The Results Act requires that the Office of Management and Budget (OMB) direct each executive agency to prepare an annual performance plan, beginning with fiscal year 1999. The performance plan is one of three components of the Results Act, the others being the strategic plan, submitted by agencies in September 1997, and the annual report due March 31, 2000. The performance plan should describe (1) annual performance goals and measures, (2) the strategies and resources to achieve those goals, and (3) procedures to verify and validate reported performance. The act requires that performance goals be linked to the program activities in agencies’ budgets and be expressed in an objective, quantifiable, and measurable form. OMB is to use agency performance plans to develop the overall federal government performance plan submitted annually to Congress, beginning with the President’s fiscal year 1999 budget. Generally, the performance goals in NASA’s plan are objective and the performance measures are quantifiable and useful for assessing progress. While the plan reflects the mission statement and strategic goals in NASA’s strategic plan and provides clear links between strategic goals and the annual performance goals and measures, it does not clearly associate the plan’s performance goals and measures with program activities in the budget. Although NASA’s plan recognizes that other agencies and partners have complementary missions and activities and acknowledges that NASA must work closely with them to achieve its goals, it does not discuss the extent to which it has coordinated either its strategies for achieving goals or its development of performance measures. The performance plan provides near-term goals for each of NASA’s four business enterprises and at least one performance target to address each of the goals for fiscal year 1999. The four enterprises, which were characterized by NASA in its fiscal year 1999 strategic plan as analogous to business units in the private sector, are Space Science; Earth Science; Human Exploration and Development of Space; and Aeronautics and Space Transportation Technology. In addition, the performance plan includes goals and measures for the internal processes it characterizes as crosscutting. NASA officials told us that the enterprise performance targets are indicators of progress toward the agency’s near-term goals. Generally, the enterprise near-term goals are objective and free from bias. The plan provides both quantitative and qualitative measures for aspects of some of the goals. For example, in addition to quantitative measures for exploring the role of gravity in physical, chemical, and biological processes, the plan provides for using “the data obtained by fluid physics experiments on suspensions of colloidal particles on MSL-1 to answer fundamental questions in condensed matter physics.....” NASA officials acknowledged that this would require the use of qualitative measures to determine whether the fundamental questions have been answered. OMB recommends that outcome goals be included in a performance plan whenever possible, but recognizes that agencies will supplement outcome goals with output goals. Some of NASA’s performance measures are outcome oriented; others are output oriented. NASA officials told us that outputs are used when demonstrating intermediate progress in support of future outcomes and often reflect program commitments made in conjunction with science users. For instance, they said that the performance target of orbiting the asteroid Eros closer than 50 kilometers—a performance measure associated with NASA’s objective of exploring the solar system—matches Near-Earth Rendezvous program expectations and specifications. A few performance goals are not specific to fiscal year 1999; rather, they span multiple years. For example, the plan provides for reducing “average spacecraft cost for Space Science and Earth Science missions to $190 million from $590 million.” However, the performance target is based on comparing spacecraft programs completed in the time period of fiscal years 1990 through 1994 with those completed between fiscal years 1995 through 1999. NASA officials told us that expressing multiple year programs in a single-year context required by the Results Act was difficult and a source of frustration for the agency. In order to provide a more comprehensive understanding of the importance of the goals and performance measures chosen for its crosscutting processes, it would have been helpful for the plan to acknowledge the agency’s major management challenges and associated corrective actions. For example, NASA officials told us that the plan’s target of achieving 70 percent or greater of resource authority obligated relates to funding carryovers—an issue we have identified as a major challengeand which the NASA Administrator has recognized in congressional testimony as a top priority. We have also identified other management challenges. These include: improving systems and information for monitoring contractor activities and complying with contract management requirements; implementing a new accounting system and the importance of this effort to providing Congress and agency management with better financial information and allowing the agency to move to full cost accounting; and resolving uneven progress toward better NASA and Department of Defense cooperation and developing a national perspective on aerospace test facilities. OMB guidance states that performance goals for corrective steps for major management problems should be included for problems whose resolution is mission-critical, such as problems that could materially impede the achievement of program goals. Recognizing those management challenges appears to meet the intent of OMB’s guidance. Furthermore, although the performance plan includes performance targets related to contracting, such as increasing the obligated funds for Performance-Based Contracts to 80 percent, the performance measure can be better understood by referencing the agency’s efforts to ensure that it has relevant and reliable methods for timely and accurate monitoring of its contract management activities. For example, the performance plan is silent on NASA’s planned corrective efforts in fiscal year 1999 to evaluate the effectiveness of its contract management activities at its field centers. NASA’s performance goals are closely aligned with the agency-wide and enterprise strategic mission, goals, and objectives, and provide good linkages between the agency’s near-term strategic goals and the enterprise near-term goals, objectives, and performance targets. This is accomplished through well-laid out charts summarizing these relationships. OMB Circular A-11 provides that the annual performance plan should also show how specific performance goals are related to the specific program activities contained in the agency’s program and financing (P&F) schedules in the President’s Budget. NASA’s performance plan contains a table that allocates NASA’s $13.5 billion fiscal year 1999 budget request among its four enterprises and several other consolidated budget accounts. Each of the enterprises is related to a set of performance goals. However, the plan does not clearly explain how NASA’s program activities relate to the budget totals presented for each enterprise. There is no crosswalk to facilitate an understanding of the relationship between the specific program activities in the budget and the goals and measures in the performance plan. Therefore, we believe NASA’s performance plan cannot help Congress understand which performance goals and measures in the plan cover which program activities or whether all program activities in NASA’s budget are covered by its performance goals. NASA officials with whom we spoke during our review indicated that these relationships can be determined by simultaneously analyzing information in its “trilogy” of documents, namely the annual budget justification, strategic plan, and performance plan. However, they recognize that a clearer connection between performance goals and the program activities in the budget needs to be provided in future performance plans to facilitate analysis. According to those officials, an initiative is underway to align these documents. The performance plan points out that collaborative efforts with other agencies and international partners will continue to be key to the successful implementation of enterprise strategies. Although the plan identifies the specific agency or international partner involved in carrying out specific efforts, it does not discuss the extent to which other agencies have been coordinated with in establishing the goals, objectives, and associated performance targets. For example, in describing the objective of developing next-generation computational design tools, the plan indicates that NASA’s efforts are part of the Federal High Performance Computing and Communications (HPCC) initiative. However, there is no discussion as to whether NASA coordinated its performance target of a 200-fold improvement with other federal partners, nor is there an explanation of how NASA’s effort will contribute to the overall federal initiative. NASA’s performance plan would be strengthened if it identified activities being undertaken to address crosscutting issues of broad national concern and discussed how achieving the agency’s goals will contribute to addressing the crosscutting issues. To indicate how NASA’s programs contribute to addressing a crosscutting issue, the plan could present output goals, output measures, intermediate outcome goals, and intermediate outcome measures that reflect the agency’s contributions to addressing the crosscutting issues. The performance plan could be improved if it discussed efforts to coordinate NASA’s programs with other federal programs performing related activities and provided evidence of coordination such as joint planning and coordination or development of partnerships aimed at improving program efficiency and effectiveness. The performance plan does not fully discuss how the agency’s strategies and resources will help achieve its goals. The implementation strategy descriptions in each enterprise section are unclear and do not provide sufficient information on how NASA will go about accomplishing its near-term enterprise goals. The plan only partially discusses resources; it does not describe the operational processes, skill and technology, human, capital, and information resources required to achieve the performance goals. The NASA plan does not fully describe how the agency will achieve its performance goals, nor does it reference other documents that show how the strategies will contribute to achieving the agency’s performance goals. Enterprise implementation strategy descriptions lack detailed information on how NASA will accomplish its enterprise goals. In several instances, these descriptions appear to outline philosophies rather than describe enabling actions. For instance, application of the “faster, better, cheaper” approach to spacecraft development identified in both the Space Science and Earth Science implementation strategy sections is not clearly explained. At a minimum, it would have been helpful if the plan had included an explicit discussion on what is involved in applying that approach and how the establishment of “prudent risks” is part of it. While not required by the Results Act, we believe that a similar discussion of external factors and discussion of how NASA will mitigate or use the identified factors to achieve performance goals could provide additional context regarding anticipated performance.