Consultant subcontracting at the Idaho National Engineering Laboratory

The Department of Energy (Department), Idaho Operations Office (ID) is responsible for ensuring that its management and operating (M&O) contractors subcontract consultant services in a manner most advantageous to the Department. The objectives of the audit were to determine whether consultant subcontracts were competitively and objectively awarded and whether these subcontracts supported the Idaho National Engineering Laboratory`s (INEL) mission. The audit showed that M&O contractors generally did not award consultant subcontracts competitively and objectively. Also, many of the subcontracts were awarded to former INEL employees, increasing the potential for conflicts of interest. These problems occurred because M&O contractors` internal controls did not ensure that sole source procurements were adequately justified and that potential conflicts of interest were avoided. By not competing consultant subcontracts the Department may not have obtained the most economical consultant services. Further, the fundamental fairness upon which such subcontracts were awarded to former employees was questionable. Additionally, one INEL M&O contractor was subcontracting consultant support services directly for Department Headquarters. This occurred because Headquarters elements and the M&O contractor did not follow Department guidance prohibiting subcontractual support from an M&O contractor directly to Headquarters. As a result, the M&O contractor acted as a procurement agent for Headquarters enabling Headquarters to avoid the more stringent requirements of the Department`s procurement process