2010 Census: Redesigned Approach Holds Promise, but Census Bureau
Needs to Annually Develop and Provide a Comprehensive Project
Plan to Monitor Costs (27-JUL-06, GAO-06-1009T).
The U.S. Census Bureau (Bureau) estimates that the 2010 Census
will cost over $11.3 billion, making it the most expensive in our
history. The U.S. House of Representatives and Senate
appropriation bills propose to reduce the Bureau's fiscal year
2007 budget request, raising questions about the Bureau's design
of the 2010 Census and associated costs. Based on issued GAO
work, this testimony addresses the extent to which the Bureau has
(1) made progress redesigning its approach, including nonresponse
follow-up, a key cost driver; and (2) developed a comprehensive
project plan for the 2010 Census, as well as timely, detailed
cost data for effective oversight and cost control.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-1009T
ACCNO: A57540
TITLE: 2010 Census: Redesigned Approach Holds Promise, but
Census Bureau Needs to Annually Develop and Provide a
Comprehensive Project Plan to Monitor Costs
DATE: 07/27/2006
SUBJECT: Census
Contract costs
Cost analysis
Cost control
E-government
Government contracts
Life cycle costs
Procurement evaluation
Procurement planning
Strategic planning
Cost estimates
2000 Decennial Census
2010 Decennial Census
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GAO-06-1009T
Testimony
Before the Subcommittee on Science, the Departments of State, Justice, and
Commerce, and Related Agencies, Committee on Appropriations, U.S. House of
Representatives
United States Government Accountability Office
GAO
For Release on Delivery Expected at 9:30 a.m. EDT
Thursday, July 27, 2006
2010 CENSUS
Redesigned Approach Holds Promise, but Census Bureau Needs to Annually
Develop and Provide a Comprehensive Project Plan to Monitor Costs
Statement of Brenda S. Farrell Acting Director, Strategic Issues
GAO-06-1009T
Mr. Chairman, Mr. Mollohan, and Members of the Subcommittee:
Thank you for the opportunity to be here today to discuss the overall
design of the 2010 Census and associated costs, in light of proposed
budget reductions1 totaling approximately $50 million from the U.S. Census
Bureau's (Bureau) $878 million fiscal year 2007 budget request. First, let
me emphasize that the Bureau, which is a part of the Commerce Department,
is aware of the need to contain 2010 Census costs and has taken some
actions, including early planning, to contain those costs. In fact, one of
the Bureau's stated goals for the 2010 Census is to contain costs.
However, according to the Bureau's estimate, the 2010 Census will be the
most expensive census in our nation's history, even after adjusting for
inflation, totaling over $11.3 billion. Based on our issued work, my
testimony today specifically addresses the extent to which the Bureau has
(1) made progress redesigning its approach, including actions related to
nonresponse follow-up, a key cost driver; and (2) developed a
comprehensive, integrated project plan for the 2010 Census, as well as
timely, detailed cost data for effective oversight and cost control. My
main point today is that while the Bureau has planned early and
reengineered the decennial census to contain costs, the Bureau has not
developed and provided a comprehensive, integrated project plan to help
monitor costs; and the Bureau's September 2005 life-cycle cost estimate
for the 2010 Census does not reflect current information from testing and
evaluation, lacks detailed information, and does not make clear the
relationship between various cost drivers and the ultimate estimate. As a
result, the impact of proposed reductions to the Bureau's fiscal year 2007
budget request can not be determined.
Today's hearing is particularly crucial as many decennial activities will
be finalized in fiscal year 2007, while others will just be getting
started. The Bureau is completing the last of its field tests-the 2006
Census Test, being held in the central portion of Travis County, Texas,
and at the Cheyenne River American Indian Reservation and Tribal Trust
Lands in South Dakota, where the Bureau is evaluating key operations and
the type of equipment that it plans to employ for the full enumeration in
2010. The evaluations from 2006 testing, the content for the 2010 census
questionnaire, and the baselining of all 2010 program requirements are
also being finalized in 2007. We agree with Bureau officials who stated
that, as 2010 approaches it becomes increasingly more difficult to make
significant changes to the decennial's design without affecting the
overall success of the census. A major milestone getting underway in 2007
will be the preparatory activities for a "Dress Rehearsal" scheduled for
2008 in San Joaquin County, California, and nine counties in Eastern North
Carolina, including the city of Fayetteville. While "Census Day" for the
Dress Rehearsal is April 1, 2008, preparations-such as opening the local
census offices, recruiting and hiring, and updating and verifying the
address file-will take place during fiscal year 2007. Finally, with three
major contracts already in place, in 2007, the Bureau plans to award three
of four remaining major 2010 decennial contracts.
1Science, State, Justice, Commerce, and Related Agencies Appropriations
Act, 2007, H.R. 5672, 109th Cong. tit. II (2006).
The decennial census is a crucial, constitutionally mandated activity
undertaken by the Bureau. The stakes for a successful census are very
high. The data that the census produces are used to reapportion the seats
of the U.S. House of Representatives; realign the boundaries of the
legislative districts of each state; allocate about $200 billion dollars
each year in federal financial assistance; and provide a social,
demographic, and economic profile of the nation's people to guide policy
decisions at each level of government. Further, businesses use census data
to target new services and products and to tailor existing ones to
demographic changes.
Over the decades, the decennial census has grown in cost and complexity,
and we have been reviewing the national enumeration on behalf of Congress.
Over the years, through scores of reports and testimonies, we have
acquired broad institutional knowledge that gives us a historical view of
the key ingredients of a successful census. One such ingredient is strong
and continued congressional involvement in the decisions that influence
the direction of the census. As you are keenly aware, Mr. Chairman,
congressional support and funding of the reengineered census are essential
to the ultimate success of the decennial.
As a backdrop for this testimony, I want to highlight several broad themes
that have emerged from our work over the years-lenses really-through which
to view the Bureau's business environment. They are important because they
ultimately affect the Bureau's readiness to conduct the census and the
quality of the results.
First, completing the decennial census is a monumental undertaking, and
the Bureau recognizes that streamlined and efficient operations are
critical for the census' cost-effectiveness. The Census' sheer size and
complexity make it a risky and fragile enterprise. The 2000 Census, for
example, involved the hiring of more than 500,000 enumerators on a
temporary basis, opening 511 local census offices and 24,000 questionnaire
assistance centers nationwide, processing 1.5 billion sheets of paper, and
in 10 weeks following up with 42 million nonrespondent households. The
size of the census means that small problems can magnify quickly, and big
problems could be overwhelming. For example, 60 seconds might seem like an
inconsequential amount of time, but in 2000, if enumerators had spent just
1 minute more at each household during nonresponse follow-up, almost $10
million would have been added to the cost of the census, assuming a pay
rate of around $13 per hour, with wages ranging from $8.25 to $18.50 per
hour for enumerators in 2000, depending on the location.
Second, sound risk management is important to a successful census because
many risks are interrelated, and a shortcoming in one operation could
cause other operations to spiral downward. For example, a low mail
response rate would drive up the follow-up workload, which in turn would
increase staffing needs and costs (of course, the reverse is also true,
where a success in one operation could have a number of positive
downstream impacts). Rigorous up-front planning and testing, as well as
risk mitigation plans, are the best ways to stave off these problems. In
the 2000 Census, the Bureau successfully planned and mitigated risk in
recruiting and hiring workers by using management information systems
capable of tracking key operations with real-time measures. To recruit the
vast army of people needed to fill the ranks of its workforce for the 2000
Census, the Bureau set a recruitment goal of 2.4 million qualified
applicants. Because the Bureau tracked the progress local census offices
were making in meeting their individual goals, it was able to mitigate
risk by quickly raising pay rates and taking other actions at those
offices where recruitment was lagging. In the end, the Bureau exceeded its
recruitment goal by 100,000 applicants.
Third, the census is conducted against a backdrop of immutable deadlines;
the census' elaborate chain of interrelated pre- and post-Census Day
activities is predicated upon those dates. The Secretary of Commerce is
legally required to (1) conduct the census on April 1 of the decennial
year, (2) report the state population counts to the President for purposes
of congressional apportionment by December 31 of the decennial year, and
(3) send population tabulations to the states for purposes of
redistricting no later than 1 year after the April 1 census date. To meet
these legally mandated reporting requirements, census activities need to
take place at specific times and in the proper sequence. We agree with
Bureau officials who recently stated that the design and plans being
implemented are too far down the road and time is too short to allow for
significant adjustments to be effectively implemented. In fact, as Census
Day approaches, the tolerance for any operational changes becomes
increasingly small. Indeed, considerable risk and cost increases could
accompany design changes that occur late in the decade.
My remarks today are based on GAO-issued work on the planning and
development of the 2010 Census. These reports are listed in attachment I.
We analyzed Bureau cost and planning documents and data and interviewed
key Bureau officials regarding the 2004 and 2006 Census Tests, contract
monitoring, and the life-cycle cost estimate. In conducting our work, we
visited the Texas and South Dakota test sites; Queens, New York; and
several counties in rural south-central Georgia, where an earlier field
test was held in 2004. During these visits we observed the
address-canvassing operation, where workers go door to door verifying
addresses and updating maps as part of the Bureau's effort to build a
complete and accurate address list, and we observed the nonresponse
follow-up operation, in which enumerators collect information from those
households that do not return their initial questionnaire. We conducted
our work in accordance with generally accepted government auditing
standards.
The Bureau Has Made Significant Progress Preparing for the 2010 Census
The Bureau has made significant progress redesigning its approach for
conducting the 2010 Census, including early planning, a greater reliance
on contractors, and actions related to nonresponse follow-up, a key cost
driver. Specifically, the Bureau's preparations for the 2010 Census appear
to be further along than at a similar point during the planning cycle for
the 2000 Census. The Bureau also plans to make the most extensive use of
contractors in its history, turning to the private sector to supply a
number of different mission-critical functions, including data collection,
data processing, and address and map updates. In addition, the Bureau has
developed new initiatives to reduce the cost of nonresponse follow-up that
include using a short-form-only census questionnaire and automating field
operations.
The Design of the 2010 Census Shows Promise
For the 2010 decennial, the Bureau developed a design for the census early
in the decade, and Congress has been supportive of the Bureau's approach.
However, the situation 10 years ago for the 2000 decennial was somewhat
different. In testimony before Congress in late 1995, we expressed concern
that Congress and the Bureau had not agreed on the fundamental design and
budget of the census, and that the longer this situation continued, the
greater the risk that the census would not be planned well and that
hundreds of millions of dollars would be spent inefficiently.2 Indeed, the
final life-cycle cost for the 2000 Census exceeded the original estimates
by about $1.5 billion, or about 30 percent.
While this time the Bureau has planned earlier than in the past, it needs
to do more. The Bureau has a significant responsibility to provide
Congress with detailed documentation and analyses that provide support and
justification for its 2007 budget and 2010 life-cycle cost estimate,
especially during a time when the nation is facing serious fiscal
challenges. In our view, the Bureau needs to inform Congress in a timely
manner on the cost and progress being made toward a successful 2010
Census.
In planning early for the 2010 Census, the Bureau established four goals
aimed at addressing shortcomings with the 2000 enumeration: (1) increase
the relevance and timeliness of data, (2) reduce operational risk, (3)
increase coverage and accuracy, and (4) contain costs. To achieve these
goals, three components-all new operations-are key to the Bureau's plans
for 2010:
o enhancing procedures for building its address list, known as
the Master Address File (MAF), and its associated geographic
information system, called the Topologically Integrated Geographic
Encoding and Referencing (TIGER(R)) database;3
o replacing the census long-form questionnaire with the American
Community Survey (ACS)4; and
o conducting a short-form-only decennial census supported by
early research and testing.
Steps that the Bureau has taken to correct problems it encountered when
planning past censuses are another sign of the thoroughness of the
Bureau's planning process. For example, early in the decade, senior Bureau
staff considered various goals for the 2010 Census and articulated a
design to achieve those goals. Moreover, staff with operational experience
in the census participated in the 2010 design process. According to Bureau
officials, this was a departure from the 2000 planning effort, in which
Bureau staff with little operational experience played key roles in the
design process, resulting in impractical reform ideas that could not be
implemented.
2 GAO, Decennial Census: Fundamental Design Decisions Merit Congressional
Attention, GAO/T-GGD-96-37 (Washington, D.C.: Oct. 25, 1995).
3 The TIGER database is a mapping system that identifies all visible
geographic features, such as type and location of streets, housing units,
rivers, and railroads. To link TIGER to the master address file, the
Bureau assigns every housing unit in the master address file to a specific
location in the TIGER, a process called "geocoding." TIGER is a registered
trademark of the U.S. Census Bureau.
4 ACS is intended to be a monthly survey of 250,000 households that, under
the Bureau's plans, will replace the long-form census questionnaire.
Bureau Will Make Extensive Use of Contractors for 2010 Census
For the 2010 Census the Bureau plans to make the most extensive use of
contractors in its history, turning to the private sector to supply a
number of different mission-critical functions, including nationwide data
collection and processing activities, and improvements to the address file
and maps. The Bureau estimates that of the $11.3 billion total cost of the
census, around $1.9 billion (or 17 percent) will be spent for its seven
largest contracts. To date, the Bureau has awarded three of its seven
major contracts that account for approximately $1.3 billion. Those
contracts support (1) MAF/TIGER modernization; (2) the development and
operation of the Decennial Response and Integration System (DRIS)-a system
planned to integrate decennial responses; and (3) the Field Data
Collection Automation (FDCA) program-a system designed to provide field
staff with the equipment and infrastructure needed to collect census data.
As detailed below, it will be important for the Bureau to monitor the
contracts to avoid late design changes and hastily designed, untested
systems that could result in additional costs.
In fiscal year 2007, the Bureau will also award three of four remaining
major decennial contracts as follows:
o in February 2007, the Bureau plans to award the contract for
Data Access and Dissemination System II, which will replace the
Bureau's current data tabulation and dissemination system;
o in March or April 2007, the 2010 Census printing contract will
be awarded; and,
o in April 2007, the Bureau will begin to lease office space for
the 2010 Census.
The exact date for the 2010 communications contract-which is set to be
awarded sometime in fiscal year 2008-is not yet firmly established.
As we noted in our May 2006 report, the Bureau has a tight schedule for
systems development and testing; therefore, it will be important for the
Bureau to keep the award of decennial contracts on schedule. To stay on
schedule, we recommended that the Bureau ensure that key systems provided
by contractors are fully functional and ready to be assessed as part of
the 2008 Dress Rehearsal.5 While the Bureau neither agreed nor disagreed
with this recommendation, the Bureau did state that it would be providing
the results from the 2006 Census Test to the FDCA contractor. Staying on
track is important because we previously reported that during the 1998
Dress Rehearsal for the 2000 Census a number of new features were not
test-ready; as a result, the Bureau said it could not fully evaluate them
with any degree of assurance as to how they would affect the census.6
These late design changes and hastily developed, untested systems resulted
in additional costs to the census.
We recognize that contractors can help the Bureau address the challenges
it faces as it plans for and implements the 2010 Census, especially as it
becomes increasingly difficult to count the nation's population with the
Bureau's in-house staff and capabilities. For example, the contractors
that the Bureau relied on to perform some of its major decennial
activities during Census 2000 generally performed well.7 However,
increased reliance on contractors entails certain management challenges,
including overseeing them to ensure that they meet the Bureau's needs in
an effective, economical, and timely manner. For example, according to the
Department of Commerce Office of Inspector General, the Bureau did not
have sufficient program management staff to efficiently acquire systems
and manage complex, high-dollar contracts during Census 2000.8 As a
result, the cost of the Bureau's data capture system increased from $49
million to $238 million by the end of that decennial.
Closely monitoring these major contracts will be important. In March 2006,
we testified that while project offices responsible for the DRIS and FDCA
contracts had carried out initial acquisition management activities,
neither office had the full set of capabilities needed to effectively
manage the acquisitions.9 For DRIS, the Bureau's project office had
established baseline requirements, but the Bureau had not validated the
requirements and had not implemented a process for managing the
requirements. Also, the project office had identified the project's risks
but had not developed written mitigation plans or established milestones
for completing key risk mitigation activities. As for FDCA, the Bureau
again had specified baseline requirements but had not validated them.
While the project office had begun activities to oversee the contractor's
performance, it had not determined which performance measures it would
use, and the office had not implemented a risk management process. Until
these basic management activities are implemented, both systems could face
increased risks of cost overruns, schedule delays, and performance
shortfalls. The Bureau has agreed to take steps to mitigate some of these
challenges, such as enhancing the ability of key contract project offices
to better manage contracts through such actions as developing action plans
with milestones for key activities and regularly briefing senior managers.
5 GAO, 2010 Census: Census Bureau Generally Follows Selected Leading
Acquisition Practices, but Continued Management Attention Is Needed to
Help Ensure Success, GAO-06-277 (Washington, D.C.: May 18, 2008).
6 GAO, 2010 Census: Basic Design Has Potential, but Remaining Challenges
Need Prompt Resolution, GAO-05-9 (Washington, D.C.: Jan. 12, 2005).
7 For example, the data capture system exceeded its performance goals for
accuracy, and the advertising campaign blanketed the country with more
than 250 advertisements in 17 languages, which helped boost the response
rate higher than the Bureau had expected.
8 Department of Commerce Office of Inspector General, Improving Our
Measure of America: What Census 2000 Can Teach Us in Planning for 2010,
OIG-14431 (Washington, D.C.: Spring 2002).
Bureau Has Taken Steps to Reduce Nonresponse Follow-up Costs, but Challenges
with Technology Remain
Since 2000, the Bureau has reengineered the decennial census and has begun
to implement new initiatives to reduce the cost of nonresponse follow-up,
including a short-form-only census and automation, the key feature of
which is the use of hand-held mobile computing devices (MCD). First, the
Bureau plans to contain the cost of nonresponse follow-up by increasing
mail response through a short-form-only census. The overall mail response
rate has been declining steadily since 1970. In the 1980 Census, the mail
response rate was 75 percent, 3 percentage points lower than it was in the
1970 Census. In the 1990 census, the mail response rate dropped to 65
percent and, in 2000, appeared to be leveling off at about 64 percent.
Contributing to this decline was the unwillingness of some of the public
to complete the long form. Specifically, the response rates during the
1990 and 2000 censuses to the short form were higher than the response
rate to the long form. Bureau data suggest a 1 percent increase in the
mail response rate would result from conducting a short-form-only census.
9 GAO, Census Bureau: Important Activities for Improving Management of Key
2010 Decennial Acquisitions Remain to be Done, GAO-06-444T (Washington,
D.C.: Mar. 1, 2006).
Secondly, by using the MCD, the Bureau plans to automate field data
collection to contain the cost of nonresponse follow-up. If successfully
used, the MCD would allow the Bureau to automate operations and eliminate
the need to print millions of paper questionnaires and maps used by census
workers to conduct address canvassing and nonresponse follow-up, as well
as managing field staff's payroll. The benefits of using the MCD have been
tested in the 2004 and 2006 tests. For example, during the 2004 Census
Test, the MCD allowed the Bureau to successfully remove over 7,000 late
mail returns from enumerators' assignments, reducing the total nonresponse
follow-up workload by nearly 6 percent. The ability to remove late mail
returns from the Bureau's nonresponse follow-up workload reduces costs,
because census workers no longer need to make expensive follow-up visits
to households that return their questionnaire after the mail-back
deadline.
However, the MCDs experienced significant reliability problems during the
2004 and 2006 census tests. At this point, the uncertainty surrounding the
MCD's reliability constitutes a risk to the cost-effective implementation
of the 2010 Census. Specifically, during the 2004 Census Test, the MCDs
experienced transmission problems, memory overloads, and difficulties with
a mapping feature-all of which added inefficiencies to the test's
nonresponse follow-up operation.10 During the 2006 Census Test's address
canvassing operation, the device was slow to pull up address data and
accept the data entered by census workers. Further, the MCD's global
positioning system (GPS) receiver-a satellite-based navigational system to
help workers locate street addresses and collect coordinates for each
structure in their assignment area-was also unreliable. According to
Bureau officials, some workers had trouble receiving signals; but even
when a signal was available, the receiver was slow to find assignment
areas and correct map locations. The Bureau extended the operation 10 days
and still was unable to complete the job, leaving census blocks in Austin,
Texas and on the Cheyenne River Reservation, South Dakota unverified.
While acknowledging that the MCD's performance is an issue, the Bureau
believes the problem will be addressed through a contract that was awarded
on March 30, 2006, to develop a new MCD, among other things. However, the
new MCD will not be operationally tested until the 2008 Dress Rehearsal,
and if problems do emerge, little time will be left to develop, test, and
incorporate refinements. In our May 2006 report, we highlighted the tight
time frames to develop the MCD and recommended that systems being
developed or provided by contractors for the 2010 Census-including the
MCD-be fully functional and ready to be assessed as part of the 2008 Dress
Rehearsal.11 The Department of Commerce noted in its comments on our draft
report that the Bureau provided competitors for the contract with
information about the design, requirements, and specification for the 2006
test in the request for proposals. Commerce also noted that the Bureau
would share preliminary results from the 2006 test with the firm that was
awarded the contract, upon the availability of those results. The Bureau,
however, did not specify when preliminary results would be available. If
after the 2008 Dress Rehearsal the MCD is found not to be reliable, the
Bureau could be faced with a remote but daunting possibility of having to
revert to the costly, paper-based census used in 2000. The Bureau in its
2005 life-cycle cost estimate did indicate that if it were to conduct a
paper-based census in 2010 using the same methods as 2000, the life-cycle
cost would increase by $1.3 billion dollars. However, as discussed in more
detail later in this testimony, we are unable to determine the validity of
the Bureau's cost estimates, paper-based or not, because those estimates
are not supported by timely and detailed data. Nevertheless, we support
the Bureau's efforts to contain cost and look forward to seeing the MCD
that is currently being designed under the FDCA contract as well as more
details concerning the Bureau's cost estimates.
10 GAO-05-9 .
Bureau Does Not Have Sufficient Planning and Cost Documentation for the 2010
Census
Despite its emphasis on cost containment, the Bureau does not have a
comprehensive, integrated project plan that details milestones and
itemized costs for completing key activities for the 2010 Census, and its
$11.3 billion life-cycle cost estimate for the 2010 Census lacks timely
and complete supporting data. The supporting data of the estimate are not
timely because they do not include the most current information from
testing and evaluation, and the estimate is not complete because it does
not provide sufficient information on how changing assumptions could
affect cost. Absent this information, we are unable to determine the
affect proposed budget reductions will have in 2007, as well as the impact
of those reductions on the overall design and the Bureau's 2010 life-cycle
cost estimate.
11 GAO, 2010 Census: Census Bureau Generally Follows Selected Leading
Acquisition Planning Practices, but Continued Management Attention Is
Needed to Help Ensure Success, GAO-06-277 (Washington, D.C.: May 18,
2006).
Cost for Each Decennial Census Continues to Significantly Increase
In our January 2004 report, we reported that the Bureau's cost projections
for the 2010 decennial census continue an escalating trend.12 As
previously noted, the Bureau now estimates the 2010 Census will cost over
$11.3 billion, making it the most expensive in history, even after
adjusting for inflation. Although some cost growth can be expected, in
part because the number of housing units-and hence the Bureau's
workload-has become larger, the cost growth has far exceeded the increase
in the number of housing units. For example, the Bureau estimates that the
number of housing units for the 2010 Census will increase by 10 percent
over 2000 Census levels, while the average cost per housing unit for 2010
is expected to increase by approximately 29 percent from 2000 levels.
Moreover, the risk exists that the actual, final cost of the census could
be considerably higher. Indeed, the Bureau's initial cost projections for
previous censuses proved to be too low because of such factors as
unforeseen operational problems or changes to the fundamental design. For
example, during the 2000 Census, the Bureau was unable to finalize its
fundamental design until late in the decade because of lack of agreement
between the administration and Congress over the design. This required the
Bureau to proceed down a dual track. The Bureau estimated that the 2000
Census would cost around $4 billion if sampling was used, as opposed to $5
billion for a traditional census without sampling. In the end, the price
tag for the 2000 Census (without sampling) was over $6.5 billion, a 30
percent increase in cost.
Bureau Has Not Provided a 2010 Comprehensive Project Plan
Our January 2004 report contained a recommendation for improving the
transparency, comprehensiveness, and timeliness of the 2010 Census'
life-cycle costs. We specifically recommended that the Bureau develop a
comprehensive, integrated project plan for the 2010 Census, and we also
emphasized the importance of providing information on the
interrelationships and dependencies among project milestones. Such a
project plan would be updated as needed and would include: (1) detailed
milestones that identify all significant interrelationships; (2) itemized
estimated costs of each component, including a sensitivity analysis, and
an explanation of significant changes in the assumptions on which these
costs are based; (3) key goals translated into measurable, operational
terms to provide meaningful guidance for planning and measuring progress,
and (4) risk and mitigation plans that fully address all significant
potential risks. We noted then that, although some of this information is
available piecemeal, to facilitate a thorough, independent review of the
Bureau's plans and hold the agency accountable for results, having a
single, comprehensive document would be important. Although the Bureau
disagreed with the recommendation, it stated it would develop and provide
such a document to Congress and GAO. More than 2 years passed and the
Bureau did not provide this plan. The Bureau has stated that it agrees
with the Office of Management and Budget that the annual budget submission
process is the appropriate vehicle for providing comprehensive and
detailed cost information on 2010 Census planning. However, in our view,
having a single comprehensive project plan that is updated annually, as we
recommended in 2004, would have provided the Bureau with additional
support for its fiscal year 2007 budget request. Further, GAO reemphasized
the need for such a plan in testimonies during March and June 2006.
12 GAO, 2010 Census: Cost and Design Issues Need to Be Addressed Soon,
GAO-04-37 (Washington, D.C.: Jan. 15, 2004).
2010 Cost Estimate Lacks Timely and Complete Information
The Bureau's most recent cost estimate is not based on timely and complete
information. As stated in our January 2004 report, the Bureau derived its
2010 cost estimate, in June 2001, by using the actual cost of the 2000
Census combined with assumptions about such cost drivers as (1) staffing
needs, (2) enumerator productivity, (3) pay rates for census workers, (4)
the nonresponse rate for mailing back the questionnaires,13 and (5)
inflation.14 However, the most recent life-cycle cost estimate15 does not
incorporate current information about assumptions made in 2001, leaving us
unable to link information on assumptions among the cost estimates
released in 2001, 2003, and 2005. For example, one key assumption that has
not been updated pertains to the use of a new technology-new hand-held,
GPS-enabled MCDs. These devices are important to the success of the 2010
census because they are expected to make possible automated and
streamlined address canvassing, nonresponse follow-up, coverage
measurement, and payroll operations. The Bureau anticipated that the use
of MCDs would facilitate reductions in administrative and support costs in
the Bureau's field offices, including a 50 percent reduction in clerical
and administrative local census office staff costs and a 50 percent
reduction in space at each local census office. However, the Bureau's
existing assumptions about the use and reliability of the MCD were not
updated to reflect information from the 2004 Census Test, which revealed
that assumptions about staffing and space associated with the new
technology had changed since the June 2001 life-cycle estimate.
Specifically, Bureau evaluations of the 2004 test show that more help desk
staff at the local census office were needed to support the use of the
MCD, and additional storage space was needed for the devices. However, the
Bureau did not use this information when revising its cost estimate in
2005 because, according to Bureau officials, they conduct field tests for
operational purposes only-not to inform the cost estimates. In our view,
revising cost estimates on the most recent information-including test
results that are pertinent to cost assumptions-can assist the Bureau and
external decision makers to oversee costs and make necessary resource
allocations to help ensure a successful, cost-effective census.
13 Lower mail-back response rates increase costs by necessitating costly
follow-up visits by enumerators to nonresponding households and/or the
mailing of a follow-up questionnaire.
14 GAO-04-37 .
15 U.S. Census Bureau: Census Bureau Estimated Life Cycle Costs for
Reengineering the 2010 Decennial Census Program (Washington, D.C.:
September 2005).
The Bureau's cost estimate also lacks complete information, such as
sensitivity analysis regarding assumptions that could affect cost drivers.
OMB Circular A-94 provides guidelines for cost-benefit analysis of federal
programs and recommends that agencies develop a sensitivity analysis for
major projects with significant uncertainty, like the decennial census.
The circular provides a method for determining how sensitive outcomes
relate to changes in assumptions. In January 2004, we reported that the
Bureau could provide more robust information on the likelihood that the
values the Bureau assigned to key cost drivers could differ from those
initially assumed. We also stated that updates of the life-cycle cost
could be timelier-previously the life-cycle cost estimate had been
provided at 2-year intervals.16 While the Bureau agreed to provide updates
of the life-cycle cost annually, the Bureau's latest life-cycle cost
document does not contain a sensitivity analysis on assumptions that
impact cost.
Having transparent information about cost estimates is especially
important, because decennial costs are sensitive to many key assumptions.
In fact, for the 2000 Census, the Bureau's supplemental funding request
for $1.7 billion in fiscal year 2000 primarily involved changes in
assumptions related to increased workload, reduced employee productivity,
and increased advertising. Given the cost of the census in an era of
serious national fiscal challenges, it would be beneficial for the Bureau
and Congress to have sensitivity information about the likelihood-high,
medium, or low-that certain assumptions would drive costs. By providing
this information, the Bureau would better enable Congress to consider
funding levels in this uncertain environment.
16 GAO-04-37 .
Conclusions
Questions have been raised about the impact of proposed reductions in the
Bureau's fiscal year 2007 overall budget request. Would such a budgetary
change cause the dramatic changes in the decennial's overall design and
life-cycle cost that the Bureau predicts? The answer is that given the
lack of consolidated, timely, and detailed plans and cost estimates, we
simply cannot tell. Importantly, this testimony notes that the preparatory
steps for the 2010 Census have almost reached a point where the Bureau
will no longer be able to effectively undertake design changes and other
significant corrective actions if such are needed-for example, in response
to unanticipated failures of the MCD. To help policymakers make informed
decisions, including funding decisions, the Bureau needs to provide
policymakers with comprehensive, timely, and updated information.
As we have previously reported, the Bureau has planned earlier than in the
past and that its plans and efforts to reengineer the census have
potential to contain costs. However, we believe the Bureau needs to do
more. In this testimony, as well as in our previous reports and
testimonies, we have discussed the Bureau's ongoing emphasis on
reengineering the census to contain costs. We have noted that while the
$11.3 billion estimate makes the 2010 Census the most expensive in
history, new cost drivers have emerged. As we previously recommended, a
periodically updated comprehensive project plan and cost estimate that is
supported by transparent, detailed, and comprehensive analyses and
documentation would enable analysts, policymakers, and others to ascertain
whether significant risks exist that could cause costs to increase. We
believe that in this era of serious national budget challenges, it is
important for the Bureau to implement our 2004 recommendation not only for
this fiscal year but every fiscal year of the 2010 decennial life-cycle.
To conduct its oversight and budgetary functions, Congress needs the
Bureau to provide it with an annually updated comprehensive, integrated
project plan which includes milestones, itemized costs, measurable goals,
and risk mitigation plans.
That concludes my statement, Mr. Chairman. I would be pleased to respond
to any questions you or other members of the Subcommittee may have.
Contacts and Acknowledgments
For questions regarding this testimony, please contact Brenda S. Farrell,
on (202) 512-6806, or by email at [email protected] . Individuals making
contributions to this testimony include Carlos Hazera, Assistant Director;
Mike Carley, Betty Clark, Robert Goldenkoff, , Shirley Hwang, Wright
Lewis, Krista Loose, Lisa Pearson, Scott Purdy, Mark Ryan, Shannon
VanCleave, and Timothy Wexler.
Attachment I: Related Products by GAO
GAO Products
2010 Census: Census Bureau Needs to Take Prompt Actions to Resolve
Long-standing and Emerging Address and Mapping Challenges. GAO-06-272 .
Washington, D.C.: June 15, 2006.
2010 Census: Costs and Risks Must be Closely Monitored and Evaluated with
Mitigation Plans in Place. GAO-06-822T . Washington, D.C.: June 6, 2006.
2010 Census: Census Bureau Generally Follows Selected Leading Acquisition
Planning Practices, but Continued Management Attentions Is Needed to Help
Ensure Success. GAO-06-277 . Washington, D.C.: May 18, 2006.
Census Bureau: Important Activities for Improving Management of Key 2010
Decennial Acquisitions Remain to be Done. GAO-06-444T . Washington, D.C.:
March 1, 2006.
2010 Census: Planning and Testing Activities Are Making Progress.
GAO-06-465T . Washington D.C.: March 1, 2006.
Information Technology Management: Census Bureau Has Implemented Many Key
Practices, but Additional Actions Are Needed. GAO-05-661 . Washington,
D.C.: June 16, 2005.
2010 Census: Basic Design Has Potential, but Remaining Challenges Need
Prompt Resolution. GAO-05-09 . Washington, D.C.: January 12, 2005.
Data Quality: Census Bureau Needs to Accelerate Efforts to Develop and
Implement Data Quality Review Standards. GAO-05-86 . Washington, D.C.:
November 17, 2004.
Census 2000: Design Choices Contributed to Inaccuracies in Coverage
Evaluation Estimates. GAO-05-71 . Washington, D.C.: November 12, 2004.
American Community Survey: Key Unresolved Issues. GAO-05-82 . Washington,
D.C.: October 8, 2004.
2010 Census: Counting Americans Overseas as Part of the Decennial Census
Would Not Be Cost-Effective. GAO-04-898 . Washington, D.C.: August 19,
2004.
2010 Census: Overseas Enumeration Test Raises Need for Clear Policy
Direction. GAO-04-470 . Washington, D.C.: May 21, 2004.
2010 Census: Cost and Design Issues Need to Be Addressed Soon. GAO-04-37 .
Washington, D.C.: January 15, 2004.
Decennial Census: Lessons Learned for Locating and Counting Migrant and
Seasonal Farm Workers. GAO-03-605 . Washington, D.C.: July 3, 2003.
Decennial Census: Methods for Collecting and Reporting Hispanic Subgroup
Data Need Refinement. GAO-03-228 . Washington, D.C.: January 17, 2003.
Decennial Census: Methods for Collecting and Reporting Data on the
Homeless and Others Without Conventional Housing Need Refinement.
GAO-03-227 . Washington, D.C.: January 17, 2003.
2000 Census: Lessons Learned for Planning a More Cost-Effective 2010
Census. GAO-03-40 . Washington, D.C.: October 31, 2002.
The American Community Survey: Accuracy and Timeliness Issues. GAO-02-956R
. Washington, D.C.: September 30, 2002.
(450516)
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www.gao.gov/cgi-bin/getrpt? GAO-06-1009T .
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Brenda S. Farrell at (202) 512-6806 or
[email protected].
Highlights of GAO-06-1009T , a testimony before the Subcommittee on
Science, the Departments of State, Justice, and Commerce, and Related
Agencies, Committee on Appropriations, House of Representatives
July 2006
2010 CENSUS
Redesigned Approach Holds Promise, but Census Bureau Needs to Annually
Develop and Provide a Comprehensive Project Plan to Monitor Costs
The U.S. Census Bureau (Bureau) estimates that the 2010 Census will cost
over $11.3 billion, making it the most expensive in our history. The U.S.
House of Representatives and Senate appropriation bills propose to reduce
the Bureau's fiscal year 2007 budget request, raising questions about the
Bureau's design of the 2010 Census and associated costs. Based on issued
GAO work, this testimony addresses the extent to which the Bureau has (1)
made progress redesigning its approach, including nonresponse follow-up, a
key cost driver; and (2) developed a comprehensive project plan for the
2010 Census, as well as timely, detailed cost data for effective oversight
and cost control.
What GAO Recommends
A January 2004 GAO report recommended that the Bureau develop a
comprehensive project plan for the 2010 Census that would include
milestones, itemized costs, and measurable goals. While the Bureau
disagreed with the recommendation, it stated it would provide such a plan
to Congress and GAO. More than 2 years passed and the Bureau did not
provide this plan. In testimonies during March and June 2006, GAO
reemphasized the need for such a plan. GAO still believes that in this era
of serious budget challenges, it is important for the Bureau to implement
this recommendation not only for the upcoming fiscal year budget but every
fiscal year of the 2010 Census' life-cycle.
Since 2000, the Bureau has made significant progress in redesigning the
2010 Census. Preparations for the 2010 Census appear to be further along
than at a similar point of the 2000 Census; the Bureau plans to make the
most extensive use of contractors in its history to implement such
mission-critical tasks as data collection and processing, and updating
addresses and maps; and it has developed new initiatives, such as changing
to a short-form-only census and automating field operations to reduce
nonresponse follow-up costs. Still, the Bureau will have to resolve
challenges that could increase the costs of the census. For example, the
Bureau will need to effectively monitor contracts, as $1.9 billion of the
$11.3 billion life-cycle costs will be spent on seven major contracts. The
Bureau has agreed to take steps to mitigate some of these challenges, such
as enhancing the ability of key contract project offices to better manage
contracts through such actions as developing action plans with milestones
for key activities and regularly briefing senior managers. Also, the use
of hand-held mobile computing devices (MCD) to help reduce nonresponse
follow-up costs by automating operations and managing the agency's payroll
is a key component of the redesigned census. However, the MCDs experienced
reliability problems during testing. The Bureau maintains that those
problems will be fixed by developing a new MCD through a contract awarded
in March 2006; however, the new MCD will not be tested until the 2008
Dress Rehearsal, and little time will remain to develop, test, and
incorporate refinements if the MCDs do not perform as expected. If after
the Dress Rehearsal the MCD is found to be unreliable, the Bureau could be
faced with the remote but daunting possibility of having to revert to the
costly paper-based census used in 2000.
The Bureau has not developed and provided a comprehensive, integrated
project plan that details milestones, itemized costs, and measurable goals
for completing key activities. Also, the Bureau's $11.3 billion life-cycle
cost estimate lacks timely and complete supporting data, because it does
not contain the most current information from testing and evaluation nor
does it provide sufficient information on how changing assumptions could
affect costs. For example, one key assumption that has not been updated
pertains to the use of the MCDs. The Bureau anticipates that their use
could reduce administrative and support costs in its local census offices,
including 50 percent cost reductions for staff and office space. However,
the 2004 Census Test showed that more help desk staff and more storage
space would be needed to support the devices. The Bureau did not change
the life-cycle cost estimate because, in the view of Bureau managers,
field tests are for operational purposes, not to inform cost estimates.
However, using test results to update cost assumptions could assist the
Bureau and external policymakers to oversee costs and make necessary
resource allocations. Furthermore, absent a comprehensive plan and updated
cost information, the effect of proposed 2007 budget reductions on the
overall design and life-cycle costs of the 2010 Census cannot be
determined.
*** End of document. ***