Dept. of Energy, Rep. George Brown Respond to GAO Report on SSC

In an eleven page letter to House science committee chairman George Brown (D-California), Secretary of Energy Hazel R. O’Leary responded to the recent GAO report on the Superconducting Super Collider (see FYI #27.) Her cover letter is reprinted in full below (space does not permit the additional nine pages of comments), as well as a one-paragraph press statement by Chairman Brown.

SECRETARY O’LEARY’S FEBRUARY 24 LETTER:

“Dear Mr. Chairman:

“Enclosed is our response to your letter of February 17, 1993. Thank you for the opportunity to comment on the General Accounting Office report entitled “Federal Research: Super Collider is Over Budget and Behind Schedule.” As the enclosed comments amply demonstrate, the report’s major conclusion and its title are based on faulty assumptions and trends based on insufficient data. The GAO did not provide the Department an opportunity to comment prior to its submission to you. [Note: as instructed by the requesting Members of Congress.]

“At the request of the GAO, DOE’s SSC Project Office performed trend analysis on selected SSC Laboratory subcontracts. The techniques established by the GAO are not appropriate for the early stages of project development. Schedule and cost performance data are distorted by startup costs so that straight line trend projections to completion are not meaningful. On November 17, 1992, the GAO was provided with trend projections for major subcontractors prepared by the SSC Laboratory. The results of those analyses were apparently ignored in the GAO report.

“The SSC project is being managed in a very conservative manner. A project contingency of almost $850 million is included in the total project cost estimate of $8.3 billion, but is not included in Laboratory budgets and can only be used with DOE approval. As reflected in the January 1, 1993, Cost Progress Report, the project is 16 percent complete and has used only 3.5 percent of its contingency.

“The SSC is meeting its schedule goals. So far, all seven scheduled Level 1 milestones have been met. The most recent Level 1 milestone, a demonstration of the capability of a string of magnets development for the collider, was accomplished 6 weeks early. The dipole magnet development program, once the single greatest technical challenge of the Super Collider project, has resulted in the design and assembly of excellent magnets, as confirmed in reviews by many of the world’s foremost experts in superconducting magnets. The aggressive early commitment to a baseline design for the production magnets, thoroughly tested individually and in a string, provides a firm foundation for the production phase. It is important to monitor trends so that problems can be avoided, but it is also important to recognize the solid accomplishments of meeting technical milestones and baseline cost objectives.

“Contrary to the conclusion drawn by the GAO, aside from the effects of substantial underfunding in the last several years, the project is meeting its budget and schedule goals and the cost estimate prepared several years ago is still accurate.

“Since the President has proposed a program stretch-out, it will be appropriate to re-examine the project’s cost and schedule in order to implement the stretch-out in the most efficient manner possible. It is my plan to have the stretch-out program independently reviewed so we may put behind us any remaining issues relative to the cost of the SSC.

“We are also scheduling a meeting with the GAO and the DOE staff to review this report and our comments in more detail.”

FEBRUARY 24 STATEMENT BY SCIENCE COMMITTEE CHAIRMAN GEORGE BROWN:

“The GAO has written a report claiming that the SSC is over budget and behind schedule. In response, the Department of Energy contends that GAO has conducted a faulty analysis based on insufficient data. Obviously, there are major disagreements between these two parties. Our goal in the coming weeks will be to understand the basis for these differing views. DOE and GAO officials will be meeting in the near future to discuss their differences on this report. I look forward to learning the outcome of those discussions.”