On Time, At Cost

ime and money are running out on agencies that handle projects and programs the old-fashioned way. It's a painfully familiar road that often has led to ruin:

Congress passes a law, something changes, a crisis occurs, or the top brass get an inspiration. Executives send a project idea down the chain of command. The description, ill-defined at the start, becomes nearly indecipherable as it filters several layers down. A team is assembled to execute the project. It is made up of experts in things like finance, information technology and budget. They are poorly equipped for complex, rapidly changing tasks. They have no training in managing projects. Their loyalties are divided between their functional supervisors and the project manager.

The budgets and schedule are set arbitrarily before the project's work is scoped out. Project customers aren't consulted. The project manager, lacking full authority over the team members, the budget or the schedule, relies obsessively on project planning software and scheduling tools that produce reams of information nobody uses.

Divorced from its users and bereft of a powerful, single-minded sponsor, the project flounders. Funding is continuously and arbitrarily altered. The project changes course repeatedly. Funding and scope changes force schedule changes, causing the project to suck up more money and time than anyone anticipated. The resulting project is at best barely acceptable to its users and disappointing to top officials. At worst, it is outdated, unusable and so costly that it is a drag on the whole organization.

In July, The Washington Post ran a front-page story on the Army's Theater High-Altitude Area Defense (THAAD) weapon system, calling it "ill-conceived and poorly executed." THAAD is supposed to protect U.S. troops by detecting, intercepting and destroying incoming enemy missiles. Six years into development, it has fallen four years behind schedule and more than $4 billion over budget.

Sprinkled throughout the Post story are the telltale sour notes of poor project management. "By all accounts, Congress and the Pentagon have pressed for too much, too soon, particularly given the novelty of what THAAD is attempting," wrote the Post's Bradley Graham. THAAD contractor Lockheed Martin Corp. misjudged the number of people it needed for the project team and failed to train engineers to replace the quality inspectors it had jettisoned to reduce costs. "There seemed to be more of an emphasis on aggressively meeting schedule as opposed to concerns about maintaining good cost controls and ensuring that performance was adequate," Air Force Lt. Gen. Lester Lyles, who commands the Ballistic Missile Defense Organization, told Graham. Outside reviewers found at Lockheed "a lack of attention to standard procedures for zeroing in on problems."

If this woeful saga sounds familiar, take heart. Disciplined project management is making a comeback in federal agencies. In improved forms, it is taking root in the realm of multi-million-dollar aerospace and weapons programs, information technology systems and building and equipment purchases. It's seeping into policy development and social programs. And, someday soon, project management may come creeping into your very office as you prepare a new report, introduce new computers, change a procedure or plan the annual Combined Federal Campaign charity drive.

New improved project management approaches force organizations to choose projects more carefully based on their contribution to agency strategic plans and performance goals. Project ideas must be carefully filtered before being adopted. The approach holds project managers in high esteem, providing them training, their pick of agency functional experts, high-level sponsorship and strong support for saying "no" to changes in project scope, schedule and funding.

In a project management-friendly environment, budgets for a carefully chosen few projects are stable and strongly protected by agency heads, the administration and Congress. Projects are clearly described and carefully planned down to the lowest level of work that could disrupt baseline cost or schedule. Risks are assessed and planned for. Cost and schedule targets are developed after the project is broken down into its constituent tasks. Customers are continuously involved in planning from the start. Expectations are in line with reality. The effects of project changes flow through the original plan, making cost and schedule consequences immediately visible. The project team continuously monitors project vital signs; any variance from plan brings fast adaptive action.

Reining In Renegades

If that sounds like perfection and seems just as unattainable, consider that project management improvements are mandated by a host of new laws, including the 1993 Government Performance and Results Act, the 1994 Federal Acquisition Streamlining Act and the 1996 Clinger-Cohen information technology management reform law. An impatient and increasingly exacting public, the movement to balance the federal budget and downsizing efforts are exerting pressure to improve agency performance and results.

Clinger-Cohen is driving agencies to improve project management by emphasizing the importance of stable funding, says Fred Manzer, a former project management professor at the Defense Systems Management College. The law requires that new programs be fully funded from the outset and meet at least 90 percent of cost, schedule and performance goals.

"Until recently, project managers spent whatever funding they had to make whatever product they could get," says Manzer, now a consultant with Welkin Associates in Chantilly, Va. In enforcing Clinger-Cohen, the Office of Management and Budget is recognizing the need to get agencies and Congress to leave project funding alone once it is appropriated, he says. Without constant budget fluctuations, project managers will be able to focus on cost, schedule and performance rather than spending most of their time defending their budgets.

Improving project management also should move agencies toward the key goal of reinvention and now of GPRA: getting results that customers value. "The biggest strength of a project is that it focuses specifically on a customer," says Ed Hoffman, program manager for NASA's Program and Project Management Initiative. That customer focus should help agencies do a better job of focusing attention and resources on fewer and better projects.

"Traditionally we haven't known what we are trying to accomplish for our broader customers, so we get renegade projects that are not related to organizational goals," Hoffman says. To rein in renegades, OMB has issued a guide for starting and running programs. The Capital Programming Guide, published in July 1997, comprises elements of information technology and acquisition reform laws, as well as GPRA. It advises agencies to undertake only those projects that will achieve strategic goals.

"We have GPRA, which requires the government to set strategic goals and objectives, and when we buy a major system, it has to support those goals and objectives," David Muzio, deputy associate administrator for procurement at OMB's Office of Federal Procurement Policy, says in a November 1997 Defense Department video. "We need a management system that provides visibility into the achievement of goals and objectives so those can be tied to budget estimates and management objectives."

"You need to set up a project portfolio that says this is what [the agency] is committed to doing, its top priorities," Hoffman says. "Then, as new work comes up, [you can say] 'This is the portfolio now. We don't have the budget or manpower to do additional work. What do you want us to take off our plate?'"

Adopting a project management approach also should help break down lumbering functional silos-such as claims processing, personnel, finance, contracting, budget and facilities maintenance-that most agencies developed to carry out ongoing work with ongoing budgets. In contrast with traditional government work, projects are started to produce a specific product or process for a set of identifiable customers and end when the product or process is delivered. Project teams include staffers drawn from many different functions. Project funding is limited. Projects are designed to meet new needs and then disappear.

"Big functional organizations are resistant to change or dealing with instability," Hoffman says. "[But] in a complex environment driven by information technology, change happens all the time." As project management takes hold, it's likely to make agencies lighter on their feet, because "it is geared to the fact that the environment is changing and it's very fluid," he says.

Projects Great and Small

Getting managers to adopt the project management approach means overcoming the common view that it is more appropriate to DoD weapons programs and NASA space missions than the day-to-day work of most federal organizations. It's true that, until now, Defense and NASA have made the most concerted efforts to systematize project management. "Other agencies I don't think have recognized the need for a more disciplined and orchestrated approach," says Air Force program manager Terry Little. "Most of them let a contract to do something-build a dam, environmental cleanup-and just wait in the hope or expectation of it getting done. They see it as contract management, not program management."

But according to the experts, the project management approach applies to all projects great and small. "A project is just a series of steps to convert an idea into a process or product," says project management consultant Gopal Kapur.

"If Human Resources wants to revamp compensation, that is a project. It is an idea to be converted into a process deliverable: a new pay scheme," adds Kapur, who is president of the Center for Project Management in San Ramon, Calif.

"If you're setting up a computer system, project management is beneficial," Hoffman says. "If you're setting strategy for a marketing campaign, the approach is similar."

The push to outsource agency work is creating a host of new projects in government, says Alex Laufer, author of Simultaneous Management: Managing Projects in a Dynamic Environment (AMACOM, 1997). "As soon as you are managing a contract, you are managing a project," he says.

The approach is particularly suited for the growing number of information technology efforts sprouting up governmentwide. Agencies and industry are plagued by IT project failures. Forty percent of software applications projects are canceled before completion, 33 percent suffer schedule overruns or significant midcourse scope changes, and government and the private sector spend an estimated $145 billion a year on failed and wounded projects, according to the Standish Group, a technology consulting firm in Dennis, Mass.

Looking for Wild Men

Project management is a mix of science and art. "You have to understand your own technical discipline, you need to understand costing, business management, scheduling, your stakeholders, politics," Hoffman says. "At NASA, no one can be a project manager if they don't know work breakdown, cost estimating and scheduling." Above all, project managers must be able to balance competing demands, be they cost vs. performance or scope vs. schedule. "The people who are successful are those who are smart in being able to make trade-offs," Hoffman says.

Performing that balancing act takes deep and up-to-date knowledge of a project's status. "Details, the devil's in them," says John Gioia, president and chief executive officer of Robbins-Gioia, a program management services firm in Alexandria, Va. "If your manager says a project must be done by X time and you do a detailed plan and you find you can't make it, you can [ask him,] 'What do you want to get rid of?'"

At the same time, Hoffman notes, work diagrams and details aren't enough. "Project management, by its nature, means you have to understand people; it means leadership," he says. Effective program and project managers are crusaders for their projects and their people. They beg, borrow, steal, cajole, wheedle and sell, sell, sell to keep projects alive and customers, sponsors and funders engaged. They plan, assess and counter risks, act methodically and scrutinize details. But at the same time, they innovate, throw caution to the wind, and focus on the big picture.

They are willing and able to say no to a doomed project or a schedule- and budget-busting midcourse change. They tell the truth, even to the detriment of their own careers. "The best program manager is someone who is ready to be fired, who says 'If I can't do the job this way, I'll leave," says Gioia, a former Air Force program manager. "You look for a little of the wild man in them. That's hard to get in government. The nonconformist risk-taker, the government's not designed for them."

The Air Force's Little is a case in point. A 15-year veteran program manager, Little is a civilian in a field dominated by military officers. He is considered an arrogant renegade by some, but acquisition reform supporters count him a hero for his nontraditional management of major weapons programs, including the Joint Direct Attack Munition (JDAM) and currently, the Joint Air-to-Surface Standoff Missile (JASSM) programs. "I'm a big-mouthed guy," Little says. "I say whatever comes into my mind, and I'm a liberal Democrat in an environment [Eglin Air Force Base, Fla.] where they are the same as Communists."

Defiantly opposed to paperwork, adamantly in favor of change, Little turned around the JDAM program when he joined it in 1993. Begun in 1991, the program aimed to develop a strap-on kit to enable "dumb" bombs to be guided to their targets in storms, darkness or high winds using satellite signals and computer technology. The Navy and Air Force hoped to pay $40,000 apiece for the kits, but cost estimates were running as high as $68,000 when Little came aboard. "To get the project started, I gave 48 briefings to senior people in my chain of command," Little is quoted as saying in a May DSMC study of the program. "Our program-approval documentation was literally 6 feet high and took 10,000 hours to prepare. Our [request for proposals] was 1,000 pages."

To short-circuit the gummed-up process, Little sent a team to gather best contracting practices from industry. Incorporating those practices, he created teams that mixed his government staff with employees of the
three contractors competing for the JDAM contract, a technique he repeated for JASSM. "The government people's role is to team with the contractor, to do the things we in government have to do-that are unique government functions-or are better prepared to do or have more experience in doing and to let the contractor do what he is able to do," Little says. "It's a pretty radical concept."

During the 18 months leading up to contract award, the government's JDAM program staffers got caught up in the competitive drive of their respective contractors. The contractors' bids were improved by having experienced and knowledgeable people on hand at all times.

Little also dropped the requirement that contractors provide extensive cost data, instead determining the winning vendor based on the per-unit price it offered and how well its product met just five live-or-die performance requirements. Vendors could modify any of the technical criteria as long as they met the performance goals. With a clear mandate to hold the price to $40,000 or below, Little was able to trade off reporting and technical requirements and the traditional arms-length contractor relationship to get a lower price. Winning bidder McDonnell Douglas came in with a per-unit price of between $14,000 and $15,000 with a 20-year warranty. The warranty is expected to save $49 million in upkeep costs.

Recruiting Winners

When you ask Little the key to his program management success, he points to his staff. "A lot of people think being successful as a program manager is about making decisions, giving directions, good planning and having a good contract," he says. "I find none of that to be true. I find it is about people." While he seeks employees "who understand the nitty-gritty" for his teams, Little also looks for energetic, open-minded people who are jazzed up by breaking with tradition.

Others also emphasize the importance of good project teams. In project-oriented organizations such as NASA, people spend whole careers moving from team to team. Managers scout the best team members and being assigned to a hot project can be a major reward. Elsewhere in government, moving people to project teams is more difficult.

"The challenge always is to get the best people," says Lisa Westerback, director of the Commerce Department's Office of Information Planning and Review. "The owners of the best people don't want to give them up." On longer term and larger projects, team members change, increasing the need to raid functional offices for talent. "In a four- or five-year program you want to change people," Gioia says. "Some are great at getting it going, but not at institutionalization. You need different kinds of people based on the life cycle of the program."

Little attracts top people by appealing to their desire to win. "What I do pretty well is get people motivated," he says. "I take advantage of the fact that people like to be part of a successful team." Once he's wooed them, Little's team members get his close attention. For example, he talks face to face with each of the 70 members of the JASSM team at least twice a week about their work, their interests and their aspirations.

Little extends his approach to working with vendors as well. "I empower people, including the contractor," he says. "I work for an open, trusting relationship. I don't have any secrets from my contractors; secrets aren't part of teamwork." Little concedes this close-knit relationship can be risky. "You make yourself vulnerable when you're trusting," he says. But he says his care in selecting winning bidders reduces the possibility that he'll be taken advantage of. "One of the most important things we do in government is picking our contractor teammates," Little says. "If you pick the right guy, everything else can be screwed up and you'll still be successful. I spend a lot of time picking the right horse to ride on." Little claims his bets always pay off.

"JASSM is the second run at the same requirement," Little explains. "The first was terminated after billions were spent and at a cost of $2 billion per missile at termination. The other program was a traditional Defense acquisition: [It had] a work breakdown structure, traditional oversight, PERT [Program Evaluation and Review Technique] charts and God knows what else.

"We just signed a contract with Lockheed Martin buying the same or better performance for something under $300,000 per missile.

"This whole notion of moving to a trusting, collaborative, commercial relationship gets products cheaper, faster and, I believe, better."

Centers of Expertise

Project teams are part of the gospel project management proselytizers preach. Integrated teams, bringing together project customers and specialists in acquisition, finance, information technology, budget and other areas, are at the core of OMB's guide to managing capital assets-equipment, land, structures, computer software and hardware and virtually any other significant items with useful lives of more than two years. "Leading organizations use multidisciplinary teams, consisting of individuals from different functional areas and led by a project manager, to plan and manage projects," writes the General Accounting Office in "Leading Practices in Capital Decisionmaking," an April draft executive guide (AIMD-98-110).

To expand the talent pool for project management teams, some agencies have begun broad training efforts. Hoffman's Program/Project Management Initiative provides training and development for NASA employees involved at any level in supporting and managing projects. "At NASA we have a requirement that any member of a project team gets 40 hours of project-related training per year and two weeks of development time a year," Hoffman says.

Following industry's lead, some agencies are developing project management bench strength. The Commerce Department is creating a "center of excellence" for project management. It will include members of the computer systems acquisition team that spearheaded the National Weather Service's $550 million Advanced Weather Interactive Processing System program. Handling the troubled program seasoned team members, who weathered tough criticism for cost and schedule overruns. Other parts of the department will be able to borrow project management experts from the center.

Similarly, the General Services Administration's Public Buildings Service is setting up a center of expertise in its Kansas City, Mo., regional office. "The center will keep a roster of all project managers," says Les Shepard, director of regional interface in PBS' Office of Business Performance. "When you have a major project, say in Boston, [and] the project manager is going to have developed very specific skills for a type of building, you can borrow and use his expertise in New York or Florida."

True believers hope that as agencies cultivate the project management approach, it will help them meet-and move beyond-legislative requirements to improve performance. "GPRA seeks plans and measures, and you must push them down into the organization to make them meaningful, because it is very unnatural for a GS-15 or senior executive to start measuring performance," Laufer says.

"Projects are about accountability," he adds. "If I feel accountable to the customer, I have to measure my performance. Measurement then is [done] to improve, not to enforce accountability. It is a behavior, not a requirement of law."