Nuclear Nonproliferation:

DOE Needs Better Controls to Identify Contractors Having Foreign Interests

RCED-91-83: Published: Mar 25, 1991. Publicly Released: Apr 25, 1991.

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Pursuant to a congressional request, GAO reviewed whether the Department of Energy (DOE) and three of its weapons laboratories complied with DOE regulations and procedures designed to protect the United States against uncontrolled transfers of nuclear weapons-related technology or material to entities that are foreign owned, controlled, or influenced (FOCI) U.S. companies performing classified work for DOE.

GAO found that: (1) DOE and its government-owned, contractor-operated weapons laboratories did not fully comply with DOE regulations and procedures aimed at determining contractors' vulnerability to foreign interests and preventing associated risks; (2) DOE did not follow FOCI procedures for 98 percent of the classified contracts it awarded from October 1987 through March 1990 that were subject to such procedures; (3) none of the eight DOE field operations offices completely complied with FOCI procedures when awarding management and operating contracts; (4) DOE regulations for determining whether contractors were subject to FOCI were inadequate; (5) the regulations required DOE contracting officers to make national security determinations, even though DOE safeguards and security officials were more qualified to make such determinations; (6) numerous DOE FOCI requirements were burdensome, and some were inconsistent with Department of Defense (DOD) regulations for determining whether DOD contractors were subject to FOCI, causing confusion among contractors working on both DOE and DOD classified contracts; (7) DOE internal control weaknesses caused numerous problems in safeguarding classified information; and (8) all three DOE weapons laboratories lacked adequate data systems to accurately identify all classified contracts.

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