Energy Management: Inadequate DOE Monitoring of Contractors' Acquisitions From Affiliates

GAO discussed the Department of Energy's (DOE): (1) monitoring of its management and operating contractors' acquisitions from their affiliates; and (2) contract reform initiatives. GAO noted that: (1) DOE monitoring of its contractors' acquisitions is inadequate; (2) contractor procurement weaknesses include inadequate cost controls, performance problems, unallowable and other questionable costs, and inappropriate contract approvals and contract payments; (3) weaknesses in the contractors' management systems and limited DOE internal controls contribute to the contractors' procurement problems; (4) DOE has not enforced its acquisition regulations limiting noncompetitive procurements or required sufficient documentation of contractor procurements; (5) problems with affiliate procurements occur throughout DOE; (6) DOE needs to obtain better and more complete information on affiliate procurements to improve its contract monitoring; (7) the goals of DOE contract reform initiatives include lessening DOE reliance on cost-reimbursable contracts, increasing the use of specific performance measures in contracts, and updating DOE financial management systems and auditing capabilities; and (8) DOE needs to strengthen its workforce and improve its and its contractors' information systems.