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In April 2010, the Office of Inspector General (OIG) began receiving allegations concerning hiring and contracting practices within the Office of Energy Efficiency and Renewable Energy (EERE). These allegations included: 1. Improprieties in the hiring of a contract employee to a senior Federal career position, including concerns that the contract employee was pre-selected or otherwise had an unfair advantage; 2. Performance of inherently governmental duties, including the supervision of Federal employees, by the same contract employee; and, 3. Award of work to a contractor without adequate competition. Although a number of other allegations with similar concerns were received, the OIG chose to focus its attention on those outlined above because of their overall importance to the integrity of the EERE mission, especially its role in the implementation and execution of the Department of Energy's responsibilities under the American Recovery and Reinvestment Act of 2009 (Recovery Act). Consequently, we initiated a fact-finding inquiry into these matters. To this end, we interviewed 31 current and former Department employees, including issue area specialists, and identified and reviewed applicable Federal regulations. We also analyzed over 250,000 emails, the results of which yielded evidence, presented in our report, pertaining to the specific allegations included in the scope of our inquiry. Our analysis of emails also disclosed another area of concern that is outlined in this report.

Special Inquiry: Review of Allegations Regarding Hiring and Contracting in the Office of Energy Efficiency and Renewable Energy

State Energy Program Residential Ground Source Heat Pump InstallationsCX(s) Applied: B5.1Date: 09/22/2010Location(s): Isle, MNOffice(s): Energy Efficiency and Renewable Energy, Golden Field Office

Joint Center for Artificial Photosynthesis CX(s) Applied: A7; B1.4; B1.5; B1.7; B1.15; B1.24; B2.1; B2.2; B3.6 Date: 09/21/2010 Location(s): California Offices(s): Berkeley Site Office

Under the American Recovery and Reinvestment Act of 2009 (Recovery Act), the Department of Energy's (Department) Office of Energy Efficiency and Renewable Energy (EERE) received $3.1 billion to be distributed through the State Energy Program (SEP) to stimulate the economy by creating and preserving jobs while increasing energy efficiency and the use of renewable energy. Under the authorizing legislation for the SEP, the 50 states, 5 territories, and the District of Columbia (states) had a degree of flexibility to design and implement programs that met their specific energy needs and goals. In response to a Department solicitation, the states prepared plans summarizing energy related programs and projects planned for the SEP Recovery Act funds. After reviewing those plans, EERE awarded Recovery Act funding to the states for approved projects consistent with the goals of the program. The $3.1 billion awarded through the Recovery Act was a dramatic increase over the $25 million appropriated for this Program in Fiscal Year 2009.

Status Report: The Department of Energy's State Energy Program Formula Grants Awarded under the American Recovery and Reinvestment Act

United States China Clean Energy Research Center for Clean VehiclesCX(s) Applied: A1, A9, B1.2, B3.6, B5.1Date: 09/21/2010Location(s): NationwideOffice(s): Energy Efficiency and Renewable Energy, National Energy Technology Laboratory

The Joint Center for Artificial PhotosynthesisCX(s) Applied: A7, B1.4, B1.5, B1.7, B1.15, B1.24, B2.1, B2.2, B3.6Date: 09/21/2010Location(s): Chicago, IllinoisOffice(s): Science, Chicago Office

Venoil Bio-RefineryCX(s) Applied: B5.1Date: 09/21/2010Location(s): WashingtonOffice(s): Energy Efficiency and Renewable Energy, Golden Field Office

State Energy Program Residential Ground Source Heat Pump Installation - KorfCX(s) Applied: B5.1Date: 09/21/2010Location(s): MinnesotaOffice(s): Energy Efficiency and Renewable Energy, Golden Field Office