Unauthorized Commitments:

An Abuse of Contracting Authority in the Department of Energy

EMD-81-12: Published: Dec 4, 1980. Publicly Released: Feb 3, 1981.

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In fiscal year 1979, the Department of Energy's (DOE) reported obligations made it the largest civil procuring agency in the Federal Government. The Federal Procurement Regulations, which govern most civilian agency purchases, give exclusive authority for establishing contracts to authorized contracting officers. However, DOE program personnel, who do not have contracting authority, have asked contractors to perform work. This circumvents established procurement regulations and eliminates the opportunity for competition. DOE has established special ratification procedures for entering into contracts after unauthorized commitments have been made. These procedures require a detailed account of why the commitment was made, reviews by the contracting officer and General Counsel, and approval by the head of the procuring activity. However, some offices have predated contracts or issued retroactive precontract authorizations instead of following DOE ratification procedures for unauthorized commitments.

Circumventing the normal procurement cycle will likely continue until DOE successfully eliminates the causes of unauthorized commitments. There are three major reasons for unauthorized commitments: (1) DOE program officials often fail to plan procurement needs far enough in advance to utilize normal contracting procedures; (2) program officials encounter emergency program requirements and do not believe that enough time is available to go through normal procurement procedures; and (3) program officials fail to expeditiously review, approve, and transmit procurement requests to the procurement office. Regardless of the cause, the Antideficiency Act is violated when DOE program officials make unauthorized commitments and accept voluntary goods or services from a contractor before funds have been appropriated by Congress. In addition, DOE Procurement Regulations do not contain the same restrictions as the Federal Procurement Regulations on ratifying improper commitments which would not be allowed by the Federal Procurement Regulations. While there may be instances where it is necessary to allow a contractor to begin work before a contract is established, unauthorized commitments are never an appropriate means of obtaining goods or services. DOE needs to establish a formal method of monitoring unauthorized commitments. Until it can accurately estimate how widespread the use of unauthorized commitments is, it will be difficult to attempt to eliminate them.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOE has added coverage of various procurement issues in its training of program personnel and considers this to be adequate implementation of the recommendation.

    Recommendation: The Secretary of Energy should take action to develop a program to educate all agency personnel who are responsible for initiating procurement requests in the proper procedures for emergency procurement situations.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Energy should take action to amend DOE procurement regulations governing ratifications to make them consistent with the Federal Procurement Regulations.

    Agency Affected: Department of Energy

  3. Status: Closed - Not Implemented

    Comments: DOE stated that it already had a system in place to ensure adequate procurement planning. Although GAO found it to be poorly implemented at the time of the review, current DOE budget reductions have forced more effective implementation.

    Recommendation: The Secretary of Energy should take action to require all program offices in DOE to effectively plan procurement actions one year in advance and enter them into the existing DOE planning system.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Energy should take action to clearly define in the DOE regulations the circumstances under which a formal ratification can be made.

    Agency Affected: Department of Energy

  5. Status: Closed - Not Implemented

    Comments: DOE believes that its current informal system of identifying unauthorized commitments is adequate.

    Recommendation: The Secretary of Energy should take action to develop procedures for identifying unauthorized commitments within the Department.

    Agency Affected: Department of Energy

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Energy should take action to eliminate violations of the Anti-Deficiency Act.

    Agency Affected: Department of Energy

  7. Status: Closed - Not Implemented

    Comments: DOE questioned its program groups concerning tracking of procurement requests and was assured that "appropriate controls were in place." DOE does not intend to act further.

    Recommendation: The Secretary of Energy should take action to develop a procurement request tracking system within each DOE program group to ensure that requests are reviewed and approved in a timely manner.

    Agency Affected: Department of Energy

 

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