Department of Energy contract/business management initiatives

More than 40 years ago the Department of Energy (DOE) developed a unique contractual instrument called a management and operating contract, to be used for the operation of our weapons production plants and the national laboratories. The contracts are very broad in scope. There is no output objective set forth in the contract. There are no cost targets, nor any contractually motivated cost objectives. Performance is measured against criteria which is often subjective. The time has come to make changes in the structure of these contracts to reflect changes in the work being performed and to make the contractors more accountable. DOE's work now, at these sites, and for years to come, consists largely of major project-type work such as environmental restoration which lends itself to a more definitized structure. DOE is in the process of implementing a work order authorization control system (task order contracting) under its management and operating contracts. Target date for implementation for our for-profit contractors is FY 1992, and for the non-profit contractors is FY 1993. Under this system, requirements will be contracted for as entities of work and contractors will be held accountable for performance, schedules and costs. Billings, payments and award fee will be tied to the specific planning objectives set forth in the tasks, including costs and schedules. Incentives will be provided for outstanding performance, fee may be withheld if performance is unacceptable. These changes will necessitate more DOE oversight of contractor operations and sound business support systems, as well as effective management disciplines. US DOE will perform business management reviews to assure contractors' systems are adequate and to support this form of contracting. The Contractor Procurement Systems Review Program will be enhanced to assure good subcontractor procurement practices