Noting that congressional and federal managers’ decision-making was often hampered by the lack of good information on the results of federal programs, the Congress passed the Government Performance and Results Act of 1993. By passing the Results Act, the Congress intended to change the focus of federal management and decision-making from the performance of tasks to the results of those tasks. To do this, the act established a system to set goals for programs’ performance and to measure the results of that performance. In part to fulfill the requirements of the Results Act, the Department of Energy (DOE) announced the development of its Strategic Management System in 1996. The system is intended to be a managerial framework for DOE’s interrelated strategic planning, budgeting, performance-based contracting, and program evaluation processes for the Department’s varied missions and numerous organizations. The Congress passed the Results Act to have federal agencies clarify their missions, set their program goals, and measure their performance toward achieving those goals. The Congress had found, among other things, that • waste and inefficiency in federal programs undermined the confidence of the American people in their government and reduced the government’s ability to address vital public needs adequately; federal managers were seriously disadvantaged in their efforts to improve program efficiency and effectiveness because programs’ goals had not been articulated sufficiently and information on programs’ performance was inadequate; and • congressional policy-making, spending decisions, and program oversight were seriously handicapped by insufficient attention to programs’ performance and the results. The Congress intended the Results Act to improve the effectiveness of federal programs by fundamentally shifting management and decision-making away from a preoccupation with staffing and activity levels to a wider focus on the results of federal programs. The framework the act established for such a shift requires executive agencies to prepare multiyear strategic plans, annual performance plans, and annual performance reports. The Results Act requires executive agencies to develop strategic plans that cover a period of at least 5 years and to update those plans at least every 3 years. Agencies were required to submit their first strategic plans to the Congress by September 30, 1997. Strategic plans are to (1) include agencies’ mission statements; (2) identify long-term general goals and objectives; (3) describe agencies’ plans to achieve those goals through their activities and through their human, capital, information, and other resources; and (4) explain the key external factors that could significantly affect the achievement of those goals. Additionally, the strategic plans are to explain how the agencies’ strategic goals and objectives are related to the performance goals in their annual performance plans. Hence, the strategic plan is the starting point for the agencies’ system of performance management. In January 1998, we reported on our reviews of 24 major agency strategic plans, including the one prepared by DOE. The Results Act requires executive agencies to develop annual performance plans that cover their performance for a single fiscal year. The first annual performance plans were to be submitted to the Congress with the President’s budget in February 1998 and were to cover the agencies’ performance in fiscal year 1999. The annual performance plan is to contain an agency’s strategic goals and annual performance goals, which the agency is to use to gauge its progress toward accomplishing its strategic goals. The annual performance plan also is to include the measures of performance that the agency will use to gauge its progress toward achieving its annual goals and the resources the agency will need to meet its goals. Finally, the plan is to discuss how the agency will verify the resulting performance data. The Results Act further requires executive agencies to prepare annual reports on program performance for the previous fiscal year. The first annual performance reports will describe agencies’ results for fiscal year 1999 and are due to the Congress and the President no later than March 31, 2000. Subsequent reports are due annually by March 31. In each report, an agency is to review and discuss its performance compared with the performance goals it established in its annual performance plan. The Senate Committee on Governmental Affairs, in its report on the Results Act, explained that it is important that performance measurement not be a major additional cost or paperwork burden imposed on federal programs. In stressing its concerns about the cost of performance measurement, the Committee cited our report on federal agencies’ use and collection of performance data. In that report, we pointed out that a great deal of data collection was already going on in federal programs and that this activity could be redirected, coordinated, and the data better reported and used. The Congress recognized the significance of converting a task-oriented government to a performance-oriented government and phased the implementation of the Results Act over a 7-year period. For example, in its report on the Results Act, the Senate Committee on Governmental Affairs recognized that the reforms of the Results Act are a major undertaking and noted that comprehensive program goal-setting and performance measurement and reporting on a governmentwide basis will not be accomplished easily. In 1997, in our review of agencies’ pilot projects under the Results Act, we reported that agencies were confronting a variety of difficult challenges. These challenges included developing strategic plans; generating the results-oriented performance information needed to set goals and assess progress; instilling a results-oriented organizational culture within agencies; and linking performance plans to the budget process. The experiences of pilot agencies and related efforts by other agencies suggest that these challenges will not be quickly or easily resolved. On March 4, 1996, DOE announced its Strategic Management System, which seeks to align planning with strategic intent, ensure that planning drives resource allocation, and provide feedback on performance results. The system provides a general explanation of how strategic planning, annual planning, budget formulation, performance-based contracting, and program evaluation are to be linked. Within the Strategic Management System, DOE’s departmental strategic plan provides the goals and strategies that will shape DOE’s future budgets. DOE’s strategic plan aligns DOE’s work into four business lines—energy resources, national security, environmental quality, and science and technology. To help ensure the success of its business lines, DOE’s strategic plan also includes a section on corporate management, which cuts across the business lines. Because DOE’s organizational structure does not mirror its business lines, the business lines include crosscutting issues within the agency that require different parts of the Department to work together to achieve the desired results. DOE’s Assistant Secretary for Policy and International Affairs is responsible for coordinating the preparation of the departmental strategic plan. Preparation of the strategic plan is managed by the Assistant Secretary’s Office of Strategic Planning, Budget and Program Evaluation. The strategic plan is to be reflected throughout all DOE organizations as missions, goals, and activities at every level are to be aligned with national energy and security policies. Among its objectives, the Strategic Management System intends to ensure that all DOE plans add value and are consistent with other DOE planning documents. The Strategic Management System states that annual performance plans are to include the results that DOE expects to deliver for the budget being requested and must be closely linked to the goals contained in the departmental strategic plan. The Strategic Management System also notes that DOE’s performance-based management contracts, a form of contract that is used to manage and operate DOE facilities, are a critical force in turning DOE’s annual plan and commitments into actions and results. Performance goals for these contracts are to be consistent with the commitments made in DOE’s annual performance plan. To work effectively, the Strategic Management System will need to integrate DOE’s complex mission structure and organization. DOE was created in 1977 from several diverse functions, including those of the Federal Energy Administration, the Energy Research and Development Administration, and the Federal Power Commission. Moreover, DOE’s missions have changed focus over the years. For example, whereas DOE was once geared toward the production of nuclear weapons, it is now focused on restoring the environment at the facilities contaminated by that nuclear production. DOE’s diverse missions include • environmental restoration of its facilities and the management of hazardous wastes created during the nuclear research and production process; • management of the nation’s nuclear weapons complex; • nuclear arms control; • development of energy policy; • research and development on both energy and basic science; • management of five power marketing administrations, such as the Bonneville Power Administration; and • development and operation of a civilian nuclear waste repository. These changing missions have had a significant impact on DOE’s various programs. For example, in 1996, we reported that DOE undertook 80 major system acquisitions from 1980 to 1996 and that only 15 of them were ever completed. Thirty-one of the major systems were terminated prior to completion. One of the causes of this poor performance was DOE’s unclear or changing missions. DOE uses management and operating contractors (M&O) to carry out the bulk of its statutory responsibilities at its facilities. In fiscal year 1997, about 70 percent ($13.8 billion) of the Department’s total fiscal year obligations were for M&O contractors. These contractors employ about 107,000 employees, compared with the approximately 11,000 federal workers employed by DOE. The Chairman of the House Committee on Commerce, noting the importance of the Results Act, requested that we review DOE’s early efforts to implement the act. Specifically, we evaluated how well (1) DOE’s program and field units linked their subordinate plans to the departmental strategic plan and (2) DOE linked the goals of its strategic plan to its annual performance plan and the goals for its performance-based management and operating contracts. We conducted our review at DOE program offices, field organizations, and facilities managed by M&O contractors. The program offices we chose for our review—the Office of Defense Programs, the Office of Energy Research, and the Office of Environmental Management—are the largest in DOE’s budget.