Contracting of Guard Services at Oak Ridge Will Spiral Costs

PLRD-82-71: Published: Apr 30, 1982. Publicly Released: Apr 30, 1982.

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GAO was asked to review decisions by the Oak Ridge Operations Office and the Technical Information Center, Department of Energy, to contract for services which were or could be performed by Government employees. The GAO objectives were to determine whether the decisions comply with provisions of the Office of Management and Budget (OMB) Circular A-76, which prescribe the policies and procedures for acquiring commercial or industrial products and services needed by the Government, and if any conflicts of interest have resulted from certain contracting situations.

GAO found that the Operations Office's award of a contract for security services will increase rather than reduce costs to the Government. The Office's decision to contract was based on a cost comparison which showed that contracting would save funds over a 3-year period. However, the comparison did not include the significant costs that would be incurred by contracting, which will actuallly increase Government costs over the 3-year period. The Operations Office did not make a required comparison before converting accounting activities for nuclear materials from in-house to contract performance. Since the activity is currently contracted, there is no requirement that a cost comparison be made unless the agency feels that the work can be performed in-house at less cost. Since a cost comparison was not made, cost data were not available for GAO to evaluate which method of operation would be less costly. The other contracting actions were in compliance with OMB Circular A-76. There appeared to be no conflict of interest resulting from those decisions specifically identified by the concerned employees as possible conflict-of-interest situations.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: GAO has pursued this matter with DOE on two separate occasions and have been unsuccessful in convincing it of the potential savings by in-house performance. GAO believes that continued pursuit would not result in DOE changing its position.

    Recommendation: The Secretary of Energy should reassess the decision to contract for guard services at the Oak Ridge Operations Office to determine whether termination of the contract might be in the best interest of the Government.

    Agency Affected: Department of Energy


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