DOE's Alcohol Fuels Awards Process Resulted in Questionable Award Selections and Limited Small Business Success

As part of the alternative fuels program, the Department of Energy (DOE) made two rounds of alcohol fuels feasibility study grants and cooperative agreement awards. In response to requests by four congressmen, GAO evaluated the criteria and process that DOE used to evaluate proposals and make award selections and the extent to which awards were made to large and small businesses.

GAO found that certain events which occurred during the process DOE used to select awardees reduced the integrity of the selection process and furthermore cast doubt over whether DOE selected the best proposals for award. DOE devoted substantial effort to conducting detailed technical evaluations of the proposals it received, yet frequently disregarded these evaluations in making award selections. It often passed over proposals with high technical rankings to select those with much lower rankings. The primary rationale given by DOE for selecting lower ranked proposals was the desire to achieve nontechnical objectives set forth in its program policy factors. While consideration of such factors in the selection process is valid, GAO believed that their application in the alcohol fuels competitions was excessive. The integrity of the DOE awards selection process was further reduced by altered cost and business management evaluations. In addition to scoring each proposal according to technical criteria, DOE evaluated the cost reasonableness and business management aspects of each cooperative agreement proposal. GAO found that the ratings on nearly half the proposals had been altered by one member of the evaluation team. Finally, GAO found that the approach DOE used in conducting its competitions limited the success small businesses had in obtaining contract awards. The DOE evaluation criteria was slanted so that large corporations with considerable financial resources were in a better position to receive contract awards.

Recommendations

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