the risks (either DOE or the contractor); the development of performance measures and incentives; the selection of the contracting mechanism; the selection of the contractor; the administration of the contract; and the implications of federal and DOE acquisition regulations. DOE should train its employees in the roles and responsibilities of a performance-based culture and then hold both employees and contractors accountable for meeting these requirements.

Recommendation. DOE should provide financial rewards for outstanding contractor performance to attract bids from the best contractors. A DOE-wide policy should be developed that provides fiscal rewards for contractors who meet or exceed schedule, cost, and scope performance targets. Contractor fees should be based on contractor performance.

Recommendation. DOE employees and contractor employees essential to projects should be trained in acquisition and contract reform. The training of source selection officials and members of source evaluation boards should be expedited; a minimum level of training should be a prerequisite.

Organizational Structure, Responsibility, and Accountability

Finding. DOE’s organizational structure makes it much more difficult to carry out projects than in comparable private and public sector organizations. Successful corporations and agencies responsible for major projects arrange their organizations to provide focused and consistent management attention to projects.

Finding. Too many people in DOE act as if they were project managers for the same project, and too many organizations and individuals outside the official project organizations and lines of accountability can affect project performance.

Finding. Compliance with DOE’s policy requiring the establishment of performance agreements and self-assessments from the field has been limited and slow.

Recommendation. To improve its project management performance, DOE should establish an office of project management on a level equal to or higher than the level of the offices of assistant secretaries. Department-wide project management functions should be assigned to the project management office, and the director of this office should have the authority and the resources to set and enforce reporting requirements for all projects. Other responsibilities, such as property and asset management, should be assigned to existing DOE headquarters offices. To be successful, the office of project management must have the full and continuing support of the secretary, the under secretary, the deputy secretary, and of all of the program offices and field offices as a top-down management initiative.

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