Nuclear Health and Safety:

DOE's Award Fees at Rocky Flats Do Not Adequately Reflect ES&H Problems

RCED-90-47: Published: Oct 23, 1989. Publicly Released: Oct 25, 1989.

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Pursuant to a congressional request, GAO reviewed the extent to which the Department of Energy (DOE) considered environmental, safety, and health (ES&H) matters in its contract award fee determinations for the Rocky Flats nuclear weapons facility.

GAO found that the DOE award fee determinations: (1) downplayed a variety of significant ES&H problems through questionable classifications and omissions; (2) emphasized production over ES&H matters; and (3) did not require DOE headquarters review or approval.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE award fee determinations must now receive headquarters' concurrence from the cognizant program Assistant Secretary, plus advisory concurrence from the Assistant Secretary, ES&H, and other departmental elements as appropriate.

    Recommendation: The Secretary of Energy should require all awards determinations to be approved at the headquarters level. Headquarters program offices should have approval authority over the operations for which they are responsible. Further, advisory roles in the process should be given to those DOE headquarters offices which have important roles in overseeing the operations.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: DOE has taken steps to ensure there is no conflict between ES&H and performance objectives for award fees. DOE included a clause, DOE Acquisition Regulation 970.5204-54, in management and operating contracts allowing the Fee Determination Official to withhold award fees for unsatisfactory performance in ES&H and other areas designated in the Performance Evaluation Plan.

    Recommendation: The Secretary of Energy should ensure that there is reasonable balance between production and ES&H performance in the award process. Further, if awards are to be given for accomplishing specific objectives, the Secretary should ensure that such objectives do not conflict with ES&H objectives.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: While DOE believes some discretion is a necessary part of the award fee process, it has implemented procedures to reduce the amount of discretion, thereby, ensuring that stated policies are more strictly adhered to. This was accomplished by DOE requiring its PEP to have appropriate milestones and performance objectives and the award fee criteria to reflect DOE restructured priorities.

    Recommendation: The Secretary of Energy should restructure the award process to reduce the level of discretion exercised in making a final determination. In this regard, more specific criteria are needed for determining how a deficiency is to be considered in the evaluation process. Further, procedures are needed to ensure that all identified deficiencies are considered in making an award determination.

    Agency Affected: Department of Energy


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