A PROJECT TO IMPROVE FEDERAL EVALUATION PLANNING HAS BEEN DEVELOPED BY THE URBAN INSTITUTE IN ITS WORK FOR THE DEPARTMENT OF LABOR AND THE NATIONAL INSTITUTE OF MENTAL HEALTH. THE APPROACH EMPHASIZES BOTH THE USEFULNESS OF THE EVALUATION RESULTS AND THE COST EFFECTIVENESS OF THE EVALUATION. EVALUATIONS ARE MORE USEFUL WHEN THEY ARE PART OF AN OVERALL PLAN AND NOT MERELY A ONE-TIME PROJECT. COORDINATING A NUMBER OF EVALUATIONS THROUGH A CENTRAL OFFICE INSURES SOME CONTINUITY OF APPROACH AMONG EVALUATIONS, AN OVERLAP OF EXPERTISE AS EVALUATORS BECOME FAMILAR WITH AGENCY GOALS, AND BETTER USE OF HIGHER QUALITY EVALUATION PERSONNEL. CENTRALIZATION WOULD INSURE FEED-BACK AT MANAGEMENT LEVELS AND ALSO PROVIDE ECONOMIES IN POLICY PLANNING. THE RESULTS OF MANY EVALUATIONS WOULD BE AVAILABLE. THREE DIAGRAMS ARE INCLUDED WHICH EXPLAIN VARIOUS MANAGEMENT SYSTEMS USING EVALUATION. IN THE SIMPLISTIC MODEL, A PROGRAM IS EVALUATED, AND THE RESULTS ARE CHANNELED BACK TO AN ADMINISTRATOR WHO MAY OR MAY NOT ACT ON IT. IN THE COMPLIANCE EVALUATION MODEL, AN EVALUATION IS USED TO BRING PROGRAMS INTO COMPLIANCE EITHER THROUGH THE CREATION OF NEW ESTABLISHMENTS OR THROUGH CHANGES IN EXISTING ESTABLISHMENTS. A PREFERRED MODEL IS THEN PRESENTED WHICH USES EVALUATION NOT ONLY TO EFFECT CHANGES IN EXISTING PROGRAMS BUT ALSO TO PROVIDE INFORMATION FOR THE DEVELOPMENT OF NEW PROGRAMS AND FOR MAKING MANAGEMENT DECISIONS FOR RELATED PROGRAMS. SINCE THE COST OF AN EVALUATION NOT ONLY INCLUDES THE COST OF DATA COLLECTION AND PROCESSING BUT ALSO THE COST OF IMPLEMENTING RESULTS, THE WIDER THE IMPLEMENTATION OF RESULTS, THE LESS THE TOTAL COST. SUCH ECONOMIES CAN BE REALIZED WHEN EVALUATION IS CONSIDERED A TOTAL AGENCY PROCESS AND NOT SIMPLY AN ISOLATED SERIES OF EVENTS. (GLR)