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
