Contract Reform: DOE's Policies and Practices in Competing	 
Research Laboratory Contracts (10-JUL-03, GAO-03-932T). 	 
                                                                 
DOE is the largest civilian-contracting agency in the federal	 
government, and relies primarily on contractors to operate its	 
sites and carry out its diverse missions. For fiscal year 2003,  
DOE will spend about 90 percent of its total annual budget, or	 
$19.8 billion, on contracts, including $9.4 billion to operate 16
of its research laboratories (called federally funded research	 
and development centers). Since 1990, GAO has identified DOE's	 
contract management as high-risk for fraud, waste, abuse, and	 
mismanagement. In 1994, DOE began reforming its contracting	 
practices to, among other things, improve contractor performance 
and accountability. As part of that effort, DOE has at times used
competition in awarding contracts to manage and operate its	 
research laboratories. In September 2002, GAO reported on the	 
status of contract reform efforts in DOE. (Contract Reform: DOE  
Has Made Progress, but Actions Needed to Ensure Initiatives Have 
Improved Results) [Sep. 2002, GAO-02-798] This testimony	 
discusses some of the findings in that report. GAO was asked to  
testify on DOE's rationale for deciding whether to compete a	 
laboratory research contract, the extent to which DOE has	 
competed these contracts, and the role of competition and other  
mechanisms in improving contractor performance. 		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-932T					        
    ACCNO:   A07497						        
  TITLE:     Contract Reform: DOE's Policies and Practices in	      
Competing Research Laboratory Contracts 			 
     DATE:   07/10/2003 
  SUBJECT:   Contract costs					 
	     Contract performance				 
	     Laboratories					 
	     Contract administration				 
	     Contract oversight 				 
	     Research and development contracts 		 
	     Competition					 
	     Performance measures				 

******************************************************************
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GAO-03-932T

Testimony Before the Subcommittee on Energy, Committee on Science, House
of Representatives

United States General Accounting Office

GAO For Release on Delivery Expected at 10: 00 a. m. EDT Thursday, July
10, 2003 CONTRACT REFORM

DOE*s Policies and Practices in Competing Research Laboratory Contracts

Statement of Robin M. Nazzaro, Director, Natural Resources and Environment

GAO- 03- 932T

DOE has competed its research laboratory contracts in three main
situations* when the contractor operating the laboratory is a for- profit
entity, when mission changes warrant a review of the capabilities of other
potential contractors, or when the incumbent contractor*s performance is
unsatisfactory. DOE guidance requires that to extend a contract
noncompetitively, the department must present a convincing case for doing
so to the Secretary of Energy. Among other

things, DOE must certify that competing the contract is not in the best
interests of the government and must describe the incumbent contractor*s
past successful performance. Of the 16 research laboratory contracts
currently in place, DOE has competed 6. The remaining 10 contracts have
not been competed since the contractors began operating the sites-- in
some cases, since the 1940s. DOE recently decided to

compete 2 of the 10 contracts that had never before been competed*
contracts to operate the Los Alamos National Laboratory in New Mexico and
the Argonne West Laboratory, located at the Idaho National Laboratory. DOE
decided to compete the Los Alamos contract because of concerns about the
contractor*s performance, and to compete the Argonne West contract as part
of an overall effort to separate the Idaho National Laboratory*s nuclear
energy research mission from the environmental cleanup mission at the
Idaho site.

Competing contracts is one of several mechanisms DOE can use to address
contractor performance problems or strengthen contract management.
However, just competing a contract does not ensure that contractor

performance will improve. Other aspects of DOE*s contract reform
initiative intended to improve contractor performance included greater use
of fixed- price contracts instead of cost- reimbursement contracts and
establishing or strengthening performance- based incentives in existing
contracts. In addition, GAO has reported that DOE must (1) effectively
oversee its contractors* activities in carrying out projects and (2) use
appropriate outcome measures to assess overall results and apply lessons
learned to continually improve its contracting practices. GAO*s recent
evaluation of DOE*s contract reform efforts indicates that DOE is still
working to put these management practices and outcome measures in place.
DOE is the largest civiliancontracting

agency in the federal government, and relies primarily on contractors to
operate its sites and carry out its diverse missions. For fiscal year
2003, DOE will spend about 90 percent of its total annual budget, or $19.8
billion, on contracts, including $9.4 billion to operate 16 of its
research

laboratories (called federally funded research and development centers).
Since 1990, GAO has identified DOE*s contract management as high- risk for
fraud, waste, abuse, and mismanagement. In 1994, DOE began reforming its

contracting practices to, among other things, improve contractor
performance and accountability. As part of that effort, DOE has at times
used competition in awarding contracts to manage and operate its research
laboratories. In September 2002, GAO reported on

the status of contract reform efforts in DOE. (Contract Reform: DOE Has
Made Progress, but Actions Needed to Ensure Initiatives Have Improved
Results) [Sep. 2002, GAO- 02- 798] This testimony discusses some of the
findings in that report. GAO

was asked to testify on DOE*s rationale for deciding whether to compete a
laboratory research contract, the extent to which DOE has competed these
contracts, and the role of competition and other

mechanisms in improving contractor performance. www. gao. gov/ cgi- bin/
getrpt? GAO- 03- 932T. To view the full product, including the scope

and methodology, click on the link above. For more information, contact
Robin M. Nazzaro (202) 512- 3841 or nazzaror@ gao. gov. Highlights of GAO-
03- 932T, testimony

before the Subcommittee on Energy, Committee on Science, House of
Representatives

July 10, 2003

CONTRACT REFORM

DOE's Policies and Practices in Competing Research Laboratory Contracts

Page 1 GAO- 03- 932T DOE Laboratory Contracts

Madam Chairman and Members of the Subcommittee: We are pleased to be here
today to discuss the Department of Energy*s (DOE) use of competition and
other mechanisms to help ensure effective contractor performance in
managing and operating its research laboratories. DOE is the largest
civilian- contracting agency in the federal government, relying primarily
on contractors to operate its sites and carry

out its diverse missions. These missions include not only conducting
research but also maintaining the nuclear weapons stockpile, and cleaning
up radioactive and hazardous waste. For fiscal year 2003, DOE will spend
about 90 percent of its total annual budget, or $19.8 billion, on
contracts, including $9.4 billion to operate 16 of its research
laboratories.

For over a decade, we, DOE*s Office of Inspector General, and others have
criticized DOE*s contracting practices, including its failure to hold its
contractors accountable for results. DOE*s longstanding approach had been
to develop a broadly defined statement of work, provide considerable
direction to the contractor, and reimburse virtually all costs. This
approach placed limited emphasis on cost control or accountability for
results. Furthermore, poor contractor performance led to schedule delays
and cost increases on many of the department*s major projects. Since 1990,
such problems have led us to designate DOE contract management* defined
broadly to include both contract administration and management of
projects* as a high- risk area for fraud, waste, abuse, and mismanagement.

In 1994, DOE began its contract reform initiative to improve contractors*
performance. Through this initiative DOE intended, among other things, to
strengthen contracting practices, hold contractors more accountable for
their performance, and demonstrate progress in achieving the agency*s
missions. DOE implemented numerous changes, such as performance based-
contracts with results- oriented measures and a greater use of competition
in awarding contracts, including contracts to manage and operate its
research laboratories known as Federally Funded Research and Development
Centers (FFRDC). According to the Federal Acquisition Regulation, FFRDCs
are entities that engage in activities sponsored by a government agency or
agencies to conduct or manage basic or applied research and development.
Contracts to operate such facilities differ from other contracts because
the government contemplates a long- term relationship with the FFRDC
contractor and the contractor has access to

government data, employees, and facilities beyond that common in a normal
contractual relationship.

Page 2 GAO- 03- 932T DOE Laboratory Contracts

My testimony today will discuss (1) DOE*s rationale for deciding whether
to compete a FFRDC contract, (2) the extent to which DOE has competed
these contracts, and (3) the role of competition and other mechanisms in

improving contractor performance. Although we have not conducted a review
solely related to FFRDC contracts, our past work on DOE*s contract reform
initiative, especially our September 2002 report, 1 focused in part on
DOE*s use of competition as a tool to improve contractor performance,
including the contractors that manage and operate DOE*s laboratories. My
testimony today is based on the findings in that report as well as related
information we have developed as part of our ongoing oversight of DOE*s
contracting activities.

In summary we found the following:  DOE has competed its FFRDC contracts
in three main situations: when the contractor operating the laboratory is
a for- profit entity, when mission changes warrant a review of the
capabilities of other potential contractors, or when the incumbent
contractor*s performance is unsatisfactory. DOE guidance on contracting
reflects a strong emphasis on competition that exists, in part, as a
result of its contract reform initiative. Statutes and regulations give
DOE considerable flexibility in deciding whether to compete or
noncompetitively extend a FFRDC contract. However, for noncompetitive
extensions, DOE guidance requires the department to present a convincing
case to the Secretary. Among other things, DOE must certify that competing
the contract is not in the best interests of the government and must
describe the incumbent contractor*s past successful performance.

 Of the 16 FFRDC contracts in place, DOE has competed 6. It has not
competed the remaining 10 contracts since the contractors began operating
the sites* in some cases, since the 1940s. DOE recently decided to compete
2 of the 10 contracts that had never before been competed* contracts to
operate the Los Alamos National Laboratory in New Mexico and the Argonne
West Laboratory, located at the Idaho National Laboratory. DOE decided to
compete the (1) Los Alamos contract because of concerns about the
contractor*s performance and (2) Argonne West contract as part of an
overall effort to separate the Idaho National Laboratory*s ongoing
research mission from the environmental cleanup 1 U. S. General Accounting
Office, Contract Reform: DOE Has Made Progress, but Actions

Needed to Ensure Initiatives Have Improved Results, GAO- 02- 798
(Washington, D. C.: Sept. 13, 2002).

Page 3 GAO- 03- 932T DOE Laboratory Contracts

mission at the Idaho site.  Competing contracts is one of several
mechanisms DOE can use to

address contractor performance problems or strengthen contract management.
However, just competing a contract does not ensure that contractor
performance will improve. Other aspects of DOE*s contract reform
initiative intended to improve contractor performance included greater use
of fixed- price contracts instead of cost- reimbursement contracts and
establishing or strengthening performance- based incentives in existing
contracts. In addition, we have reported that DOE must (1) effectively
oversee its contractors* activities in carrying out projects and (2) use
appropriate outcome measures to assess overall results and apply lessons
learned to continually improve its contracting practices. Our recent
evaluation of DOE*s contract reform efforts indicates that DOE is still
working to put these management practices and outcome measures in place.

DOE has a large complex of sites around the country dedicated to
supporting its missions: sites that were used to produce or process
materials and components for nuclear weapons and laboratories that conduct
research on nuclear weapons, defense issues, basic science, and other
topics. These sites and laboratories are often located on government-
owned property and facilities, but are usually operated by

organizations under contract to DOE, including universities or university
groups, non- profit organizations, or other commercial entities.

DOE contracting activities are governed by federal laws and regulations.
Although federal laws generally require 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. Those
contracts were subject to regulation that established noncompetitive
extensions of contracts with incumbent contractors as the norm and
permitted competition only when it appeared likely that the competition
would result in improved cost or contractor performance and would not be
contrary to the government*s best interests. In the mid- 1990s, DOE began
a series of contracting reforms to improve its contractors* performance. A
key factor of that initiative has been the increasing use of competition
as a way to select management and operating contractors for

DOE sites. Although DOE initially focused the increased use of competition
on its contracts with for- profit organizations, the laboratories
Background

Page 4 GAO- 03- 932T DOE Laboratory Contracts

operated by universities and other nonprofit organizations have not been
completely insulated from these changes.

Contract administration in DOE is carried out by the program offices, with
guidance and direction from DOE*s Office of Procurement and Assistance
Management. The management and operating contracts at DOE*s FFRDC
laboratories are administered primarily by the National Nuclear Security
Administration, a semi- autonomous agency within DOE; or DOE*s Offices of
Science, Environmental Management, or Nuclear Energy, Science, and
Technology. DOE has had three main reasons for competing its FFRDC
contracts

instead of extending the contracts noncompetitively: when the contractor
operating the laboratory is a for- profit entity, when mission changes
warrant a review of the capabilities of other potential contractors, or
when the incumbent contractor*s performance is unsatisfactory. Without one
of these conditions, DOE has generally extended these contracts without
competition.

DOE has considerable flexibility in deciding whether to compete a
management and operating contract for one of its FFRDC laboratories.
Although federal procurement law specifies a clear preference for
competition in awarding government contracts, the Competition in
Contracting Act of 1984 provided for certain conditions under which full
and open competition is not required. One of these noncompetitive
conditions occurs when awarding the contract to a particular source is
necessary to establish or maintain an essential engineering, research, or
development capability to be provided by an educational or other nonprofit
institution or a FFRDC.

The Federal Acquisition Regulation, which implements federal law, defines
government- wide policy and requirements for FFRDCs, including the
establishment, use, review, and termination of the FFRDC relationship.
Under this regulation (1) there must be a written agreement of sponsorship
between the government and the FFRDC; (2) the sponsoring

governmental agency must justify its use of the FFRDC; (3) before
extending the agreement or contract with the FFRDC, the government agency
must conduct a comprehensive review of the use and need for the FFRDC; and
(4) when the need for the FFRDC no longer exists, the agency may transfer
sponsorship to another government agency or phase out the FFRDC. DOE Has
Competed

FFRDC Contracts for Three Main Reasons

Page 5 GAO- 03- 932T DOE Laboratory Contracts

DOE*s 1996 acquisition guidance describes the procedures DOE program
offices must follow to support any recommendation for a non- competitive
extension of any major site contract, including a FFRDC contract. This
guidance indicates a clear preference for competition and requires DOE
program offices to make a convincing case to the Secretary before a
noncompetitive contract extension is allowed. This preference for
competition is an outcome of DOE*s contract reform initiative, which
concluded that DOE needed to expand the use of competition in awarding or
renewing contracts. Among other things, the 1996 guidance specifies that,
before a noncompetitive contract extension can occur, DOE must provide

 a certification that full and open competition is not in the best
interest of the department,

 a detailed description of the incumbent contractor*s past performance, 
an outline of the principal issues and/ or significant changes to be

negotiated in the contract extension, and  in the case of FFRDCs, a
showing of the continued need for the research

and development center in accordance with criteria established in the
Federal Acquisition Regulation.

In November 2000, DOE*s Office of Procurement and Assistance Management
issued additional guidance on how to evaluate an incumbent contractor*s
past performance when deciding whether to extend or compete an existing
contract. The guidance states that DOE contracting officers must review an
incumbent contractor*s overall performance including technical,
administrative, and cost factors, and it outlines the information required
to support the performance review and the expected composition of the
evaluation team. When reporting the results of a performance evaluation,
the team should address all significant areas of performance and highlight
the incumbent contractor*s strengths and weaknesses. The evaluation team*s
report serves as the basis for determining whether extending a contract is
in the best interests of the government and is subject to review and
concurrence by the responsible assistant secretary and DOE*s Procurement
Executive.

Page 6 GAO- 03- 932T DOE Laboratory Contracts

In September 2002, we reported that DOE had taken several steps to expand
competition for its site management and operating FFRDC contracts. First,
DOE reassessed which sites it should continue to designate as federally
funded research and development centers. As a result of the reassessment,
DOE removed 6 of the 22 sites from the FFRDC designation. DOE subsequently
competed the contracts for two of these* the Knolls and Bettis Atomic
Power Laboratories in New York and Pennsylvania. DOE restructured the
other four contracts and, because of the more limited scope of activities,
no longer regards them as major site contracts. The six site contracts
that DOE has dropped from FFRDC status since 1992 are listed in table 1.

Table 1: Sites Where DOE Has Eliminated the FFRDC Designation Site Year
FFRDC status

terminated

Bettis Atomic Power Laboratory, Pennsylvania 1992 Hanford Engineering
Development Laboratory, Washington 1992 Inhalation Toxicology Research
Institute, New Mexico 1995 Energy Technology Engineering Center,
California 1995 Knolls Atomic Power Laboratory, New York 1992 Oak Ridge
Institute of Science and Education, Tennessee 1999 Source: GAO analysis of
DOE data.

For the 16 remaining FFRDC contracts that DOE sponsors, DOE has competed 6
of them and is planning to compete two additional contracts in 2004 and
2005. The 16 current FFRDC sites and the competitive status of the site
contract are shown in table 2. DOE Has Competed

or Plans to Compete Half of Its 16 FFRDC Contracts

Page 7 GAO- 03- 932T DOE Laboratory Contracts

Table 2: DOE*s FFRDC Sites and Contract Status Site Site contractor
Contract status Sites with contracts that have not been competed:

Ames National Laboratory, Iowa Iowa State University Initiated in 1943.
Argonne National Laboratory, Illinois University of Chicago Initiated in
1946. DOE plans to

compete the Argonne West (Idaho) portion of the contract in 2004. Fermi
National Laboratory, Illinois Universities Research

Association Initiated in 1967. Jefferson Laboratory, Virginia Southeastern
Universities

Research Association Initiated in 1984. Lawrence Berkeley National
Laboratory, California University of California Initiated in 1947.
Lawrence Livermore National Laboratory, California University of
California Initiated in 1952. Los Alamos National Laboratory, New Mexico
University of California Initiated in 1943. DOE plans to

compete the contract in 2005. Pacific Northwest National Laboratory,
Washington Battelle Memorial Institute Initiated in 1964. Princeton Plasma
Physics Laboratory, New Jersey Princeton University Initiated in 1975.
Stanford Linear Accelerator Facility, California Stanford University
Initiated in 1976.

Sites with competed contracts:

Brookhaven National Laboratory, New York Brookhaven Science Associates
Competed in 1997. Idaho National Engineering and Environmental Laboratory,
Idaho Bechtel BWTX Idaho, LLC Competed in 1999. DOE plans to restructure
the site contract and compete it in 2004.

National Renewable Energy Laboratory, Colorado Midwest Research Institute
Competed in 1998. Oak Ridge National Laboratory, Tennessee UT- Battelle,
LLC Competed in 1999. Sandia National Laboratory, New Mexico Sandia
Corporation Competed in 1993. Savannah River Site, South Carolina
Westinghouse Savannah River

Company Competed in 1996. Source: GAO analysis of DOE data.

DOE*s decision to compete the six FFRDC sites shown in table 2 is
consistent with the department*s overall policy on determining when
competition is appropriate. For example, DOE competed the contract for the
Brookhaven National Laboratory in 1997, after terminating the previous
contract for unsatisfactory performance by the incumbent contractor. DOE
competed the contract for the National Renewable Energy Laboratory in 1998
to incorporate additional private sector expertise into the management
team for the site. This competition resulted from an expanded mission at
the site to develop innovative renewable energy and energy efficient
technologies and to incorporate these technologies into cost effective new
products. For the remaining four FFRDC contracts that DOE has competed,
the operator of the laboratory was a for- profit entity.

Page 8 GAO- 03- 932T DOE Laboratory Contracts

When DOE has decided not to compete its FFRDC contracts but to extend them
noncompetitively, its decisions have not been without controversy. For
example, in 2001, DOE extended the management and operating contracts with
the University of California for the Los Alamos and Lawrence Livermore
National Laboratories. The University of California has operated these
sites for 50 years or more and has been the sites* only contractor. In
recent years, we and others have documented significant problems with
laboratory operations and management at these two laboratories*
particularly in the areas of safeguards, security, and project management.
2 Congressional committees and others have called for DOE to compete these
contracts. Until recently, however, DOE did not compete them. Instead, DOE
chose to address the performance problems using contract mechanisms, such
as specific performance measures and interim performance assessments. In
our September 2002 report, we commented

that if the University of California did not make significant improvements
in its performance, DOE may need to reconsider its decision not to compete
the contracts.

In April 2003, the Secretary of Energy decided to open the Los Alamos
National Laboratory contract to competition when the current contract
expires in September 2005. The Secretary made this decision based on
*systemic management failures* that came to light in 2002. The management
failures included inadequate controls over employees* use of government
credit cards, inadequate property controls and apparent theft

of government property, and the firing of investigators attempting to
identify the extent of management problems at the laboratory. DOE has also
decided to restructure the FFRDC contracts supporting

work at the Idaho National Laboratory. Currently the laboratory has two
FFRDC contracts*( 1) a site management contract that includes activities
ranging from waste cleanup to facility operations activities and (2) a
contract to operate Argonne National Laboratory, which includes the
Argonne West facility at the Idaho site. DOE plans to restructure the two
contracts so that one focuses on the nuclear energy research mission and

2 For, example, see U. S. General Accounting Office, Department of Energy:
Key Factors Underlying Security Problems at DOE Facilities, GAO/ T- RCED-
99- 159 (Washington, D. C.: Apr. 20, 1999); U. S. General Accounting
Office, Nuclear Security: Improvements Needed in DOE*s Safeguards and
Security Oversight, GAO/ RCED- 00- 62 (Washington, D. C.: Feb. 24, 2000);
and A Special Investigative Panel, President*s Foreign Intelligence
Advisory Board,

Science at its Best, Security at its Worst: A Report on Security Problems
of the U. S. Department of Energy (Washington, D. C.: June 1999).

Page 9 GAO- 03- 932T DOE Laboratory Contracts

the other focuses on the cleanup mission at the site. DOE also plans to
include the activities at Argonne West in the contract competition for the
site*s research mission and to remove the Argonne West scope of work from
DOE*s existing contract with the University of Chicago to operate Argonne
National Laboratory. DOE believes this contract restructuring will help
revitalize the nuclear energy research mission at the Idaho Site and
accelerate the environmental cleanup.

DOE is continuing to examine the nature of its relationship with FFRDC
contractors and the implications of that relationship for its contracting
approach. DOE established FFRDCs in part to gain the benefits of having a
long- term association with the research community beyond that available
with a normal contractual relationship. However, more recent events are
causing DOE to rethink its approach. As discussed above, DOE has been

criticized for not competing laboratory contracts where the contractors
are performing poorly. Furthermore, annual provisions in the Energy and
Water Development Appropriations Acts since fiscal year 1998 have required
DOE to compete the award and extension of management and operating
contracts, including FFRDC contracts, unless the Secretary waives the
requirement and notifies the Subcommittees on Energy and Water of the
House Committee on Appropriations 60 days before contract award.

Given these concerns, in 2003 the Secretary of Energy commissioned an
independent panel to determine what criteria DOE should consider when
deciding whether to extend or compete a laboratory management and
operating contract. The panel is expected to help DOE determine, among
other things, the conditions under which competition for laboratory
contracts is appropriate, the appropriate criteria for deciding to compete
or extend laboratory contracts, the benefits and disadvantages derived
from competing laboratory contracts, and whether different standards and
decision criteria should apply depending on whether the contractor is
nonprofit, an educational institution, an academic consortium, or a
commercial entity.

Page 10 GAO- 03- 932T DOE Laboratory Contracts

Competing contracts is one of several mechanisms DOE can use to address
contractor performance problems or strengthen contract management.
However, competing a contract does not ensure that contractor performance
will improve. Other steps DOE has taken as part of its contract reform
initiative to address contractor performance issues include changing the
type of contract, such as from a cost- reimbursement to a fixed- price
contract, or establishing or strengthening performancebased incentives in
the contract. For example, in September 2002, we reported that DOE now
requires performance- based contracts at all of its major sites. DOE has
also increased over time the proportion of contractors* fees tied to
achieving those performance objectives. However, DOE has struggled to
develop effective performance measures and continues to modify and test
various performance measures that more directly link performance
incentives to a site*s strategic objectives.

Even these changes to DOE*s contracts do not by themselves ensure that
contractor performance will improve. We have reported that DOE must also
(1) effectively oversee its contractors* activities in carrying out
projects and (2) use appropriate outcome measures to assess overall
results and apply lessons learned to continually improve its contracting
practices. Effectively overseeing contractor activities involves, among
other things, ensuring that appropriate and effective project management
principles and practices are being used. Since June 1999, DOE has been
working to implement recommendations by the National Research Council on
how to improve project management at DOE. In 2003, the National

Research Council reported that DOE has made progress in improving its
management of projects but that effective management of projects was not
fully in place.

Regarding the use of outcome measures to assess overall results, in
September 2002, we reported that DOE did not have outcome measures or data
that could be used to assess the overall results of its contract reform
initiatives. We recommended that DOE develop an approach to its reform
initiatives, including its contracting and project management initiatives,

that is more consistent with the best practices of high- performing
organizations. DOE is still working to put a best- practices approach in
place.

As we reported in 2001, improving an organization*s performance can be
difficult, especially in an organization like DOE, which has three main
Competing Its

Contracts Is One of Several Mechanisms DOE Has to Address Contractor
Performance, but Effective Oversight and Improved Outcome Measures Are
Also Needed

Page 11 GAO- 03- 932T DOE Laboratory Contracts

interrelated impediments to improvement* diverse missions, a confusing
organizational structure, and a weak culture of accountability. 3 However,
DOE expects to spend hundreds of billions of dollars in future years on
missions important to the well- being of the American people, such as
ensuring the safety and reliability of our nuclear weapon stockpile.
Therefore, the department has compelling reasons to ensure that it has in
place an effective set of contracting and management practices and

controls. Thank you, Madam Chairman and Members of the Subcommittee. This
concludes my testimony. I would be pleased to respond to any questions
that you may have.

For further information on this testimony, please contact Ms. Robin
Nazzaro at (202) 512- 3841. Individuals making key contributions to this
testimony included Carole Blackwell, Bob Crystal, Doreen Feldman, Molly
Laster, Carol Shulman, Stan Stenersen, and Bill Swick.

3 U. S. General Accounting Office, Department of Energy: Fundamental
Reassessment Needed to Address Major Mission, Structure, and
Accountability Problems, GAO- 02- 51 (Washington, D. C.: Dec. 21, 2001).
Contacts and

Acknowledgments

(360367)

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Washington, D. C. 20548 Obtaining Copies of

GAO Reports and Testimony Order by Mail or Phone To Report Fraud, Waste,
and Abuse in Federal Programs Public Affairs
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