Support Service Contracts:

NNSA Could Better Manage Potential Risks of Contractors Performing Inherently Governmental Functions

GAO-19-608: Published: Sep 26, 2019. Publicly Released: Sep 26, 2019.

Additional Materials:

Contact:

Allison Bawden
(202) 512-3841
bawdena@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The National Nuclear Security Administration has increasingly used support service contracts to carry out its mission. NNSA obligated about $193 million in FY 2018 for support service contracts (which include program management services and more).

However, NNSA may not be effectively managing the risk that some of its contractors could perform inherently governmental functions—which federal contractors are not allowed to do.

We recommended that NNSA require its contracting officers to document their oversight plans for certain contracts and verify that they’re following through with those plans.

National Nuclear Security Administration’s Support Service Contracts, Fiscal Years 2010-2018

Bar chart starting at $139 million in FY 2010 and ending at $193 million in FY 2018

Bar chart starting at $139 million in FY 2010 and ending at $193 million in FY 2018

Additional Materials:

Contact:

Allison Bawden
(202) 512-3841
bawdena@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

The National Nuclear Security Administration (NNSA) obligated about $193 million in fiscal year 2018 for support service contracts (SSC), an increase of nearly 40 percent since 2010. These contracts provide a variety of professional support services, such as program management support. Officials attribute the increased use of SSCs to increases in appropriations and workload for the modernization of nuclear weapons and related infrastructure and decreases in the number of authorized federal staff due to the decrease in the statutory cap from fiscal year 2014 to 2015.

Information on SSCs in NNSA's congressional budget justification materials is not complete or fully useful for congressional decision-making because, among other things, NNSA did not include information on all of its professional SSCs. NNSA is required to report annually certain information about SSCs, including the number and cost of SSCs, in its materials. NNSA reported information on its SSCs in its materials for fiscal years 2017 through 2020. However, NNSA's reporting was not complete because NNSA excluded information on 31 to 42 contracts each year (see fig. for fiscal year 2020). According to officials, they excluded contracts that expired during the fiscal year. By reporting information on all professional SSCs to which funds were obligated during the fiscal year, NNSA could provide more complete information to Congress that it could use to make better informed decisions about NNSA's annual appropriations levels.

Number of Contracts Reported in the Fiscal Year 2020 Congressional Budget Justification

Number of Contracts Reported in the Fiscal Year 2020 Congressional Budget Justification

NNSA may not be effectively managing the potential risks of contractors performing inherently governmental functions—those that must be performed by a government employee—for contracts NNSA identifies as having the potential for providing such functions. NNSA identifies such SSCs through required assessments. However, contracting officers are not required to document planned steps to oversee these contracts, and the agency does not verify that planned oversight is performed. Contracting officers who oversee SSCs can change during the life of a contract. By documenting steps that contracting officers plan to take to oversee contracts with a high risk of including inherently governmental functions—and verifying that the planned oversight occurs—NNSA can better ensure over the life of the contract that the functions contractors are performing do not evolve into inherently governmental functions and that planned oversight is completed.

Why GAO Did This Study

The Department of Energy's NNSA relies on federal employees and contractor personnel to carry out its mission. SSCs fill essential needs, and their use requires special diligence to ensure applicable statutes, regulations, and management practices are followed.

The House report on the National Defense Authorization Act for Fiscal Year 2018 included a provision for GAO to report on NNSA's use of SSCs. This report examines the extent to which: (1) NNSA used SSCs for professional support in fiscal years 2010 through 2018; (2) the information about SSCs in NNSA's annual congressional budget justification materials for fiscal years 2017 through 2020 is complete and useful to support congressional decision-making; and (3) NNSA manages the potential risks of SSCs that it determines are at high risk for providing inherently governmental functions. GAO analyzed agency data; reviewed documentation; and interviewed federal and contractor officials representing a non-generalizable sample of 12 SSCs out of 407, selected to represent a range of years and contract obligations.

What GAO Recommends

GAO is making six recommendations to NNSA, including that NNSA: (1) report information on all professional SSCs to which funds were obligated during the fiscal year; (2) document plans to oversee SSCs that have a high risk of including inherently governmental functions, and (3) verify that the planned oversight occurs. NNSA generally agreed with the recommendations.

For more information, contact Allison Bawden at (202) 512-3841 or bawdena@gao.gov.

Recommendations for Executive Action

  1. Status: Open

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

    Recommendation: The Associate Administrator for Acquisition and Project Management should report information on all professional SSCs to which funds were obligated during the fiscal year in its annual congressional budget justification materials. (Recommendation 1)

    Agency Affected: Department of Energy: National Nuclear Security Administration

  2. Status: Open

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

    Recommendation: The Associate Administrator for Acquisition and Project Management should collect and report all required data regarding the number of FTE contractor personnel employed under an SSC for more than 2 years. (Recommendation 2)

    Agency Affected: Department of Energy: National Nuclear Security Administration

  3. Status: Open

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

    Recommendation: The Associate Administrator for Acquisition and Project Management, in coordination with NNSA's Office of Management and Budget, as appropriate, should report annual obligations data by fiscal year, as part of its reporting on SSCs in annual congressional budget justification materials. (Recommendation 3)

    Agency Affected: Department of Energy: National Nuclear Security Administration

  4. Status: Open

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

    Recommendation: The Associate Administrator for Acquisition and Project Management should report in NNSA's annual congressional budget justification materials the program appropriations account—Weapons Activities or Defense Nuclear Nonproliferation—used to fund each SSC and total the amounts obligated by appropriations account. (Recommendation 4)

    Agency Affected: Department of Energy: National Nuclear Security Administration

  5. Status: Open

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

    Recommendation: The Associate Administrator for Acquisition and Project Management should take steps to ensure that contracting officers document—in the required determination form or elsewhere in the contract file—information on the steps that the contracting officers plan to take to oversee SSCs that NNSA has determined to be at high risk of including inherently governmental functions. (Recommendation 5)

    Agency Affected: Department of Energy: National Nuclear Security Administration

  6. Status: Open

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

    Recommendation: The Associate Administrator for Acquisition and Project Management should develop a process to verify that contracting officers are carrying out the steps identified to oversee contracts at risk of including inherently governmental functions throughout the term of the contract. (Recommendation 6)

    Agency Affected: Department of Energy: National Nuclear Security Administration

 

Explore the full database of GAO's Open Recommendations »

Oct 23, 2019

Oct 16, 2019

Sep 24, 2019

Sep 9, 2019

Aug 8, 2019

Jul 29, 2019

Jun 17, 2019

May 20, 2019

May 1, 2019

Apr 17, 2019

Looking for more? Browse all our products here