Contractor Approved Funding for Own Government Contract

Thursday, May 14, 2009
Hanford workers checking a leak, 2007

The Department of Energy, overseer of the nation’s most toxic cleanup operation, allowed a private contractor to authorize its own payments for work billed to the government, according to the department’s inspector general (IG). The audit that turned up this big no-no discovered other important responsibilities that Energy officials had ceded to the company, Project Assistance Corporation (PAC), which has been helping to dispose of plutonium at the old Hanford nuclear weapons complex in Washington. Located near the Columbia River, the Hanford site is considered the most challenging clean up project left over from the Cold War, with more than 53 million gallons of highly radioactive waste located on the sprawling facility that once produced plutonium for America’s nuclear arsenal.

IG auditors knew something was wrong from the moment they arrived at Hanford’s Office of River Protection to review the government’s administration of the PAC contract. That’s because instead of finding Energy employees at the office, they found PAC staff minding the store. Federal rules specifically prohibit contractors from performing duties that government workers are in charge of—like drafting departmental responses to congressional inquiries, which PAC was also handling. When auditors did locate Energy officials, they were working side-by-side with PAC’s crew, which was another violation of federal rules.
The auditors report said “PAC employees developed their own scope of work for services to be provided to the Office of River Protection and approved funding authorizations for procurement requests related to PAC’s own contract.” It was also found that between 2005 and 2008, the annual cost of PAC’s contract almost doubled from $4.7 million to $9.2 million.
-Noel Brinkerhoff
IG: Energy Needs to Improve Contractor Oversight (by Katherine McIntire Peters, Government Executive)
Management Controls over the Use of Service Contracts at the Office of River Protection (Office of Inspector General, Department of Energy) (PDF)


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