Summary of Report 05-036

June 2005

Report Number 05-036

The Railroad Commission (Commission) should improve the accuracy of its estimates of the cost of and time needed to complete its Oil and Gas Migration Project. Through this project, the Commission plans to convert its oil and gas legacy systems from an outdated and unsupported mainframe to a Web-based environment. Although the Commission is currently using many of the tools and techniques that can result in a successful project, it significantly underestimated the level of effort the project would require, the total costs, and the time needed to complete the project. In addition, there were cost estimation errors that, to a significant extent, resulted in the Commission's substantially underreporting actual project expenditures to date.

During the project, the Commission has revised and increased its estimates of the cost of and time required to complete the project, but its revised estimates are not reliable:

- The Commission increased the total cost estimate for the project from $12.4 million to $27.6 million (a 122.6 percent increase). However, the $27.6 million cost estimate is inaccurate because the Commission based this amount on its anticipated legislative appropriations for the project for the next seven years rather than a realistic estimate of the projects expected costs.

- The Commission reported to the Legislature that actual project expenditures totaled $9.9 million through March 2005. However, this amount is understated because the Commission omitted the costs associated with the salaries of additional staff members who are working on the project. The salary costs included in the reported amount are based on 8 full-time equivalent positions plus $75,000 for an additional estimated 1.5 positions, but we found that as many as 27 additional staff members are working either full- or part-time on the project. (The Commission's lack of detailed records supporting the time charged to the project prevented us from determining the total amount by which actual expenditures were understated.)

- The Commission extended the project's expected completion date from 2005 to 2012. However, the 2012 completion date is not accurate because the Commission based that date on an imprecise methodology that did not (1) segregate the conversion of these systems into individual segments that can be estimated and completed independently or (2) account for efficiencies gained through repetition of the conversion process.

Contact the SAO about this report.

Download the Acrobat version of this report. (.pdf)

If you prefer an HTML version, follow this link to an Adobe site which converts PDF files to HTML.