Nuclear Health and Safety:

Increased Rating Results in Award Fee to Rocky Flats Contractor

RCED-92-162: Published: Mar 24, 1992. Publicly Released: Apr 15, 1992.

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Pursuant to a congressional request, GAO reviewed the award fee determination process at the Department of Energy's (DOE) Rocky Flats Plant in Colorado, focusing on the: (1) development of the final award fee decision for the current contractor; (2) justification provided to support the final award fee; and (3) extent to which DOE considered the contractor's environmental, safety, and health (ESH) performance in its decision.

GAO found that: (1) during the award fee process, DOE raised the contractor's rating for the period of April 1991 through July 1991 from a satisfactory level with no recommended award fee to a performance level resulting in an award fee of more than $1.7 million; (2) the DOE Rocky Flats Office manager, who served as the fee determination official, cited six specific contractor accomplishments in addition to overall observations on contractor performance to justify the increased award, but some of the cited accomplishments were not consistent with the award fee board's findings, and the fee determination officer did not address numerous significant ESH deficiencies that the board cited; (3) the fee determination officer did not question the validity of the board's findings, but noted that the contractor could not be expected to meet the board's standards due to the legacy of ESH problems at Rocky Flats that the contractor was brought in to fix; (4) DOE supported the fee determination officer's award fee score and schedule; (5) in order to stress contractor ESH performance in the award fee process, DOE now requires that at least 51 percent of the award fee be associated with contractor ESH performance; and (6) in the board's assessment, contractor ESH activities were weighted to account for 57 percent of the contractor's performance score, but the information provided to support the final rating did not indicate how DOE weighted contractor ESH performance in the final determination.

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