Energy's Support Service Contracts

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) estimated costs for support service contracts, focusing on: (1) a comparison of DOE-estimated costs under the DOE Strategic Alignment and Downsizing Initiative and the approach set forth in the conference report for the Fiscal Year 1996 Energy and Water Development Appropriation; and (2) whether implementing the initiative will reduce the costs of administrative and management services by 50 percent. GAO noted that: (1) DOE estimate of contract costs under the conference report approach is uncertain because DOE did not review its 500 support service contracts individually to determine whether they would be subject to 50- or 15-percent reductions; (2) DOE excluded certain contracts totalling $55 million from its calculations under the initiative, but included those contracts in its estimate under the conference report approach; (3) DOE did not design the initiative to achieve the higher-percentage reductions specified in the conference report for administrative and management service contracts; and (4) implementation of the initiative will not necessarily reduce DOE costs for support service contracts by 50 percent.