Controlling federal costs for coal liquefaction program hinges on management and contracting improvements

Technical Report · Wed Feb 04 04:00:00 EST 1981

OSTI ID:6129386

GAO's review of the H-Coal and Exxon projects showed inadequacies in DOE's contracting practices and a failure by DOE to properly plan, manage, and monitor, especially the H-Coal project. The initial Government-industry H-Coal agreements regarding the level of investment by private sponsors and the ceilings imposed on sharing in cost growth were imbalanced. Larger investments by private sponsors and sharing of cost growth provides an incentive to private sponsors to control costs and helps to assure that each party is fully committed to the success of the project. DOE started the H-Coal project prematurely before sufficiently detailed designs were available and without adequate project planning for functions such as construction scheduling, materials handling, inventory systems, and quality control. DOE staffing was inadequate at both projects to effectively monitor progress and contribute to timely decisions. Its contracts for the H-Coal plants were poorly written and administered. DOE plans for two large demonstration plants need careful review and attention in light of escalating cost and the risks involved in scaling up to the 6,000-ton-a-day facilities.

• Research Organization: General Accounting Office, Washington, DC (USA). Procurement and Systems Acquisition Div.
• OSTI ID: 6129386
• Report Number(s): AD-A-094709
• Country of Publication: United States
• Language: English

Related Subjects

01 COAL, LIGNITE, AND PEAT
010405* -- Coal
Lignite
& Peat-- Hydrogenation & Liquefaction
ACCOUNTING
CARBONACEOUS MATERIALS
COAL
COAL LIQUEFACTION
CONTRACTS
ENERGY SOURCES
EXXON GASIFICATION PROCESS
FINANCING
FOSSIL FUELS
FUELS
FUNCTIONAL MODELS
GOVERNMENT POLICIES
H-COAL PROCESS
INDUSTRIAL PLANTS
INVESTMENT
LIQUEFACTION
MANAGEMENT
MATERIALS
MONITORING
NATIONAL ORGANIZATIONS
NORTH AMERICA
PILOT PLANTS
RESEARCH PROGRAMS
SYNTHETIC FUELS
THERMOCHEMICAL PROCESSES
US DOE
US ORGANIZATIONS
USA