Energy Management

DOE Has an Opportunity to Improve Its University of California Contracts Gao ID: RCED-92-75 December 26, 1991

The Department of Energy (DOE) is negotiating extensions of its management and operating contracts with the University of California for the Lawrence Livermore National Laboratory, the Lawrence Berkeley Laboratory, and the Los Alamos National Laboratory. GAO believes that these contract renegotiations afford DOE an opportunity to institute changes that will help ensure that the three laboratories are run effectively and efficiently. Under its current contracts with the University, DOE lacks the authority to direct changes to the laboratories' procurement and property management policies and procedures. The nonstandard procurement and property management clauses in the current contracts have precluded timely corrective action in these areas and have permitted costly procurement actions that do not comply with DOE's policies and procedures. In addition, the University's contracts include a number of other nonstandard clauses that can further limit DOE's effective oversight of the contracts, such as the nonstandard allowable costs clause. GAO strongly supports DOE's (1) goal of including as many standard clauses in the contracts as possible and (2) decision to have any deviations fully justified and approved by DOE's top management.

GAO found that: (1) nonstandard clauses in DOE contracts with the university provide DOE with less authority to direct changes in procurement and property management; (2) with nonstandard clauses, laboratories only make the changes they agree with and can delay or avoid implementation of DOE recommendations; (3) nonstandard clauses have also resulted in costly vehicle leases that DOE did not approve and contributed to a 5-year disagreement between DOE and the laboratory regarding the appropriate size of the vehicle fleet; (4) other nonstandard clauses hinder DOE ability to provide effective oversight of costs and to set requirements for internal audits; (5) DOE tried to make changes in contracts in 1987 and 1990, but was unsuccessful because the university would not accept standard clauses; and (6) DOE is attempting to negotiate contracts again and the university has indicated a willingness to accept some standard clauses.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.