Morning Briefing - March 14, 2019
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March 14, 2019

DOE Pushes Back on Suggestion That Local Feds Investigate Subcontractor Ownership Ties

By ExchangeMonitor

The Department of Energy pushed back against a new Government Accountability Office (GAO) recommendation that local agency field offices investigate the ownership of subcontractors on nuclear sites for potential conflicts of interest.

Local DOE officials should “independently review subcontractor ownership information as part of DOE consent reviews and assess potential conflicts of interest to ensure contractors are mitigating them,” GAO auditors said in a 76-page report published Tuesday. 

John Bashista, director of DOE’s Office of Acquisition Management, said that responsibility can remain with DOE contracting officials.

Instead of requiring local feds to perform due diligence on subcontractor ownership, “DOE will issue guidance emphasizing the importance of contracting officers reviewing contractors’ … close working relationships, conflicts of interest, or ownership affiliations between the prime and subcontractor,” Bashista wrote in a Feb. 7 letter to the GAO.

The National Nuclear Security Administration (NNSA), which manages contracts for active nuclear-weapon sites independently of DOE, will have to decide whether to make the same recommendation, Bashista wrote. The broader DOE will finalize its guidance to contracting officers by Aug. 9, he stated.

The Government Accountability Office report examined subcontracts active in 2016 at current and former DOE nuclear-weapon sites. Of $23 billion under contract at DOE that year, some $6 billion went to subcontracts, including about $930 million to entities that were part of DOE prime contracts.

A notable example of subcontractors party to prime contracts in the NNSA enterprise is Bechtel National. The company is the lead partner on Consolidated Nuclear Security (CNS), operator of the Y-12 National Security Complex in Oak Ridge, Tenn., and the Pantex weapons assembly plant in Amarillo, Texas. At Y-12, the company is also building the Uranium Processing Facility under a subcontract to CNS.