Need for $200,000 Subcontract Apparently Eliminated by Reagan Administration Proposal

EMD-81-81: Published: Apr 24, 1981. Publicly Released: Apr 24, 1981.

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In January 1981, the Department of Energy (DOE) transferred $250,000 in fiscal year (FY) 1981 funds to the Los Alamos Scientific Laboratory and authorized $200,000 for a sole source subcontract to MIL Corporation located in Bethesda, Maryland, to assist the DOE Office of Energy from Municipal Waste in developing the planning systems and documentation necessary to comply with DOE needs and to allow for the proper management of energy from waste programs and projects; the contract has not yet been awarded. However, the Administration favors the eventual elimination of the Office of Energy from Municipal Waste and has recommended to Congress that the moneys already appropriated for the Office's FY 1981 and 1982 commercialization program be rescinded and that the FY 1981 and 1982 appropriations be limited for research and development.

Because the Office of Energy from Municipal Waste decided to obtain the subcontract by contracting through the Los Alamos Scientific Laboratory, the DOE Office of Procurement and Contracts Management did not have an opportunity to review the proposed expenditure. According to DOE officials, the Office purposely by-passed the DOE Office of Procurement Operations to expedite the contract awarding process. A review of DOE records revealed that this is not the first time the Office has circumvented normal procurement practices. GAO expressed concern over this, because while this may be an indication of the DOE Office of Procurement's inability to respond to procurement requests, it may also be an indication of procurement regulation abuses and inadequate oversight.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Energy should review the transfer of $250,000 in DOE funds to Los Alamos Scientific Laboratory, and determine whether the services of MIL Corporation are still needed in light of the Administration's proposed rescission and budget reductions. Because the contract is currently being finalized, we also recommend that the Secretary take immediate action to stop the award until DOE adequately reevaluates this situation. If such services are later determined to be needed, however, we recommend that the contract should be awarded in accordance with established Federal and DOE procurement regulations.

    Agency Affected: Department of Energy


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