Special Care Needed in Selecting Projects for the Alternative Fuels Program

Under the Alternative Fuels Program, the Department of Energy (DOE) is authorized to provide various forms of financial assistance to expedite the commercial production of alternative fuels. DOE procedures and criteria for soliciting, evaluating, and selecting the recipients of feasibility study and cooperative agreement grants were reviewed.

The work performed by DOE evaluation boards and the oversight provided by the Source Evaluation Boards was reasonably comprehensive and thorough. Evaluation criteria was appropriate and appeared to be applied consistently. However, frequent use of program policy factors such as geographic diversity heightened concern regarding the integrity of the selection process. Policy factors were assigned no priority, and DOE officials could apply any or none of them in choosing among proposals. As a result, the feasibility study projects which the Senior Review Board chose differed substantially from the rankings developed by the evaluation teams and Source Evaluation Board. The application by the Senior Review Board of the geographical diversity and technical mix factors weighed heavily in the final selection of projects and generally accounted for this difference. A need exists for policy judgments and some flexibility in the selection process. The myriad of factors which DOE considered in selecting projects indicates that it did not lose sight of the program objective. However, frequent use of policy considerations is an area requiring special care to avoid any inferences of impropriety in future project selections.