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Watchdog Finds Flaws in DOE Contractor Responsibility Checks

The Department of Energy’s (DOE) watchdog office just published a report finding weaknesses in the Department’s policies and procedures for keeping contracts out of the hands of disreputable companies and individuals.

“The Department had developed internal controls designed to ensure that awards were made to responsible prospective contractors,” according to a Department of Energy Inspector General (DOE IG) audit report released last week. “Although procurement officials were familiar with the…requirements regarding responsibility determinations, we found that management did not ensure these requirements were consistently followed.”

DOE IG found instances of contractor responsibility certifications either incomplete or expired at the time of contract award. Contractors are required to register in an online database called the Online Representation Certification Application (ORCA)—now part of the System for Award Management (SAM) database—in which they certify they have not been suspended or debarred, declared ineligible for federal contracts, indicted on criminal or civil charges, or have federal tax delinquencies exceeding $3,000. In instances involving nearly $35 million in contracts, however, DOE IG found contractors had not registered in ORCA or had incomplete or expired certifications.

DOE IG also found some contract files were missing important documentation used to determine a contractor’s responsibility, such as documents reflecting that the contracting official checked various responsibility databases before awarding the contract. The audit found missing documentation in instances involving contracts valued at more than $90 million. In one instance, the official who awarded the contract told DOE IG “he assumed the contractor would follow through with the required online registration.” Strangely, the report makes no mention of the Federal Awardee Performance and Integrity Information System (FAPIIS), a responsibility database created in 2010 that contracting officials are required to check as part of their responsibility review.

The report mentions only one instance in which contracts might have been awarded to a non-responsible contractor. This unnamed entity, with $314 million in DOE contracts, had affirmed in its certification that it had been or was presently indicted or convicted of a criminal offense. Contracting officials did not conduct a due diligence follow-up to determine if the matter adversely affected the contractor’s responsibility.

In 1998, an expert at the Brookings Institution described DOE as “little more than a hollow shell over a vast network of contractors.” Little has changed since then. DOE, second only to the Pentagon in federal contract spending, now boasts a workforce of approximately 115,000 employees, of which almost 100,000 are contractors. That means contractors outnumber federal employees at DOE by a ratio of roughly 6 to 1. DOE’s imbalanced workforce has long been an area of concern, singled out in periodic management challenges reports as an area warranting immediate corrective measures. This latest audit report shows DOE still has room for improvement in ensuring that its contractors meet responsibility requirements.