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.