The Subcontracting Practices of Large Department of Energy Contractors Need To Be Improved

EMD-82-35: Published: Apr 22, 1982. Publicly Released: May 6, 1982.

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GAO was requested to review the subcontracting practices of major Department of Energy (DOE) contractors, particularly those operating national laboratories of other Government-owned, contractor-operated installations. DOE officials believe that strict adherence to Federal procurement regulations could be counterproductive and prevent the contractors from efficiently and effectively carrying out their assigned tasks. However, these contractors are required to follow procedures which approximate most aspects of the Federal regulations and which are intended to guarantee open competition and reasonable prices for goods and services.

In spite of this, GAO found that DOE contractors have: (1) engaged in practices which prevent or limit competition; (2) awarded subcontracts directly for DOE program offices allowing these offices to bypass Federal and DOE procurement regulations and policies; (3) not fully complied with Federal and DOE conflict of interest regulations; (4) not been required to follow Federal and DOE guidelines relating to the use of consultant-type contracts; and (5) not established adequate controls to evaluate the utility of subcontractor work products and ensure that subcontractor efforts are not duplicated.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOE believes that current administrative controls are adequate to handle this problem. GAO does not wish to pursue the matter further.

    Recommendation: The Secretary of Energy should require that operating contractor procurement offices implement more effective and systematic administrative controls designed to avoid duplication of work, ensure prompt and appropriate evaluation of contractor performance, and ensure prompt dissemination of subcontractor work products.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Energy should require that operating contractors: (1) consider the intent of Federal requirements and guidelines relating to consultant and support service contracts; and (2) report periodically to DOE on the extent of such contracting.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Energy should promptly enter into negotiations with all operating contractors to include organizational conflict of interest provisions in their current contracts.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Energy should improve DOE oversight of operating contractors by: (1) expanding the scope of the DOE Procurement Systems Reviews particularly in the area of noncompetitive procurements, organizational conflicts of interest, and the use of consultant and support service contractors; and (2) directing that surveillance reviews be planned and performed in a systematic and timely manner.

    Agency Affected: Department of Energy

 

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