Energy Management:

DOE Actions to Improve Oversight of Contractors' Subcontracting Practices

RCED-92-28: Published: Oct 7, 1991. Publicly Released: Oct 7, 1991.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) Contractor Purchasing System Review (CPSR) Program, which oversees the extensive subcontracting activities of DOE management and operating (M&O) contractors.

GAO found that: (1) a recent DOE CPSR indicated that M&O subcontracts are vulnerable to fraud, waste, and abuse; (2) excessive contract costs are attributed to M&O contractors' poor procurement practices and inadequate DOE oversight; (3) DOE reviews indicated that M&O contractors often failed to ensure that subcontract prices were fair and reasonable, and restricted competition by inappropriately using sole-source purchases; (4) the CPSR identified a number of internal control weaknesses at M&O contractor sites; (5) such CPSR program limitations as insufficient DOE oversight, DOE reluctance to withhold or withdraw purchasing system approval, and field office's inadequate follow-up of contractors' responses to CPSR recommendations restricted DOE ability to identify all significant procurement weaknesses and ensure that identified problems were corrected; and (6) DOE is taking such actions to address internal control problems as centralizing the CPSR program, conducting frequent reviews, and issuing agency-wide CPSR program requirements and procedures.