Energy Management:

DOE Needs to Better Implement Conflict-of-Interest Controls

RCED-91-15: Published: Dec 26, 1990. Publicly Released: Jan 25, 1991.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) controls over conflicts of interest in subcontracts awarded by its research centers, focusing on: (1) DOE policies and procedures for identifying and avoiding conflicts of interest; and (2) implementation of those policies.

GAO found that: (1) DOE regulations relied on subcontractors' self-reporting for identifying possible conflicts of interest; (2) DOE research centers did not properly implement conflict-of-interest determination policies and procedures; (3) the DOE Albuquerque Operations Office improperly allowed the Los Alamos and Sandia research centers to review subcontracts for conflicts of interest resulting in three cases of possible conflicts of interest; (4) Albuquerque failed to verify the accuracy of subcontractors' certifications; (5) Sandia's practices did not follow DOE regulations or approved procedures; (6) Los Alamos and Sandia failed to document their conflict-of-interest decisions; (7) DOE headquarters and the Albuquerque Operations Office failed to exercise proper oversight to ensure avoidance of conflict of interest; and (8) as a result of this review, Albuquerque began to bring its practices into compliance with DOE regulations. In addition, GAO noted that it was unable to test whether policies and procedures were effective, since Albuquerque had not properly implemented them.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Secretary of Energy should direct the Manager, Albuquerque operations office, to explore options to improve the reliability of the conflict-of-interest information that its research centers' subcontractors submit. In exploring options, Albuquerque should consider reviewing a randomly selected sample of submissions and imposing administrative sanctions on subcontractors that submit incomplete or inaccurate information.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE conducted training on conflict policies and procedures in May 1991 to enable contractors and reviewers to recognize problems. Albuquerque will follow up to ensure that appropriate personnel have received this training.

    Recommendation: The Secretary of Energy should ensure that the Director of Procurement, Assistance, and Program Management revises DOE headquarters' oversight procedures so that they rely less on self-disclosures by the operations offices to identify problems with the implementation of conflict-of-interest policies and procedures.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE has highlighted and placed special emphasis on conflict-of-interest issues in its procurement management assistance reviews, according to DOE officials. If the operations offices do not perform adequately, the procurement executive will take corrective action.

    Recommendation: The Secretary of Energy should direct the Manager, Albuquerque operations office, to ensure that: (1) Albuquerque's oversight reviews focus on the adequacy of Sandia's and Los Alamos' implementation of conflict-of-interest requirements; and (2) operations office officials follow up on research centers' actions to ensure that identified weaknesses are corrected.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE stated that deficiencies found will be addressed by Albuquerque officials and then followed up quarterly until resolved. DOE stated that oversight will be enhanced by requiring inclusion of a sample of conflict actions in the judgmental sample of contract actions during quarterly surveillance.

    Recommendation: The Secretary of Energy should determine whether the conflict-of-interest problems identified at the Albuquerque operations office exist at other operations offices.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE revised its criteria for assessing the application of conflict determinations by each contracting office. DOE officials stated that they have made conflict-of-interest issues a point of emphasis in DOE procurement management assistance reviews.

    Recommendation: The Secretary of Energy should direct the Manager, Albuquerque operations office, to ensure that its research centers forward subcontracts in the specified categories to Albuquerque for conflict-of-interest determinations.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE approved revised procedures for Sandia and Los Alamos which require that subcontracts be forwarded to Albuquerque for OCI determinations. DOE plans to assess the research centers' compliance during the operations offices' periodic reviews.

    Recommendation: The Secretary of Energy should ensure that the Albuquerque Operations Office has sufficient resources to carry out its conflict-of-interest responsibilities.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: The DOE Albuquerque Operations Office found that the workload of potential conflict-of-interest cases is not as great as it originally estimated. A review of Albuquerque's procurement function by a headquarters team showed that Albuquerque was carrying out all of its conflict-of-interest activities.

    Recommendation: The Secretary of Energy should direct the Manager, Albuquerque operations office, and the managers of its other operations offices, if appropriate, to take the necessary measures to ensure that conflict-of-interest decisions are well documented.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE stated that its policies and procedures now require decisions and actions to be documented and that when a field activity is less than satisfactory, corrective action will be taken.

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