oversight

Observations on the Department of Energy's Fiscal Year 2000 Performance Plan

Published by the Government Accountability Office on 1999-07-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office                                                           Resources, Community, and
Washington, D.C. 20548                                                                        Economic Development Division



                 B-282416

                 July 20, 1999

                 The Honorable Dick Armey
                 Majority Leader
                 House of Representatives

                 The Honorable Dan Burton
                 Chairman, Committee on Government Reform
                 House of Representatives

                 The Honorable Fred Thompson
                 Chairman, Committee on Governmental Affairs
                 United States Senate

                 Subject: Observations on the Department of Energy’s Fiscal Year 2000 Performance Plan

                 As you requested, we have reviewed and evaluated the fiscal year 2000 performance plans
                 for the 24 Chief Financial Officers (CFO) Act agencies that were submitted to Congress as
                 required by the Government Performance and Results Act of 1993 (Results Act). Enclosure I
                 to this letter provides our observations on the fiscal year 2000 performance plan for the
                 Department of Energy (DOE). Enclosure II lists the identified GAO management challenges
                 and the DOE Inspector General’s areas of concern that DOE faces and the applicable goals
                 and measures in the fiscal year 2000 annual performance plan.

                 Our objectives were to (1) assess the usefulness of the agency’s plan for decision making and
                 (2) identify the degree of improvement the agency’s fiscal year 2000 performance plan
                 represents over the fiscal year 1999 plan. Our observations were generally based on the
                 requirements of the Results Act, guidance to agencies from the Office of Management and
                 Budget (OMB) for developing the plan (OMB Circular A-11, Part 2), our previous reports
                 and knowledge of DOE’s operations and programs, and our observations on DOE’s fiscal
                 year 1999 performance plan. Our summary report on the CFO Act agencies’ fiscal year 2000
                 plans contains a complete discussion of our objectives, scope, and methodology.1



                 1
                  Managing for Results: Opportunities for Continued Improvements in Agencies’ Performance Plans (GAO/GGD/AIMD-99-215,
                 July 20, 1999).




                 Page 1                                                 GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
B-282416


As agreed, unless you announce the contents of this letter earlier, we plan no further
distribution until 30 days from the date of the letter. The major contributors to this report are
Jeffrey E. Heil, Robert Antonio, and Michael J. Wargo. Please call me on (202) 512-3841 if
you or your staff have any questions.




Victor S. Rezendes
Director, Energy, Resources and
  Science

Enclosures - 2




Page 2                                       GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I

Observations on the Department of
Energy's Annual Performance Plan
for Fiscal Year 2000
The Department of Energy’s (DOE) fiscal year 2000 annual performance plan provides a
limited picture of intended performance across the agency, a general discussion of strategies
and resources the agency will use to achieve its goals, and limited confidence that agency
performance information will be credible. First, while the plan is clearly linked to the
strategic plan, the strategic plan does not always provide quantitative goals and objectives
that show what DOE’s plans to accomplish. As a result, it is difficult for the user to determine
whether the annual goals are reasonable and to measure how the Department’s annual
performance compares with the strategic plan’s goals and objectives. For example, under the
Environmental Quality business line, DOE describes one of its long-term strategies as
“Reducing Worker, Public, And Environmental Risks” and one of its goals is to “stabilize and
safely store approximately 53 metric tons of heavy metal of spent nuclear fuel.” However, the
strategic goal or objective does not describe the total amount to be stabilized and stored to
meet this long-term strategy. Second, while the plan links annual performance to the program
activities in the President’s budget request, the plan would be more informative if it also
presented all annual goals by the individual office. Third, although DOE recognizes the
importance of validating and verifying performance measures and information systems
required to assess its accomplishments, the annual plan does not translate that general
recognition into specific plans for assessing and improving performance. The following figure
highlights the plan’s major strengths and key weaknesses as DOE seeks to make additional
improvements in its plan.

Figure I.1: Major Strengths and Key Weaknesses of Fiscal Year 2000 Annual Performance Plan

Major Strengths
• Clearly links annual performance to the strategic plan, and
• Shows how budgetary resources are related to performance goals.

Key Weaknesses
• Strategic goals and objectives do not provide a context for evaluating planned
performance, and
• Details are not provided to show how performance will be verified and validated.

DOE’s fiscal year 2000 performance plan indicates moderate improvement in addressing the
weaknesses we identified in our assessment of the fiscal year 1999 performance plan. In
reviewing the fiscal year 1999 plan, we observed that the performance plan did not

• provide an overall context for the measurement of performance addressed in the annual
goals,
• link all goals and measures to program activities in the budget request,
• identify annual performance goals with crosscutting issues,




Page 3                                      GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




• explain how strategies would contribute to achieving performance goals, and
• provide details of the procedures to be used to verify and validate its performance.

Among improvements in the fiscal year 2000 plan are better linkage between annual
performance and program activities in the budget request and strategies that are linked
through strategic objectives to annual performance goals. However, the annual performance
plan could be improved by providing quantifiable strategic goals and objectives. These
strategic goals and objectives would serve as a context for evaluating the Department’s
planned annual performance, identifying crosscutting issues with annual performance goals,
and providing details showing how performance will be verified and validated.

The Agency’s Performance Plan Provides a Limited Picture of
Intended Performance Across the Agency
Although the annual performance is linked directly to the strategic plan, the description of
expected annual performance is incomplete because the strategic plan does not provide an
overall context for the user to determine whether the annual goals are reasonable and to
measure how the Department’s annual performance compares with the strategic plan’s goals
and objectives. Additionally, while DOE assists the users by presenting 3 fiscal years of
performance goals in the annual plan, the method used to classify the performance is not
precise.

For fiscal year 2000, DOE has clearly linked the goals and measures in its annual performance
plan to the goals, objectives, and long-term strategies in its strategic plan. First, the annual
plan begins with the mission statement from the strategic plan. Second, the annual plan, like
the strategic plan, is divided into five sections corresponding to DOE’s four business lines
(Energy Resources, National Security, Environmental Quality, and Science and Technology)
and Corporate Management. Within these sections, the annual plan lists the strategic goals,
strategic objectives, and long-term strategies for achieving the objectives identified in the
strategic plan. Finally, the annual plan links its goals and measures to the strategic plan’s
long-term strategies in a matrix that covers fiscal years 1998, 1999, and 2000. This
presentation allows the user of the plan to examine the Department’s actual and intended
performance towards the strategic goals and objectives over a 3-year period.

Many of the annual plan’s goals and measures are stated in quantifiable terms, but the annual
plan’s description of expected performance is often incomplete because the strategic plan’s
goals and objectives are not quantifiable. As a result, the strategic and annual plans do not
provide an overall context to determine whether the annual goals are reasonable and
appropriate and to measure how the Department’s annual performance compares with the
strategic plan’s goals and objectives. For example, under the Environmental Quality business
line, DOE restates a long-term strategy as “Reducing Worker, Public, And Environmental




Page 4                                             GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




Risks.” It supports this strategy with three annual goals and measures: (1) “stabilize and
safely store approximately 53 metric tons of heavy metal of spent nuclear fuel,” (2) “stabilize
approximately 38,000 kilograms bulk of plutonium residues, approximately 160 liters of
plutonium solution, and 238 containers of plutonium metals/oxides,” and (3) “make
disposition ready 910 containers of plutonium metals/oxides.” These goals and measures
clearly quantify DOE’s planned performance for fiscal year 2000; however, without
quantifiable strategic goals, objectives, and strategies that define the total work to be
accomplished, it will be impossible to determine how much progress DOE has made during
the year toward fulfilling its strategic goal, objective, and strategy.

While many of DOE’s annual goals and measures are output-oriented and quantifiable, others
are vague. As a result, they may not provide clear standards for evaluating DOE’s
performance. For example, to accomplish one of its long-term strategies—”Improve Existing
Nuclear Power Plants”—DOE plans to “Implement a cooperative R&D program to address
technical questions that could prevent continued operation of current nuclear power plants
by working with industry, universities, and national laboratories.” The word “Implement”
could mean, “organize,” “conduct,” or “initiate.” It does not clearly indicate what DOE is to
accomplish in fiscal year 2000. The term “could prevent” is also undefined and unclear as a
measure of performance.

DOE’s annual plan provides performance goals and measures for 3 fiscal years—1998, 1999,
and 2000—allowing users of the plan to see what the Department has done or is planning to
do over several years to achieve its strategic goals, objectives, and long-term strategies.
Although not required by the Results Act, for fiscal year 1998, DOE reports on its fiscal year
1998 performance goals using four categories—fully successful, successful, partially
successful, and unsuccessful. Fully successful equates to meeting or exceeding the goal;
successful equates to meeting 80 to 100 percent of the goal, partially successful equates to
meeting 50 to 80 percent of the goal, and unsuccessful equates to meeting less than 50
percent of the goal. This classification system is flawed, we believe, because it allows DOE to
identify incomplete performance as “successful.” For example, if DOE completes 80 percent
of the work defined under one measure, it can claim that it has been “successful” even though
20 percent of the work was not done. Table I.1 summarizes the results of DOE’s scoring for
fiscal year 1998.

Table I.1: DOE’s Measurement of the Fiscal Year 1998 Annual Performance
                                                                                                                a
Category                                        Number or measures                           Percent of total

Fully Successful                                                      113                                  59
Successful                                                             57                                  30
Partially successful                                                   19                                  10
Unsuccessful                                                            3                                   2
a
Column does not equal 100 percent due to rounding.




Page 5                                               GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




DOE’s mission and strategic goals overlap those of other agencies, such as the National
Science Foundation, Department of Commerce, and the Environmental Protection Agency.
However, the annual plan continues to provide little information about coordination with
these agencies. While DOE’s strategic plan states that DOE is committed to working closely
with other federal agencies, its annual plan does not show other agencies’ programs that
contribute to their results and complementary goals. For example, DOE’s annual plan states
that a discussion of specific coordination is included in the “means and strategies” section of
its strategic objectives or in the performance measures themselves. However, under its
business line of Science and Technology, DOE does not identify any federal agency in the
“means and strategies” section for the objectives of the business line. Additionally, of the 48
specific goals and measures identified for this business line, only 2 identify a federal agency
by name and this information is provided in vague terms. For example, one goal and measure
states that DOE will “Continue collaborative efforts with NASA on space science and
exploration,” while the other states that DOE will “In cooperation with NASA, NSF,
USDA/Forest Service, and the Smithsonian Institution, provide quantitative data on the
annual exchange of carbon dioxide . . . .” In neither case does DOE explain how the agencies
will work together to meet their common goals. We believe that DOE could improve its
description of crosscutting issues by specifically identifying the crosscutting issues and
addressing how it will contribute with the other federal agencies towards their common
goals. For example, DOE could highlight crosscutting issues in the annual plan and show how
its performance goals complement the goals of other agencies.

The plan also provides some goals covering mission critical problems and issues. For
example, it has two goals addressing its need to improve contractor performance through use
of performance-based contracts. The matrix at the end of this summary describes how DOE’s
performance goals address major management challenges including completing major
projects, transitioning to external regulations, addressing organizational problems, improving
contract management, and assuring that its workforce has the needed skills.

The fiscal year 2000 performance plan recognizes the weaknesses that we identified in our
assessment of the fiscal year 1999 performance plan as it relates to providing a clear picture
of intended performance across the agency and makes specific commitments to address
those weaknesses. In reviewing the fiscal year 1999 plan, we observed that the plan did not
(1) provide an overall context to allow performance goals to be measured and (2) show
coordination with other agencies that have related strategic or performance goals. These
weaknesses remain in the fiscal year 2000 plan.




Page 6                                             GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




DOE’s Performance Plan Provides a General Discussion of the
Strategies and Resources It Will Use to Achieve Its Goals
The plan provides a general discussion of the strategies and resources that DOE will use to
achieve its performance goals. Annual performance can be linked through a system of
matrixes to the program activities in the President’s budget request. However, the annual plan
is structured according to DOE’s business lines—not its organization—and this structure
makes it difficult to identify the planned performance for any specific DOE office.
Additionally, while DOE describes the strategies it will use to achieve its performance goals,
it does not identify the key external factors that may have a significant effect on its annual
performance.

DOE uses two matrixes to link its annual performance to the program activities in the
President’s budget request. First, for each of its four business lines and corporate
management, it uses a matrix to link its offices and programs to the program activities and
the amounts requested in the budget. Second, DOE uses a matrix to show which office is to
carry out each annual goal and measure and to show which strategic objectives each office
supports. Although this linkage provides the information required by the Results Act, the total
number of individual goals and measures for a specific DOE office may be located in various
parts of the annual plan. As a result, it is difficult to associate this office’s total planned
performance with the funds requested—an association that congressional decisionmakers
may wish to make during their deliberations on the budget request. For example, we
identified 18 annual goals and measures for the Office of Nuclear Energy, Science and
Technology. However, they were included under three different business lines in different
sections of the annual plan. To weigh the planned performance with the budget request of the
Office of Nuclear Energy, Science and Technology, it is necessary to review each goal and
measure in the annual plan to see if the goal and measure is associated with that office. If
DOE were to supplement its annual plan with information showing performance measures by
office, annual goals and measures for each office could be provided in one matrix and
associated with a specific resource level.

Although not required by the Results Act, DOE could make its annual plan more informative
if it identified the key external factors that may have a significant effect on its planned
performance. For example, in its strategic plan, DOE notes that a “revised Environmental
Protection Agency radiological protection standard specific to the Yucca Mountain site is a
prerequisite to getting a Nuclear Regulatory Commission license for permanent storage of
civilian radioactive waste.” However, for its annual goals that deal with Yucca Mountain,
there is no discussion of EPA’s part in the license applications. Additionally, there is no
mention of any actions that the Nuclear Regulatory Commission may take during the
licensing process. DOE could improve the information presented by adding explanatory
footnotes to annual goals that may be affected by key external factors and explaining the
potential effect of the external factors.




Page 7                                             GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




DOE provides a brief description of its strategies after each of its strategic objectives in the
annual plan. Since the annual goals and measures are linked to each strategic objective, this
brief description of the strategies can be associated with the performance goals and measures
listed for each strategic objective. Additionally, DOE’s annual plan partially discusses needed
human resources and technical skills for its federal and contractor workforce. However, it
does not show clearly how these resources and skills will help to achieve the annual goals. As
far back as 1990, we raised concerns over problems that related to the insufficient technical
staff that DOE had to accomplish its programs and oversight functions.1 In October 1997,
DOE reported that it faced challenges in getting needed skilled employees to manage its
contracts.2

The fiscal year 2000 performance plan represents a moderate improvement in addressing the
weaknesses identified in our assessment of the fiscal year 1999 performance plan as it relates
to providing a specific discussion of strategies and resources the agency will use to achieve
performance goals. In reviewing the fiscal year 1999 plan, we observed that the annual plan
did not (1) link all annual performance goals to program activities in the budget request, (2)
show how strategies contributed to achieving annual goals, (3) identify external factors that
might affect the annual goals, and (4) show how human resources and skills would help
achieve the annual goals. Among improvements in the fiscal year 2000 plan are (1) linkages of
all performance goals to program activities in the budget request and (2) strategies that are
linked to strategic objectives and their annual goals.

The Agency’s Performance Plan Provides Limited Confidence
That Agency Performance Information Will Be Credible
The plan provides limited confidence that DOE’s performance information will be credible.
Although DOE recognizes the importance of verifying and validating the performance
measures and the information systems used to assess DOE’s accomplishments, the plan does
not provide details to show how this verification and validation will be performed.

In its annual plan, DOE recognizes the importance of valid and reliable data and reporting
systems for assessing its annual performance. The “validation and verification” and
“demonstrating credible performance” sections of the plan provide an overview of the
information sources (program offices, national laboratories, and contractors), the primary
information system, and the general procedures followed to ensure that performance data


1
    DOE’s Management and Oversight of the Nuclear Weapons Complex (GAO/T-RCED-90-52, Mar. 1990)
2
 Assessment of the Use of Performance-Based Incentives in Performance-Based Management and Management and Integration
Contracts, Office of Procurement and Assistance Management, DOE (Oct. 1997).




Page 8                                                  GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




and reports are reliable and accurate. DOE states that it provides periodic guidance and
training to information providers, requires the heads of organizational elements to certify the
accuracy of data and reports, and conducts its own reviews of the reporting system and
management controls.

DOE’s Inspector General also independently audits the Department’s financial statements
and the performance data reported in the statements. Finally, the annual plan recognizes the
need to assess and improve procedures for collecting and validating the data that will be used
to evaluate DOE’s performance.

Although DOE recognizes the importance of validation and verification, the annual plan could
better translate that general recognition into specific plans for assessing DOE’s performance.
More specifically, the plan could better (1) describe credible procedures to verify and
validate the performance measures and information systems required to assess DOE’s
accomplishments for fiscal year 2000, and (2) identify any significant data and/or information
system limitations, discuss their implications for assessing progress toward performance
goals, and identify any actions needed to correct recognized problems.

The fiscal year 2000 performance plan does not completely address the weaknesses that we
identified in our assessment of the fiscal year 1999 performance plan as it relates to providing
sufficient confidence that the agency’s performance information will be credible. In reviewing
the fiscal year 1999 plan, we observed that the plan did not discuss the details of the
procedures that DOE planned to use to help ensure the quality of data nor did it identify
significant data limitations. These weaknesses continue in the fiscal year 2000 annual plan.

Other Observations on DOE’s Implementation of Performance-
Based Management
DOE’s strategic and annual plans are structured according to business lines, but DOE’s
organizational structure is quite different. Because the business lines are not aligned with the
organizational structure, more than one DOE organization contributes to the same business
line. For example, DOE’s headquarters offices contribute to the goals of more than one
business line. The relationship among programs and business lines becomes more
complicated when the field-level structure is considered, DOE’s field structure includes 10
major operations and field offices and several area offices. Each of these offices may
contribute to the business lines through several headquarters offices. For example, the Oak
Ridge Operations Office performs work for the major headquarters offices as well as for
smaller headquarters offices, and in doing so, performs work for all four business lines. We
believe DOE will need to continually review its organizational structure to better align the
organization with its strategic and annual plans.




Page 9                                             GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




Additionally, the fiscal year 1998 and 1999 annual plans established goals for implementing
“Year 2000” repairs of mission-critical systems. However, Energy did not establish year 2000
goals for fiscal year 2000. While the Department has made significant strides in repairing
mission - critical systems, some of its most essential and complex systems will not be
compliant until October 31, 1999. As a result, independent testing of these systems will not be
completed until November 1999 and testing of core processes that involve these systems will
be delayed as well. Also, DOE is still in the early stages of continuity and contingency
planning with final plans due at the end of August 1999. It will be critical that agencies use the
first quarter of fiscal year 2000 to make sure that all possible measures have been identified
and implemented to ensure that mission performance remains uninterrupted at the turn of
the century.

Additionally, the fiscal year 2000 annual plan did not address how DOE will ensure that the
data it receives from external sources will be year 2000 compliant. Even if an agency has
made its own systems compliant, incorrect data entering from external sources can still
contaminate the systems. DOE will be unable to meet many of its performance goals if
systems external, but critical to the Energy’s mission, fail on the Year 2000 issue.

Agency Comments
On April 13, 1999, we obtained comments from the Director, Strategic Planning, Budget &
Program Evaluation and members of his office, on a draft of our analysis of DOE’s fiscal year
2000 annual performance plan. These officials generally agreed with our observations but
pointed out several areas they felt needed clarification.

DOE believes that its annual plan provides a context for evaluating whether the annual goals
are reasonable because it presents annual goals for three fiscal years. However, they
acknowledge that the strategic plan’s goals and objectives need to be revised to show the
overall goals and objectives that the annual goals seek to fulfill. We agree with DOE that its
strategic plan’s goals and objectives need to be quantifiable to provide a context in which to
evaluate the annual goals and we revised the language in our report to clarify that the
strategic plan’s goals and objectives need to be quantifiable to provide a context in which to
evaluate annual performance goals. DOE also believes that, in our verification and validation
section, we improperly used a material weakness in DOE’s estimating environmental
liabilities as an example. DOE does not believe this is a performance plan issue because it
deals with cost estimating and not performance. We agree with DOE and we have deleted the
example from our report.

In regard to DOE’s efforts to implement “Year 2000” repairs of mission-critical systems, DOE
said that they did not include goals for this effort in its fiscal year 2000 annual plan because it
intends to complete all of its Year 2000 activities by September 30, 1999. This includes its
repairs of mission-critical systems by August 31, 1999 and its final business continuity and




Page 10                                            GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Energy's Annual Performance Plan for Fiscal Year 2000




contingency plans by August 30, 1999. Nevertheless, we believe that DOE should include Year
2000 goals for fiscal year 2000 for several reasons.

First, while DOE has made significant strides in repairing mission-critical systems, some of its
most essential and complex systems are not yet compliant. Further, independent verification
and validation of these systems is not expected to be completed until September 1999—
leaving little time to address unanticipated concerns. Our reviews of other agencies’ Year
2000 activities have shown instances where mission-critical systems deemed as compliant
were later classified as not compliant because of problems identified during verification and
validation of the systems.

Second, achieving individual system compliance, although important, does not necessarily
ensure that core business processes will continue to operate through the end of the century.
Key actions, such as testing interrelated systems within a business process to ensure that
they will function as intended and conducting business continuity and contingency planning,
are vital to ensuring that this goal is met. Any slippage in the Department’s already tight
schedule could delay the critical testing needed to ensure that core processes will continue to
function through the century date change.

Further, another key element of business continuity and contingency planning is the
development of a zero-day or day-one risk reduction strategy, and procedures for the period
between late December 1999 and early January 2000. While Energy has not addressed this
issue in its Year 2000 quarterly reports or in its performance plan, several agencies have
reported that they will be developing and testing day-one strategies through the end of 1999.
It will be critical that agencies use the first quarter of fiscal year 2000 to make sure that all
possible measures have been identified and implemented to ensure that mission performance
remains uninterrupted at the turn of the century.

DOE also offered several technical corrections that we incorporated in our report.




Page 11                                            GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure II

Management Challenges


The following table provides management challenges that we identified and areas of concern
that the DOE Inspector General identified in comparison to the annual performance plan. As
noted in its performance plan, the included measures are only an overview of the
comprehensive set of performance measures and goals set forth in the Department’s full
performance-based budget.

Table II.1: Management Challenges in Energy’s Fiscal Year 2000 Performance Plan
GAO identified management challenge                       Applicable references in the fiscal year 2000 annual
                                                          performance plan
DOE has had difficulty completing large projects.         Objective 4 under DOE’s corporate management strategic
From 1980 through 1996, DOE terminated 31 of 80           goal is to improve the delivery of products and services
major system acquisitions (mission-critical projects      through contract reform and the use of business-like
costing over $100 million) after expenditures of over     management practices. Strategy 5 is to strengthen the
$10 billion.                                              management of projects, materials, facilities, land,
                                                          infrastructure, and other assets; to ensure safe, sound,
                                                          and cost-effective operations, appropriate maintenance of
                                                          sites; and to ensure intended project results. Two
                                                          performance goals and measures are provided:

                                                          •Complete the independent project management reviews
                                                          and forward the applicable reports and Departmental
                                                          position papers to the Congress.
                                                          •Verify progress against established scope, schedule, and
                                                          cost baselines on projects valued at $5 million or more.
DOE’s transition to external regulations is slow. With    Objective 1 under DOE’s corporate management strategic
few exceptions, DOE’s facilities are not licensed or      goal is to ensure the safety and health of the DOE
inspected by independent regulators.                      workforce and members of the public, and the protection
                                                          of the environment in all DOE activities. Strategy 4 is to
                                                          work with the Nuclear Regulatory Commission and the
                                                          Occupational Safety and Health Administration to evaluate
                                                          the costs and benefits of independent external regulation
                                                          of safety and health. DOE has one goal and measure
                                                          under this strategy:

                                                          •Support regulatory transition of legislatively designated
                                                          sites, accomplish necessary planning for appropriate
                                                          classes of DOE facilities to be regulated, and report to the
                                                          Congress on the status of regulatory transition.
DOE’s organizational structure allows challenges to       Objective 3 under DOE’s corporate management strategic
go uncorrected. For example, at its Brookhaven            goal is to use efficient and effective corporate
National laboratory, radioactive tritium leaked into      management systems and approaches to guide decision
groundwater for years because DOE’s weak                  making, streamline and improve operations, align
organizational structure discouraged effective            resources and reduce costs, improve the delivery of
oversight of the contractor’s operations.                 products and services, and evaluate performance.
                                                          Strategy 1 under this goal is to improve decision-making,
                                                          ensure accountability, maximize departmental resources,
                                                          and achieve results by corporately managing the
                                                          Department’s mission, functions, and activities. DOE has
                                                          one goal and measure for this strategy:

                                                          •Develop annual performance-based budgets by using




Page 12                                                 GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure II
Management Challenges




GAO identified management challenge                        Applicable references in the fiscal year 2000 annual
                                                           performance plan
                                                           DOE’s corporate Strategic Management System to link
                                                           resource requirements to 5-year plans, make independent
                                                           project validations, and performing crosscutting program
                                                           evaluations.

Contract management remains vulnerable to risk.            Objective 4 under DOE’s corporate management strategic
DOE relies on its contractors to perform about 90          goal is improve the delivery of products and services
percent of its work.                                       through contract reform and the use of business-like
                                                           management practices. Strategy 2 under this objective is
                                                           to use prudent contracting and business management
                                                           approaches that emphasize results, accountability, and
                                                           competition; improve timeliness; minimize costs; and
                                                           ensure customer satisfaction. DOE’s performance plan
                                                           has three specific goals and measures addressing
                                                           contract reform:

                                                           •Converting one management and operating contract
                                                           awarded in fiscal year 2000 to a performance based
                                                           service contract (PBSC) using the governmentwide
                                                           standards.
                                                           •Convert one support services contract at each major site
                                                           to PBSC using the governmentwide standards.
                                                            Achieve 95 percent of contract professionals certified
                                                           under DOE professional development standards.
DOE’s staff lack technical and management skills.          Objective 1 under DOE’s corporate management strategic
For example, at an Idaho facility, DOE turned to a         goal is to ensure the safety and health of the DOE
private contractor, in part, because it lacked the in-     workforce and members of the public, and the protection
house expertise needed to evaluate technical               of the environment in all DOE activities. DOE’s Strategy 3
cleanup proposals.                                         is to ensure that all DOE employees are appropriately
                                                           trained and technically competent commensurate with
                                                           their environment, safety & health responsibilities.
                                                           Objective 3 under DOE’s corporate management strategic
                                                           goal is to use efficient and effective corporate
                                                           management systems and approaches to guide decision
                                                           making, streamline and improve operations, align
                                                           resources and reduce costs. DOE’s Strategy 3 is to
                                                           implement quality management principles, value diversity,
                                                           and continue to improve human resources systems and
                                                           practices. DOE’s performance plan has two specific goals
                                                           and measures addressing human resource skills.

                                                           •Improve federal technical workforce capabilities at
                                                           defense sites by implementing the fiscal year 2000
                                                           milestones of the Revised Implementation Plan for
                                                           DNFSB Recommendation 93-3.
                                                           •Improve workforce skills and reduce training costs by
                                                           implementing the fiscal year 2000 milestones in the DOE
                                                           Corporate Education, Training, and Development Plan.




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Enclosure II
Management Challenges




Inspector General’s areas of concern                     Applicable goals and measures in the fiscal year 2000
                                                         performance plan
Significant environmental compliance and waste           All of DOE’s environmental quality strategic objectives
management problems at the Department facilities.        address this issue. These objectives contains many
                                                         performance goals and measures.
Nuclear and occupational safety and deficiencies         One of DOE’s corporate management strategic objectives
impair the Department’s ability to ensure the health     addresses this issue. This objective is to “Ensure the
and welfare of workers and the public.                   safety and health of the DOE workforce and members of
                                                         the public, and the protection of environment in all
                                                         Departmental activities. Under this objective, DOE lists
                                                         eight individual performance goals and measures.
The Department’s schedules for permanent disposal        One of DOE’s environmental quality strategic objectives
of radioactive waste generated by nuclear utilities      addresses this issue. This objective is to “Safely and
and weapons complex experienced significant              expeditiously dispose of waste generated by nuclear
delays.                                                  weapons and civilian nuclear research and development
                                                         programs, and make defense high-level radioactive
                                                         wastes disposal-ready. Under this objective, DOE list six
                                                         individual performance goals and measures.
The Department experienced significant                   Measures addressing this concern were discussed above.
weaknesses in contract administration.                   See contract the management issue.
The Department lacks structure for controlling           Measures addressing this concern were discussed above.
program and baseline changes to projects.                See large projects issue.
The Department has extensive inventories of nuclear      Objective 4 under DOE’s national security strategic goal is
and nonnuclear materials that may no longer be           to reduce nuclear weapons stockpiles and the proliferation
necessary due to the end of the cold war or other        threat caused by the possible diversion of nuclear
mission changes.                                         materials. Under this objective, DOE has two strategies
                                                         and several goals and measures including:

                                                         •Adhere to schedules for the safe and secure
                                                         dismantlement of approximately 375 nuclear warheads
                                                         that have been removed form the U.S. nuclear weapons
                                                         stockpile.

                                                         Objective 4 under DOE’s corporate management strategic
                                                         goal is to improve the delivery of products and services
                                                         through contract reform and the use of business-like
                                                         management practices. Strategy 2 under this objective is
                                                         applying business practices to management of DOE
                                                         projects and assets. One goal and measure under this
                                                         strategy is:

                                                         •Define and pursue innovative strategies for promoting
                                                         mortgage reductions through disposition of excess
                                                         property, including real estate, facilities, and materials.
Much of the Department’s infrastructure is in poor       None, however objective 3 under DOE’s national security
condition.                                               strategic goal is to ensure the vitality of DOE’s national
                                                         security enterprise. Strategy 5 under this objective is to
                                                         maintain readiness for nuclear or other emergencies. Two
                                                         goals and measures under this strategy is:

                                                         •Ensure that the capability to resume underground testing




Page 14                                                GAO/RCED-99-218R DOE’s Fiscal Year 2000 Performance Plan
Enclosure II
Management Challenges




Inspector General’s areas of concern                   Applicable goals and measures in the fiscal year 2000
                                                       performance plan
                                                       is maintained in accordance with the Presidential Decision
                                                       Directive and Safeguard C of the CTBT.

                                                       •Maintain robust emergency response assets in
                                                       accordance with Presidential Decision Directive 39, The
                                                       Atomic Energy Act, Executive Order 12656, and Federal
                                                       Emergency Plans.
The Department has significant deficiencies in its     None identified.
control over Government personal property.
Department officials and others have raised            Although not identified in the annual plan, DOE plans to
concerns about access to sensitive materials, areas,   include an additional strategy, goal and measure in its
and information, and about physical security.          performance agreement with the President to deal with
                                                       counterintelligence activities.
The Department is not making satisfactory progress     Objective 5 under DOE’s corporate management strategic
in dealing with the computer-related century date      goal is to implement information systems so employees
change issue according to the Office of Management     can perform their jobs efficiently and effectively. Under this
and Budget.                                            objective, DOE’s strategy is ensuring department’s
                                                       information systems are based on cost effective
                                                       technology solutions. Its performance goal and measure is
                                                       to:

                                                       •Complete all fiscal year 2000 milestones in its Corporate
                                                       Management Information Program.




(141301)




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