August 31, 1999

Thompson letter on GPRA - DOE Attachment 1

MOST SIGNIFICANT OPEN GAO RECOMMENDATIONS

ON HIGH-RISK AREA:

DEPARTMENT OF ENERGY CONTRACT MANAGEMENT

Description of high-risk area: DOE relies on contractors to perform about 90 percent of its work. Recently, it has significantly increased its use of competition in selecting contractors to manage and operate its major facilities, but it should do more. In addition, it is still not competitively awarding contracts for environmental restoration work at its national laboratories, even though it does so at other facilities. Although DOE originally planned to shift risk from the federal government to private contractors as a means of enhancing their performance, it now considers risk-sharing more appropriate. At its Hanford site in Washington State, for example, DOE assumed much of the risk that it initially planned to shift to the contractor.

GAO Report No. and Date	Recommendation
RCED-94-202 Aug. 25, 1994	Ensure that the Departments new policies for nonprofit management and operating (M&O) contractors apply to the largest DOE non-profit contractors.
RCED-94-202 Aug. 25, 1994	Ensure that the fees paid to contractors for incurring increased financial risks are cost-effective by developing criteria for measuring the costs and benefits to the government of this approach.
RCED-94-202 Aug. 25, 1994	Require the University of California to obtain DOE advance approval for any research projects the University sponsors at the laboratory.
RCED-94-202 Aug. 25, 1994	Review the instances in which DOE has less authority under the University of California contracts than is provided in the standard clauses and determine whether the basis for allowing the deviations are sound and whether DOE should use its authority to propose contract modifications to better protect the government’s interests.
RCED-95-10 Jan. 27, 1995	Evaluate alternatives for managing the laboratories that more fully support clear missions, achieve results by linking the laboratories’ activities to DOE missions, and maximize the laboratories’ resources.
RCED-97-18 Dec. 10, 1996	Require that the goals written into the M&O contracts be clearly linked to DOE’s strategic plan and annual performance goals.
RCED-97-18 Dec. 10, 1996	Continue reforms that are aimed at placing more cost risk on its contractors through use of cost incentives and in a further effort to bring M&O contracting into the mainstream of federal contracting.
RCED-97-18 Dec. 10, 1996	Require that a mandatory standards contract clause be included in all M&O contracts that gives DOE exclusive authority to set contract goals and incentives that support the strategic plans and missions of the Department.
RCED-97-63 March 14, 1997	Ensure that the Fernald Area Office strengthens its oversight at Fernald in order to correct the project management, safety and health programs, and performance and financial system weaknesses.
RCED-97-63 March 14, 1997	Ensure that contract reform initiatives that DOE has undertaken are fully integrated into the Fernald contract.
RCED-98-94 April 14, 1998	Modify the agency’s contracting process to ensure adequate time is available to incorporate performance goals and fees in contracts for the start of the fiscal year’s work.