The Department of Energy’s Office of Environmental Management should bring in an outside entity to gauge the effectiveness of the overhauled procurement strategy implemented in 2019 to improve its multi-billion-dollar nuclear cleanup operation, the Government Accountability Office said Wednesday.
The head of DOE’s Office of Environmental Management (EM) should also develop specific performance goals for the End State Contracting Model, EM has now used to award six contracts worth $47 billion, the Government Accountability Office (GAO) said in a new report.
The Office of Environmental Management agrees with the GAO recommendations in the report and will “continue to strengthen acquisition processes” through the end state model, an office spokesperson said in a Thursday email. “At the same time, EM will continue to be a demanding client, expecting that contractors perform in a safe, efficient, and cost-effective manner and with the highest ethical standards.”
So far, end state awards have been made for Central Plateau Cleanup at the Hanford Site in Washington state, the Cleanup Project at the Idaho National Laboratory, Environmental Program Services at the Nevada National Security Site, Remedial Action at the Moab uranium tailings site in Utah, Integrated Mission Completion at the Savannah River Site in South Carolina and Cleanup at the Oak Ridge Site in Tennessee.
Two more awards are expected in coming months —Integrated Tank Disposition at Hanford and Decontamination and Decommissioning of the Portsmouth Site in Ohio.
The GAO would have preferred a slower rollout starting with an EM pilot program to test if the new model is working and help identify potential problems before this approach is implemented “across its cleanup portfolio,” according to the report.
GAO’s analysis of end state contracts found weaknesses with the model’s post-award phase, such as authorizing certain work to begin before EM and contractors reach final agreement on contract terms, according to the 52-page report.
The end state method, rolled out in mid-2019, uses single-award indefinite delivery/indefinite quantity contracts with task orders for defined scopes of work after contract award. End state departs from the prior system “which generally required developing detailed scopes of work for the full length of the contract prior to award,” GAO said.
An end state contract can run for 15 years, often a 10-year ordering period plus a five-year extension that can be tacked on near the end of the 10 years. After the initial contract award, “EM then negotiates with the selected contractor for task orders that define the scopes of work, costs, and schedules for specific cleanup activities at the site,” GAO said.
Under the end state model, these key details are hammered out with DOE during a 60-to-90-day transition between the old and new contractor, GAO said.
In the early going, however, DOE learned everything could not be ironed out in such a short period, which led to the addition of 120-to-180-day “implementation” periods as an early task order. The cleanup office has also used “undefinitized contract actions,” where work goes forward prior to final business agreements being worked out — a situation that both feds and the contractors prefer to avoid, GAO said.
The DOE has touted end state as an approach that provides “simpler, less burdensome contract proposal process [enabling] shorter procurement time frames during the pre-award phase,” according to the GAO report.
The GAO questions if there is too much flexibility built into the approach, especially when it as well as the National Academies have raised concerns on whether EM has enough procurement staff with expertise necessary to monitor contractor progress.
The end state program was criticized by some industry stakeholder interviewed by GAO.
“For example, one industry stakeholder explained that because there is no competition on price for task orders, EM officials must do their best to evaluate each task order proposal without the advantages and built-in checks and balances that a competitive process would provide.”
In researching the current report, GAO also interviewed officials from the U.S. Army Corps of Engineers to collect information on how the Corps uses single-award indefinite delivery/indefinite quantity contracts for environmental cleanup work.
GAO’s performance audit in September 2021 and concluded earlier this month, according to the report. The report was called for by the National Defense Authorization Act of fiscal 2022.
