Nuclear Security & Deterrence Monitor Vol. 20 No. 8
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Nuclear Security & Deterrence Monitor
Article 8 of 10
February 19, 2016

DOE IG Audit Questions $167K Cost Incurred by B&W Pantex

By Alissa Tabirian

The Department of Energy (DOE) Inspector General’s Office (IG) is questioning the allowability of over $167,000 in costs incurred by Babcock & Wilcox Technical Services Pantex (B&W Pantex), the contractor that managed and operated the Pantex Plant from 2001 to 2014.

Of the $966 million in costs the contractor incurred in fiscal 2013 through the end of June 2014, an internal audit questioned whether $1.3 million was allowable – or authorized under the contract – according to an IG audit released Thursday. The IG said it resolved $1.2 million of that amount and is questioning the remaining $167,327.

This amount includes $115,870 in “certification payments made without adequate documentation, erroneous payment of certification pay, unauthorized contract commitments, and subcontract payments made outside subcontract terms and conditions,” $28,668 in payments that were made outside subcontract terms, and $22,789 in the coordination of medical benefits, the IG said.

The IG also found that B&W Pantex did not initiate an external assessment of its internal audit process as required at least once every five years, with the most recent external assessment taking place in 2009. The IG noted an internal audit concluded the assessment was unnecessary because of the transition in 2014 that consolidated the Pantex and Y-12 National Security Complex contracts under contractor Consolidated Nuclear Security.

The IG suggested an external assessment be conducted by the end of 2018 and recommended that the National Nuclear Security Administration Production Office determine the allowability of the $167,327 and recover any amount deemed unallowable under the contract. NNSA management agreed and said it would resolve the questioned costs by around the end of March 2016.

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