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Audit Report: IG-0690

May 20, 2005

Contractor Post-Retirement Health Benefits at the Oak Ridge Reservation

The Department of Energy (Department), including the National Requirements Nuclear Security Administration (NNSA), was inconsistent in its reimbursement for contractor post-retirement health benefit costs. Further, as a result of these inconsistencies, contractors were reimbursed for unreasonable costs. Specifically, while NNSA reimbursed BWXT Y-12, LLC (BWXT Y-12) for the post-retirement health benefits of corporate transferees, the Oak Ridge Operations Office (Operations Office) disallowed similar costs from the Bechtel Jacobs Company, LLC (Bechtel Jacobs) contract for the East Tennessee Technology Park and denied a request from UT-Battelle, LLC (UT-Battelle), to provide similar benefits for the employees of the Oak Ridge National Laboratory. BWXT Y-12 employees are able to use their corporate years-ofservice credits when eligibility for post-retirement health benefits is determined.