A recent audit by the Energy Department’s Office of Inspector General found that a major vendor at the Hanford Site in Washington state, Mission Support Alliance (MSA), is not meeting its agreed-upon small business contracting commitments.
The Leidos-led vendor, which provides landlord services at the former plutonium production complex that range from road maintenance to emergency response, reported subcontracting 27% of its total contract value to small businesses. But the Office of Inspector General said it determined the figure is only 21%, which misses the contract requirement of 25%.
The audit looked at the first five years of the MSA contract, which began in May 2009.
The IG report also says MSA self-performed 73% of the total contracted work itself, compared to the 55% cited by the company. The contract limit is 60%. Mission Support Alliance “potentially deprived” other firms of small business awards, the IG said .
The audit cited less-extensive shortcomings with the small business recordkeeping of a Jacobs subsidiary, CH2M Plateau Remediation, which is in charge of Central Plateau cleanup at Hanford.
The CH2M contract limits its “self-performed” work to 65% of the total contract value and also stipulates that small business subcontracts receive 17% of the total value. But CH2M was still expected to meet its subcontractor target by contract expiration.
The Office of Inspector General called for Hanford’s major site contractors to develop better procedures to monitor small business contributions and the amount of work being self-performed. The Energy Department agreed to make that and other changes, such as better oversight by prime contractors of various subcontractor costs, by June 2021.
The IG also said the Energy Department’s Richland Operations Office at Hanford took a step in the right direction in August 2019 when it implemented new guidelines for small business reporting by contractors. It is too early to determine if the guidelines will provide sufficient, according to the report.
Mission Support Alliance is serving out a $4.9 billion contract that began in May 2009 and is set to expire this November. In December, the DOE Office of Environmental Management awarded a potential 10-year, $4 billion contract for support operations to another Leidos-led joint venture, Hanford Mission Integration Solutions (HMIS). The new vendor team withstood a contract protest in April and is awaiting DOE’s approval to start its transition during the COVID-19 pandemic.
The Jacobs subsidiary’s Central Plateau remediation contract, which began in October 2008 and is valued at about $7.2 billion, is currently scheduled to expire Sept. 30, barring an extension.
The IG conducted its audit from November 2018 through March 2020. An exit conference was held with DOE officials June 18.
The Energy Department and both contractors declined comment on the IG report.
