DOE Watchdog Sniffs Out More Waste at National Labs

Last week, POGO blogged about the Department of Energy (DOE) Office of Inspector General (IG) finding waste at the Sandia National Laboratories in the form of prime contractor employees retiring and then going back to the same job as a much higher-paid subcontractor. The DOE watchdog found instances of former contractor employees returning to Sandia as consultants earning a significantly higher wage—almost 40 percent higher in one case—in violation of internal Sandia policies (although not in violation of federal or DOE policies).

This week, the IG issued another report finding wasteful compensation practices at the government’s nuclear labs. This time, it’s the East Tennessee Technology Park in Oak Ridge, where the IG discovered that a former senior DOE official had improperly approved excessive salaries for the contractor overseeing environmental cleanup at the facility, URS|CH2M Oak Ridge, LLC (UCOR).

The IG found that the former official had exceeded his or her authority in approving salary increases for ten UCOR executives that were higher than the calculated local market (a.k.a. private sector) rates. In the two most extreme examples, one executive’s annual base salary determination was 82 percent higher than the market rate ($299,800 vs. $164,889), while another was 74 percent higher ($337,581 vs. $194,400). POGO wonders if this report, which found contractor employees getting paid salaries far exceeding private sector rates, will feed into the ongoing controversy over the pay gap between federal, contractor, and private sector employees.

According to the report, if the raises are left unmodified, the DOE could incur more than $3.4 million in unjustified costs over the life of the contract. The IG recommended that the DOE update its policies to ensure that contractor executive salaries are reasonable, consistent with local market compensation rates, and developed according to consistent guidelines and procedures.

This is yet another reminder of the tenuous workforce balance at the DOE, an agency that has been described as “little more than a hollow shell over a vast network of contractors.” As noted in the IG report, the DOE is the largest civilian contracting agency within the federal government, consisting of approximately 100,000 contractor employees. It’s no wonder watchdogs such as the IG and the Government Accountability Office regularly find exorbitant or unjustified contractor costs at the DOE, whether it’s salaries or contractor travel and pensions.