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Audit Report: OAS-M-06-07

August 24, 2006

Management Controls over Performance Fees in the Idaho National Laboratory Contract

The Department of Energy (Department) did not always effectively use performance measures and fees to appropriately reward contractor performance. Specifically, the Department allocated approximately $1.1 million for 3 of the 27 performance measures and fees for Fiscal Year (FY) 2005, which were disproportionately high for the work performed. Four of the 49 measures and fees established for FY 2006 provided the contractor the opportunity to earn $1 million under similar circumstances. Also, some of the performance measures worth $460,000, were implemented well after the performance period began.