DOE IG Finds Issues With WRPS’ Management of Materials Inventory
WC Monitor
1/16/2015
Hanford tank farms contractor Washington River Protection Solutions is implementing corrective actions after a Department of Energy Office of Inspector General report highlighted management issues with its materials system inventory. The tank farm material services system is used to manage inventory for the tank farms, tracking it from “receipt to issuance of the parts to the field,” according to the report released this week. It represents just a portion of WRPS’ total inventory. The IG said it found that “the Office of River Protection had not effectively managed inventory needed to support tank farm operations at WRPS.” The IG’s report adds: “We found that WRPS could not accurately determine the number and value of items held in inventory from the Materials System.”
The investigation discovered that not all items listed in the materials system were present in the warehouses, many items in the warehouses were not listed or were listed inaccurately and WRPS could not provide a “reasonable” estimate of the total value or number of items in the inventory. The inaccuracies were a result of weaknesses at both WRPS and DOE’s Office of River Protection, according to the report. “WRPS did not comply with Federal Acquisition Regulation (FAR) requirements to maintain accurate records and perform periodic physical inventories on Materials System items,” the report states. “WRPS’ failure to update tracking its Materials System when projects were completed exacerbated inventory problems and resulted in the retention of parts in inventory that were no longer needed to complete work orders. Contributing to the weaknesses, the Office of River Protection’s oversight of inventory management practices for the Materials System was insufficient to prevent or detect the control issues we identified.”
The weaknesses could increase the risk of lost or stolen items or lead to unnecessary costs and schedule delays, according to the report. The IG recommended that WRPS ensure that inventory changes are inputted accurately and timely, physical inventories of WRPS warehouses are taken regularly and the status and availability of inventory are reviewed and updated. It also recommended that the Office of River Protection conduct regular reviews of WRPS’ materials system to ensure that it complies with FAR.
ORP: Corrective Actions Underway
The Office of River Protection concurred with the IG’s recommendations and said corrective actions are underway, while noting that the material handling facilities covered by the IG report only include about $4.6 million worth of inventory, while WRPS manages a total of $136 million in inventory, property and warehousing, according to a management response by ORP Manager Kevin Smith.
WRPS has already completed five actions to ensure accountability, including employing a material coordinator, a temporary warehouseman, on-the-job training for new hires, using electronic tablets to record receipt of material, and removing more than 20,000 excess items. WRPS has seven more actions to be completed. ORP has also agreed to conduct periodic reviews of WRPS’ corrective actions and reviewing the materials system on an annual basis. The IG believes the planned corrective actions are “fully responsive to our findings and recommendations,” according to the report.
‘WRPS Is Actively Working to Improve’ Material Inventory System
WRPS this week highlighted the actions already being taken in response to the IG’s findings. “WRPS is actively working to improve the way it logs, verifies and tracks material inventory. WRPS self-identified several opportunities for improvement prior to the DOE-IG review and already has put in place a series of actions to improve management practices. Several significant actions have already been completed,” according to a WRPS statement. It adds: “Other similar actions have been identified that will be completed by fall 2015. WRPS will continue to work with ORP to schedule regular reviews of its materials management programs.”
