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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: May 23, 2000

FROM: Barry McVay, CPCM

SUBJECT: Department of Energy; Initiative to Improve Contractor Accountability and Performance

SOURCE: Department of Energy Press Release, May 19, 2000

AGENCIES: Department of Energy (DOE)

ACTION: Announcement

SYNOPSIS: On May 19, 2000, Secretary of Energy Bill Richardson announced an initiative designed to boost contractor performance management. The initiative includes strengthening DOE's ability to sanction poor contractor performance and reward outstanding performance, and gives the secretary of energy the authority to direct contractors to remove senior contract managers who perform poorly.

FOR FURTHER INFORMATION CONTACT: Lisa Cutler, 202-586-5806.

SUPPLEMENTAL INFORMATION: DOE is administering 30 facility management and operating (M&O) contracts worth over $50 billion that extend through this decade. DOE has been working to reform its contractor performance management in several ways, including implementing performance-based contracting to tie sanctions and rewards to progress toward achieving annual contract performance measures. While this effort has seen some success, there are still problems.

Three of the problems mentioned are: (1) fees are not always aligned with performance goals -- some contractors have earned high fees without commensurate results; (2) there are no clear and consistent criterion for decisions on whether to extend contracts under option provisions; and (3) there is inadequate linkage of performance standards with DOE's strategic planning.

Secretary Richardson's initiative requires greater responsibility and accountability from both the department's senior managers and its contractors. Its major provisions include:

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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