Department of Energy Contracting: Additional Actions Could Further Strengthen Competition

GAO-23-105209 Published: Jan 24, 2023. Publicly Released: Jan 24, 2023.
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Fast Facts

The Department of Energy relies on contractors to operate national laboratories and conduct environmental cleanup. Competition for these contracts saves taxpayer dollars and improves performance.

DOE received multiple offers for most of its large contracts. But some industry representatives questioned the fairness of the award process, such as how officials rate potential contractors' relevant past work. We didn't find evidence to support such concerns, but the perception of unfairness may deter competition.

We recommended that DOE hold periodic meetings with industry to share information on how they conduct competitions and evaluate offers.

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Highlights

What GAO Found

The Department of Energy (DOE) received multiple offers for almost all of its competitions for its largest contracts awarded from fiscal years 2015 through 2020 (see figure). However, relatively fewer entities—such as companies, universities, or organizations—submitted offers for management and operating (M&O) contracts than for other types of contracts. When fewer entities submit offers, risks to competition may increase, such as entities engaging in anticompetitive behavior. DOE officials say they help to mitigate these risks through relevant training for staff.

Number of Offers Received for Competitions Resulting in the Department of Energy's (DOE) Largest Contracts, Fiscal Years 2015–2020

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Industry representatives GAO interviewed identified wide-ranging factors that may hinder competition for DOE's largest competitions. A majority of the industry representatives expressed concerns about the fairness of aspects of the award process. For example, they questioned whether officials fairly rated offerors' performance on relevant past work. GAO did not find evidence in the contract files that supported these concerns. However, perceptions of unfairness may hinder competition, because entities may choose not to submit an offer if they perceive that they will not be treated fairly in a competition.

Some DOE components have taken actions to address factors that could hinder competition, such as sharing information with industry about the award process—consistent with guidance from the Office of Management and Budget (OMB). For example, DOE's Office of Environmental Management has recently begun holding quarterly meetings with industry entities. Agency officials and industry representatives said these meetings have been helpful. DOE's National Nuclear Security Administration (NNSA) and Office of Science, which had M&O contracts in GAO's scope, have not held similar meetings. Improved information sharing could help these components address industry perceptions about fairness, which could in turn remove barriers to a more competitive acquisition environment.

Why GAO Did This Study

DOE is one of the largest federal civilian contracting agencies, awarding contracts for research, weapons production, and environmental cleanup. Competition saves taxpayer dollars, improves contractor performance, and curbs fraud.

The explanatory statement accompanying the Consolidated Appropriations Act, 2021, includes a provision for GAO to assess competition and other aspects of DOE's contracting process. This report examines, among other things, for DOE's largest competitions for contracts awarded in fiscal years 2015 through 2020, (1) the number of offers DOE received and the acquisition environment's potential effects on competition; and (2) factors identified by selected industry entities that may hinder competition, and actions DOE has taken to address such factors.

GAO analyzed contract files for the 15 competitions in its scope, interviewed DOE officials and representatives from selected industry entities that expressed interest in the contracts and did—or did not—submit an offer, and compared DOE actions to OMB guidance for enhancing competition.

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Recommendations

GAO is making eight recommendations, including that NNSA and the Office of Science hold periodic meetings to share information with industry about how competitions are conducted and how offers are evaluated. DOE concurred and NNSA either concurred or concurred in principle with the recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
National Nuclear Security Administration The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should hold periodic meetings to share information with industry about how competitions are conducted and how offers are evaluated, including any changes in agency practices. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Energy The Director of DOE's Office of Science should hold periodic meetings to share information with industry about how competitions are conducted and how offers are evaluated, including any changes in agency practices. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Energy The Assistant Secretary for EM should use structured mechanisms for soliciting information on how entities decide whether to submit an offer for a solicitation, such as through periodic reverse industry day events. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
National Nuclear Security Administration The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should use structured mechanisms for soliciting information on how entities decide whether to submit an offer for a solicitation, such as through periodic reverse industry day events. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Energy The Director of DOE's Office of Science should use structured mechanisms for soliciting information on how entities decide whether to submit an offer for a solicitation, such as through periodic reverse industry day events. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Energy The Director of DOE's Office of Acquisition Management should determine whether using structured mechanisms for soliciting industry feedback on entities' offer decisions, such as through periodic reverse industry day events, would be appropriate for smaller DOE offices with fewer large competitions. Depending on that determination, DOE's Office of Acquisition Management should share information with those offices as appropriate. (Recommendation 6)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
National Nuclear Security Administration The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should document the types of scoping alternatives that contracting officials should consider as part of acquisition planning for M&O contracts and how to take into account a competition's goals when considering alternatives. (Recommendation 7)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of Energy The Director of DOE's Office of Science should document the types of scoping alternatives that contracting officials should consider as part of acquisition planning for M&O contracts and how to take into account a competition's goals when considering alternatives. (Recommendation 8)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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