Office of Inspector General report on audit of support services subcontracts at Argonne National Laboratory

Department of Energy (Department) policy prohibits the use of subcontracts awarded by management and operating contractors to provide direct support to Headquarters program offices. When support is necessary, program offices are required to use the Headquarters procurement organization, not the management and operating contractors. The objective of this audit was to determine whether the program offices were obtaining direct support for their programs through subcontracts awarded by Argonne National Laboratory (Argonne). Despite the Department`s policy, program offices in four major Departmental divisions used 24 subcontracts awarded by Argonne to provide direct support for their programs in Fiscal Year 1996. The program offices acquired the subcontractor services through Argonne because they believed that Argonne`s procurement organization could provide the services faster than the Headquarters procurement organization. As a result, the Department may have paid more than necessary for the services, while many of the safeguards against noncompliance with laws and regulations that are normally provided by the Department`s procurement process were lost. The authors recommended that the Assistant Secretary for Environment, Safety and Health; the Assistant secretary for Environmental Management; the Director, Office of Energy Research; and the Director, Office of Nuclear Energy, Science and Technology (1) direct program managers to discontinue the practice of acquiring support services from subcontractors hired by Argonne; and (2) establish management controls to ensure that program managers acquire support services through the Department`s normal procurement process, and not through management and operating contractors. Management concurred with the audit finding and recommendations and initiated corrective action