December 19, 2019

Audit Coverage of Cost Allowability for National Security Technologies LLC from October 1, 2014, Through November 30, 2017 Under Department of Energy Contract No. DE-AC52-06NA25946

From July 1, 2006, to November 30, 2017, National Security Technologies, LLC (NSTec), managed and operated the Nevada National Security Site under contract with the Department of Energy and National Nuclear Security Administration (NNSA).  The Nevada National Security Site hosts an array of defense and national security experiments for the national weapons laboratories, as well as supports homeland security, nonproliferation testing and treaty verification training, radiological detection, and first responder training.  The Nevada National Security Site was managed by NSTec under a cost-reimbursement management and operating contract employing performance incentives which ran from July 1, 2006, through November 30, 2017.  The contract is currently managed and operated by Mission Support and Test Services, LLC (MSTS).  From October 1, 2014, through November 30, 2017, NSTec incurred and claimed costs totaling $ 1,636,854,757.

During our assessment, nothing came to our attention to indicate that the allowable cost–related audit work performed by NSTec Internal Audit from October 1, 2014, through November 30, 2017, could not be relied upon. While we did not identify any material internal control weaknesses with either cost allowability or subcontract audits, we are questioning $42,282 of unresolved questioned costs identified by MSTS Internal Audit.

Management concurred with the recommendation to direct the Contracting Officer to make a determination regarding the allowability of unresolved questioned costs, and recover costs determined to be unallowable.  Management’s actions are estimated to be completed by June 30, 2020. 

Topic: Management & Administration