How government can regain the capacity to control and manage environmental disasters

On a recent segment of MSNBC’s “Morning Joe,” the folks around the table were discussing the federal government’s seeming inability to get BP to act with urgency and effectiveness in stopping the oil leaking into the Gulf of Mexico.

Much of the discussion, of course, concerned the damage to the environment that is being compounded daily by the spreading oil.  But there was also frustration expressed by just about everyone at the table at the government’s “loss of capacity” to do anything about it. 

It does seem that we used to be a “can do” nation that could win wars unambiguously, land men on the moon, and respond effectively to disasters.  But it seems we have lost much of our capacity in recent years, not only to accomplish great public undertakings, but even to manage the growing number of private sector actors that have moved in to fill the vacuum. 

Why is this?  Have we, in fact, become a “hollow state” in which public agencies have little ability left to do anything other than rubber stamp corporate activities, many of which seem irresponsible if not downright destructive?  From the reconstruction of Iraq to the Big Dig in Boston, we no longer seem to be able to control spiraling costs or ensure top quality in the results. 

In fact, the related managerial trends of privatization, decentralization, and deregulation have combined in the past couple of decades to reduce government’s capacity to act effectively in these instances.   The Government Accountability Office reported that while the amount of federal contracting rose by 11 percent between 1997 and 2001, the size of the federal workforce devoted to managing contracts decreased by 5 percent.   This phenomenon has certainly been true at the state and local levels as well. 

The late academic scholar Larry Terry pointed to a loss in “institutional memory” in government due to the departure of “institutional elders–those individuals who possess extensive knowledge, expertise, and valuable information about an organization’s history…”    Some of this governmental loss in capacity is the result of downsizing trends in government that took root in the Reagan years and continued during the Clinton years and during the presidencies of Bush 1 and 2.  The New Public Management, which was promoted by the Clinton administration, promoted “market driven management,” which advocated increased privatization of government services and the use of private sector practices and technologies within government.  

Meanwhile, countless politicians, from state legislators to presidents, have built their political careers on criticizing government as too big, bureaucratic, and ineffective.  The result, however, is that we now have a government in this country that may be a little less big, but still seems bureaucratic and even more ineffective. 

But that doesn’t mean we can’t undertake great projects anymore or that government is doomed to impotence in controlling  oil spills and other disasters.  Take the oil spill in the Gulf.  Government still has the capacity to act effectively in situations like that.  It simply has to act smarter. 

First, political leaders and public managers must resist the temptation to muddle through these crises with ad-hoc decisions that seem to change each day on the basis of news reports and polling.  The president needs to establish an environmental crisis team that can respond immediately to situations such as the oil spill, similar to the crisis team that advises him during national security emergencies.  

When an environmental crisis occurs, the president and his team must immediately develop a coherent plan for dealing with it.  That process must involve a careful analysis and definition of the problem the team is facing.  The president and all team members must constantly question their presumptions about the problem and its possible solutions.  From day one, such a team could have held a series of meetings in which they asked themselves: what methods of stopping the oil leak are likely to be the most successful and to stop it the fastest?  BP engineers and executives as well as outside oil industry and environmental experts should have been called in to the meetings. 

Many collateral issues should have been explored in the meetings as well, including the best options for cleaning up the already-spilled oil, the safety of the chemical dispersant being used by BP, and how the oil-capping and cleanup activities would be financed. 

The project plans that emerged from that process would have clear scopes of work for BP and others to accomplish as well as clear penalties for failure to meet the specifications.  Then, once the plans had been put into effect, the president and his crisis team would be well-positioned to monitor and assess the project activities in accordance with the plans. 

Both public and private-sector organizations have always suffered from a lack of systematic approaches to dealing with complex projects and sudden crises.  It’s all the more imperative that such approaches be developed and used by our current downsized public sector in our increasingly fragile world.

How not to undertake a public project

(Part 2 in a comparison of public projects)

In the previous post on this site, I described a successful project to design and construct a new public library in my hometown of Harvard, Massachusetts.  It’s interesting to compare some of the key managerial decisions and actions in that case with a public construction project in Iraq.

Clearly, the construction of the Basrah Children’s Hospital in Iraq, now three years behind schedule, is being done under much more difficult conditions than was the Harvard town library.  Yet, many of the basic management decisions involved in these two public projects are the same.  The Basrah Children’s Hospital project in Iraq is an example of a public project beset by managerial problems, and in many ways it seems to symbolize the overall U.S.-led reconstruction effort in Iraq.

In August 2004, the U.S. Agency for International Development issued a job order to Bechtel National, Inc. to construct the 50-bed pediatric facility in the city of Basrah. The construction of the hospital was to be part of the overall U.S.-led effort to rebuild the Iraqi infrastructure following the invasion of the country in 2003. Congress authorized $50 million in funding for the hospital project, which was intended to improve the quality of care and life expectancy for women and children in that war-torn country. 

The hospital project was apparently one of some 20 projects being undertaken by USAID under a single $1.4 billion contract with Bechtel.

The scope of work was expanded in July 2005 to increase the number of beds to 94 and to upgrade the faciity to be an oncology center, according to a 2006 report by the Special Inspector General for Iraq Reconstruction.  The schedule and projected cost of the project, however, remained the same.  The hospital was projected to be complete as of December 2005.

According to a July 2006 report by the Special Inspector General, USAID’s accounting systems and processes were inadequate, and the agency failed to identify and report project costs to the U.S. Chief of Mission in Iraq and to Congress.  The Special IG noted that the completion date of the hospital had slipped by nearly 270 days as of March 2006, and the projected construction cost had risen to between $150 and $170 million.

Corner view of Basrah Children's Hospital, March 2008 (SIGIR)

 Here are some highlights from the Special IG’s report on the construction of the hospital through July 2006:

• USAID did not establish an appropriate program management structure for the hospital or for its other reconstruction projects.  The agency relied on one “administrative contracting officer” and one “cognizant technical officer” to manage the entire $1.4 billion in projects under contract with Bechtel, and never appointed a program manager with sole responsibility for the hospital project.
• Even though Bechtel briefed USAID in March 2006 that the hospital project was 273 days behind schedule, USAID’s report to Congress the following month reported no problems with the project schedule.  In addition, the agency continued to report the project cost as $50 million, even though Bechtel was estimating the cost at $98 million by April 2006.
• USAID did not include the installation of medical equipment in its cost estimate for the hospital.
• A consultant to USAID recommended that the agency discontinue Bechtel as the prime contractor for the hospital project.  The consultant, Louis Berger Group, projected that discontinuing Bechtel would reduce costs by some $8 million, primarly from the reduction in contractor overhead.

In the wake of the Special IG’s report, the U.S. Mission in Iraq transferred the the hospital project from USAID to the U.S. Army Corps of Engineers.  In addition, the U.S. Mission ordered Bechtel to stop work on the project, at least until the Corps of Engineers could take over management.

As of now, the hospital is still not finished.  An April 2008 quarterly report by the Special IG listed the project as 85 percent complete.  The total cost of the project, now projected to be finished by February 2009, is pegged by the Special IG at $163.6 million–a roughly 227 percent increase over the original cost estimate.

To me, a key difference between the hospital project and the Harvard town library that jumps out is the level of involvement by public managers in each case.  It appears there was a higher actual number of public-sector managers overseeing the construction of the $7 million Harvard library than were overseeing the entire $1.4 billion USAID reconstruction effort in Iraq, including the $163.6 million Basrah Children’s Hospital.

Undertaking a successful public project

The new library in the center of the town of Harvard, Massachusetts, where I live, is a clear example of a successful public project.

Construction of the library was completed a little over a year ago, on time and on budget.  CBT, a Boston-based architect, came up with a design that seamlessly matched a new brick structure to the existing historic Old Bromfield school.  Inside, the refurbishing of the old has been done with sensitivity and the new has been matched to it just as flawlessly.  The project recently won an award from the Massachusetts Historical Commission.

Heading the project were three longtime town residents, two of whom chaired a volunteer town building committee that shepherded the project to completion.  A couple of months ago, I had the opportunity to interview the three citizen managers for a book I’m writing for the American Society for Public Administration on managing public projects.  Given that the prevailing perception of public projects is that they are plagued by cost overruns, schedule delays, and poor quality construction, I was curious to find out what steps were taken to ensure that the Harvard library project didn’t end up fitting that prevailing view.

 

View of Harvard library with Old Bromfield building on left and new building on right

Sitting down in the library’s elegant first-floor conference room, Roy Moffa, Pete Jackson, and Mary Wilson had a lot to say about how they were able to make the library project succeed.  It came as a shock to me to find out a few days later that Moffa, a retired software company executive and entrepreneur, library trustee, and avid bicyclist, had suddenly passed away, at the age of 65. I’m glad he was able to realize the biggest dream of his retirement and to know it was a success.

Speaking in our interview specifically about the private funding that supplemented the library project’s public funding (private funding was, in itself, a key reason for the project’s success), Moffa noted:

We raised this money…on the commitment that we were going to build something extraordinary, something that was worthy of their contributions. We’d made a lot of promises. ‘We’re going to take your money, but we’re going to treat the money well and we’re going to communicate with you and show you what we’re going to do,’ and I don’t think we’ve disappointed a donor yet.

Here are some highlights of the planning and construction process for this project:

• Moffa, Jackson, and Wilson exercised maximum due diligence in selecting the architect.  They personally visited and toured more than 30 libraries in Massachusetts that had been designed by four architects they picked as finalists in the selection process.
• The three citizen managers, building committee, and other key project supporters undertood, involved, and satisfied the potential stakeholders in the project.  For instance, they agreed to cap the town’s financial exposure at $2.6 million, no matter what happened during construction.  This forced the managers to critically assess the project’s risks and take steps to keep costs under control.
• The managers and the entire building committee stayed involved in the library design process and  established an effective partnership with the architect, CBT. That partnership was characterized by frequent brainstorming of design alternatives. One example of that was a decision to redesign the planned children’s room, which had originally been designed to be split between the old and new buildings, and locate it entirely within the new building.
• The three managers attended all of the weekly construction meetings with representatives of the general contractor, architect and project manager. The three were at the site so often, in fact, that they got to know all the subcontractors.
• The three pushed hard in support of moving forward with construction in the fall of 2005, rather than waiting until spring when costs, particularly for steel and glass, were expected to be much higher. The brainstorming over the design had to come to an end. “My words to the rest of the building committee was ‘it’s time for pens down'” Jackson said.
• The three developed an effective and quick process for analyzing and approving change orders.  Jackson, a former project manager with the U.S. Army Corps of Engineers, was given discretion to approve changes in consultation with a professional project manager.  The process was done via email.

In the end, the undertaking of successful public (and private) projects comes down to effective leadership and teamwork, and it’s clear that was the case with the Harvard library project.  As Wilson, a former town librarian, who became library director in 2002, put it:

This was the last shot.  In our lifetimes, this was the only chance we would have and we wanted to make sure we did it right.