NNSA Set to Decertify Los Alamos Earned Value Mgmt. System

Todd Jacobson
NS&D Monitor
11/14/2014

The National Nuclear Security Administration is set to withdraw the Earned Value Management System certification for Los Alamos National Laboratory because of “systemic and material deficiencies” with the system, according to a draft letter slated to be sent to acting Deputy Lab Director Paul Henry obtained by NS&D Monitor. The letter from Los Alamos Field Office Contracting Officer Sheryl Chesnutt and an accompanying memo from the Department of Energy’s Office of Acquisition and Project Management revealed that the lab’s EVMS system had repeatedly failed reviews, including a review this summer by the DOE’s APM Office that turned up 92 corrective action requests and noncompliance with 31 of 32 American National Standards Institute guidelines (one other guideline was determined to be inapplicable).

In three reviews since the lab’s EVMS system was first certified in 2009, the review team noted “repeat deficiencies” and “an increasing trend in repeat findings.” The issues included failures in defining the work scope and defining the project organizational structure to failures in planning, scheduling, budgeting, and accounting. The lab struggled with project management, with massive cost increases forcing the deferment of the Chemistry and Metallurgy Research Replacement-Nuclear Facility and causing major cost and schedule overruns on the Nuclear Materials Security and Safeguards Upgrade Project. “The Review Team determined that the LANS EVMS data is not reliable, accurate, timely, auditable, traceable, or reconcilable, and therefore, any performance Measurement Baseline would be invalid such that neither the current project status nor the forecast completion cost and schedule are determinable,” DOE APM chief Paul Bosco said in an Oct. 30 memo to NNSA Associate Administrator for Acquisition and Project Management Bob Raines and Los Alamos Field Office Contracting Officer Robert Poole. “As a result the Government cannot have confidence in any project’s reported financial position, and the Government’s ability to manage and take corrective actions has been hampered.”

In a review of the EVMS system, DOE APM said that the system appeared to be structured as a “contractually mandated system” rather than as an effective management tool. “Contributing to the systemic issues in properly implementing a solid EVM System, was an apparently lack of rigor in the review of the Earned Value Management System from a compliant viewpoint, to include the analysis and value of the data produced,” DOE APM said, adding: “There was a general lack of knowledge in regard to even the most basic of Earned Value concepts.”

Chesnutt said the lab’s plan for recertification is due by Dec. 10. “It is paramount that your EVMS achieves recertification at the earliest possible date to ensure that accurate reporting of cost and schedule performance on the mission critical capital asset projects, both planned and currently underway at the Los Alamos National Laboratory is attainable,” Chesnutt wrote. The suspension will prevent capital asset projects at the lab from proceeding beyond the Critical Decision-2 (approve performance baseline) or Critical Decision-3 phase (approve start of construction/execution. “If it is necessary to proceed with any capital asset projects to meet critical mission objectives, alternate means to monitor and control cost and schedule against contractual terms must be in place, acceptable to NNSA and OAPM,” Bosco said.

The DOE APM review team said it believes the lab’s EVMS system can be brought back into compliance in a “reasonable timeframe” if the lab develops a detailed plan, senior leadership at the lab “champions” the effort, and the lab coordinates its efforts with DOE and NNSA. “Thoughtful attention must be given to eliminating those practices which led to non-compliance and increasing the knowledge of the CAMs and project controls personnel to ensure EVM processes are understood and followed,” the review team said. “The absence of a compliant EVM System has, and will continue to diminish the ability to make informed decisions and could harm timely engagement when corrective action is required to mitigate issues in a timely, proactive manner.”