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(EST-3860) Cost Growth in Early Stage NNSA Construction Projects: Root Cause Analysis

Level: Intermediate
TCM Section(s):
6.1. Asset Performance Assessment
6.4. Forensic Performance Assessment
Venue: 2022 AACE International Conference & Expo

Abstract: The Office of Program Analysis and Evaluation (PA&E) within the National Nuclear Security Administration's (NNSA) is charged with leading programmatic cost estimating and associated analytical support throughout the federal budgeting process. In this role, PA&E has conducted a root cause analysis on cost growth in early capital acquisition programs meant to revitalize the NNSA’s aging infrastructure. This analysis tracked projects from initial mission need and requirements through conceptual design and initial budget submission, a process that takes approximately 3 to 5 years. The study tracks and catalogues changes in estimates from the initial mission need stage through subsequent analysis of alternatives, conceptual design, and final budget submission.

The analysis identified the following as primary cost growth drivers: differences in escalation assumptions, scope “growth” additions, missed scope, and contingency growth. Cumulatively these resulted in as much as 100% growth over the studied timeframe. Identifying these underlying root causes as drivers enable program managers and organization leadership to better prevent, track, and manage project and portfolio risk.