**GAO-02-798**                      Published: Sep 13, 2002. Publicly Released: Sep 13, 2002.                  

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## Highlights

The Department of Energy (DOE), the largest civilian contracting agency in the federal government, relies primarily on contractors to operate its sites and carry out its diverse missions, such as maintaining the nuclear weapons stockpile, cleaning up radioactive and hazardous wastes, and performing research. Although federal law generally requires federal agencies to use competition in selecting a contractor, until the mid-1990s, DOE contracts for the management and operation of its sites generally fit within an exception that allowed for the use of noncompetitive procedures. Since 1996, DOE has made progress toward implementing contract reform initiative in three key areas--developing alternative contracting approaches, increasing competition, and using performance-based contracts. However, DOE continues to encounter challenges in implementing these initiatives. Although DOE has made strides in implementing contract reform initiatives, it is difficult to determine whether contractors' performance has improved because objective performance information is scarce. Over the past 8 years, DOE has primarily gauged progress by measuring its implementation of the reforms, such as the number of contracts competed each year, and by reviewing individual contract performance incentives. DOE faces a fundamental challenge to ensuring the effectiveness of its contract reform initiatives--developing an approach to managing its initiatives and sustaining improvements that would incorporate the best management practices of high-performing organizations. These practices include four key elements: (1) clearly defined goals; (2) an implementation strategy that sets milestones and establishes responsibility; (3) results-oriented outcome measures, established early in the process; and (4) systematic use of results-oriented data to evaluate the effectiveness of the initiative and make additional changes where warranted.

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## Topics

Government Operations

CompetitionContract administrationContract oversightPerformance measuresContract performanceContract modificationsCost estimatesBudget estimatesGovernment reformPerformance measurement