EPA, GAO spar on IT cost estimates

Two Environmental Protection Agency officials are objecting to a review of how they estimated the cost of their Superfund Enterprise Management System. Despite the Government Accountability Office’s findings,  the EPA officials say the agency followed the "spirit and intent" of the GAO guidelines on estimating costs.

SEMS is a project intended to replace three legacy systems and multiple applications used to comply with the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, commonly known as Superfund. The law provides federal authority to respond directly to releases or threatened releases of hazardous substances that could hurt public health or the environment.

According to a GAO report released July 27, SEMS lacked key supporting documentation on cost estimates. EPA officials didn’t document costs at sufficient level of detail, according to GAO. EPA didn’t document source data, calculations and the methodologies they used to develop the estimate, and  there was a lack of documentation on the source of the rationale for the inflation factor officials used, GAO found.

But Mathy Stanislaus, assistant administrator of Office of Solid Waste and Emergency Response, and Malcolm Jackson, assistant administrator and CIO of the Office of Environmental Information, disagreed with GAO.

“The Office of Solid Waste and Emergency Response believes that the SEMS project has met the spirit and intent of the cost estimating guidelines,” they wrote in a letter to GAO dated June 29. “However, EPA may have used different processes or documentation in order to do so.”

In their letter, the two EPA officials said GAO erroneously concludes that the SEMS cost estimate increased from $39.3 million to $62 million in two years, even though officials tried to explain the changes to GAO. Stanislaus and Jackson wrote that the revision came as a direct result of a change in the duration of the operation and maintenance included in each calculation. The $39.3 million figure is an estimate until fiscal 2013. The $62 million is an estimate through fiscal 2017. They also said that the estimate was aligned with the Office of Management and Budget’s Capital Planning and Investment Control process.

GAO officials disagreed, saying EPA’s SEMS program documents showed the $22.7 million increase in the estimated cost. One estimate was based on information from 2009, which had costs at $39.3 million. EPA had a second estimate released in 2011 that had costs expected to reach $62 million. However, both of them were based on a 10-year lifecycle from 2007 to 2017, according to GAO.

GAO said EPA officials updated their cost estimate in 2011, two years after GAO released the guidance.

The EPA officials further argued that GAO’s cost estimation guide was only that—a guide. Beyond that, SEMS “has withstood intense internal and external review,” they wrote. Further, EPA was three years into SEMS’ development when the guide came out. Nevertheless, GAO’s guide is a useful tool for the future estimations, they wrote.

GAO officials didn’t back off their review though, saying EPA lacked the detailed documentation of estimated costs, which hindered GAO from linking the estimate and other program documents, such the system’s technical baseline and schedule. As a result, GAO could not determine whether EPA’s estimate reflects the current program and status.