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Audit Report: OAS-RA-L-13-04

July 9, 2013

Modular Office Facilities for Recovery Act Program Activities at the Hanford Site

The Department of Energy's Richland Operations Office (Richland) awarded a contract, effective October 1, 2008, to CH2M HILL Plateau Remediation Company (CHPRC) to remediate select portions of the Hanford Site's Central Plateau.  As part of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Richland designated $1.3 billion of Recovery Act funding to the Plateau Remediation Contract to accelerate CHPRC's work scope from April 2009 through September 2011.

Due to the influx of Recovery Act funding in 2009 and the accelerated schedule, CHPRC hired an additional 1,757 employees, including subcontractors.  To provide office space for these temporary employees, CHPRC procured a total of 176 modular facilities consisting of 114 purchased and 62 leased facilities at an approximate total cost of $29 million. 

The Office of Inspector General received an allegation that a number of the facilities CHPRC purchased with Recovery Act funds were either never used or were underutilized.  Our review substantiated the allegation.  In particular, we discovered that CHPRC incurred as much as $1.5 million more than necessary by purchasing unneeded modular facilities and almost $600,000 in lease costs that could have been avoided by more expediently returning leased facilities that were no longer needed.  In fact, we found that 7 of 176 facilities purchased with Recovery Act funds were not utilized through September 30, 2011, the date that most Recovery Act work at Richland ended.  We could not determine whether the remaining facilities were underutilized because the contractor's documentation did not adequately justify the need for all of the facilities.  Management generally concurred with the suggested actions in our report.

TOPIC: Management & Administration