Major Management Challenges and Program Risks

This publication is part of GAO's performance and accountability series which provides a comprehensive assessment of government management, particularly the management challenges and program risks confronting federal agencies. Using a "performance-based management" approach, this landmark set of reports focuses on the results of government programs--how they affect the American taxpayer--rather than on the processes of government. This approach integrates thinking about organization, product and service delivery, use of technology, and human capital practices into every decision about the results that the government hopes to achieve. The series includes an overview volume discussing governmentwide management issues and 20 individual reports on the challenges facing specific cabinet departments and independent agencies. The reports take advantage of the wealth of new information made possible by management reform legislation, including audited financial statements for major federal agencies, mandated by the Chief Financial Officers Act, and strategic and performance plans required by the Government Performance and Results Act. In a companion volume to this series, GAO also updates its high-risk list of government operations and programs that are particularly vulnerable to waste, fraud, abuse, and mismanagement.

GAO noted that: (1) DOE has had difficulty completing large projects on time and within budget; (2) from 1980 through 1996, DOE terminated 31 of 80 major system acquisitions (mission-critical projects costing over $100 million) before completion, after expenditures of over $10 billion, and completed only 15, most of which were behind schedule and over budget; (3) with few exceptions, DOE's facilities are not licensed or inspected by independent regulators to help ensure safe operations; (4) the Department's own advisory committee concluded that widespread environmental contamination at DOE facilities and the immense costs associated with their cleanup provide clear evidence that self-regulation has failed; (5) while DOE agreed to external regulation in these areas, its commitment appears to be lagging; (6) DOE's ineffective organizational structure blurs accountability, allowing problems to go undetected and remain uncorrected; (7) DOE relies on contractors to perform about 90 percent of its work; (8) recently, it has significantly increased its use of competition in selecting contractors to manage and operate its major facilities, but it should do more; (9) however, it is still not competitively awarding contracts for environmental restoration work at its national laboratories, even though it does so at other facilities; (10) in addition, although DOE originally planned to shift risk from the federal government to private contractors as a means of enhancing their performance, it now considers risk-sharing more appropriate; (11) DOE's staff lack technical and management skills needed to oversee complex operations; (12) finding enough staff with the necessary skills presents a serious challenge to DOE, particularly in light of recent downsizing initiatives; (13) to correct performance and management challenges, DOE developed a strategic plan for contract reform in 1994; (14) in addition, during the early 1990s, DOE conducted or commissioned several studies of the missions and organization of its national laboratories; (15) DOE completed strategic and annual performance plans under the Results Act; and (16) these plans responded to reported criticisms of DOE's operations and established goals and measures for improved performance.