Management and Organizational Performance Consulting Engagements

James E. Kelley, Jr., Principal

During the past 30 years, James E. Kelley, Jr. has been involved in numerous engagements involving performance analysis of management and organizations, both on program/project levels and corporate structures. Following are selected highlights of this experience.

Yucca Mountain Project, Nye County, Nevada

The Nuclear Waste Policy Act of 1982, as amended in 1987, established the Office of Civilian Radioactive Waste Management within the United States Department of Energy, and directed that Office to investigate a site at Yucca Mountain, Nevada, to determine its suitability for construction of a repository for the permanent disposal of high-level nuclear wastes. By late 1994, work on site suitability studies had been underway for several years and nearly $2 billion had been spent on characterization studies. At that time, the completion of studies was projected to cost over $6 billion by the year 2001, when permitting and licensing activities could begin. (Total system life cycle costs, in 1995 dollars, were then estimated to be in the $35 to 40 billion range for a completed and operating facility.) The project had received (and still does) substantial criticism from a broad spectrum of sources including the Congress, the General Accounting Office, the State of Nevada, the United States Nuclear Waste Technical Review Board, the National Academy of Sciences, the nuclear power industry, many state Public Utility Commissions, concerned individual scientists, and the concerned public at large. As a result of this criticism, Secretary of Energy O'Leary and Nevada Governor Miller entered into a cooperative agreement whereby each would appoint a representative to a "special review panel" to select and oversee the work of a consultant to perform an Independent Management and Financial Review of the Yucca Mountain Project. The National Association of Regulatory Utility Commissioners was engaged by the special review panel to administer the contract of the consultant selected.

Kelley developed the proposed approach to the independent review and served as Project Manager to direct the work. During the eight-month period for the review, between November of 1994 and July of 1995, the following scope of work was performed:
  • Analysis of Financial and Contract Management Techniques and Controls

  • Analysis of Project Schedules and Assessment of Milestone Credibility.

  • Analysis of Project Organization Structure, Effectiveness, and the Internal Planning Processes.

  • Analysis of Funding Levels and Funding Priorities.
The 300-page Preliminary Report was subjected to public review and comment through public hearings and the 300-page Final Report was favorably received by the numerous critics of the Yucca Mountain Project.

(Confidential Client) Nationally-Ranked, Interior-Finish Contractor

A large specialty contractor who focused on interior finish work had the good fortune of doubling in size and revenue during a one-year period and had experienced the associated growing pains. Kelley directed an effort to analyze all aspects of the contractor's business, formulate recommendations for addressing previously unidentified major issues, and develop action plans for improvement. The work included analyses of cost estimating procedures, bids and sales; material purchasing, inventories, and controls; workplace morale; organizational structure to address the potential for continuing growth; budgeting, cost control, accounting, and auditing; incentive compensation; and other factors involved in the client's business. Over the succeeding years, the client experienced controlled growth and substantially improved its financial performance.

(Confidential Client) Electric and Gas Public Utility Company, Southern California

In the late 1970s, a large electric and gas utility was investigating the feasibility of conversion of its manually-created-and-maintained distribution mapping and records system to a fully-integrated/automated system of graphic maps and facilities diagrams, and non-graphic system attribute information. Kelley participated in this effort in the following ways:
  • Performed an in-depth investigation of the (manual) system then in use.

  • Provided input to the definition for the automated system.

  • Provided input to the independently prepared feasibility study.

  • Assisted in the preparation of strategic and implementation action plans for the conversion project
The automated system was implemented pursuant to the recommended phased approach and became operational by the end of the 1980s decade.

(Kelley subsequently participated in similar roles in twelve additional engagements involving conversions of manual mapping/facilities management systems conversion to fully automated/integrated systems, all for electric, gas, water and telephone utility clients.)

(Confidential Client) Basic Materials Manufacturer

A cement plant was developed by a large basic materials manufacturer in the late 1970s. At the time of design and construction, it was believed to have been the world's largest single-kiln cement plant. From the time of preliminary design development to the completion of construction and start-up operations, the actual construction cost realized was nearly double that of the original estimate, which was already in the nine-digit range.

Kelley was part of a team engaged by the Client's Board of Directors to independently review the financial, management, and technological development history of the project to inform the Board as to the root causes that drove the cost overruns on the project and provide recommendations to be applied to future major capital project development.

(Confidential Client) Oil Shale Project Owner/Developer, Central Rocky Mountain States

A very large oil shale project located in the central Rocky Mountain region of the western United States was initiated in the late 1960s and was terminated in the early 1980s. The original capital cost estimate for the project was $800 million and the pre-termination cost projection calculated in 1982 was over $6 billion. The project was initially owned by a single entity, which later sold a majority interest to a larger oil company who subsequently sold its interest to another large oil company in 1980. Throughout this time, the original owner retained a 40 percent interest in the project as a minority partner.

Following termination of the project by the majority partner, the minority partner sought an independent identification and analysis of the reasons for the substantial cost overruns and other factors leading to project termination. Kelley served as principal investigator and project manager for this work, which included reviews of cost estimates, summary and control budgets, project development policies and enhancement decisions, and management/organizational tenets employed over the 16-year life of the project. A comprehensive report, which documented the analysis and proposed recommendations for planning and managing future similar-scale capital development projects, was prepared and presented to senior management.

During the latter years of this project, the original minority partner was developing plans for another oil shale project, as either sole owner or majority partner. This second project was smaller in size and was estimated to cost $1.5 billion, in 1982 dollars. As with the first project, this second project was to be developed in a remote location, which would require substantial attention to infrastructure needs for material transportation and housing/community development for a 2,000-person development work force.

During a follow-on engagement with respect to the second oil shale project, Kelley served as project manager for management planning consulting services, which included the following scope of work:

  • Taking the lessons learned from the first oil shale project and transforming them into pro-active tenets for application to the second project.

  • Creation of a comprehensive outline, to five progressive levels of detail, for a project management plan.

  • Creation of a recommended project organizational structure with defined interfaces between the project and the overall corporate organizational structure. This included definitions of communication channels, decision-making authority, responsibilities, and accountability.

  • Facilitation of a "fatal-flaw" analysis and development of risk tables for use in managing subsequent phases of design development and program management.

(Confidential Client) Public Power Supply Provider, Northwestern United States

Kelley substantially participated in two engagements to provide consulting services to the owner of a large nuclear power generating facility under construction in the Northwestern United States. The first engagement called for an independent assessment of the change order procedures employed during construction and the formulation of recommendations to make the procedures more efficient and effective. The second engagement was similar in scope to the first but related to contract closeout procedures. In both engagements, Kelley participated by mapping the flow of work involved in each procedure and applied time factors within and between organizational subdivisions to pinpoint work flow bottlenecks, and serve as the baseline for improvements.

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