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Inspection Report: INS-O-98-01

November 17, 1997

Report On Inspection Of Concerns Regarding DOE's Evaluation Of Chevron U.S.A's Unsolicited Proposal For The Elk Hills Naval Petroleum Reserve

Integrity of the Department of Energy’s (DOE) unsolicited proposal review process may have been compromised by the actions of a former Deputy Secretary of Energy and his Executive Assistant during the review of an unsolicited proposal received from Chevron U.S.A. Production Company (Chevron) in May 1993. The Chevron unsolicited proposal was for the management and operation of DOE’s Elk Hills Naval Petroleum Reserve (Elk Hills), located near Bakersfield, California. Chevron submitted the unsolicited proposal on May 19, 1993. DOE formally rejected Chevron’s unsolicited proposal in May 1995. Although Chevron’s unsolicited proposal was eventually rejected by DOE, the complainant specifically alleged that the “sanctity, integrity, and sensitivity” of the unsolicited proposal review process had been breached in meetings during the Fall of 1993 between Chevron officials, the Deputy Secretary of Energy (Deputy Secretary), and his Executive Assistant. Based on our review of the allegation, we identified the following issue as the focus of our inspection: Was the DOE review of the Chevron unsolicited proposal handled in accordance with the requirements of DOE Order 4210.9A, “UNSOLICITED PROPOSALS?”