DOE Committee Reviews SSC Cost and Schedule

“The Committee agrees that the value of the work performed is consistent with the expenditures to date, all Level 1 milestones have been met, and progress to date is satisfactory. However, the Committee believes that there are significant cost and schedule risks in the project work remaining “to-go”. -- Report of the DOE Review Committee

With the Superconducting Super Collider, Secretary of Energy Hazel O’Leary inherited a very troubled program. Much of her first half-year in office has been taken up in trying to determine the current status of the project and straighten out the management problems that continue to plague it. O’Leary, the SSC Lab management, and the SSC contractor, Universities Research Association, have all come under fire from Congress and the media over the giant proton collider; the Washington Post recently dedicated a front-page article to the SSC’s troubled history and uncertain future. As part of the effort to get the SSC program back on track, DOE implemented a review of the project’s status, what past spending indicates for future costs, and the effectiveness of its much-maligned management systems.

The “Report of the DOE Review Committee on the Baseline Validation of the Superconducting Super Collider,” which runs 223 pages, was released in August. Neither harshly critical nor overly optimistic, the report will most likely be used as ammunition by both SSC friends and foes in upcoming skirmishes over the energy appropriations bill (H.R. 2445.) The version passed by the House eliminated SSC funding, but the project is expected to have stronger backing in the Senate (see FYIs #110, 105, and 102.)

The review committee comprised 75 members with relevant expertise, culled from the DOE SSC Project Office, DOE Headquarters, Operations Offices, the DOE National Labs, DOD, and private industry. They had only three weeks, from July 13 to July 31, to conduct their review, which necessarily limited its scope. The committee was charged with three tasks: to validate the project’s progress as reported in the May 1993 Monthly Progress Report (MPR), to come up with an estimated cost range at completion based on current trends and projected changes, and to assess the usefulness of the current business management systems.

The May MPR identified the SSC’s progress as 20 percent complete, based on DOE’s January 1991 cost and schedule baseline. The 1991 baseline, the last official estimate, projected a total project cost of $8.25 billion, with completion in September 1999. The committee “determined that the project’s progress is reasonably reported in the [May MPR] at approximately 20 percent, but is very difficult to track using the current project and business management systems.”

While the committee did not calculate a new baseline cost (DOE expects to have one prepared by next spring), it did determine an estimated range for the project’s cost at completion. Looking at the work still to be done and the cost trends so far, the committee “identified potential risks of $1.5 billion and approximately a one-year slip” in the completion date. The committee reported that “unless significant management actions are taken . . . this cost risk could result in a cost of $9.95 billion.” In particular, the committee expressed concern over possible escalation of production costs for the superconducting magnets, and recommended higher contingency funding for magnet production than for the overall project.

Due to time constraints, the committee did not take into account the potential results of altered budget profiles, such as President Clinton’s plan to stretch out the completion date to 2003, expected to add approximately $2 billion in associated costs. Nor did it consider possible changes in management approach, design optimization and trade-offs, or staffing efficiencies, which might reduce overall costs. While the committee did adjust the 1991 baseline to take into account some contingency funds originally expected to come from non-federal sources (which increased the baseline to $8.47 billion), it identified, but did not include, the following additional costs: spare parts, lab operating costs, a second detector, and additional contingency funds.

Through its attempts to evaluate the project’s status and cost trends, the committee determined the SSC’s project and business management systems to be of only “marginal usefulness.” The report makes the following recommendations: the project be rebaselined; a new integrated, resource-loaded project schedule be completed; the management structure and approach be modified to reduce costs; and substantial improvements to the management systems be implemented immediately.

As part of her attempt to address the SSC’s problems, O’Leary intends to bring in a new contractor to take over the construction portion of the project (see FYI #106). The report recommends that the new contractor participate in the rebaselining effort. However, all these improvements to the project may be moot if the Senate votes to kill it, or it is not resurrected in conference. The Senate Appropriations Subcommittee on Energy and Water, chaired by SSC supporter J. Bennett Johnston (D-Louisiana) is expected to mark up H.R. 2445 next week.