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Audit Report: IG-0460

February 17, 2000

The Department's Management and Operating Contractor Make-or-Buy Program

In 1994, the Department of Energy's (Department) Contract Reform Team concluded that savings could accrue to the government if certain operating functions not essential to the Department's core mission were performed by outside contractors. Over the next several years, the Department initiated actions that required management and operating (M&O) contractors to identify, categorize, and evaluate all of their functions and prepare make-or-buy plans to obtain supplies and services on a least-cost basis subject to program specific make-or-buy criteria. The objective of this audit was to determine whether the Department's M&O contractors (1) identified those functions for which make-or-buy opportunities existed and (2) performed cost-benefit analyses.