Audit Report on "Work for Others Performed by the Department of Energy for the Department of Defense"
Pursuant to the Atomic Energy Act of 1954, as amended, and the Economy Act of 1932, the Department of Energy and its semi-autonomous National Nuclear Security Administration (NNSA) provide research and technical assistance to other Federal agencies on a reimbursable, full cost recovery basis through the Work for Others (WFO) program. For the vast majority of WFO technical projects, Department Federal officials furnish administrative project oversight while the actual detailed scientific or technical work is completed by the Department's 'management and operating' contractors. These contractors are awarded a special contract type specifically created under the Federal Acquisition Regulation to manage and operate Department sites and facilities, including sophisticated laboratories and technical centers, on a government-owned, contractor-operated basis. With annual expenditures exceeding $1 billion, the Department of Defense (DoD) is one of the Department's largest WFO customers. Work performed for DoD at the Department's national laboratories and other facilities includes highly technical research in areas such as nuclear weapons systems, counter-terrorism, and in-theater troop support. The National Defense Authorization Act for Fiscal Year (FY) 2009, required the Inspectors General of the DoD and the Department to review procurement methods to determine whether the Department complied with DoD procurement requirements and/or whether alternative procurement policies were in place. In response, we focused our review on projects performed by NNSA because it completes the vast majority (approximately $900 million in FY 2008) of the Department's work for DoD. As part of this effort, and, at the specific request of the DoD Office of Inspector General (DoD OIG), we identified the universe of WFO technical projects that received new funding in the fourth quarter of FY 2008 at NNSA sites. We independently reviewed a judgmental sample of 11 projects selected by the DoD OIG to meet the objectives of this audit. Our review revealed that NNSA managed DoD WFO technical projects in a manner consistent with requirements of the Atomic Energy Act of 1954, the Federal Acquisition Regulation, and the Department's implementing guidance, the Department of Energy Acquisition Regulation. Because of the very nature of the Department's management and operating contracting model, WFO projects may not be technically compliant with DoD procurement regulations in certain instances. We found that NNSA did not let new contracts or task orders for the DoD WFO technical projects we reviewed and instead managed them under its existing internal control process as part of its management and operating contract structure. In one instance, we noted that the Department had, at DoD's request, supplemented its control structure to incorporate specific DoD procurement requirements. Senior Department of Energy procurement officials acknowledged that neither the Department nor NNSA modified their existing prime contracts to incorporate specific defense procurement requirements because such modifications would be inappropriate, costly, and inefficient. In short, they informed us that the Department had developed and implemented a series of controls designed to monitor overall contractor performance, including WFO technical projects. Department and NNSA officials noted, however, that they were willing to incorporate DoD specific requirements into work orders should DoD request and fund such efforts. Additional details regarding management of WFO technical projects are discussed in the body of this report.
- Research Organization:
- DOEIG (USDOE Office of the Inspector General (IG) (United States))
- Sponsoring Organization:
- USDOE
- OSTI ID:
- 967390
- Report Number(s):
- DOE/IG-0829; TRN: US200924%%160
- Country of Publication:
- United States
- Language:
- English
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