National Laboratories:

DOE Needs to Improve Oversight of Work Performed for Non-DOE Entities

GAO-14-78: Published: Oct 25, 2013. Publicly Released: Nov 25, 2013.

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What GAO Found

In fiscal years 2008 through 2012, the Department of Energy (DOE) performed about $2 billion annually of Work for Others (WFO) projects, as measured by the costs incurred. Although the amount of WFO performed has remained relatively constant over the last 5 years overall, WFO as a percentage of the total work performed at the laboratories--measured in total laboratory costs incurred--has declined from 17 percent in fiscal year 2008 to about 13 percent in fiscal year 2012. In fiscal year 2012, the WFO program included more than 6,500 projects. About 88 percent of this work was for other federal agencies, with the majority of it performed for the Department of Defense. For example, one project for the Army applies a laboratory's expertise in laser decontamination of surfaces to develop a system that will remove chemical agent residues from equipment. The remaining WFO work was sponsored by nonfederal entities, including state and local governments, universities, private industry, and foreign entities.

DOE officials have not ensured that WFO program requirements are consistently met. For example, a DOE official is required to determine whether a proposed WFO project has met DOE requirements for accepting work before approving, or certifying, the work and this responsibility may not be delegated to the laboratories. However, DOE officials from site offices at 8 of the 17 laboratories reported that these determinations were made by the laboratories and that the DOE officials did not take steps to independently verify the determinations prior to approving the work. DOE also cannot ensure that the full costs of materials and services for WFO projects are charged to sponsors because 12 of 17 laboratories have limited or no written procedures for developing WFO project budgets or charging costs to ongoing projects, two important steps for recovering the full costs of materials and services. A 2013 DOE Office of Inspector General report found that the costs of administering WFO projects at one laboratory were allocated to DOE projects, resulting in an estimated $400,000 in WFO project costs that were not reimbursed to the laboratory. DOE requires that its program offices annually review the WFO program at each of its laboratories. However, DOE requirements do not specify what the reviews should include, and DOE program offices varied in what they consider to be an annual review. DOE also requires the department's Chief Financial Officer to report annually on the activities conducted under the WFO program, but DOE officials told GAO that they no longer produce the report because the requirement is outdated, choosing instead to fulfill data requests on a case-by-case basis. As a result, DOE does not have data that are comparable across laboratories or over time.

DOE has not measured the extent to which WFO program performance is measured against program objectives and has not established performance measures to do so. Some DOE site offices and laboratories have taken steps to evaluate the performance of the WFO program, but these steps are not consistent across the laboratories, do not incorporate key attributes of successful performance measures, and do not address the WFO program objectives. Recent internal and external reviews of the laboratories have recommended that DOE establish clear measures to evaluate laboratory WFO program performance against the WFO program objectives. DOE officials told GAO that they do not believe it is appropriate to develop one set of measures for all laboratories and that they do not plan to do so.

Why GAO Did This Study

DOE's 17 national laboratories house cutting-edge scientific facilities and equipment, ranging from high-performance computers to ultra-bright X-ray sources for investigating fundamental properties of materials. DOE allows the capabilities of the laboratories to be made available to perform work for other federal agencies and nonfederal entities through its WFO program, provided that the work does not hinder DOE's mission or compete with the private sector, among other things. GAO was asked to review the WFO program. GAO examined (1) the amount and type of work conducted under the program, (2) the extent to which DOE has ensured that WFO program requirements are met, and (3) the extent to which program performance is measured against WFO program objectives. GAO reviewed DOE and laboratory data and documents, internal and external review reports, and interviewed officials from DOE and the laboratories.

What GAO Recommends

GAO recommends, among other things, that DOE take steps to ensure compliance with project approval requirements; require laboratories to establish written procedures for charging costs to projects; specify what the annual program reviews should include; produce annual reports on WFO activities; and establish performance measures for the WFO program. DOE generally agreed with the report and its recommendations.

For more information, contact David C. Trimble at (202) 512-3841 or trimbled@gao.gov.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to this recommendation, on June 17, 2014, DOE issued Policy Flash 2014-32 to its Procurement Directors/Contracting Officers (COs)reminding them that "DOE Order 481.1C, Work for Others [WFO] (Non-DOE Funded Work) assigns decision responsibility for WFO project determinations and written certification to authorized DOE officials. DOE policy specifically prohibits delegation of these responsibilities to contractors". The Policy Flash further stated "DOE WFO policy requires specific information to be provided by non-DOE project sponsors and DOE contractors. However, it is the DOE COs responsibility to ensure independent final determinations and written certifications are completed by DOE officials."

    Recommendation: To improve DOE's management and oversight of the WFO program, the Secretary of Energy should ensure compliance with the requirements in the WFO order for project approval.

    Agency Affected: Department of Energy

  2. Status: Open

    Comments: According to DOE, the Chief Financial Officer will address this recommendation as part of the revisions to DOE Order 520.1A. As of March 2017, DOE anticipates that the updated order will be completed in the first quarter of fiscal year 2018.

    Recommendation: To improve DOE's management and oversight of the WFO program, the Secretary of Energy should require laboratories to establish and follow written procedures for developing WFO project budgets and for charging costs to WFO projects.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: On November 27, 2013 the department's headquarters CFO issued a reminder to Field CFOs of the requirements for conducting and documenting the review of prices charged for DOE materials and services for reimbursable work (Work For Others) and directed the field CFOs to submit the review reports.

    Recommendation: To improve DOE's management and oversight of the WFO program, the Secretary of Energy should ensure compliance with the requirements for conducting biennial pricing reviews.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: DOE issued revised order 481.1D, Strategic Partnership Projects (SPP) [formerly know as Work for Others)(Non-Department of Energy Work)] on December 5, 2016. The order states that SPP reviews should include an assessment of review and approval procedures to ensure compliance with DOE-wide SPP policies and procedures. The order includes a detailed list of SPP policies and procedures.

    Recommendation: To improve DOE's management and oversight of the WFO program, the Secretary of Energy should specify in the WFO order what the annual WFO program reviews should include.

    Agency Affected: Department of Energy

  5. Status: Open

    Comments: On December 5, 2016, DOE issued revised order 481.1D, Strategic Partnership Projects (SPP) [Formerly Known as Work for Others (Non-Department of Energy Funded Work)] and has removed the requirement to issue annual summary reports of Work for Others activities. Instead, the revised order states that reports can be prepared on an "as needed" basis.

    Recommendation: To improve DOE's management and oversight of the WFO program, the Secretary of Energy should ensure that annual summary reports of WFO activities are prepared so that data on those activities are readily available for those who need this information.

    Agency Affected: Department of Energy

  6. Status: Open

    Comments: On December 5, 2016, DOE issued revised order 481.1D Strategic Partnership Projects (SPP)[Formerly Known as Work for Others (Non-Department of Energy Funded Work)]. DOE states that this order addresses performance measures and that the corrective action is closed. Although the order directs DOE Field Office Managers to "establish performance measures to assess the effectiveness of the procedures for SPP review, acceptance, authorization and monitoring consistent with NNSA policies and procedures", it does not further identify specific performance measures that address the objectives of the SPP program as indicated in the order.

    Recommendation: To improve DOE's management and oversight of the WFO program, the Secretary of Energy should establish performance measures that incorporate key attributes of successful performance measures and that address the objectives of the WFO program.

    Agency Affected: Department of Energy

 

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