Energy Management:

DOE Has Improved Oversight of Its Work for Others Program

RCED-93-111: Published: Apr 7, 1993. Publicly Released: May 7, 1993.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) controls over its Work for Others program, focusing on: (1) DOE progress in correcting problems discussed in a 1989 GAO report; and (2) activities of the DOE San Francisco field offices and its two largest facilities.

GAO found that: (1) DOE has initiated several actions in response to the GAO report, including establishing minimum standards for overseeing contractor performance, management reviews of field offices' implementation of the program, establishing procedures to recover the full cost of Work for Others projects, establishing a steering committee to develop new policies and resolve cross-cutting issues and concerns, and increasing on-site DOE personnel; (2) one field office had not fully implemented the revised procedures for approving Work for Others projects, but has taken action to correct identified deficiencies; (3) cost overruns occurred on projects due to work beginning before DOE received the sponsors' funding documents; (4) DOE could be liable for cost overruns if the sponsor fails to fund the project; and (5) the contractor is liable for any Work for Others costs overruns under new DOE contracts for the operation of two DOE laboratories.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE action on this recommendation resulted in the issuance of Acquisition Letter 94-11 dated July 29, 1994. This letter, which expires 6 months after issuance, is a reminder to DOE's contracting officers that it is DOE's policy that DOE should not be liable for costs incurred by a contractor who performs work for others prior to the availability of funds from the sponsor. It also spells out the circumstances -- primarily if the contractor assumes liability for the costs incurred -- under which the contracting officer may allow the contractor to continue ongoing work while awaiting the receipt of additional funding from the sponsor. This is not fully responsive to our recommendation because the acquisition letter does not require the contracting officers to ensure that this provision in written into DOE's management and operating contracts. DOE could, therefore, remain liable for these costs.

    Recommendation: The Secretary of Energy should revise DOE other management and operating contracts as they are renewed or awarded to clearly make the contractors liable for any costs incurred before DOE formally authorizes work to begin, either for new projects or for ongoing projects for which additional funding is to be provided by the sponsor.

    Agency Affected: Department of Energy


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