Chapter 1

Introduction

1.1 Motivations and Objectives

Successful implementation of government projects and programs requires a great deal of planning, coordination, and collaboration that should be done through established processes, strong team effort, and involvement of multiple stakeholders. Management of government projects and programs is a challenge for government officials and project managers often because a formal process is not in place, project objectives are not clearly identified, and the costs and benefits of the deliverables are difficult to justify and measure. Government projects and programs also tend to have a long duration, a large budget, multiple stakeholders, and a great deal of uncertainties that make them difficult to plan, implement, and manage effectively.

The application and performance of project and program management in government agencies has been historically poor as reported by the U.S. Government Accountability Office (GAO), the UK National Audit Office (NAO), and the Australian National Audit Office (ANAO) and others. Many government projects and programs are prolonged for years, failing to meet the projects’ objectives, wasting taxpayers’ money, or they are abruptly terminated in the midst of planning or implementation. Due to the fact that primary funding for government projects comes partially or entirely from constituents, government projects and programs are often scrutinized and criticized by the general public, which exacerbates the image of government as a whole.

This research investigated recurring problems and challenges leading to the poor performance of government projects. Specifically, the past performance and management challenges of large government projects in developed countries (United States, United Kingdom, and Australia) were studied to evaluate estimating, planning, management, control, and close-out practices of government projects. The study covered both government-initiated and funded projects from three major sectors: transportation and infrastructure; defense and space; and information systems development and deployment. Particular focus was given to large-scale and complex megaprojects and programs as many of the government-initiated and funded projects fall into this category.

By investigating projects and programs of different countries and across sectors, this research identified challenges and problems associated with managing government projects and programs. Previously, organizations have proposed modified approaches for the management of government projects and programs, including PMI's Government Extension to the PMBOK ^® Guide Third Edition. The key findings of this study will help practitioners make better decisions when they are involved in large-scale, complex government projects. To provide valuable implications to practitioners, this research suggests key lessons learned and identifies key success factors for effectively managing governmental projects.

This research also contributes to the body of knowledge that describes the challenges and opportunities related to applying and implementing project management principles in government. This research is very timely as large government projects and programs greatly contribute to economic recovery and development. Practical implications of this study include the enhancement of decisions made by policy makers, government officials, and project managers in various governments around the world, specifically to better use project management principles, tools, and techniques.

1.2 Literature Review

A comprehensive literature review was conducted on previous research to better understand current project and program management practices in government. The literature review included government reports, whitepapers, and memos to explore research methods, lessons learned, and strategic roadmaps that have been suggested, if any. The literature reviews are divided into three categories to capture issues related to managing government projects and programs: poor performance management; challenges of megaproject management; and efforts to improve project performance.

1.2.1 Poor Performance Management of Government Projects and Programs

Previous studies of government projects from the United States, United Kingdom, Australia, and other nations with the focus on government IT/IS projects, defense department programs, and large transportation projects show poor performance of managing projects in terms of cost, schedule, and deliverables. Generally, the problems related to system management, governance, project management, contract management, and acquisition management are common (Arditi, Akan, & Gurdamar, 1985; Han, Yun, Kim, Kwak, Park, & Lee, 2009; Kwak & Smith, 2009; Patanakul & Omar, 2010).

Patanakul and Omar (2010) found the common reasons for poor performance of government IT/IS projects related to system management, governance, project management, and contract management. Kwak and Smith (2009) explored key aspects involved in managing risk associated with acquisition projects within the U.S. Department of Defense in order to identify the strengths and weaknesses of overall program management practices by reviewing and analyzing various U.S. GAO reports. Han et al. (2009) provided guidelines and lessons learned to better identify critical causes of schedule delays and cost overruns for evaluating mega transportation project performance. Kwak and Anbari (2010, 2012) investigated the full range of technical, financial, managerial, and organizational effects of applying Earned Value Management (EVM) principles. Their findings contributed to knowledge and practice in this area, and greater opportunities for implementation of EVM in government for objective measurement of project performance and progress.

The main causes for delay of government-initiated construction projects include inadequate resources, public agencies’ and contractors’ financial difficulties, organizational deficiencies and delays in design work, frequent change orders, and considerable extra work (Arditi, Akan, & Gurdamar 1985; Park, J.R., Park, Y.K., & Kim 2005; Gil, 2007). Insufficient risk management also contributes significantly to project delays and cost overruns in managing government projects (Baldry, 1998; Tysseland, 2008; Kwak & Smith, 2009; Patanakul & Omar, 2010). Dvir (2005) found that customer participation in the development process and end-user preparations have the highest impact on project success. A clear understanding of users’ requirements, a proper project classification prior to project initiation, and a carefully selected management style may lead to better implementation and to an increased chance of project success (Shenhar & Dvir, 1996; Shenhar & Bonen, 1997; Shenhar, 1998; Dvir, Raz, & Shenhar, 2003).

1.2.2 Challenges of Managing Large and Complex Projects and Programs

Overly optimistic owners and project managers greatly contribute to cost overruns and schedule delays of megaprojects (Lovallo & Kahneman, 2003). In the pursuit of successful project performance, time control is one of the most important functions, especially in megaprojects where various risk variables cause schedule delays (Jolivet & Navarre, 1996). Schedule delays are a source of great distress to both owners and contractors, mainly because time overruns are directly or indirectly connected with cost overruns (Majid & McCaffer, 1998; Frimpong & Oluwoye, 2003; Lyer & Jha, 2006; Han et al., 2009). Consequently, both researchers and practitioners have focused continually on the analysis of schedule delays in megaprojects (Morris & Hough, 1987; Assaf, Al-Khalil, & Al-Hazmi, 1995; Chan & Kumaraswamy, 1995; Yeo, 1995; Flyvbjerg, Bruzelious, & Rothengatter, 2003b; Williams, 2003).

Poor performance in infrastructure and capital megaprojects relative to cost and time most often results in cost overruns (Stannard, 1990; Merrow, McDonnell, & Argüden, 1988; Flyvbjerg, Holm, & Buhl, 2003a; Flyvbjerg et al., 2003b; Flyvbjerg, Holm, & Buhl, 2004; Flyvbjerg, 2007). In addition, the complexity of megaprojects brings challenges to quality control. Complexity of large government projects is constituted of structural complexity, the number and interdependence of elements, and uncertainty in goals and means (Bruelious, Flyvberg, & Rothengatter, 1998; Kwak, Walewski, Sleeper, & Sadatsafavi, 2014; Williams, 1999 and 2004; GAO, 2002, 2004a, 2004b, 2005a, 2005b, 2006, 2007a, 2007b, 2007c, and 2007d).

1.2.3 Efforts to Improve Project Performance

Approaches recommended for improving performance of large-scale projects include: project implementation profile methodology (Pinto & Slevin, 1987); three systems perspectives based on the concepts of large-scale living systems, hard systematic thinking, and soft systemic methodology (Yeo, 1995); continuous approval methods (Bhuiyan & Thomson, 1999); human factors integration method (Strain & Preece, 1999); and quality management procedures of ISO 9000 QMS, U.S. Army Corps of Engineers, and American Public Works Association. From an organizational performance perspective, Huemann, Keegan, and Turner (2007) developed a research model of human resource management practices for project-oriented organizations. PMI (2006) developed the Government Extension to the PMBOK^® Guide Third Edition specifically for government projects. The extension provides an overview of the key processes for projects undertaken in the public sector. It is critical to select the right project, the right process, and the right teams to deliver a quality product.

1.3 Research Approach and Data Analysis

1.3.1 Research Questions

The following research questions have been formulated to gain a better understanding of the problems leading to the poor performance of managing government projects and programs from a global perspective.

• What are the unique characteristics of government projects and programs?
• What is the current performance status of managing government projects and programs in terms of cost, schedule, and other project related variables?
• What are the common reasons for poor performance in managing government projects?
• How do project personnel address the impacts of external issues (e.g., politics, environment, social awareness), managerial issues (e.g., authority, competency, governance and oversight, information sharing, and decision making), and technical issues (e.g., system requirements, technology, design maturity, and system integration) on the performance of managing government projects?
• What are the key lessons learned from analyzing different government projects and programs?

1.3.2 Content Analysis

This research explores common reasons for poor project performance by the government, analyzes relationships among the performance of government projects and programs and their characteristics (e.g., budget size, duration, scope, and team composition), reports key lessons learned, and provides recommendations to improve project management performance in government. The key lessons learned are captured and classified into a comprehensive database of worldwide government projects and programs that can be used by both practitioners and academics.

Using data from governmental auditing agencies of the respective countries, we conducted content analysis to identify the problems and challenges in managing government projects. To extract the most information from each report, we performed content coding to create groups of problems and challenges for each project, related to the quality of its scoping and approval processes, as well as the way it was managed.

1.3.3 Project Demographics

The research team gathered in-depth information of 39 government projects and programs from the United States, United Kingdom, and Australia (see Appendix A for the complete list of projects and programs). To do so, public information and audit reports from the U.S. GAO, the UK NAO, and the ANAO were collected. Analyzing and evaluating in-depth project performance information from different countries’ audit reports provided an objective approach to determine the current state of government projects. The auditing offices are non-partisan and therefore, the information is deemed reliable, factual, and unbiased.

Eighteen of the projects have been executed in the U.S., 15 in Australia, and the remaining six in the United Kingdom. These 39 projects also represent different sectors: 13 from the infrastructure sector, nine from IT/IS (Information and Communications Technology in the United Kingdom and Australia), eight from the defense sector, and nine involve more than one sector. The average duration was 8.8 years with the average cost of US$13 billion.

The projects were analyzed by using project typology framework's four-dimension diamond model proposed by Shenhar and Dvir (2007). This analysis suggests our sample represents all levels of novelty, technology, complexity, and pace as follows:

• Novelty: eight derivative, 21 platform, 10 breakthrough;
• Technology: six low, 12 medium, 12 high, nine super-high;
• Complexity: two assembly, 16 system, 21 array; and
• Pace: 13 regular, 14 fast, 11 time-critical, one blitz