The Department of Energy's Practices for Awarding and Administering Contracts Need To Be Improved

EMD-80-2: Published: Nov 2, 1979. Publicly Released: Nov 15, 1979.

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The Department of Energy (DOE) is the largest civil procuring agency in the Federal Government. Its contracting obligations represented 79 percent of its total fiscal year 1978 appropriations of $10.8 billion. With such a heavy reliance on contractors to help carry out its missions, an effective and efficient procurement function is essential to ensure that DOE obtains acceptable goods and services at the lowest prices. A review of DOE procurement practices and procedures focused on five DOE organizations.

Many problems have resulted from the DOE failure to adhere to sound procurement practices. Extensive use of sole-source contracts, task order contracts, and quick-reaction work-order master contracts avoid or limit competition. Some contracts for basic management functions require the contractors to perform activities such as program planning and development, and establishing goals and priorities, thereby offering the potential for allowing the contractor to determine energy policy. Contracting officers are delegating responsibility to program personnel which weakens DOE control over work performed by contractors. In addition, at the time of the review, a backlog of over 2,500 expired contracts existed in the headquarters procurement office. Timely closeout of the expired contracts is important to provide final assurance that Government funds were properly expended for work performed and to avoid claims by the contractor which may be difficult and costly to handle as time progresses. All of these problems lessen DOE assurance that it is contracting for goods and services which are actually required, and that it is efficiently, effectively, and fairly obtaining an acceptable product at the best possible price. Because the DOE procurement office appears to be stressing its role as a service organization at the expense of adhering to sound procurement practices, GAO believes DOE personnel would benefit from undergoing a reeducation process.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Energy should direct DOE to: (1) take action to ensure that competition for DOE contracts is maximized and that sole-source contracts, task order contracts, quick-reaction work-order master contracts, and contract ratifications are used only as exceptions to normal contracting practices; and (2) establish specific guidelines to more explicitly delineate the types of management tasks which are and are not acceptable for contractors to perform. The Secretary should also direct that contracting officers maintain administrative control over contracts in the areas of voucher approval and contract monitoring, and maintain responsibility for contracts assigned to other Government agencies for closeout. In addition, the Secretary should establish a training program to reeducate procurement and program personnel in their respective procurement roles and responsibilities. With the assistance of the DOE Office of the Inspector General, the Secretary should direct that a Department-wide review be made of contracting policies and practices and require that these policies and practices be periodically monitored.

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