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Audit Report: WR-B-00-05

April 3, 2000

Performance Incentives at the Idaho National Engineering and Environmental Laboratory

In 1994, the Department of Energy (DOE) decided to replace its standard management and operating contract with a new performance-based contract. Such contracts were to include incentives to improve performance and/or reduce costs. The contract awarded by the Idaho Operations Office (Idaho) to Lockheed Martin Idaho Technologies Company (Lockheed) in 1995 for the operation of the Idaho National Engineering and Environmental Laboratory (INEEL) was the first to incorporate performance-based incentives. The objective of our audit was to determine whether performance-based incentives at the INEEL had improved performance and reduced costs