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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

October 2013: 

National Laboratories: 

DOE Needs to Improve Oversight of Work Performed for Non-DOE Entities: 

GAO-14-78: 

GAO Highlights: 

Highlights of GAO-14-78, a report to congressional committees. 

Why GAO Did This Study: 

DOE’s 17 national laboratories house cutting-edge scientific facilities 
and equipment, ranging from high-performance computers to ultra-bright 
X-ray sources for investigating fundamental properties of materials. 
DOE allows the capabilities of the laboratories to be made available 
to perform work for other federal agencies and nonfederal entities 
through its WFO program, provided that the work does not hinder DOE’s 
mission or compete with the private sector, among other things. GAO 
was asked to review the WFO program. GAO examined (1) the amount and 
type of work conducted under the program, (2) the extent to which DOE 
has ensured that WFO program requirements are met, and (3) the extent 
to which program performance is measured against WFO program objectives. 
GAO reviewed DOE and laboratory data and documents, internal and external 
review reports, and interviewed officials from DOE and the laboratories. 

What GAO Found: 

In fiscal years 2008 through 2012, the Department of Energy (DOE) 
performed about $2 billion annually of Work for Others (WFO) projects, 
as measured by the costs incurred. Although the amount of WFO performed 
has remained relatively constant over the last 5 years overall, WFO as 
a percentage of the total work performed at the laboratories—measured 
in total laboratory costs incurred—has declined from 17 percent in 
fiscal year 2008 to about 13 percent in fiscal year 2012. In fiscal 
year 2012, the WFO program included more than 6,500 projects. About 
88 percent of this work was for other federal agencies, with the 
majority of it performed for the Department of Defense. For example, 
one project for the Army applies a laboratory’s expertise in laser 
decontamination of surfaces to develop a system that will remove 
chemical agent residues from equipment. The remaining WFO work was 
sponsored by nonfederal entities, including state and local governments, 
universities, private industry, and foreign entities. 

DOE officials have not ensured that WFO program requirements are 
consistently met. For example, a DOE official is required to determine 
whether a proposed WFO project has met DOE requirements for accepting 
work before approving, or certifying, the work and this responsibility 
may not be delegated to the laboratories. However, DOE officials from 
site offices at 8 of the 17 laboratories reported that these 
determinations were made by the laboratories and that the DOE officials 
did not take steps to independently verify the determinations prior to 
approving the work. DOE also cannot ensure that the full costs of 
materials and services for WFO projects are charged to sponsors because 
12 of 17 laboratories have limited or no written procedures for developing 
WFO project budgets or charging costs to ongoing projects, two important 
steps for recovering the full costs of materials and services. A 2013 DOE 
Office of Inspector General report found that the costs of administering 
WFO projects at one laboratory were allocated to DOE projects, resulting 
in an estimated $400,000 in WFO project costs that were not reimbursed 
to the laboratory. DOE requires that its program offices annually 
review the WFO program at each of its laboratories. However, DOE 
requirements do not specify what the reviews should include, and DOE 
program offices varied in what they consider to be an annual review. 
DOE also requires the department’s Chief Financial Officer to report 
annually on the activities conducted under the WFO program, but DOE 
officials told GAO that they no longer produce the report because the 
requirement is outdated, choosing instead to fulfill data requests 
on a case-by-case basis. As a result, DOE does not have data that are 
comparable across laboratories or over time. 

DOE has not measured the extent to which WFO program performance is 
measured against program objectives and has not established performance 
measures to do so. Some DOE site offices and laboratories have taken 
steps to evaluate the performance of the WFO program, but these steps 
are not consistent across the laboratories, do not incorporate key 
attributes of successful performance measures, and do not address the 
WFO program objectives. Recent internal and external reviews of the 
laboratories have recommended that DOE establish clear measures to 
evaluate laboratory WFO program performance against the WFO program 
objectives. DOE officials told GAO that they do not believe it is 
appropriate to develop one set of measures for all laboratories and 
that they do not plan to do so. 

What GAO Recommends: 

GAO recommends, among other things, that DOE take steps to ensure 
compliance with project approval requirements; require laboratories 
to establish written procedures for charging costs to projects; 
specify what the annual program reviews should include; produce annual 
reports on WFO activities; and establish performance measures for the 
WFO program. DOE generally agreed with the report and its recommendations. 
 
View [hyperlink, http://www.gao.gov/products/GAO-14-78]. For more 
information, contact David C. Trimble at (202) 512-3841 or trimbled@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

DOE Has Performed About $2 Billion of Work under the WFO Program 
Annually, but the Amount and Sponsors of Work Varied Among 
Laboratories: 

DOE Has Not Ensured That WFO Program Requirements Are Consistently Met: 

DOE Has Not Measured WFO Program Performance against Established 
Objectives: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: List of the 17 Department of Energy (DOE) National
Laboratories: 

Appendix III: Department of Energy National Laboratory Work For Others
Costs and Total Costs, as Measured in Costs Incurred, in Fiscal Year 
2012: 

Appendix IV: Comments from the Department of Energy: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Amount of Work for Others (WFO) Performed and as a Percentage 
of Total Work Performed at the Department of Energy (DOE) Laboratories 
for Fiscal Year 2012: 

Table 2: Key Attributes of Successful Performance Measures: 

Figures: 

Figure 1: Location of the 17 Department of Energy (DOE) National
Laboratories: 

Figure 2: Amount of Work for Others (WFO) Performed and Total Work at 
the 17 Department of Energy (DOE) National Laboratories, Fiscal Years 
2008 through 2012: 

Figure 3: Sponsors of Work for Others (WFO) Performed at the 17 
Department of Energy (DOE) National Laboratories, Fiscal Year 2012: 

Abbreviations: 

CAS: Cost Accounting Standards: 

CFO: Office of the Chief Financial Officer: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DOE: Department of Energy: 

GPRA: Government Performance and Results Act: 

M&O: management and operating: 

NAPA: National Academy of Public Administration: 

NASA: National Aeronautics and Space Administration: 

NNSA: National Nuclear Security Agency: 

STARS: Standard Accounting and Reporting System: 

TEPCO: Tokyo Electric Power Company: 

WFO: Work for Others: 

[End of section] 

GAO:
United States Government Accountability Office: 
441 G St. N.W. 
Washington, DC 20548: 

October 25, 2013: 

The Honorable Fred Upton: 
Chairman: 
The Honorable Henry Waxman: 
Ranking Member: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Timothy F. Murphy: 
Chairman: 
The Honorable Diana DeGette: 
Ranking Member: 
Subcommittee on Oversight and Investigations: 
Committee on Energy and Commerce: 
House of Representatives: 

Since the 1940s, the Department of Energy’s (DOE) national laboratories
and specialized research facilities have played a central role in 
advancing research in physics and other basic and applied sciences. As 
one of the largest research agencies in the federal government, DOE 
spends billions of dollars each year on publicly funded research to 
support its diverse missions, including advancing scientific research 
and technology development, ensuring efficient and secure energy, and 
ensuring the safety and reliability of the nation’s nuclear weapons 
stockpile. In fiscal year 2012, from its appropriations DOE allocated 
nearly $11 billion to its 17 national laboratories. These laboratories 
house cutting-edge scientific facilities and equipment, ranging from 
high-performance computers to ultra-bright X-ray sources for 
investigating fundamental properties of materials. The majority of the 
research and development funded by DOE is carried out under the 
department’s direction and overseen by scientists, engineers, and 
others employed at the 17 national laboratories, 16 of which are 
managed and operated by contractors under management and operating 
(M&O) contracts,[Footnote 1] and 1 of which DOE directly manages and 
operates.[Footnote 2] The M&O contractors include universities, 
private companies, and nonprofit organizations. 

To allow non-DOE entities to benefit from the significant public 
investment in DOE’s laboratories and from the unique and highly 
specialized facilities and scientific and technical expertise at these 
laboratories, DOE operates the Work for Others (WFO) program. This 
program allows work to be performed at the laboratories for both 
federal agencies and nonfederal entities, provided that several 
requirements are met, including that WFO projects do not hinder DOE’s 
mission or compete with the private sector. Several laws provide the 
foundation for DOE’s WFO program. The Economy Act of 1932 allows 
federal agencies to obtain goods and services from other agencies as 
long as the work cannot be performed as conveniently or cheaply by the 
private sector and is in the best interests of the federal government. 
[Footnote 3] The Atomic Energy Act of 1954 also provides DOE the 
authority to perform work for other federal agencies, as well as for 
state and local governments, private-sector organizations, academic
institutions, and foreign entities, if private-sector facilities or 
laboratories are not adequate for the purpose.[Footnote 4] In 
addition, the Energy Reorganization Act of 1974 gives the Nuclear 
Regulatory Commission special access to DOE research and development 
capabilities.[Footnote 5] 

DOE has established program and financial management policies,
requirements, and procedures for WFO that are contained in several DOE
directives. DOE Order 481.1C establishes WFO management requirements, 
program roles and responsibilities, as well as defines the program’s 
objectives.[Footnote 6] These objectives include providing access to 
DOE laboratories-—including National Nuclear Security Agency (NNSA)
laboratories[Footnote 7]—-to accomplish goals that may be otherwise 
unattainable by federal agencies and nonfederal entities and avoid 
duplication of effort at federal facilities, to provide access for non-
DOE entities to DOE’s unique and highly specialized facilities when 
private-sector facilities are inadequate, to increase the research and 
development interaction between the laboratories and industry, and to 
maintain core competencies and enhance the science and technology base 
at the laboratories. DOE’s WFO order also establishes requirements for 
project selection, program reviews, and annual reporting on WFO 
activities performed by DOE. According to the order, WFO projects must 
meet the following criteria: 

* be consistent with or complementary to the missions of DOE and the
facility to which the work is to be assigned;

* avoid adverse impact to programs assigned to the facility;

* not place the facility in direct competition with the domestic private
sector; and: 

* not create a detrimental future burden on DOE resources. 

DOE Order 522.1 requires that the entity requesting the work reimburse
the laboratory for the full cost of the work—-including labor, 
materials, overhead, and other costs—-plus a federal administrative 
charge, unless waived under departmental guidelines.[Footnote 8] 

In a time of uncertainty over future federal budgets and calls to reduce
spending, DOE may have difficulty sustaining its current laboratory
structure. Under budget pressure, DOE’s Office of Inspector General
officials and others have observed that the laboratories could become
dependent on reimbursements received under the WFO program to
maintain the laboratories’ current facilities. In this context, you 
asked us to review the WFO program at DOE’s laboratories. Our 
objectives were to determine (1) the amount and type of work conducted 
under DOE’s WFO program, (2) the extent to which DOE has ensured that 
WFO program requirements are met, and (3) the extent to which DOE and 
the laboratories have measured WFO program performance against WFO
program objectives. 

To determine the amount and type, or sponsors, of the work conducted
under DOE’s WFO program, we reviewed DOE data on the amount of work 
performed under the WFO program in total and by laboratory for fiscal 
years 2008 through 2012, as measured by costs incurred for WFO 
projects. We also obtained total costs incurred for each laboratory for
fiscal years 2008 through 2012. To assess the reliability of these 
data, we interviewed DOE officials who oversee them for DOE’s Office 
of the Chief Financial Officer (CFO) to understand how the data are 
collected and reported. We also reviewed recent external audits of DOE’
s financial reporting system and financial data. We determined that 
the data were sufficiently reliable to describe the amount of WFO 
activities performed at the laboratories. To determine the amount of 
work conducted by federal and nonfederal sponsors under the program, 
we gathered data on the costs of WFO activities performed for federal 
versus nonfederal sponsors. In addition, we interviewed DOE 
headquarters and site officials and officials for the 17 laboratories 
to gather examples of projects performed for federal and nonfederal 
sponsors. We visited 3 laboratories and contacted the remaining 14 
laboratories by telephone. To determine the extent to which DOE has 
ensured that WFO program requirements are met, we reviewed federal 
regulations; DOE requirements; and DOE and laboratories’ policies and 
procedures governing the WFO program, including those for approval of 
WFO projects; cost recovery for WFO projects (i.e., development of 
project budgets and charging of costs); and reports of reviews of WFO 
programs. To determine the extent to which DOE and the laboratories 
have measured WFO project performance against program objectives, we 
reviewed DOE orders; performance requirements for WFO projects, if 
any, in DOE contracts with laboratories; DOE evaluations of 
laboratories’ performance; and laboratories’ strategic plans and 
procedures for establishing and executing WFO projects. We
discussed laboratories’ strategies and goals for the WFO program and
WFO program performance measurement with DOE headquarters and
site officials and officials from each of the laboratories. See 
appendix I for a more detailed description of our scope and 
methodology. 

We conducted this performance audit from August 2012 to October 2013,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives. 

Background: 

DOE program offices manage the department’s 17 national laboratories
and support the department’s diverse missions, as follows: 

* The Office of Science oversees 10 national laboratories and, for 
fiscal year 2012, received appropriations of more than $4.3 billion to
operate these laboratories. The Office of Science is the nation’s single
largest funding source for basic research in the physical sciences,
supporting research in energy sciences, advanced scientific computing, 
and other fields.

* NNSA oversees 3 national laboratories and, for fiscal year 2012,
received appropriations of more than $4.6 billion to operate these
laboratories. NNSA helps support understanding of the physics 
associated with the safety, security, and reliability of nuclear weapons
and maintains core competencies in nuclear weapons science, 
technology, and engineering.

* The Office of Nuclear Energy oversees 1 laboratory and received
appropriations for fiscal year 2012 totaling more than $1 billion to
operate this laboratory. The primary mission of the Office of Nuclear
Energy is to advance nuclear power as a resource capable of meeting
the nation’s energy, environmental, and national security needs by
resolving technical, cost, safety, proliferation resistance, and 
security barriers.

* The Office of Fossil Energy oversees 1 laboratory and received
appropriations for fiscal year 2012 totaling more than $551 million to
operate this laboratory. The Office of Fossil Energy’s primary mission
is to ensure reliable fossil energy resources for clean, secure, and
affordable energy while enhancing environmental protection.

* The Office of Energy Efficiency and Renewable Energy oversees 1
laboratory and received appropriations for fiscal year 2012 totaling
over $271 million to operate this laboratory. The Office of Energy
Efficiency and Renewable Energy’s mission is to develop solutions for
energy-saving homes, buildings, and manufacturing; sustainable
transportation; and renewable electricity generation.

* The Office of Environmental Management oversees 1 laboratory and, 
for fiscal year 2012, received appropriations of about $7.6 million to
operate this laboratory. The Office of Environmental Management is
responsible for cleaning up hazardous wastes left from decades of
nuclear weapons research and production. 

See figure 1 for the locations of the laboratories managed by the 
various program offices. DOE also maintains individual site offices 
that provide federal oversight at 16 of the 17 laboratories.[Footnote 
9] In addition, DOE’s field CFOs are responsible for overseeing 
financial activities at each location.[Footnote 10] For a complete 
list of DOE’s national laboratories and more information on each, see 
appendix II. 

Figure 1: Location of the 17 Department of Energy (DOE) National 
Laboratories: 

[Refer to PDF for image: illustrated U.S. map] 

DOE Laboratories: 
* Idaho National Laboratory (Office of Nuclear Energy), Idaho; 
* National Renewable Energy Laboratory (Office of Energy Efficiency 
and Renewable Energy), Colorado; 
* National Energy Technology Laboratory (Office of Fossil Energy), 
West Virginia; 
* Savannah River National Laboratory (Office of Environmental 
Management), South Carolina. 

Office of Science Laboratories: 
* Ames Laboratory, Iowa; 
* Argonne National Laboratory, Illinois; 
* Brookhaven National Laboratory, New York; 
* Fermi National Accelerator Laboratory, Illinois; 
* Lawrence Berkeley National Laboratory, California; 
* Oak Ridge National Laboratory, Tennessee; 
* Pacific Northwest National Laboratory, Washington; 
* Princeton Plasma Physics Laboratory, New Jersey; 
* Thomas Jefferson National Accelerator Facility, Virginia; 

National Nuclear Security Administration Laboratories: 
* Lawrence Livermore National Laboratory, California; 
* Sandia National Laboratory, California; 
* Sandia National Laboratory, New Mexico; 
* SLAC National Accelerator Laboratory, California; 

Sources: DOE; Map Resources (map). 

[End of figure] 

DOE's WFO program aims to provide benefits to organizations such as 
U.S. companies or academic institutions that have work performed at the 
laboratories and to the national laboratories as well. For example, 
according to a 2011 DOE report to Congress,[Footnote 11] the WFO 
program helps to leverage DOE investment in the laboratories by further 
developing technical expertise for accomplishing critical tasks needed 
to fulfill DOE's mission priorities. Furthermore, according to the DOE 
report, the WFO program can also help the national laboratories to 
retain highly trained scientists and engineers in support of DOE and 
national priorities by, for example, providing opportunities for them 
to stay engaged during times when mission critical work has slowed. 

According to officials from DOE and laboratories and DOE documentation, 
a potential WFO project begins when an entity desiring to have work 
performed becomes aware of the capabilities available at a laboratory. 
Entities can become aware of these capabilities in a number of 
different ways, including as a result of networking by laboratory 
researchers and scientists, by responding to funding opportunity 
announcements of other federal agencies, or through information posted 
on the laboratories' public websites. Once a potential project has been 
identified, representatives of the entity (i.e., the sponsor) and the 
laboratory begin to negotiate the work to be performed and the 
estimated costs. When the laboratory and sponsor have agreed to the 
terms of work, DOE site officials review the proposed WFO agreement. 
Finally, if the terms are approved by DOE and the sponsor has provided 
certification of funding or advance payment for the work, a DOE 
contracting officer certifies that the requirements have been met for 
the laboratory to conduct the work. 

DOE's WFO order establishes DOE policy and requirements for accepting, 
authorizing, and administering such work. This order applies to work 
for all non-DOE entities except the Department of Homeland Security 
(DHS), which is covered by a separate order, and is not considered to 
be WFO work.[Footnote 12] In addition, under the WFO order, each site 
office is responsible for establishing its own procedures and processes 
for the review and approval of work performed under WFO agreements and 
for conducting periodic reviews of laboratory policies and procedures 
for negotiating and administering WFO projects. Requirements for 
establishing prices and charges for materials and services sold or 
provided to outside entities either directly or through the 
department's M&O contracts are established through DOE's pricing order, 
including for the WFO program.[Footnote 13] 

DOE Has Performed About $2 Billion of Work under the WFO Program 
Annually, but the Amount and Sponsors of Work Varied Among 
Laboratories: 

The total amount of work performed under the WFO program, as measured 
by costs incurred for WFO projects, has remained relatively constant 
over the last 5 fiscal years overall, but the amount of WFO work 
performed and the sponsors of the work varied widely among the 
laboratories. 

Amount of Work Performed under the WFO Program Has Been About $2 
Billion Annually: 

In fiscal years 2008 through 2012, DOE performed about $2 billion of 
work annually under the WFO program, as measured by costs incurred (see 
figure 2). Although the amount of work performed under the WFO program 
has remained relatively constant over the last 5 years, it has declined 
slightly relative to total work performed at the laboratories during 
this period. From fiscal year 2008 through fiscal year 2011, total work 
performed at the laboratories increased from $12.0 billion to $17.1 
billion and fell to $16.3 billion in fiscal year 2012. As a result, the 
proportion of WFO performed as a percentage of total work performed 
declined from 17 percent in fiscal year 2008 to about 13 percent in 
fiscal year 2012. In fiscal year 2012, more than 6,500 WFO projects 
were carried out at DOE's laboratories. 

Figure 2: Amount of Work for Others (WFO) Performed and Total Work at 
the 17 Department of Energy (DOE) National Laboratories, Fiscal Years 
2008 through 2012: 

[Refer to PDF for image: stacked vertical bar graph] 

Fiscal year 2008; 
Work for Others: $2.1 billion; 
All Other Work: $9.9 billion; 
Total laboratory costs: $12.0 billion. 

Fiscal year 2009; 
Work for Others: $2.0 billion; 
All Other Work: $11.3 billion; 
Total laboratory costs: $13.3 billion. 

Fiscal year 2010; 
Work for Others: $2.1 billion; 
All Other Work: $13.7 billion; 
Total laboratory costs: $15.8 billion. 

Fiscal year 2011; 
Work for Others: $2.1 billion; 
All Other Work: $15.0 billion; 
Total laboratory costs: $17.1 billion. 

Fiscal year 2012; 
Work for Others: $2.1 billion; 
All Other Work: $14.2 billion; 
Total laboratory costs: $16.3 billion. 

Source: GAO analysis of DOE data. 

Note: Because Work for Others (WFO) agreements can span multiple years, 
the amounts shown in the figure for WFO performed are the costs 
incurred by the laboratories for each of the fiscal years. The total 
laboratory costs incurred are the operating costs incurred for all 
laboratory activities. Totals may not add due to rounding. 

[End of figure] 

Amount of WFO Performed Varied by Laboratory: 

During the period we reviewed, each of DOE's 17 national laboratories 
performed some work on WFO projects, with some laboratories involved in 
significantly more WFO activities than others. In fiscal year 2012, the 
amount of work performed by the laboratories on WFO projects ranged 
from about $1.5 million at the National Energy Technology Laboratory to 
over $803 million at the Sandia National Laboratories. The proportion 
of WFO activities relative to all work at the laboratories also varied 
widely. Specifically, work performed on WFO projects as a percentage of 
total work performed at the laboratories ranged from less than 1 
percent at the National Energy Technology Laboratory to nearly 33 
percent at the Sandia National Laboratories (see table 1). 

Table 1: Amount of Work for Others (WFO) Performed and as a Percentage 
of Total Work Performed at the Department of Energy (DOE) Laboratories 
for Fiscal Year 2012: 

DOE National Laboratory: Sandia National Laboratories; 
Amount of WFO performed: $803,313,000; 
Total work performed: $2,437,990,000; 
Percentage of total work performed: 32.9%. 

DOE National Laboratory: Lawrence Livermore National Laboratory; 
Amount of WFO performed: $242,975,000; 
Total work performed: $1,628,530,000; 
Percentage of total work performed: 14.9%. 

DOE National Laboratory: Oak Ridge National Laboratory; 
Amount of WFO performed: $206,770,000; 
Total work performed: $1,532,200,000; 
Percentage of total work performed: 13.5%. 

DOE National Laboratory: Los Alamos National Laboratory; 
Amount of WFO performed: $197,770,000; 
Total work performed: $2,298,488,000; 
Percentage of total work performed: 8.6%. 

DOE National Laboratory: Pacific Northwest National Laboratory; 
Amount of WFO performed: $182,399,000; 
Total work performed: $877,366,000; 
Percentage of total work performed: 20.8%. 

DOE National Laboratory: Idaho National Laboratory; 
Amount of WFO performed: $148,506,000; 
Total work performed: $849,413,000; 
Percentage of total work performed: 17.5%. 

DOE National Laboratory: Lawrence Berkeley National Laboratory; 
Amount of WFO performed: $118,320,000; 
Total work performed: $804,545,000; 
Percentage of total work performed: 14.7%. 

DOE National Laboratory: Argonne National Laboratory; 
Amount of WFO performed: $85,132,000; 
Total work performed: $756,078,000; 
Percentage of total work performed: 11.3%. 

DOE National Laboratory: Brookhaven National Laboratory; 
Amount of WFO performed: $50,823,000; 
Total work performed: $726,971,000; 
Percentage of total work performed: 7.0%. 

DOE National Laboratory: National Renewable Energy Laboratory; 
Amount of WFO performed: $33,756,000; 
Total work performed: $508,932,000; 
Percentage of total work performed: 6.6%. 

DOE National Laboratory: Savannah River National Laboratory; 
Amount of WFO performed: $25,563,000; 
Total work performed: $1,080,017,000; 
Percentage of total work performed: 2.4%. 

DOE National Laboratory: Thomas Jefferson National Accelerator 
Facility; 
Amount of WFO performed: $8,250,000; 
Total work performed: $177,822,000; 
Percentage of total work performed: 4.6%. 

DOE National Laboratory: SLAC National Accelerator Laboratory; 
Amount of WFO performed: $8,226,000; 
Total work performed: $362,929,000; 
Percentage of total work performed: 2.3%. 

DOE National Laboratory: Fermi National Accelerator Laboratory; 
Amount of WFO performed: $5,722,000; 
Total work performed: $424,843,000; 
Percentage of total work performed: 1.3%. 

DOE National Laboratory: Ames Laboratory; 
Amount of WFO performed: $4,106,000; 
Total work performed: $36,751,000; 
Percentage of total work performed: 11.2%. 

DOE National Laboratory: Princeton Plasma Physics Laboratory; 
Amount of WFO performed: $3,227,000; 
Total work performed: $82,615,000; 
Percentage of total work performed: 3.9%. 

DOE National Laboratory: National Energy Technology Laboratory; 
Amount of WFO performed: $1,498,000; 
Total work performed: $1,713,844; 
Percentage of total work performed: 0.1%. 

Total: 
Amount of WFO performed: $2,126,357,000; 
Total work performed: $16,299,334,000; 
Percentage of total work performed: 13.0%. 

Source: GAO analysis of DOE data. 

Note: The amount of Work for Others (WFO) performed and the total work 
performed reported in this table is the costs incurred by each 
laboratory for fiscal year 2012. Totals may not add due to rounding. 

[End of table] 

According to DOE officials, the variation in the amount of WFO 
performed is due in large part to differences in the core mission 
capabilities of each laboratory. For example, Sandia National 
Laboratories has extensive expertise in systems engineering, a 
capability that is heavily utilized by other federal agencies. 
According to the officials, other laboratories' capabilities are less 
in demand and, therefore, less WFO work is performed at these 
laboratories. 

Type, or Sponsors, of WFO Projects Performed Varied by Laboratory: 

DOE's laboratories carried out a variety of WFO projects for many 
different sponsors, but the majority of the work was for other federal 
agencies--in particular, the Department of Defense (DOD). Of the $2.1 
billion in work performed on WFO projects in fiscal year 2012, over 
$1.8 billion, or about 88 percent, was for other federal agencies, with 
DOD sponsoring about $1.5 billion, or 71 percent of the work performed 
(see figure 3). The majority of the work performed under the program 
for DOD for fiscal year 2012 was carried out at six national 
laboratories--Idaho, Lawrence Livermore, Los Alamos, Oak Ridge, 
Pacific Northwest, and Sandia. The type of work sponsored by DOD 
included a variety of projects. For example, Pacific Northwest 
National Laboratory has developed a software technology for the Air 
Force that performs, among other things, automatic topical analysis 
and organization of large collections of documents graphically. The 
laboratory is training the Air Force on applying the software to a 
diverse set of Air Force data to help analysts extract information to 
better identify potential uses for emerging technologies. In another 
example, the Idaho National Laboratory has applied its expertise in 
the area of laser decontamination of surfaces to develop and deploy a 
laser cleaning system for the Army. The objective of the project is to 
develop a system to, among other things, remove chemical agent 
residues from contaminated surfaces and equipment so that equipment 
can be reused, reduce personnel exposure risks, and reduce secondary 
waste streams. 

Figure 3: Sponsors of Work for Others (WFO) Performed at the 17 
Department of Energy (DOE) National Laboratories, Fiscal Year 2012: 

[Refer to PDF for image: pie-chart] 

DOD: 71%; $1.5 billion; 
Other federal agencies (non-DOD): 17%; $363.4 million; 
Non-federal entities: 12%; $251.5 million. 

Source: GAO analysis of DOE data. 

Note: Totals may not add due to rounding. 

[End of figure] 

Other federal agencies also sponsored a variety of WFO projects in 
fiscal year 2012, such as climate change and energy efficiency research 
conducted at the Lawrence Berkeley National Laboratory for the 
Environmental Protection Agency, and plutonium production research 
conducted at the Idaho National Laboratory for the National Aeronautics 
and Space Administration's (NASA) space exploration program. For more 
information on the amount and type of work carried out at each 
laboratory, see appendix III. 

Nonfederal entities sponsored $251.5 million, or 12 percent, of the WFO 
performed at the laboratories in fiscal year 2012. Sponsors and types 
of projects included the following: 

* State and local governments. For example, officials in Sonoma County, 
California, entered into an agreement with the Lawrence Berkeley 
National Laboratory to conduct research on local rivers and dams to 
better understand the natural riverbed processes that occur as a 
function of dam and pumping operations, including sedimentation and 
evolution of biomass. These processes can lead to clogging of the 
riverbed, which in turn can limit the ability to pump water from 
beneath the riverbed as is needed for subsequent distribution as 
drinking water in the county. Under the current phase of this WFO 
project, the laboratory is using its hydrological, geochemical, and 
biological tools and expertise to quantify the riverbed clogging 
mechanisms and to represent them in a computer model. 

* Colleges and universities. For example, researchers at the University 
of Chicago studied the structures of proteins and, in particular, how 
proteins in lung cancer patients are affected by certain drugs. These 
researchers set up a WFO agreement with Argonne National Laboratory, 
under which the laboratory drew upon its extensive protein sequence 
database and its research capabilities to assist the university in 
analyzing, modeling, detecting, and characterizing proteins in lung 
cells. Under this agreement, Argonne National Laboratory also updated 
and maintained a database of protein structures that will be accessible 
to the broad biology community. 

* Private industry. For example, GE Global Research, a private research 
laboratory, has entered into a WFO agreement with Lawrence Livermore 
National Laboratory to help refine wind prediction and control 
capabilities at wind farms. Under this agreement, the laboratory is 
evaluating high-resolution wind farm modeling tools in natural terrain 
using high-performance computers to run wind simulation and forecasting 
models. 

* Foreign entities. For example, following the events at the Fukushima 
Daiichi Nuclear Power Station resulting from the earthquake and tsunami 
in March 2011, Tokyo Electric Power Company (TEPCO) entered into a WFO 
agreement with the Savannah River National Laboratory and the Pacific 
Northwest National Laboratory. The laboratories were to evaluate and 
define the scope of work for TEPCO to accomplish a number of tasks 
including the prevention of underground water contamination and the 
treatment and disposal of nuclear waste. The laboratories each drew 
upon their expertise in these areas to develop a schedule for how the 
work could proceed and to identify the necessary equipment, materials, 
facilities, personnel, and the costs to perform the work. 

DOE Has Not Ensured That WFO Program Requirements Are Consistently Met: 

DOE has not ensured that WFO program requirements are consistently met. 
Specifically, DOE has not ensured compliance with requirements for the 
approval of WFO projects, cost recovery, program reviews, and annual 
reporting. 

DOE Has Relied on Laboratories' Determinations That WFO Projects Meet 
Requirements for Approval: 

According to DOE's WFO order, WFO projects must meet specific DOE 
requirements, including being consistent with or complementary to DOE's 
missions and those of the laboratories, not hindering those missions, 
and not placing the laboratories in direct competition with the 
domestic private sector. A DOE contracting officer or other authorized 
DOE designee is required to determine whether a proposed WFO project 
has met all of these requirements before approving or certifying the 
work. These determinations may not be delegated to the laboratories. 
However, DOE officials from site offices at 8 of the 17 laboratories 
told us that the laboratories provide written justification in the WFO 
package to support, or determine, that some or all of the requirements 
are met and that the DOE officials have often accepted the 
laboratories' determinations without taking steps to independently 
verify them. DOE officials cited various reasons for relying on the 
laboratories to make the determinations. For example, an official from 
one site office told us that he relies on the laboratory's 
determination that WFO projects are consistent with the mission. He 
explained that he does not believe that the laboratory would accept 
work that would be inconsistent with its mission. Similarly, an 
official at another DOE site office explained that she relies on the 
laboratory's determination that the work cannot be performed by the 
private sector because she believes the laboratory staff are better 
informed about the capabilities available in the private sector. By 
relying on the laboratories' determinations without taking steps to 
independently verify the information, DOE does not have assurances that 
the WFO projects selected meet DOE's requirements. The DOE Office of 
Inspector General has identified the WFO program as a priority area and 
is reviewing laboratories with major WFO programs to determine whether 
they meet internal control and compliance requirements established by 
DOE. 

DOE Has Not Ensured That Cost Recovery Procedures for WFO Projects Are 
in Place: 

DOE's pricing order requires that the department charges for the full 
cost of materials and services provided to external organizations, 
including the amounts charged for work under the WFO program. DOE has 
not ensured, however, that all laboratories have formal, written 
procedures for developing WFO project budgets or charging costs to 
ongoing projects, two important steps for recovering the full costs of 
materials and services provided.[Footnote 14] Specifically, five 
laboratories have detailed, written procedures for developing WFO 
project budgets and charging costs to projects that include, among 
other things, detailed instructions on the types of costs to include in 
a WFO project budget and specific instructions for calculating the 
costs and for ensuring that the costs of the work are charged to the 
sponsor. However, while the remaining laboratories did provide a 
description of their WFO budget development and cost charging 
processes, five of these laboratories had limited written procedures or 
tools in place for these processes. For example, one laboratory had a 
template that could be used to prepare a WFO budget but did not have 
detailed, written requirements or procedures for using this tool. The 
remaining seven laboratories did not provide any formal, written 
procedures to guide the development of WFO project budgets or the 
charging of costs. Without detailed, written guidance, DOE may not be 
able to ensure that its cost recovery requirements are consistently 
met. 

In addition, DOE field CFOs do not always review costs charged to WFO 
projects in accordance with DOE's pricing order, which requires that 
DOE's field CFOs conduct biennial reviews of the pricing of materials 
and services and other costs charged to WFO projects at the 
laboratories. Under the pricing order, the reviews are required to 
include steps to ensure that (1) prices charged conform to the 
requirements of OMB Circular A-25 and departmental pricing policy or 
other legislative authority, as applicable; (2) adequate documentation 
exists for prices established for materials and services; and (3) 
exceptions to the full cost recovery requirements were limited to those 
authorized in the order. The reviews are intended to provide assurance 
to the department's CFO that the full cost of the work, including all 
applicable direct and indirect costs, is charged to the sponsor of each 
WFO project.[Footnote 15] We requested DOE's most recent biennial 
review reports of WFO project pricing for each of the 17 laboratories. 
Reviews for 16 of the 17 laboratories were provided.[Footnote 16] These 
reviews were conducted by the seven field CFOs that oversee the 
laboratories and covered fiscal years 2010 and 2011.[Footnote 17] We 
found that 6 of the 16 reviews did not include steps to ensure that 
prices for WFO projects conformed to DOE requirements. For example, in 
order to ensure that adequate documentation exists for prices 
established for materials and services charged to sponsors of WFO 
projects, reviewers need to examine pricing documentation for a sample 
of WFO projects. Reports for 6 reviews indicated that, for a sample of 
WFO projects, pricing documentation for overhead and administrative 
costs was examined, but the reports did not provide evidence that 
documentation to support direct costs--such as labor and materials--was 
examined. Furthermore, one biennial pricing review was conducted by the 
laboratory instead of by the DOE field CFO, as required, and no details 
on the review steps were provided in the report. Reports for 9 of the 
16 reviews indicated that a sample of WFO projects was reviewed. 
Reviewing a sample of WFO projects can provide useful information, such 
as identifying errors in costs charged to those projects. For example, 
2 of the reviews that included an examination of a sample of WFO 
project documentation identified errors in general and administrative 
costs charged to WFO projects that resulted in either undercharges or 
in overcharges to the sponsor. In the case of undercharges, DOE paid 
part of the sponsor's cost of the WFO project. In the case of 
overcharges, the sponsor subsidized a portion of DOE's mission work. 
The DOE Office of Inspector General has also identified errors related 
to the charging of general and administrative costs to WFO projects in 
their audits of WFO programs at the laboratories. For example, a 2013 
review at Lawrence Berkeley National Laboratory found that costs of 
administering WFO projects were allocated in part to other DOE 
projects, resulting in estimated $400,000 in project costs that the 
sponsor did not reimburse to the laboratory.[Footnote 18] 

DOE Did Not Consistently Conduct Required Annual WFO Program Reviews: 

DOE's WFO order requires each DOE program office to annually review the 
WFO program at each of its laboratories to ensure compliance with WFO 
policies and procedures. The order does not specify what the reviews 
should include. As a result, the program offices varied in what they 
consider to be their annual review. For example, DOE Office of Science 
program officials explained that they believe their annual WFO planning 
efforts with the laboratories fulfill the program review requirements 
in the WFO order. Specifically, each of the Office of Science 
laboratories develops a plan that contains a section that summarizes 
the laboratory's WFO portfolio and discusses the WFO strategy for the 
future. DOE Office of Science officials told us that, as part of this 
process, each federal site office manager provides a review of the 
laboratory's ongoing WFO program operations and proposed WFO funding 
level that includes a statement about the adequacy of the laboratory's 
management and oversight of WFO activities. However, these plans were 
primarily focused on planning for WFO project work to be performed in 
the future and were not reviews to ensure compliance with WFO policies 
and procedures. NNSA officials told us that they had performed annual 
reviews of their WFO program since 2008; however, in response to our 
request for information, they provided one briefing from 2012 that 
focused on improving the WFO agreement processing times. 

Program officials also conducted reviews of WFO policies and procedures 
at 6 of the 16 site offices. However, officials from the Office of 
Science told us that these reviews were not conducted to satisfy the 
annual review requirement in the WFO order because they focused on the 
site offices' WFO policies and procedures rather than laboratories' 
policies and procedures. Specifically, as of May 2013, Office of 
Science program officials conducted a total of six reviews--one at each 
of 6 site offices--since 2008. These generally consisted of a review of 
WFO program policy and procedure documents at the site offices 
including flow charts, forms, and correspondence. Each of the six 
reviews identified areas of concern within the WFO programs. For 
example, one program office review reported that the laboratory was 
dependent on funds from a single WFO project to support a major DOE 
program. The review cautioned that if the WFO project was discontinued, 
it could create a detrimental financial burden on the laboratory in the 
future, which is not consistent with DOE's requirement to avoid doing 
so. In addition, four of the reviews found deficiencies related to WFO 
program documentation or procedures. For example, one review reported 
that a DOE site office WFO program procedural guide was out of date and 
did not reflect all relevant DOE policy requirements or current DOE 
site office operating procedures. Although the reviews were not 
conducted to satisfy the annual review requirement in the WFO order, 
the reviews appeared to include useful information about the WFO 
program that was not included in the annual laboratory planning 
processes, which were focused on future WFO efforts. No program office 
reviews were conducted at the other 10 site offices. 

DOE Does Not Produce the Required Annual Summary Report on Project 
Activities: 

DOE's WFO order also requires that the DOE headquarters CFO prepare an 
annual summary report of WFO activities performed at its laboratories. 
DOE headquarters officials told us they have not produced this report 
in the past several years because the requirement to produce it is an 
outdated requirement that was put into place to facilitate data 
collection before the implementation of DOE's current financial system. 
The officials said that they plan to eliminate this requirement. They 
also said that they have made better use of their limited program 
resources by choosing to fulfill requests for WFO project data from 
Congress and others on a case-by-case basis. For example, in the 
Conference Report[Footnote 19] to accompany the Energy and Water 
Development and Related Agencies Appropriations Act of 2010,[Footnote 
20] DOE was directed to submit an annual report on the status of its 
WFO activities. DOE officials provided the requested information on WFO 
activities; however, this information might have already been available 
if DOE had prepared the annual summary report as required by the WFO 
order. In addition, other DOE programs regularly need and collect WFO 
project data that could be provided by the annual summary report if it 
had been prepared in accordance with the order. For example, DOE's 
technology transfer coordinator has been collecting data on nonfederal 
WFO project activities from each of the laboratories since 2001 for 
inclusion in the Department of Commerce's annual report on technology 
transfer.[Footnote 21] Choosing to report data on a case-by-case basis, 
rather than in an annual report, may make it difficult for those 
providing oversight and for some users of the data. This is because the 
data are not readily available, requiring DOE to generate it, which is 
time-consuming and, because depending on how the data are generated, 
they may not be comparable across laboratories or over time. 

DOE Has Not Measured WFO Program Performance against Established 
Objectives: 

DOE has not measured the extent to which WFO program objectives are 
being met, even though DOE site offices are required under the WFO 
order to measure their laboratories' WFO program performance. Some DOE 
site offices and laboratories have taken steps to evaluate WFO program 
processes, but these steps are not consistent across the laboratories, 
generally do not address the program objectives in the WFO order, and 
do not incorporate key attributes of successful performance measures. 

DOE's WFO order requires that DOE site offices establish performance 
goals and measures to assess field performance of the WFO program at 
the laboratories they oversee, including the effectiveness and impact 
of WFO program processes and improvements.[Footnote 22] Moreover, in 
2011, the President directed each agency with a federal laboratory to 
establish performance goals, measures, and evaluation methods related 
to technology transfer.[Footnote 23] Although the presidential memo 
does not specifically mention the WFO program, an objective of the 
program is to transfer technology originating at DOE facilities to 
industry for further development or commercialization. We found that, 
although some DOE site offices and laboratories have taken steps to 
evaluate the performance of the WFO program, these steps do not 
directly address the WFO program objectives. Moreover, DOE site 
offices' and laboratories' efforts to evaluate the WFO programs are 
focused on reviewing processes; including tracking the number of WFO 
agreements and improving timeliness of project selection and approval, 
rather than developing goals and measures for assessing performance 
against WFO program objectives.[Footnote 24] 

According to our discussions with officials from DOE headquarters and 
site offices and laboratory representatives, efforts to evaluate the 
performance of the WFO program at the laboratories include the 
following: 

* Assessing customer satisfaction or other qualitative measures. 
Officials from 4 of the 17 laboratories told us that they have some 
mechanisms in place to collect qualitative information about WFO 
projects, such as customer satisfaction. This information is shared 
with DOE site officials. For example, officials at one laboratory send 
surveys to sponsors to assess customer satisfaction after the 
completion of WFO projects. Another laboratory reports to DOE on 
success stories about WFO projects once they are complete. 

* Tracking the number of WFO agreements. Officials from 6 of the 17 
laboratories told us that they track the amount of or have set targets 
related to the number of WFO agreements in place. 

* Evaluating WFO agreement processing times. Officials from 6 of the 17 
laboratories told us that they have goals to streamline the WFO 
agreement process, as measured by the time it takes from initiation to 
approval of a WFO agreement. In addition, in 2009 DOE commissioned a 
study of the time it takes to process WFO agreements across the 
laboratories and identified best practices for streamlining that 
process. Moreover, in 2011 NNSA commissioned a similar study of 
processing time for WFOs and other interagency agreements at the 3 
laboratories that it oversees. 

We have previously reported on the nine attributes most often 
associated with successful performance measures,[Footnote 25] which are 
summarized in table 2. 

Table 2: Key Attributes of Successful Performance Measures: 

Attributes: Linkage; 
Definitions: Measure is aligned with division and agencywide goals and 
mission and clearly communicated throughout the organization; 
Potentially adverse consequences of not meeting attribute: Behaviors 
and incentives created by measures may not support achieving division 
or agencywide goals or mission. 

Attributes: Clarity; 
Definitions: Measure is clearly stated and the name and definition are 
consistent with the methodology used to calculate it; 
Potentially adverse consequences of not meeting attribute: Data may 
confuse or mislead users. 

Attributes: Measurable target; 
Definitions: Measure has a numerical goal; 
Potentially adverse consequences of not meeting attribute: Managers 
may not be able to determine whether performance is meeting 
expectations. 

Attributes: Objectivity; 
Definitions: Measure is reasonably free from significant bias or 
manipulation; 
Potentially adverse consequences of not meeting attribute: Performance 
assessments may be systematically over- or understated. 

Attributes: Reliability; 
Definitions: Measure produces the same result under similar conditions; 
Potentially adverse consequences of not meeting attribute: Reported 
performance data may be inconsistent and add uncertainty. 

Attributes: Core program activities; 
Definitions: Measures cover the activities that an entity is expected 
to perform to support the intent of the program; 
Potentially adverse consequences of not meeting attribute: Information 
available to managers and stakeholders in core program areas may be 
insufficient. 

Attributes: Limited overlap; 
Definitions: Measure provides new information beyond that provided by 
other measures; 
Potentially adverse consequences of not meeting attribute: Manager may 
have to sort through redundant, costly information that does not add 
value. 

Attributes: Balance; 
Definitions: Taken together, measures ensure that an organization's 
various priorities are covered; 
Potentially adverse consequences of not meeting attribute: Measures 
may over emphasize some goals and skew incentives. 

Attributes: Governmentwide priorities; 
Definitions: Each measure should cover a priority such as quality, 
timeliness, and cost of service; 
Potentially adverse consequences of not meeting attribute: A program's 
overall success is at risk if all priorities are not addressed. 

Source: GAO. 

[End of table] 

Our analysis shows, however, that the steps DOE and the laboratories 
have taken to evaluate performance did not include some of these key 
attributes. For example, while customer satisfaction surveys or other 
qualitative measures, such as success stories gathered by the 
laboratories, may provide some useful information and indicate areas 
for improvement, customer satisfaction is not included in the WFO order 
as a program goal. Furthermore, the performance measures do not 
directly link with the WFO program goals or objectives such as 
providing access to DOE laboratories to accomplish goals that may be 
otherwise unattainable by federal agencies and nonfederal entities. 
Without such linkage, DOE and decision makers may not have the needed 
information to track the program's progress in meeting its objectives. 
Additionally, some WFO qualitative measures such as customer 
satisfaction may lack clarity and a measurable target, making it 
difficult to compare performance across laboratories. These types of 
qualitative measures also may not meet the key attribute of objectivity 
due to the potential for bias or other manipulation, depending on how 
the information is gathered and assessed. Other efforts to measure the 
performance of the program--specifically, the number of WFO agreements 
in place and WFO agreement processing time--both provide some helpful 
information but do not include all key attributes of successful 
performance measures. For example, tracking the number of agreements is 
clear and measurable and provides some information about the number of 
WFO projects at a laboratory. However, without linkage to the program's 
objectives, measuring the number of agreements in place does not 
capture the program's effectiveness in meeting the program's objectives 
laid out in the WFO order, such as maintaining core competencies and 
enhancing the science and technology base at the laboratories. 

As we have reported,[Footnote 26] performance measures provide 
organizations with the ability to track the progress they are making 
toward their mission and objectives. We also have found that 
performance measures can create powerful incentives to influence 
organizational and individual behavior. Our analysis indicates that 
site office and laboratory performance measures lack these key 
attributes. In addition, DOE headquarters officials told us that there 
are no performance measures to assess the WFO program's performance 
against WFO program objectives across all laboratories. The officials 
said that this is because the WFO program is decentralized, and 
laboratories are managed individually. 

Recent external and internal reviews of the DOE laboratories have 
recommended that clear performance measures are needed to measure 
laboratory WFO program performance against the WFO program objectives. 
In January 2013, the National Academy of Public Administration (NAPA) 
reported that while DOE officials at the laboratories have measures to 
assess DOE funded work; these measures do not always apply to non-DOE 
funded work such as work performed under the WFO program.[Footnote 27] 
NAPA also noted that DOE's decentralized approach to managing the WFO 
program raised questions about DOE's ability to oversee the program as 
a whole. NAPA recommended that DOE include measures for WFO work 
performed in its evaluations of laboratory performance. Similarly, in 
2012, a working group set up by DOE headquarters to oversee efforts at 
the laboratories to share technology with non-DOE entities, reported 
concerns that measures did not exist to evaluate the impact and success 
of WFO work activities in achieving program objectives. DOE officials 
told us that, because WFO agreements are unique to each laboratory, 
they do not believe it is appropriate to develop one set of measures 
for all laboratories and that they have no plans to do so. However, 
without measures that apply to all laboratories, it is difficult to 
compare performance across laboratories in meeting overall program 
objectives. 

Conclusions: 

DOE laboratories' highly specialized facilities, cutting-edge 
technologies, and highly trained scientists, technicians, and other 
staff represent a significant investment of public funds. DOE's WFO 
program has allowed the department to share these capabilities with 
both other federal agencies and nonfederal entities. DOE has 
established WFO program requirements--including for project approval, 
cost recovery, program reporting, and program review--that together are 
intended to help DOE operate a successful WFO program and avoid adverse 
impacts on the laboratories' missions and facilities and to avoid 
competition with the private sector. DOE falls short, however, in 
ensuring that these requirements are consistently met. For example, DOE 
has frequently relied on the laboratories to determine whether WFO 
projects selected meet the requirements of the WFO order, and DOE 
officials have accepted the laboratories' determinations without taking 
steps to independently verify these determinations. Ensuring that the 
WFO projects selected meet DOE requirements is a governmental 
responsibility and, according to the WFO order, a DOE contracting 
officer or other authorized DOE designee is required to determine 
whether a proposed WFO project has met all of these requirements before 
approving the work. By relying instead on the laboratories to make 
these determinations, DOE cannot ensure that all WFO projects meet 
requirements. DOE may also not be able to ensure that the costs of WFO 
projects are recovered according to its pricing order because it has 
not required the laboratories to establish written procedures to guide 
development of project budgets or charging of costs to projects, 
important steps for determining and recovering the full costs of WFO 
projects' materials and services. The department's CFO also does not 
have assurance that the full costs of WFO projects are charged to the 
projects' sponsors because field CFOs do not always conduct biennial 
pricing reviews according to requirements. 

Furthermore, the WFO order does not specify what should be included in 
the annual WFO program reviews required by the order. Without clear and 
specific requirements, it may be difficult for DOE to identify WFO 
program deficiencies, if any. In addition, DOE officials told us that 
the requirement to prepare an annual summary report of WFO activities 
performed at its laboratories is outdated and has not been followed for 
several years, and that the department plans to eliminate this 
requirement. However, members of Congress have directed DOE to provide 
information on the status of WFO activities, and other DOE programs 
regularly need and collect WFO project data that would be available if 
DOE prepared the annual summary report. Choosing to report data on a 
case-by-case basis, rather than in an annual report, may make it 
difficult for those providing oversight and some users of the data, and 
because the data are not readily available, DOE will need to generate 
them, which is time-consuming, and the data may not be comparable across 
laboratories or over time. Furthermore, while some site offices have made 
efforts to evaluate the performance of the WFO program, these efforts 
do not always incorporate key attributes of successful performance 
measures, such as being quantifiable or having a numerical goal. 
Moreover, these efforts generally do not directly address the 
objectives of the WFO program. Without better measures to evaluate 
program performance, DOE and decision makers will not have the needed 
information to track the program's progress in meeting its objectives. 

Recommendations for Executive Action: 

To improve DOE's management and oversight of the WFO program, we 
recommend that the Secretary of Energy take the following six actions: 

* Ensure compliance with the requirements in the WFO order for project 
approval. 

* Require laboratories to establish and follow written procedures for 
developing WFO project budgets and for charging costs to WFO projects. 

* Ensure compliance with the requirements for conducting biennial 
pricing reviews. 

* Specify in the WFO order what the annual WFO program reviews should 
include. 

* Ensure that annual summary reports of WFO activities are prepared so 
that data on those activities are readily available for those who need 
this information. 

* Establish performance measures that incorporate key attributes of 
successful performance measures and that address the objectives of the 
WFO program. 

Agency Comments and Our Evaluation: 

We provided DOE with a draft of this report for its review and comment. 
In written comments, reproduced in appendix IV, DOE stated that it 
concurred with the recommendations in the report and provided information 
on planned actions to address each recommendation. We believe that many 
of the proposed actions, while good first steps, fall short of our 
recommendations, however, and may not fully address the issues we 
discussed in our report. 

For example, in response to the first three recommendations (i.e., ensure 
compliance with the requirements in the WFO order for project approval; 
require laboratories to establish and follow written procedures for 
developing WFO project budgets and for charging costs to WFO projects; 
and ensure compliance with the requirements for conducting biennial 
pricing reviews), DOE stated that it will issue a policy flash, or notice, 
on the requirements of the WFO program. While reminding staff of the 
requirements of the WFO order would likely be beneficial, to improve its 
management and oversight of the WFO program, DOE also needs to take steps 
to ensure that these requirements are consistently being met by periodically 
monitoring the processes for project approval, full cost recovery of 
projects, and biennial pricing reviews. 

DOE also stated that it concurred in principle with the fourth 
recommendation to specify in the WFO order what the required annual 
program reviews should include. DOE added, however, that the current 
WFO order appropriately provides discretion to DOE program offices in 
determining the scope and extent of WFO program reviews. Again, DOE 
states that it will issue a policy flash reminding the program offices 
of the annual review requirement for the WFO program. DOE’s planned action, 
however, does not directly address our recommendation to update the WFO 
order with specific requirements for these reviews. Likewise, DOE stated 
that it concurred in principle with the fifth recommendation that it ensure 
that annual summary reports of WFO activities are prepared so that data on 
those activities are readily available for those who need this information. 
However, rather than preparing annual summary reports, DOE stated that the 
WFO order requires revision to reflect its current practice of providing 
current WFO program summary information. As we said in our report, choosing 
to report data on a case-by-case basis rather than in an annual report may 
make it difficult for those providing oversight, and for some users of the 
data, because the data are not readily available and DOE will need to generate 
them, which is time-consuming, and they may not be comparable across 
laboratories or over time. Finally, in response to the sixth recommendation 
to establish performance measures that incorporate key attributes of 
successful performance measures and that address the objectives of the WFO 
program, DOE plans to issue a policy flash on the current requirements of 
the WFO program related to program assessments. In our report, we discussed 
that the WFO order, however, does not include specific requirements for 
program assessments and a policy flash that repeats the current requirements 
for program assessments would, therefore, not address the recommendation. 

DOE also provided clarifying comments that we incorporated, as appropriate. 
In particular, DOE requested that we consider its laboratory describing their 
cost accounting practices and procedures as written procedures for charging 
costs to ongoing projects. We have added information to our report about the 
CAS disclosure statements. While these statements describe how the laboratory 
plans to allocate costs, we do not agree that these disclosure statements 
constitute procedural guidance for developing project budgets and charging 
costs to projects. Moreover, as we point out in the report, we found that 
several laboratories have developed detailed written procedures for developing 
project budgets and charging costs to projects, which would be unnecessary if 
the disclosure statements were sufficient as guidance. 

As agreed with your offices, unless you publicly announce the contents of 
this report earlier, we plan no further distribution until 30 days from the 
report date. At that time, we will send copies to the Secretary of Energy, 
the appropriate congressional committees, and other interested parties. In 
addition, the report will be available at no charge on the GAO website at 
[hyperlink, http://www.gao.gov. 

If you or your staff members have any questions about this report, please 
contact me at (202) 512-3841 or trimbled@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on the 
last page of this report. GAO staff who made key contributions to this 
report are listed in appendix V.

Signed by: 

David C. Trimble: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine the amount and type of work conducted at the laboratories 
under the Department of Energy's (DOE) Work for Others (WFO) program, 
we requested and obtained DOE data on WFO costs from DOE's Office of 
the Chief Financial Officer (CFO) for fiscal years 2008 through 2012, 
including WFO program costs by sponsor and by laboratory, as measured 
in costs incurred. We also requested and obtained total costs incurred 
for each laboratory for these same fiscal years. We selected costs 
incurred as the measure of the amount of WFO projects performed for our 
purposes because WFO agreements can span multiple years and these costs 
are similar to the costs presented in reports by DOE and its Office of 
Inspector General. We used data for fiscal years 2008 through 2012 
because our last report on DOE WFO projects reported data through 
fiscal year 2008. We interviewed DOE officials who oversee and collect 
these cost data for DOE's Office of the CFO and determined that these 
data were obtained from DOE's Standard Accounting and Reporting System 
(STARS) financial reporting system. 

To assess the reliability of DOE's WFO project cost data and total 
laboratory costs, we reviewed information about DOE's STARS financial 
reporting system, as well as a recent external audit of the STARS 
system and DOE's financial data. We also reviewed recent GAO 
assessments of the STARS system. No material weaknesses were reported. 
For data verification purposes, we obtained fiscal year 2012 cost data 
on WFO projects from each laboratory and compared that data with the 
fiscal year 2012 cost data on WFO projects obtained from the DOE CFO. 
Although we identified some differences between the data, through 
discussions with the DOE CFO, we determined that those differences were 
the result of variances in the cost elements that were included in the 
information provided by each laboratory. Based on our assessment, we 
concluded that the data obtained from the DOE CFO were sufficiently 
reliable to describe the dollar amount and percentage of WFO projects 
performed at the laboratories. To determine the number of WFO projects 
that were active during fiscal year 2012, we used information from the 
fiscal year 2012 WFO project lists provided by each laboratory, as the 
DOE CFO does not have the capability to identify individual nonfederal 
projects. To determine the type of WFO projects performed at DOE's 
laboratories, we gathered data on the costs of WFO activities performed 
for federal versus nonfederal sponsors. We also reviewed the lists of 
WFO projects provided by each laboratory, we conducted interviews with 
DOE headquarters officials, and we conducted structured interviews with 
DOE site officials and officials for the 17 laboratories to gather more 
information about examples of WFO projects performed for one federal 
and one nonfederal WFO sponsor from each laboratory with activity 
during fiscal year 2012. We judgmentally selected three laboratories to 
visit; including the National Nuclear Security Agency’s (NNSA) Sandia 
National Laboratory in Albuquerque, New Mexico, the DOE laboratory with 
the largest dollar amount of WFO project work conducted in fiscal year 
2012. We also visited NNSA's Los Alamos National Laboratory in Los Alamos, 
New Mexico, due to its size and proximity to Sandia National Laboratory; 
and Pacific Northwest National Laboratory--a larger Office of Science of 
laboratory located in Richland, Washington. We contacted officials at the 
remaining 14 laboratories by phone. 

To determine the extent to which DOE ensures that WFO program 
requirements are met, we reviewed federal regulations, DOE 
requirements, and DOE and laboratories' policies and procedures 
governing the WFO program, including for selection and approval of WFO 
projects and for cost recovery--establishing project budgets and 
charging costs to ongoing projects--for WFO projects. We discussed 
these policies and procedures and how they are carried out in practice 
in our structured interviews with DOE site office and laboratory 
officials responsible for the WFO program at each laboratory. We 
reviewed and analyzed biennial pricing reviews conducted by the DOE 
field CFOs responsible for oversight of each laboratory covering fiscal 
years 2010 and 2011, the most recent data available. We discussed 
procedures for review and approval of WFO project proposals in our 
structured interviews with DOE site office and laboratory officials. We 
discussed DOE requirements for WFO project pricing, pricing reviews, 
and review results with officials from DOE's CFO offices at 
headquarters and the seven DOE field CFOs that oversee the 
laboratories. We also reviewed DOE program office and site office 
review reports on laboratory WFO programs that were conducted from 
calendar years 2008 through 2012 to identify findings related to the 
WFO programs. For additional information applicable to all of our 
objectives, we reviewed external reports on the WFO program, including 
several reports issued from calendar years 2009 through 2013 by the DOE 
Office of Inspector General, a December 2010 report issued by the 
Department of Defense Office of Inspector General, a February 2012 
report issued by the National Research Council, and a January 2013 
report issued by the National Academy of Public Administration. We
contacted officials from these external entities to discuss their 
reports. 

To determine the extent to which DOE and the laboratories have measured 
WFO program performance against WFO program objectives, we reviewed DOE 
orders, performance requirements in DOE's contracts with laboratory 
management and operating contractors, DOE evaluations of laboratories' 
performance, and laboratories' strategic plans. We also reviewed policies 
and procedures for establishing and for executing WFO projects at each 
laboratory. We discussed laboratories' strategies and goals for their 
WFO programs and WFO program performance measurements with DOE headquarters 
officials, and in our structured interviews with DOE site office officials, 
and with officials from each of the laboratories. 

[End of section] 

Appendix II: List of the 17 Department of Energy (DOE) National 
Laboratories: 

National Laboratory: Ames Laboratory; 
Location: Ames, IA; 
Research area: Rare earths and other critical materials, applied 
energy, fossil energy, and nonproliferation programs; 
DOE program office: Science; 
Laboratory contractor: Iowa State University. 

National Laboratory: Argonne National Laboratory; 
Location: Argonne, IL; 
Research area: Energy innovation, sustainable energy; 
DOE program office: Science; 
Laboratory contractor: U Chicago Argonne, LLC. 

National Laboratory: Brookhaven National Laboratory; 
Location: Upton, NY; 
Research area: Physical, energy, environmental, and life sciences; 
energy technologies and national security; 
DOE program office: Science; 
Laboratory contractor: Brookhaven Science Associates, LLC. 

National Laboratory: Fermi National Accelerator Laboratory; 
Location: Batavia, IL; 
Research area: Experimental and theoretical particle physics, 
astrophysics, and accelerator science; 
DOE program office: Science; 
Laboratory contractor: Fermi Research Alliance, LLC. 

National Laboratory: Idaho National Laboratory; 
Location: Idaho Falls, ID; 
Research area: Sustainable energy and national and homeland security; 
DOE program office: Nuclear Energy; 
Laboratory contractor: Battelle Energy Alliance. 

National Laboratory: Lawrence Berkeley National Laboratory; 
Location: Berkley, CA; 
Research area: Particle and nuclear physics; physical, chemical, 
computational, biological, and environmental systems; 
DOE program office: Science; 
Laboratory contractor: University of California. 

National Laboratory: Lawrence Livermore National Laboratory; 
Location: 
Livermore, CA; 
Research area: National defense, nuclear weapons stockpile 
stewardship, weapons of mass destruction, and nuclear nonproliferation; 
DOE program office: National Nuclear Security Administration; 
Laboratory contractor: Lawrence Livermore National Security, LLC. 

National Laboratory: Los Alamos National Laboratory; 
Location: Los Alamos, NM; 
Research area: National defense, nuclear weapons stockpile 
stewardship, weapons of mass destruction, and nuclear nonproliferation; 
DOE program office: National Nuclear Security Administration; 
Laboratory contractor: Los Alamos National Security, LLC. 

National Laboratory: National Energy Technology Laboratory; 
Location: Pittsburgh, PA; 
Research area: Environmental stewardship, clean energy; 
DOE program office: Fossil Energy; 
Laboratory contractor: Government owned and operated by DOE. 

National Laboratory: National Renewable Energy Laboratory; 
Location: Golden, CO; 
Research area: Renewable energy and energy efficiency research; 
DOE program office: Energy Efficiency and Renewable Energy; 
Laboratory contractor: Alliance for Sustainable Energy, LLC. 

National Laboratory: Oak Ridge National Laboratory; 
Location: Oak Ridge, TN; 
Research area: Neutron scattering, advanced materials, high-
performance computing, and nuclear science and engineering; 
DOE program office: Science; 
Laboratory contractor: UT-Battelle, LLC. 

National Laboratory: Pacific Northwest National Laboratory; 
Location: Richland, WA; 
Research area: Electricity management, sustainability, threat 
detection and reduction, in situ chemical imaging and analysis, 
simulation and analytics; 
DOE program office: Science; 
Laboratory contractor: Battelle Memorial Institute. 

National Laboratory: Princeton Plasma Physics Laboratory; 
Location: Princeton, NJ; 
Research area: Plasma and fusion energy sciences; 
DOE program office: Science; 
Laboratory contractor: Princeton University. 

National Laboratory: Sandia National Laboratories; 
Location: Albuquerque, NM; 
Research area: National defense, weapons of mass destruction, 
transportation, energy, telecommunications, and financial networks, 
and environmental stewardship; 
DOE program office: National Nuclear Security Administration; 
Laboratory contractor: Sandia Corporation. 

National Laboratory: Savannah River National Laboratory; 
Location: Aiken, SC; 
Research area: Environmental stewardship, national and homeland 
security, clean energy; 
DOE program office: Environmental Management; 
Laboratory contractor: Savannah River Nuclear Solutions, LLC. 

National Laboratory: SLAC National Accelerator Laboratory; 
Location: Menlo Park, CA; 
Research area: Materials, chemical and energy science, structural 
biology, and particle physics and astrophysics; 
DOE program office: Science; 
Laboratory contractor: Stanford University. 

National Laboratory: Thomas Jefferson National Accelerator Facility; 
Location: Newport News, VA; 
Research area: Fundamental nature of confined states of quarks, 
gluons, and nucleons; superconducting radio-frequency technology; 
DOE program office: Science; 
Laboratory contractor: Jefferson Science Associates, LLC. 

Source: GAO analysis of DOE data. 

[End of table] 

[End of section] 

Appendix III: Department of Energy National Laboratory Work For Others 
Costs and Total Costs, as Measured in Costs Incurred, in Fiscal Year 
2012: 

Sandia National Laboratories; 
Total Work for Others (WFO) performed: $803,313,000; 
WFO performed as a percentage of total laboratory work performed: 
32.9%; 
WFO sponsor: 
Federal: Total: $786,915,000; 
Federal: Percentage of total WFO: 98.0%; 
Nonfederal: Total: $16,398,000; 
Nonfederal: Percentage of total WFO: 2.0%. 

Lawrence Livermore National Laboratory; 
Total Work for Others (WFO) performed: $242,975,000; 
WFO performed as a percentage of total laboratory work performed: 
14.9%; 
WFO sponsor: 
Federal: Total: $206,222,000; 
Federal: Percentage of total WFO: 84.9%; 
Nonfederal: Total: $36,752,000; 
Nonfederal: Percentage of total WFO: 15.1%. 

Oak Ridge National Laboratory; 
Total Work for Others (WFO) performed: $206,770,000; 
WFO performed as a percentage of total laboratory work performed: 
13.5%; 
WFO sponsor: 
Federal: Total: $186,713,000; 
Federal: Percentage of total WFO: 90.3%; 
Nonfederal: Total: $20,057,000; 
Nonfederal: Percentage of total WFO: 9.7%. 

Los Alamos National Laboratory; 
Total Work for Others (WFO) performed: $197,770,000; 
WFO performed as a percentage of total laboratory work performed: 8.6%; 
WFO sponsor: 
Federal: Total: $169,847,000; 
Federal: Percentage of total WFO: 85.9%; 
Nonfederal: Total: $27,923,000; 
Nonfederal: Percentage of total WFO: 14.1%. 

Pacific Northwest National Laboratory; 
Total Work for Others (WFO) performed: $182,399,000; 
WFO performed as a percentage of total laboratory work performed: 
20.8%; 
WFO sponsor: 
Federal: Total: $173,794,000; 
Federal: Percentage of total WFO: 95.3%; 
Nonfederal: Total: $8,605,000; 
Nonfederal: Percentage of total WFO: 4.7%. 

Idaho National Laboratory; 
Total Work for Others (WFO) performed: $148,506,000; 
WFO performed as a percentage of total laboratory work performed: 
17.5%; 
WFO sponsor: 
Federal: Total: $144,729,000; 
Federal: Percentage of total WFO: 97.5%; 
Nonfederal: Total: $3,777,000; 
Nonfederal: Percentage of total WFO: 2.5%. 

Lawrence Berkeley National Laboratory; 
Total Work for Others (WFO) performed: $118,320,000; 
WFO performed as a percentage of total laboratory work performed: 
14.7%; 
WFO sponsor: 
Federal: Total: $61,250,000; 
Federal: Percentage of total WFO: 51.8%; 
Nonfederal: Total: $57,070,000; 
Nonfederal: Percentage of total WFO: 48.2%. 

Argonne National Laboratory; 
Total Work for Others (WFO) performed: $85,132,000; 
WFO performed as a percentage of total laboratory work performed: 
11.3%; 
WFO sponsor: 
Federal: Total: $50,017,000; 
Federal: Percentage of total WFO: 58.8%; 
Nonfederal: Total: $35,115,000; 
Nonfederal: Percentage of total WFO: 41.2%. 

Brookhaven National Laboratory; 
Total Work for Others (WFO) performed: $50,823,000; 
WFO performed as a percentage of total laboratory work performed: 7.0%; 
WFO sponsor: 
Federal: Total: $40,369,000; 
Federal: Percentage of total WFO: 79.4%; 
Nonfederal: Total: $10,454,000; 
Nonfederal: Percentage of total WFO: 20.6%. 

National Renewable Energy Laboratory; 
Total Work for Others (WFO) performed: $33,756,000; 
WFO performed as a percentage of total laboratory work performed: 6.6%; 
WFO sponsor: 
Federal: Total: $22,055,000; 
Federal: Percentage of total WFO: 65.3%; 
Nonfederal: Total: $11,701,000; 
Nonfederal: Percentage of total WFO: 34.7%. 

Savannah River National Laboratory; 
Total Work for Others (WFO) performed: $25,563,000; 
WFO performed as a percentage of total laboratory work performed: 2.4%; 
WFO sponsor: 
Federal: Total: $22,929,000; 
Federal: Percentage of total WFO: 89.7%; 
Nonfederal: Total: $2,634,000; 
Nonfederal: Percentage of total WFO: 10.3%. 

Thomas Jefferson National Accelerator Facility; 
Total Work for Others (WFO) performed: $8,250,000; 
WFO performed as a percentage of total laboratory work performed: 4.6%; 
WFO sponsor: 
Federal: Total: $5,160,000; 
Federal: Percentage of total WFO: 62.5%; 
Nonfederal: Total: $3,090,000; 
Nonfederal: Percentage of total WFO: 37.5%. 

SLAC National Accelerator Laboratory; 
Total Work for Others (WFO) performed: $8,226,000; 
WFO performed as a percentage of total laboratory work performed: 2.3%; 
WFO sponsor: 
Federal: Total: $2,263,000; 
Federal: Percentage of total WFO: 27.5%; 
Nonfederal: Total: $5,963,000; 
Nonfederal: Percentage of total WFO: 72.5%. 

Fermi National Accelerator Laboratory; 
Total Work for Others (WFO) performed: $5,722,000; 
WFO performed as a percentage of total laboratory work performed: 1.3%; 
WFO sponsor: 
Federal: Total: $95,000; 
Federal: Percentage of total WFO: 1.7%; 
Nonfederal: Total: $5,627,000; 
Nonfederal: Percentage of total WFO: 98.3%. 

Ames Laboratory; 
Total Work for Others (WFO) performed: $4,106,000; 
WFO performed as a percentage of total laboratory work performed: 
11.2%; 
WFO sponsor: 
Federal: Total: $667,000; 
Federal: Percentage of total WFO: 16.3%; 
Nonfederal: Total: $3,439,000; 
Nonfederal: Percentage of total WFO: 83.7%. 

Princeton Plasma Physics Laboratory; 
Total Work for Others (WFO) performed: $3,227,000; 
WFO performed as a percentage of total laboratory work performed: 3.9%; 
WFO sponsor: 
Federal: Total: $790,000; 
Federal: Percentage of total WFO: 24.5%; 
Nonfederal: Total: $2,437,000; 
Nonfederal: Percentage of total WFO: 75.5%. 

National Energy Technology Laboratory; 
Total Work for Others (WFO) performed: $1,498,000; 
WFO performed as a percentage of total laboratory work performed: 0.1%; 
WFO sponsor: 
Federal: Total: $1,014,000; 
Federal: Percentage of total WFO: 67.7%; 
Nonfederal: Total: $485,000; 
Nonfederal: Percentage of total WFO: 32.3%. 

Total: 
Total Work for Others (WFO) performed: $2,126,357,000; 
WFO performed as a percentage of total laboratory work performed: 
13.0%; 
WFO sponsor: 
Federal: Total: $1,874,829,000; 
Federal: Percentage of total WFO: 88.2%; 
Nonfederal: Total: $251,527,000; 
Nonfederal: Percentage of total WFO: 11.8%. 

Source: GAO analysis of DOE data. 

[End of table] 

[End of section] 

Appendix IV: Comments from the Department of Energy: 

Department of Energy: 
Washington, DC 20585: 

September 26, 2013 

Mr. David Trimble: 
Director: 
Natural Resources and Environment: 
United States Government Accountability Office: 
44 1 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Trimble: 

This letter provides the U.S. Department of Energy's consolidated 
comments to the Government Accountability Office (GAO) draft report 
entitled: National Laboratories: DOE needs to Improve Oversight of 
Work Performed for Non-DOE Entities (GAO-13-7415, September 2013). We 
appreciate GAO's perspective on the work for others program and 
recommendations for improvement. 

GAO provides six recommendations for ensuring DOE compliance with 
various requirements of the DOE work for others program. The 
Department concurs with the report's recommendations and will notify 
relevant Departmental officials of the various WFO program 
requirements that were the subject of GAO's assessment. Additionally,
the Department provides the following clarifying comments regarding 
GAO's conclusions related to DOE's management or the work for others 
program. 

* DOE Has Not Ensured That Cost Recovery Procedures for WFO Projects 
Are in Place: The GAO concluded that DOE has not ensured that the 
laboratories have written procedures for charging costs to ongoing 
projects. Contractors are required to submit Cost Accounting Standards 
(CAS) disclosure statements describing their cost accounting practices 
and procedures (48 CFR 9903.202). To ensure consistent treatment of 
laboratory costs and consistency with CAS, contractors use these cost 
recovery and cost allocation procedures regardless of the source of 
funds. All DOE contractor CAS disclosure statements are reviewed and 
approved by DOE officials. DOE considers the disclosed CAS practices
described above to be specific written procedures used for cost 
recovery and cost allocation. We request that GAO take the DOE 
required CAS disclosure statements and their requisite written 
procedures into cons deration in its report. 

* 2013 Inspector General Report on WFO at Lawrence Berkeley National
Laboratory: The GAO states that the DOE Office of Inspector General 
(IG) has identified errors related to the charging of general and 
administrative costs to WFO projects. The GAO cited a report issued by 
the IG in 2013 on WFO at Lawrence Berkeley National Laboratory and 
stated that the IG found that $400,000 in project costs were not 
reimbursed by the sponsor of the WFO projects. DOE's position is that 
the $400,000 does not represent non-compliance with the Cost 
Accounting Standards (CAS) and is further supported by the DOE
IG auditor who agreed the current allocation methodology complies with 
CAS. 

A response to the report recommendations is attached. 

For further questions regarding our response, please contact A. Scott 
Geary at (202) 287-1507 or Andrew.Geary@HQ.DOE.GOV. 

Sincerely, 

Signed by: 

Ingrid Kolb: 
Director: 
Office of Management: 

Attachment: 

Department of Energy Response to GAO Draft Report 13-745, "National 
Laboratories: DOE Needs to Improve Oversight of Work Performed for Non-
DOE Entities" 

Recommendation 1: Ensure compliance with the requirements in the WFO 
order for project approval. 

DOE Response: Concur in principle. DOE will issue a Policy Flash 
reminding organizations involved in the review, approval and 
performance of WFO activities of the DOE Order policy, procedures and 
responsibilities including the importance of sufficient information 
for making contract-related decisions. 

The DOE was pleased that the GAO did not identify any instances where 
projects were not being approved by DOE Contracting Officers (COs) and 
that required determinations were being made prior to the CO approval. 
The report also did not identify any projects thought to be 
inappropriately approved and being performed by DOE. The draft report 
did question the level COs relied on contractor provided information 
when assessing whether a proposed WFO project meets DOE requirements 
and should be approved. To address this potential issue, DOE will 
issue a reminder to contracting officers of the requirements of the 
DOE Order. 

Recommendation 2: Require laboratories to establish and follow written 
procedures for developing WFO project budgets and for charging costs 
to WFO projects. 

DOE Response: Concur in principle. DOE will issue a Policy Flash on 
the requirements of the WFO program. All laboratories will be reminded 
on the written procedures for charging costs to WFO projects as set 
forth in the Cost Accounting Standards disclosure statement and DOE
officials have verified that contractors currently follow those 
practices. Costs for WFO projects will continue to be developed and 
charged consistent with those used for DOE work. 

Recommendation 3: Ensure compliance with the requirements for 
conducting biennial pricing reviews. 

DOE Response: Concur. DOE will issue a notice on the requirements of 
the WFO program. 

Recommendation 4: Specify in the WFO order what the annual WFO program 
reviews should include. 

DOE Response: Concur. DOE will issue a Policy Flash on the 
requirements of the WFO program. The DOE Order appropriately provides 
discretion to DOE program offices in determining the scope and extent 
of WFO program reviews. 

Recommendation 5: Ensure that annual summary reports of WFO activities 
are prepared so that data on those activities are readily available 
for those who need this information. 

DOE Response: Concur. The DOE recognizes that the DOE Order requires 
revision to properly reflect DOE's current practices for providing WFO 
program summary information. The Office of the CFO will ensure the DOE 
accounting system continues to provide summary WFO program information 
on WFO activities. 

Recommendation 6: Establish performance measures that incorporate key 
attributes of successful performance measures and that address the 
objectives of the WFO program. 

DOE Response: Concur in principle: DOE will issue a Policy Flash on 
the requirements of the WFO program related to program assessments. 

As required by DOE Order 481.1C, DOE site office managers will develop 
performance goals and measures appropriate for their laboratories. As 
appropriate, site office managers will consider the best practices 
identified by GAO in its draft report when developing these measures. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David C. Trimble, (202) 512-3841 or trimbled@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Dan Feehan and Janet Frisch, 
Assistant Directors; Joseph Cook; Elizabeth Curda; Paul Kinney; Jeff 
Larson; Cynthia Norris; Josie Ostrander; Kathy Pedalino; Tim Persons; 
Cheryl Peterson; Carl Ramirez and Kiki Theodoropoulos made key 
contributions to this report. 

[End of section] 

Footnotes: 

[1] M&O contracts are agreements under which the government contracts 
for the operation, maintenance, or support, on its behalf, of a 
government-owned or -controlled research, development, special 
production, or testing establishment wholly or principally devoted to 
one or more of the major programs of the contracting federal agency. 
See Federal Acquisition Regulation, 48 C.F.R. § 17.601. 

[2] At DOE's National Energy Technology Laboratory, DOE employees--
rather than employees of one of DOE's contractors--carry out the 
laboratory's activities. 

[3] 31 U S C § 1535. 

[4] 42 U.S.C. § 2053. 

[5] 42 U.S.C.A. § 5801. 

[6] DOE, Work for Others (Non-Department of Energy Funded Work), DOE 
Order 481.1C (Washington, D.C.: Mar. 14, 2011). 

[7] Congress created NNSA as a semiautonomous agency within DOE in 1999 
(Title 32 of the National Defense Authorization Act for Fiscal Year 
2000, Pub. L. No.106-65, § 3201 et seq.). Although the DOE order 
related to WFO makes separate reference to NNSA and its facilities, 
including NNSA laboratories, for purposes of this report references to 
DOE or its program offices will include NNSA. 

[8] DOE, Pricing of Departmental Materials and Services, DOE Order 
522.1 (Washington, D.C.: Nov. 3, 2004). 

[9] With the exception of DOE's National Energy Technology Laboratory, 
which reports directly to DOE headquarters, each DOE laboratory is 
overseen by a single federal site office that reports to DOE 
headquarters. Similarly, each NNSA laboratory is overseen by a single 
federal office, called a field office, and each field office reports 
directly to NNSA headquarters. For the purposes of this report, we will 
use the term site office to indicate the federal office overseeing the 
laboratories. 

[10] A total of seven field CFOs oversee financial activities at the 17 
national laboratories. 

[11] DOE, U.S. Department of Energy Work for Others at the National 
Laboratories Report to Congress (Washington, D.C.: May 2011). 

[12] The Homeland Security Act of 2002, Pub. L. No. 107-296, Title III, 
§ 309 (2002) authorizes DOE to accept and perform work at its 
laboratories in support of Homeland Security activities on an equal 
basis to other missions at the laboratories. Accordingly, work 
performed by DOE for DHS is covered by a separate order that differs 
from the WFO order in one key way: while work performed under the WFO 
order must not adversely impact DOE mission-related work assigned to 
the facility performing the WFO, work performed for DHS has no such 
limitation. In part because of this difference, DHS work is not 
considered to be WFO. See DOE, Reimbursable Work for the Department of 
Homeland Security, DOE Order 484.1 (Washington, D.C.: Mar. 14, 2011). 

[13] DOE, Pricing of Departmental Materials and Services, DOE Order 522.1 
(Washington, D.C.: Nov. 3, 2004). 

[14] DOE laboratory contractors are required by 48 C.F.R. 9903.202 to 
develop Cost Accounting Standards (CAS) disclosure statements. These 
statements describe contractors’ cost accounting practices and procedures 
and are reviewed and approved by DOE officials. DOE officials told us 
that these CAS disclosure statements serve as written procedures used 
for cost recovery and assignment of costs to ongoing projects, but we 
found that five of the laboratories also developed detailed, written 
procedures for staff to use when developing WFO project budgets and 
charging costs to projects. 

[15] DOE requires advance payment before beginning work on a WFO project. 
Specifically, under DOE requirements, WFO projects for federal sponsors 
may not begin until a valid reimbursable agreement has been executed, 
and certification of funding has been completed. Under DOE’s financial 
management policy, sponsors of nonfederal WFO projects must provide a 
60-day cash advance of funds before work can begin (DOE, “Reimbursable 
Work, Revenues, and Other Collections,” chap. 13 in DOE Financial 
Management Accounting Handbook). 

[16] DOE's National Renewable Energy Laboratory did not provide a 
biennial pricing review. Instead, they provided a letter from the 
Golden, Colorado field office (the DOE field office responsible for 
oversight of the laboratory) stating the Golden field office is in full 
compliance with biennial pricing review requirements because each WFO 
proposal request is reviewed by a budget analyst and the field CFO. 

[17] Biennial pricing reviews cover a 2-year period. The biennial 
pricing reports that we reviewed were the most recent reviews conducted 
and covered the 2-year period of fiscal years 2010 and 2011. 

[18] DOE, Office of Inspector General Office of Audits and Inspections, 
Fiscal Year 2011 Audit of the Work for Others Program at the Lawrence 
Berkley National Laboratory (Washington, D.C.: June 2013). DOE officials 
told us that they do not agree with the Inspector General’s finding 
because they believe that the cost allocation methodology used to 
allocate WFO administrative costs complies with CAS. 

[19] H.R. Conf. Rep. No. 111-278 at 101 (2009). 

[20] Pub. L. No. 111-85, 123 Stat. 2845 (2009). 

[21] The Energy Policy Act of 2005, Pub. L. No. 109-58, Title X, sec. 
1001(a) (2005) sought to improve the process for transferring 
technologies by requiring the Secretary of Energy to, among other 
things, appoint a technology transfer coordinator for the department 
and to develop technology transfer goals and a plan for implementing 
them. 

[22] In 1993, Congress enacted the Government Performance and Results 
Act (GPRA) to improve the efficiency and accountability of federal 
programs, among other purposes, and established a system for agencies 
to set goals for program performance and to measure results. Federal 
agencies are to comply with GPRA requirements, such as developing 
performance goals and measures, and we have previously reported that 
these requirements also can serve as leading practices for lower levels 
within federal agencies, such as individual divisions, programs, or 
initiatives. GPRA is a leading practice, but DOE's WFO program is not 
subject to its requirements. 

[23] The White House, Presidential Memorandum-Accelerating Technology 
Transfer and Commercialization of Federal Research in Support of 
High-Growth Business (Oct. 28, 2011). 

[24] For example, in 2009, DOE commissioned a study of the time it 
takes to process WFO agreements and what best practices existed to 
streamline that process; and, in 2011, NNSA (which oversees three of 
DOE’s laboratories) commissioned a similar study of process time for 
WFOs and other interagency agreements at its laboratories.

[25] GAO, Environmental Justice: EPA Needs to Take Additional Actions 
to Help Ensure Effective Implementation, [hyperlink, 
http://www.gao.gov/products/GAO-12-77] (Washington, D.C.: Oct. 6, 2011); 
GAO, Tax Administration: IRS Needs to Further Refine Its Tax Filing 
Season Performance Measures, [hyperlink, 
http://www.gao.gov/products/GAO-03-143] (Washington, D.C.: Nov. 22, 2002). 

[26] [hyperlink, http://www.gao.gov/products/GAO-12-77]. 

[27] NAPA, U.S. Department of Energy: Positioning DOE's Labs for the 
Future: A Review of DOE's Management and Oversight of the National 
Laboratories (Washington, D.C.: January 2013). NAPA was established in 
1967 and chartered by Congress as an independent, nonpartisan 
organization to evaluate, analyze, and make recommendations on the 
nation's most critical and complex public management, governance, 
policy and operational challenges. 

[End of section] 

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