Department of Energy:

The Property Management System at the Rocky Flats Plant Is Inadequate

RCED-94-77: Published: Mar 1, 1994. Publicly Released: Mar 3, 1994.

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Pursuant to a congressional request, GAO reviewed the extent of property losses at the Department of Energy's (DOE) Rocky Flats Plant, focusing on: (1) the amount of property missing; (2) the adequacy of the onsite contractor's property management system; and (3) whether DOE has been providing effective oversight of the property management system.

GAO found that: (1) DOE cannot determine the exact amount of government-owned property missing because annual inventory reviews have varied; (2) as of 1993, $12.8 million in government-owned property was missing from Rocky Flats and an additional $16.5 million could not be physically located; (3) although the contractor has not classified the additional items as missing because it believes there is documentation showing the items' disposition, it may have to reclassify some of the items as missing because the supporting documentation is incomplete; (4) DOE cannot hold anyone accountable for the missing property at the plant because it has not investigated the circumstances surrounding the missing property or pursued contractor liability; (5) the contractor's property management system contains major data and control weaknesses that render the plant vulnerable to losses and hinder its ability to determine the amount of missing property; (6) DOE oversight of the contractor's property management system is inadequate because it allows the contractor to operate without detailed written procedures for its property management activities, does not review the contractor's property management system, and does not ensure timely correction of property management weaknesses; and (7) DOE needs to strengthen its commitment to overseeing the contractor's property management system so that it can ensure that government-owned property is properly accounted for.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE has established a task force to identify short- and long-term oversight improvements. The Rocky Flats Office has hired two specialists and is recruiting a third one to assist in performing oversight of the contractor.

    Recommendation: To improve DOE oversight of property management at the Rocky Flats Plant, the Secretary of Energy should direct DOE Rocky Flats management to place a higher priority on overseeing property management activities at the plant.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: The contractor has revised its procedures for the retirement of personal property and these procedures have been reviewed and approved by the Rocky Flats Field Office.

    Recommendation: To improve the contractor's property management system and ensure that the plant's database accurately reflects the government-owned property at the plant, the Secretary of Energy should require the contractor to develop guidance specifying the roles and responsibilities of property management staff in retiring property.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: The contractor has acquired a new property management database system that contains the necessary edits to limit and prevent unauthorized access.

    Recommendation: To improve the contractor's property management system and ensure that the plant's database accurately reflects the government-owned property at the plant, the Secretary of Energy should require the contractor to institute system-level edits into the system to limit and prevent unauthorized access. Such edits would also help prevent errors from entering the system.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: The contractor has issued a revised list of items that will be controlled as sensitive property. This list was approved by the Rocky Flats Field Office on May 25, 1994. The contractor has a new procedure in place for reviewing and recertifying determinations made regarding useful service life and capitalization of questionable items, including detectors and boroscopes.

    Recommendation: To improve the contractor's property management system and ensure that the plant's database accurately reflects the government-owned property at the plant, the Secretary of Energy should require the contractor to revise, with DOE guidance, the criteria at the plant for what should be in the database so that all sensitive equipment is included in the database. Furthermore, the 2-year useful life criteria that exempts certain equipment should be dropped except in special cases.

    Agency Affected: Department of Energy

  5. Status: Closed - Implemented

    Comments: The contractor has completed a review of historical records and databases and added 5,782 items, valued at $16.5 million, to the property records. The contractor has also established a task force to identify necessary enhancements to the property database.

    Recommendation: To improve the contractor's property management system and ensure that the plant's database accurately reflects the government-owned property at the plant, the Secretary of Energy should require the contractor to undertake, to the extent practical, a study of historical records at the plant to identify and include all appropriate property into the plant's property database, and correct database inaccuracies as necessary.

    Agency Affected: Department of Energy

  6. Status: Closed - Implemented

    Comments: DOE/Rocky Flats' General Counsel determined there were no facts to support negligence or willful misconduct on the part of the contractor for property losses at Rocky Flats. Because of that, the DOE/Rocky Flats contracting officer made the decision not to pursue the issue.

    Recommendation: To improve property management at the Rocky Flats Plant, the Secretary of Energy should order an investigation, in accordance with DOE guidance, of missing plant property and determine, among other things, what happened to the missing property. Such an investigation can then be used to determine whether the contractor could be deemed liable in accordance with the terms of the contract.

    Agency Affected: Department of Energy

  7. Status: Closed - Not Implemented

    Comments: DOE has hired a new Rocky Flats Plant contractor. The contractor intends to have an approved property management system in place by the end of calendar year 1996.

    Recommendation: To improve DOE oversight of property management at the Rocky Flats Plant, the Secretary of Energy should direct DOE Rocky Flats management to require the contractor to: (1) immediately develop written procedures for its property management system; (2) submit its property management system to DOE for review and approval; and (3) complete corrective action on previously identified contractor property management deficiencies.

    Agency Affected: Department of Energy

 

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