Kenneth Fletcher
NS&D Monitor
5/29/2015

The Department of Energy and its contractors should improve the management of spare parts at sites across the complex, according to a DOE Office of Inspector General report released this week. Spare parts inventories are needed to maintain DOE facilities, but the IG encountered issues at the three sites covered by its audit—Oak Ridge National Laboratory, Lawrence Livermore National Laboratory and the Savannah River Site. “These issues occurred because the Department had not ensured that sites were managing spare parts inventories for nuclear facilities in accordance with Department requirements,” the report states. “Also, unlike guidance for nuclear facility spare parts, contractors were not provided with consistent guidance for the management of spare parts inventories for nonnuclear facilities.”

For example, Lawrence Livermore “did not maintain a catalog of parts, materials, and equipment normally used at its facilities with an up-to-date indication of availability. It also had a decentralized approach to managing spare parts in its nonnuclear facilities, some of which did not track their spare parts,” the report states. ORNL did manage all spare parts in its nuclear facilities, but “did not track all spare parts inventories for nonnuclear applications.” SRS M&O contractor Savannah River Nuclear Solutions had a “large inventory of spare parts, valued at more than $26 million, which had not been used in more than 5 years. While the contractor had identified this portion of its approximately $42 million inventory as ‘nonmoving,’ it had not yet determined what portion of these items were no longer needed,” the report states.

The IG listed numerous reasons why an accurate inventory of spare parts is crucial. “Without a complete inventory of spare parts, the Department is unable to account for millions of dollars of parts and property, thus putting valuable property at an increased risk of loss or theft,” the report states.
“Furthermore, necessary and critical spare parts may not be readily available when needed to address not just mission needs, but also operational issues that may arise.”

DOE Addressing IG Recommendations

The report recommends that DOE ensure that spare parts inventories at all sites meet Department requirements and that DOE “develop and implement a policy for the effective management of spare parts at the Department’s facilities.” DOE agreed with the recommendations and has developed corrective actions to address them. “Specifically, NNSA and the Department will clarify existing requirements as they may relate to spare parts and ensure consistent interpretation and application,” the report states. “In addition, the Livermore Field Office and LLNL will conduct a review of procurement for management of critical spare parts for all LLNL nuclear facilities. The Department will also clarify existing policy regarding management of spare parts through its life cycle, and the Department and NNSA will request that the respective internal audit organizations review and validate the appropriateness of accounting for spare parts at Department sites.”