Recommendation: The Director of the DOE Office of Acquisition Management should clearly define—in guidance or other documents—which subcontracts should be audited, how an audit is defined, and how to meet subcontract audit requirements if Defense Contract Audit Agency is unable to conduct the audit.(Recommendation 1)
Agency: Department of Energy
Status: Open
Comments: In its comments on a draft of the report, DOE partially concurred with the recommendation, but stated that there is no government-wide requirement that defines an audit or prescribes the auditing of subcontracts. According to officials, DOE reviewed existing regulations, guidance, and contract provisions on audit requirements and determined that a need exists for additional guidance or contract provisions on audits for major contracts. As of June 2020, DOE was working with the Civilian Agency Acquisition Council to recommend a government-wide requirement to define audit and prescribe when to obtain audits of subcontracts. Additionally, DOE included in its Acquisition Guide information on audit options when the Defense Contract Audit Agency is unable to conduct an audit.
Recommendation: The Director of the DOE Office of Acquisition Management should require local officials to independently review subcontractor ownership information as part of DOE consent reviews and assess potential conflicts of interest to ensure contractors are mitigating them. (Recommendation 4)
Agency: Department of Energy
Status: Open
Priority recommendation
Comments: DOE did not concur with our recommendation; instead, they plan to issue guidance emphasizing the importance of contracting officers reviewing contractors' disclosing and dealing with issues created by close working relationships, conflicts of interest, or ownership affiliations between prime and subcontractor. We have identified complex relationships among DOE contractors and subcontractors that were not documented by DOE, as well as incidents involving subcontractors related to conflicts of interest that were not disclosed to DOE. We noted that DOE officials--including those in local offices--have access to several databases and other sources of information that would allow them to independently verify ownership information that could allow the local offices to identify potential conflicts of interest that were not disclosed. In July 2020, DOE issued guidance summarizing and reiterating existing regulations, policy and procedures that require DOE contracting officers to perform independent analyses when reviewing subcontract consent packages, contractor purchasing systems, and potential organizational conflicts of interest. However, this is the same as previous guidance and it does not include direction to review subcontractor ownership information.
Recommendation: The Director of the DOE Office of Acquisition Management should require contracting officers to include assessments of the contractors' management of subcontractors as part of annual Performance Evaluation and Measurement Plans, as appropriate. (Recommendation 6)
Agency: Department of Energy
Status: Open
Comments: DOE partially concurred with the recommendation and agreed to review existing guidance and determine if additional guidance is needed to conduct an assessment of the contractors' management of subcontractors in annual Performance Evaluation and Measurement Plans. As of June 2020, DOE officials said they have reviewed existing federal and departmental policies, procedures, and available tools and determined sufficient guidance exists for contracting officers to make informed decisions on whether to include contractor management of subcontractors in annual Performance Evaluation and Measurement Plans based on the characteristics, circumstances, and requirements of a specific contract. DOE's Performance Evaluation and Measurement Plan template provides a subcontractor management evaluation factor for use by contracting officers who have determined it is appropriate for their contracts. Although we recognize the value in deferring to contracting officers to determine whether the factor is appropriate based on the characteristics, circumstances, and requirements of the contract, we continue to believe that DOE should place additional emphasis on the contractors' oversight of subcontracts by assessing the contractors on this factor.
