Bad Watchdog Season 2 launches June 20.


Public Unable to Hold Nuclear Subcontractors Accountable

Should subcontractors at a nuclear facility be held just as accountable for their work as the prime contractors who contract with them? Given the sensitive material, potential dangers, and high maintenance costs associated with such sites, the obvious answer is “yes.” Unfortunately, current Department of Energy (DOE) policy leaves subcontractor activity virtually invisible to the public.

The National Nuclear Security Administration (NNSA), the part of the DOE that oversees nuclear weapons facilities, contracted with Babcock and Wilcox Y-12, LLC (B&W) to manage and operate the Y-12 nuclear complex in Oak Ridge, Tennessee. B&W then subcontracted with WSI-Oak Ridge to manage security for the site. Rising costs of the new Uranium Processing Facility and recent embarrassing security contractor failures at the complex caused the Project On Government Oversight to send a Freedom of Information Act (FOIA) request to NNSA regarding contracted work there.

Among other things, POGO requested all Show Cause and Cure Notices issued to Babcock and Wilcox Y-12 and WSI-Oak Ridge related to work at Y-12. Such notices hold contractors accountable for their work by forcing evidence of progress. Although documents pertaining to both contractors were requested, we only received documents pertaining to B&W’s work.

The NNSA General Counsel responded to our request for documents relating to WSI-Oak Ridge work by stating that NNSA Production Office, the office charged with overseeing contract management at Y-12, “searched but did not locate any responsive records.” It is worrisome that the NNSA does not possess such records, given the potential harm that can be done at the site.

The response then explains that only B&W has possession of the records: “the documents you are seeking [regarding WSI-Oak Ridge] are contained in procurement records in the possession and control of B&W Y-12, LLC…and are therefore, not ‘agency records’ subject to the provision of the FOIA.”

The Department of Energy Acquisition Regulation (DEAR), DOE’s procurement policy, justifies this lack of transparency. DOE modified its contract with B&W, adding DEAR clause “Access to and ownership of records.” This clause differentiates between government-owned records and contractor-owned records. Government-owned records are available via FOIA, while contractor-owned records are not.

According to this clause, “all records acquired or generated by the contractor in its performance of this contract shall be the property of the Government,” except for “records relating to any procurement action by the contractor.” In other words, prime contractors own any records related to work that they subcontract.

Federal regulations do allow the government to conduct audits, inspections, and reports of contractors and subcontractors, but because the government doesn’t own the documents related to subcontracted work, the DOE’s designation of “contractor-owned records” keeps the public blind. The Y-12 website claims that the facility “strives to implement subcontracting practices that will be regarded as the Standard of Excellence by the Department of Energy and others.” As POGO discovered, “others” is not referring to the American people.

Government oversight of contractors and subcontractors is woefully deficient. On June 7, 2013, the DOE Inspector General (IG) issued an inspection report detailing “serious concerns with the administration and management” of a subcontractor consulting firm working indirectly for NNSA. And recently, POGO blogged that according to DOE IG, “taxpayers lost billions due to a government agency’s poor management of contractors”—an issue we have dealt with multiple times. The agency in question is the NNSA.

When it comes to oversight, subcontractor work should be no different than prime contractor work. Subcontractors need public oversight.