After 23 years, NNSA still on 'the list'

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GAO > Agency vulnerable to waste, fraud, abuse

By The Staff

The U.S. Government Accountability Office has once again targeted the National Nuclear Security Administration and placed it on its “high risk” list.

The GAO cites the NNSA’s inability to bring in a Los Alamos plutonium factory at a reasonable rate and on schedule.

The list is put together every two years and it highlights agencies that are “most in need of transformation” because of management and other problems.

According to the report, this is why NNSA is on the high-risk list.

“The Department of Energy, the largest civilian contracting agency in the federal government, and relies primarily on contractors to carry out its diverse missions and operate its laboratories and other facilities.

“Approximately 90 percent of DOE’s budget is spent on contracts and large capital asset projects. GAO designated contract management — which includes both contract administration and project management — as a high-risk area in 1990 because DOE’s record of inadequate management and oversight of contractors has left the department vulnerable to fraud, waste, abuse and mismanagement.

“In January 2009, to recognize progress made at the Office of Science, GAO narrowed the focus of its high-risk designation to two DOE program elements — the National Nuclear Security Administration and Office of Environmental Management. Together, these two programs accounted for almost 65 percent of DOE’s fiscal year 2012 discretionary funding of more than $26 billion. This year, GAO is further narrowing the focus of its high-risk designation to major contracts and projects, those with values of at least $750 million, to acknowledge progress made in managing smaller value efforts.”

So how does NNSA and DOE get off the list?

DOE’s removal from the High Risk List requires meeting all five of GAO’s long-established criteria. DOE has already demonstrated and must continue to sustain leadership commitment and progress implementing corrective measures and also ensure the successful implementation of its corrective action pan.

Additional actions are needed to meet the remaining two criteria. DOE needs to commit sufficient people and resources to resolve its contract management problems. Furthermore, DOE must monitor and independently validate the effectiveness and sustainability of its corrective measures, particularly for major projects, but also for non-major projects.

Specifically, DOE must ensure that the corrective measures it is taking result in sustained improvements to the achievement of cost, schedule, and scope targets and that federal managers are receiving and validating accurate and reliable information from contractors that can be used to make decisions and to hold them and the department accountable for performance.

The Nuclear Weapons and Materials Monitor reported that the NNSA did itself a “tremendous disservice” by granting award term extensions to contractors that run Los Alamos and Lawrence Livermore National Laboratories even though the contractors did not meet requirements to trigger the extensions.

That was the assessment of senior Government Accountability Office official Allison Bawden. She told the trade publication that the “inconsistent” administration of the contracts raises questions, not only for existing NNSA contracts that employ award term measures but also for a new cost-savings based contract that was awarded for the combined management of Y-12/Pantex last month but is under protest.

The contracts of Los Alamos National Security, LLC, and Lawrence Livermore National Security, LLC, required the contractors to meet a handful of performance measures and earn at least 80 percent of the at-risk fee that makes up its contract. Neither contractor met the 80 percent threshold, but acting NNSA Administrator Neile Miller used her discretion as the Fee Determining Official to grant award term extensions to both LLCs.

Bawden also asked the following question.

“Is NNSA prepared to quickly recompete these contracts if planned efficiencies are not achieved?” Bawden said. “The decisions with respect to LANS and LLNS from earlier this year create significant doubt. NNSA must be willing to live with the contracts it designs and signs. If it is not, then there is a problem with the contract vehicle that must be addressed. Inconsistent implementation is either a symptom of poor design or of a lack of will.”