Department of Energy Contracting: Actions Needed to Strengthen Certain Acquisition Planning Processes
Fast Facts
The Department of Energy has a record of inadequate contract management, which can lead to increased acquisition costs and delays. This has raised concerns among congressional committees and others about how DOE plans for its acquisitions.
We assessed how DOE implemented certain acquisition planning practices for some acquisitions.
It wasn't always clear that DOE reviewed lessons learned from prior acquisitions, which is a way to avoid repeating mistakes. We also found that DOE needed to improve its data on acquisition problems—such as award delays—to better understand their causes.
Our 12 recommendations address these issues and more.
Highlights
What GAO Found
Offices in the Department of Energy (DOE), including the National Nuclear Security Administration (NNSA), implemented eight of 10 selected acquisition planning practices for 20 contracts GAO reviewed. For example, DOE offices conducted market research and created written acquisition plans and milestones for all 20 contracts. However, independent government cost estimates, important for estimating potential contract costs, were not always developed, even though DOE guidance directs officials to perform them. Instead, DOE offices sometimes obtained waivers of office-specific direction to conduct such estimates or used a budget-based model that is typically based on current budget forecasts.
DOE offices also did not always include evidence indicating that contracting officers reviewed lessons learned from prior acquisitions or followed a lessons learned process for acquisitions that employs all leading practices. Consistently reviewing and leveraging knowledge gained from prior acquisitions, as well as using a process that follows all lessons learned leading practices, can help ensure that past mistakes are not repeated and opportunities to improve acquisition planning are not lost.
DOE does not have readily available procurement data on the number of canceled solicitations and terminated awards for fiscal years 2017 through 2022 in its contract database. Reviewing other data sources, GAO identified canceled solicitations and terminated awards that were not captured in DOE's contract data (see figure).
Number of Department of Energy (DOE) Canceled Solicitations and Terminated Awards, by Data Source, Fiscal Years 2017–2022
DOE and office requirements and guidance provided limited instruction about how to record and report cancellations and terminations. DOE officials reported that cancellations and terminations are infrequent, but GAO found that such actions can have considerable negative effects on industry and DOE, including financial losses. By providing clearer guidance to contracting officials on how to properly record and report data on these actions, DOE could improve the reliability of information to better understand the frequency with which they occur, and any underlying causes and necessary corrective actions. Changes to requirements contributed to the majority of canceled solicitations and terminated contracts, but DOE officials told GAO they had not assessed this issue. Doing so would better position DOE to determine any root causes or potential improvements to requirements setting.
Why GAO Did This Study
DOE obligates tens of billions of dollars annually on contracts to support critical missions and the management and operation of its laboratories and production facilities. Aspects of DOE's acquisition process have been on GAO's High Risk List since 1990. Congressional committees and industry have raised questions about the prolonged nature of some DOE acquisitions and abrupt cancellations of multibillion-dollar contract awards.
Several congressional committee reports include provisions for GAO to review aspects of DOE's acquisition planning. GAO examined the extent to which DOE (1) implemented selected acquisition planning practices and (2) has readily available information about solicitation cancellations and contract award terminations and delays.
GAO reviewed federal procurement data as of January 2023, along with relevant contract files, for selected contracts awarded in fiscal years 2017 through 2022 (the most recent at the time of review). GAO identified contracts for review based on criteria such as potential total contract value and having a written acquisition plan. GAO also interviewed DOE officials and representatives from 10 selected industry entities.
Recommendations
GAO is making 12 recommendations, including that DOE revise its acquisition lessons learned process, implement procedures to improve how certain data are collected, and assess the role of requirements setting in causing solicitations to be canceled or awards to be terminated. DOE and NNSA agreed with the 12 recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Energy | The Director for DOE's Office of Acquisition Management should ensure that for non-M&O acquisitions, the Acquisition Guide clearly specifies what information should be included in the contract file to support how acquisition officials considered prior lessons learned during acquisition planning. (Recommendation 1) |
DOE agreed with the recommendation and said that its Office of Acquisition Management will revise the department's guidance to strengthen language regarding contract file documentation and how acquisition officials considered prior lessons learning. DOE expects to complete this update in 2025. We will follow up with DOE after it has taken action.
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| Department of Energy | The Director for DOE's Office of Acquisition Management should develop a policy to ensure that DOE acquisition offices consistently document potential lessons learned identified during acquisition planning. (Recommendation 2) |
DOE agreed with the recommendation and said that its Office of Acquisition Management will revise the department's guidance on reviewing lessons learned during the acquisition planning process. DOE expects to complete this update in 2025. We will follow up with DOE after it has taken action.
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| National Nuclear Security Administration | The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should develop a policy to ensure that NNSA acquisition offices consistently document potential lessons learned identified during acquisition planning. (Recommendation 3) |
NNSA agreed with the recommendation and said that its Office of Partnership and Acquisition Services will coordinate with DOE to update its internal guidance as appropriate. NNSA expects to complete this update in 2025. We will follow up with NNSA after it has taken action.
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| Department of Energy | The Director for DOE's Office of Acquisition Management should revise the source evaluation board lessons learned process described in the Acquisition Guide to ensure that it incorporates all leading practices. (Recommendation 4) |
DOE agreed with the recommendation and said that its Office of Acquisition Management will revise the department's guidance to incorporate leading lessons learned practices as appropriate. DOE expects to complete this update in 2025. We will follow up with DOE after it has taken action.
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| Department of Energy | The Director of DOE's Office of Acquisition Management should develop guidance to ensure the accurate tracking of information on canceled solicitations in agency procurement systems. (Recommendation 5) |
DOE agreed with the recommendation and said that its Office of Acquisition Management will implement a reporting mechanism to track information on canceled solicitations. DOE expects to complete this update in 2025. We will follow up with DOE after it has taken action.
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| Department of Energy | The Senior Advisor for the Office of Environmental Management should implement procedures to consistently record information on canceled solicitations so that the information is reliable and comprehensive. (Recommendation 6) |
DOE's Office of Environmental Management agreed with the recommendation and said it will follow guidance that DOE's Office of Acquisition Management plans to issue. EM expects to complete this action in 2025. We will follow up with EM after it has taken action.
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| National Nuclear Security Administration | The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should implement procedures to consistently record information on canceled solicitations so that the information is reliable and comprehensive. (Recommendation 7) |
NNSA agreed with the recommendation and said its Office of Partnership and Acquisition Services will coordinate with DOE in the development of actions taken to ensure the accurate tracking of information on canceled solicitations and update its internal guidance as appropriate. NNSA expects to complete this action in 2025. We will follow up with NNSA after it has taken action.
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| Department of Energy | The Senior Advisor for the Office of Environmental Management should implement procedures to ensure it maintains required contract documents on canceled solicitations. (Recommendation 8) |
DOE's Office of Environmental Management agreed with the recommendation and said that, if needed to complement any future DOE-wide guidance on recording information on canceled solicitations, it will develop supplemental guidance to address the specific documentation to be maintained in the event of a canceled solicitation.
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| National Nuclear Security Administration | The Associate Administrator for NNSA's Office of Partnership and Acquisition Services should implement procedures to ensure it maintains required contract documents on canceled NNSA solicitations. (Recommendation 9) |
NNSA agreed with the recommendation and said that its Office of Partnership and Acquisition Services will coordinate with DOE in the development of implementation procedures for consistently recording information on canceled and terminated awards in agency procurement systems and update its internal guidance as appropriate. NNSA expects to complete this action in 2025. We will follow up with NNSA after it has taken action.
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| Department of Energy | The Director of DOE's Office of Acquisition Management should implement procedures for DOE acquisition offices to consistently record information on terminated awards in agency procurement systems so the information is reliable and comprehensive. (Recommendation 10) |
DOE agreed with the recommendation and said that the department will issue additional guidance to supplement Federal Procurement Data System procedures so that acquisition offices consistently record information on canceled and terminated awards in the department's procurement systems. DOE expects to complete this action in 2025. We will follow up with DOE after it has taken action.
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| Department of Energy | The Director for DOE's Office of Acquisition Management should review, through lessons learned or other review processes, the role of requirements setting in causing canceled solicitations and terminated awards, including the identification of root causes and solutions. (Recommendation 11) |
DOE agreed with the recommendation and said that its Office of Acquisition Management will revise the department's guidance to include language regarding documenting lessons learned on canceled solicitations and terminated awards. DOE expects to complete this action in 2025. We will follow up with DOE after it has taken action.
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| Department of Energy | The Director of DOE's Office of Acquisition Management should implement procedures to ensure the accurate tracking of information on contract award timeliness at the agency. (Recommendation 12) |
DOE agreed with the recommendation and said that the department will assess the current procedures and issue additional guidance as appropriate. DOE expects to complete this action in 2025. We will follow up with DOE after it has taken action.
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