The Department of Energy Needs Better Procedures for Selecting a Contractor To Operate Argonne National Laboratory

EMD-81-66: Published: Jun 8, 1981. Publicly Released: Jun 8, 1981.

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As part of a continuing evaluation of the Department of Energy's (DOE) management of its substantial research and development resources and activities, GAO evaluated the DOE decision to extend the existing contract to operate the Argonne National Laboratory and the procedures it used in awarding the contract to the incumbent contractors. Argonne is unique because it is operated by two contractors, the University of Chicago and the Argonne Universities Association. Under the current contract, DOE pays each contractor an annual management allowance for its services, in addition to paying for the actual costs of Laboratory operations. However, the current contract does not have any financial performance incentives.

In its review, GAO found that: (1) DOE did little to determine the availability and potential benefits of competition; (2) DOE did not schedule its extend or compete decision early enough to award a new contract using competitive procurement procedures; (3) DOE did not carry out consistent and timely evaluations of the contractors' performances, based on preestablished criteria, with feedback of results to the contractors; (4) for the fifth consecutive time, DOE extended the Argonne contract for a shorter than normal period because one DOE program office was not satisfied with the contractors' performances; (5) DOE did not obtain contractors' commitments to fully perform their contractual duties despite DOE findings that neither contractor was fulfilling its assigned duties; and (6) DOE did not end the two-contractor arrangement even though the arrangement's primary original purpose, to permit member universities of the Argonne Universities Association access to a high-energy particle accelerator, no longer exists.

Recommendations for Executive Action

  1. Status: Closed

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

    Recommendation: The Secretary of Energy should identify and document the availability and potential benefits of competition and complete the extend or compete the decision process early enough so that competitively awarding a new Argonne operating contract becomes a realistic alternative to extending the existing contract.

    Agency Affected: Department of Energy

  2. Status: Closed

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

    Recommendation: The Secretary of Energy should limit the number of times a contract may be extended for shorter than normal periods as a probationary measure.

    Agency Affected: Department of Energy

  3. Status: Closed

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

    Recommendation: The Secretary of Energy should either enforce the existing contract or renegotiate it, with a corresponding reduction in contractor management allowance, to reflect the contractors' actual duties.

    Agency Affected: Department of Energy

  4. Status: Closed

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

    Recommendation: The Secretary of Energy should establish and communicate to the Argonne contractors the role the Department of Energy expects Argonne to play in carrying out the DOE program objectives.

    Agency Affected: Department of Energy

  5. Status: Closed

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

    Recommendation: The Secretary of Energy should suspend any planned renovation or expansion of Argonne facilities and purchase of major equipment until Argonne's role is established, and base future facility and equipment improvements on the established role.

    Agency Affected: Department of Energy

  6. Status: Closed

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

    Recommendation: The Secretary of Energy should end the two-contractor arrangement when the contract expires on September 30, 1983.

    Agency Affected: Department of Energy

  7. Status: Closed

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

    Recommendation: The Secretary of Energy should establish criteria for evaluating the contractors' past performances and capabilities of meeting the Department of Energy's future requirements, consistent with Argonne's established role, and conduct formal evaluations with feedback to the contractors on a periodic basis.

    Agency Affected: Department of Energy

 

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