Alissa Tabirian
NS&D Monitor
10/9/2015
The Department of Energy (DOE) is questioning $1.5 million in “unresolved” subcontract costs with the contractor that managed and operated the Y-12 National Security Complex from 2000 and 2014, according to a DOE Inspector General’s Office (IG) report released this week. Babcock and Wilcox Technical Services Y-12 (B&W Y-12) – a limited liability company made up of B&W, now known as BWXT, and Bechtel National – identified $1,516,033 in unresolved costs out of a total $3.2 million in questioned costs by internally auditing 24 subcontracts in fiscal 2013 and 2014 through June 30, 2014, the IG said. Costs may be questioned for a variety of reasons, including lack of documentation or proper approval, and may be deemed unresolved due to lack of audit coverage.
B&W Y-12 audited subcontractors “when costs incurred are a factor in determining the amount payable to a subcontractor,” the IG said. Additional subcontract audits by the Defense Contract Audit Agency also found unresolved questioned costs of $482,971 associated with administrative expenses that were incurred in 2005 and 2006. B&W Y-12’s internal audits of cost allowability found that all fiscal 2013 questioned costs were resolved, while $761 remained unresolved from fiscal 2014 out of a total $32,825 in questioned expenses.
The IG recommended that the National Nuclear Security Administration’s (NNSA) production office manager determine the allowability of questioned costs in both audits, which total $1,482,161 for fiscal 2013 and $517,604 for fiscal 2014, and recover any unallowable amounts. Allowable costs are those that fall within the terms of the contract. The NNSA concurred with the IG’s findings and estimated that all questioned costs will be resolved by Dec. 30, 2015. BWXT spokeswoman Aimee Mills said in a statement that "B&W Y-12 is working to resolve any questions the Inspector General’s office may have" and that "the auditing processes in place for B&W Y-12 were compliant with strict industry standards."
