Alissa Tabirian
NS&D Monitor
8/7/2015
Several fiscal 2013 subcontracts at the National Nuclear Security Administration’s (NNSA) National Security Campus (NSC) in Kansas City, Mo., worth almost one-third of the total value of subcontracts reviewed by the Department of Energy (DOE) Office of Inspector General (IG), were awarded noncompetitively without justification, according to an audit report released this week. The audit of DOE’s management and operating contractors in fiscal 2013, specifically at the NSC (previously called the Kansas City Plant), noted that the site “had a total of 18,026 subcontracts worth almost $241 million.” The IG audited 47 subcontracts worth $33.7 million and found that although there were no “material issues with administration” of those subcontracts, eight of them worth $10.2 million had been awarded “on a sole-source basis without specific justification.”
Five of the eight subcontracts in question were for “Work for Others customers where [NSC] used the subcontractors specified by the customers without competition,” the report says, noting this might violate the Federal Acquisition Regulation. “[NSC] procurement officials were unable to provide documentation necessary to support the sole-source procurement” for the other three subcontracts worth roughly $590,000, the audit says. These issues were largely due to a NSC policy “providing an exception from competition in instances when a Work for Others customer required the use of a specific subcontractor” without requiring justification documentation in the subcontract file, according to the report. Work for Others agreements allow DOE labs to “conduct work for other federal agencies and non-federal entities . . . on a reimbursable basis,” according to department guidelines. However, the report says the NSC did not have an overall policy for these types of agreements that would address “contractual requirements, such as not directly competing with the domestic private sector, recovering all costs associated with the work, and controlling the work to be subcontracted.”
As a result of the audit, DOE recommended the NSC “develop a Work for Others policy that includes subcontract award procedures for documenting justifications to use customer-specified subcontractors without competition,” develop appropriate “Work Instructions to reflect contract terms and Departmental regulations,” and train procurement personnel on the new policy, the report says. NNSA agreed with the recommendations and said the plant that produces non-nuclear components for nuclear weapons will develop the necessary policy to require documentation of subcontract justifications and will require “Work for Others procurements to use the same sole-source justification that apply to other subcontract awards.”
“We support the IG’s recommendations, and process improvements are under way as planned,” Gayle Fisher, spokeswoman for the NNSA Kansas City Field Office, told NS&D Monitor.
