Energy Management:

DOE Has an Opportunity to Improve Its University of California Contracts

RCED-92-75: Published: Dec 26, 1991. Publicly Released: Dec 26, 1991.

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Pursuant to a congressional request, GAO examined the Department of Energy's (DOE) use of nonstandard contract clauses in laboratory management and operation (M&O) contracts with a university, focusing on: (1) the impact of the nonstandard procurement and property management clauses; (2) other nonstandard clauses that may limit DOE ability to effectively oversee the contracts; and (3) DOE plans to require the inclusion of standard clauses in new contracts with the university.

GAO found that: (1) nonstandard clauses in DOE contracts with the university provide DOE with less authority to direct changes in procurement and property management; (2) with nonstandard clauses, laboratories only make the changes they agree with and can delay or avoid implementation of DOE recommendations; (3) nonstandard clauses have also resulted in costly vehicle leases that DOE did not approve and contributed to a 5-year disagreement between DOE and the laboratory regarding the appropriate size of the vehicle fleet; (4) other nonstandard clauses hinder DOE ability to provide effective oversight of costs and to set requirements for internal audits; (5) DOE tried to make changes in contracts in 1987 and 1990, but was unsuccessful because the university would not accept standard clauses; and (6) DOE is attempting to negotiate contracts again and the university has indicated a willingness to accept some standard clauses.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The new contracts with the University of California, which were signed November 20, 1992, contain the standard Department of Energy acquisition regulation clauses for procurement and property management.

    Recommendation: To ensure that adequate policies, procedures, and controls are in place to protect the government's interests, the Secretary of Energy, should require that the new M&O contracts with the University of California contain the standard DOE procurement and property management clauses.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: The new contracts with the University of California, which were signed November 20, 1992, include the standard "disputes" clause, which according to DOE, gives the contracting officer ultimate authority to direct the contractor. A followup job is planned to examine the effectiveness of the new contract provisions. Therefore, an accomplishment report is not planned at this time.

    Recommendation: To ensure that adequate policies, procedures, and controls are in place to protect the government's interests, the Secretary of Energy, should require that deviations from any other standard clauses provide DOE with authority at least equivalent to that provided in DOE standard clauses.

    Agency Affected: Department of Energy

 

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