Energy Management

This fact sheet provides information on uncosted obligations held by the Energy Department's (DOE) management and operating contractors. Uncosted obligations are budget authority that DOE has obligated to its contractors for goods and services that have not yet been provided and for which costs have therefore not yet been incurred. At the end of fiscal year 1993, uncosted obligations totaled about $9 billion for DOE-funded programs. DOE's management and operating contractors held about $5.7 billion of these uncosted obligations. This report discusses the uncosted balances reported by contractors at nine DOE facilities. GAO identified uncosted balances related to ongoing programs that could be used to offset fiscal year 1995 budget needs. GAO focused on the funds in two areas--environmental restoration and waste management and defense programs. These program areas had the largest uncosted balances--$1.8 and $2 billion, respectively--at the end of fiscal year 1993.

GAO found that: (1) by the end of 1993, DOE M&O contractors held about $5.7 billion in total uncosted obligations; (2) $508 million of the uncosted balances were not tied to specific needs or were excess to expected needs; (3) $132 million in uncosted balances were mistakenly identified as encumbered obligations and $254 million in uncosted balances were identified by contractors as prefinancing or unencumbered obligations; (4) during 1994, $54 million became available because of subcontract closeouts, program terminations, or cost savings; (5) $67 million has been requested for certain activities in 1995 that are not tied to specific needs; (6) the need for this amount is questionable because $60 million will already be available from uncosted obligations and the remaining $7 million will not be needed because of project suspensions and cancellations; (7) although DOE plans to use some of its uncosted balances to offset 1995 activities, it has not specifically identified which uncosted balances it will use; and (8) DOE cannot ensure that it is using the maximum amount of available uncosted obligations, since it sets target levels for using uncosted balances.