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Inspection Report: DOE/IG-0889

June 7, 2013

Concerns with Consulting Contract Administration at Various Department Sites

The National Nuclear Security Administration (NNSA) requested that we conduct a review to determine whether a consulting agreement awarded to Heather Wilson and Company, LLC (HWC), by Los Alamos National Laboratory (Los Alamos) was appropriately administered and managed.  Specifically, we were asked to determine whether:  (1) work products (deliverables) were produced in return for monthly payments to HWC of $10,000; (2) invoices included itemized charges, as required by the agreement; (3) there was overlap between the services provided and work products produced by HWC on consulting agreements awarded by Sandia National Laboratories, Los Alamos, Oak Ridge National Laboratory and the Nevada National Security Site; and (4) an NNSA Contracting Officer was subjected to "pressure" when Los Alamos National Security, LLC, the Management and Operating contractor for Los Alamos, requested authorization to enter into an agreement with HWC.

Our inspection identified serious concerns with the administration and management of agreements with HWC for advice and consultation provided to senior managers at four Department contractor-operated sites.  Specifically, our testing revealed that the four facility contractors paid approximately $450,000 to HWC even though they did not receive evidence that work performed under the agreements had been completed.  These payments were fully reimbursed by the Government.

The issues identified in this report occurred because contractor officials responsible for crafting and administering the consulting agreements either did not incorporate, or failed to enforce, the requirements of the Federal Acquisition Regulation into the agreements with HWC.  Management generally agreed with our findings and recommendations and indicated it was in the process of implementing or completing corrective actions.  Management indicated that the Department has already recovered $442,877 from its contractors of the approximately $464,203 paid to HWC, and is reviewing the allowability of the additional amounts. 

TOPIC: Management & Administration