January 12, 2015

Materials System Inventory Management Practices at Washington River Protection Solutions

Washington River Protection Solutions (WRPS) is the Department of Energy Office of River Protection's contractor responsible for operation of the Hanford Site tank farms. As part of its overall property management system, WRPS manages inventory needed to support tank farm operations through the Tank Farm Material Services System (Materials System), which tracks inventory from receipt to issuance of the parts to the field. As of August 11, 2014, the Materials System listed more than 258,000 items with an estimated acquisition cost of $4.6 million.

Our review determined that the Office of River Protection had not effectively managed inventory needed to support tank farm operations at WRPS. We found that WRPS could not accurately determine the number and value of items held in inventory from the Materials System due to internal control weaknesses at both the contractor and the Office of River Protection.

Although specifically required under the terms of its contract, WRPS did not comply with Federal Acquisition Regulation (FAR) requirements to maintain accurate records and perform periodic physical inventories on Materials System items. We recommend that management take the necessary actions to ensure their inventory management system complies with FAR requirements.

Topic: Management & Administration