room Team Trainer Facility Construction Project

The Department of Energy’s Kenneth A. Kesselring Site (Kesselring Site), located in West Milton, New York, is part of the Naval Nuclear Laboratory. The Kesselring Site’s primary mission is to train nuclear officers and enlisted personnel to operate the United States Navy’s nuclear-powered aircraft carriers and submarines. A new facility is being constructed to provide space for simulation equipment to support student training. The new facility, the Kesselring Site Engine Room Team Trainer Facility (Facility), has a total project cost of $41 million and beneficial occupancy1 is expected to be achieved by December 31, 2019. The Facility is being constructed by P. J. Dick Incorporated, the subcontractor, under a firm-fixed price subcontract managed by Fluor Marine Propulsion, LLC (FMP), the Naval Nuclear Laboratory management and operating contractor.

Department Order 413.3B, Program and Project Management for the Acquisition of Capital Assets, provides program and project management direction for the acquisition of capital assets with the goal of delivering projects within the original performance baseline2 cost and schedule and fully capable of meeting mission performance. Generally, the Order requires the

Department to establish a performance baseline and controls to monitor project progress. We conducted this audit to determine whether the Department is on track to meet its construction goals for the Facility.

We found that the Department appeared to be on track to meet its construction goals for the Facility. As required by Department Order 413.3B, Program and Project Management for the Acquisition of Capital Assets, the Department had established a performance baseline for the Facility as well as controls to monitor project progress. Specifically, the Facility was progressing in accordance with the current approved baseline schedule, cost, and scope requirements. We also determined that the Department had implemented several project management practices to monitor the Facility’s progress. For example, the FMP Subcontractor Technical Representative (STR) closely monitored Facility construction status; FMP project management used schedule and cost tracking tools as well as performed detailed invoice reviews; and the subcontractor, FMP, and the Department were in frequent communication with each other.

Because nothing came to our attention to indicate that the Department would not meet its construction goals for the Facility, we are not making any recommendations.

Topic: Management and Administration