DOE IG: NNSA Must Exercise ‘Professional Judgment’ in Support Service Contracts to Avoid Federal Regulation Violations

The National Nuclear Security Administration (NNSA) must pay closer attention to its management of Support Service Contracts (SSC) to avoid violating federal regulations that govern personal services contracts and inherently governmental functions, according to a special review released yesterday by the Department of Energy (DOE) Office of Inspector General (IG). The IG report follows a 2013 self-assessment conducted by the NNSA’s Office of Defense Programs, both of which found that a significant portion of the SSCs reviewed "exhibited one or more of the characteristics of a personal services contract," according to the audit. The Federal Acquisition Regulation (FAR) does not allow agencies to award personal services contracts, "in which contractor personnel are subject to the relatively continuous supervision and control of a Government officer or employee," the report says. The audit also found that some contracted services "approached being inherently governmental functions," including "the determination of agency policy and program priorities, and the direction of Federal employees." The report also notes that "NNSA’s use of program funds for some SSCs was questionable" due to discrepancies in program funding sources.

DOE "found no clear violations of the FAR or [DOE] and NNSA guidance," the report says. Instead, it says the issues of concern "often hinge upon subtlety, nuance, and professional judgment." The report notes that NNSA has taken various corrective actions, including personnel training and ongoing reviews. NNSA spokeswoman Shelley Laver said in a statement that NNSA continues "to track our existing action plan to completion, and we report our progress through the quarterly updates in the Departmental Audit Report Tracking System as indicated in the management response to the report.”