Audit: DOE-OIG-26-13

February 10, 2026

Fluor Federal Petroleum Operations, LLC’s Costs Incurred and Claimed for Fiscal Years 2022 and 2023 Under Contract No. DE-FE0011020

This audit was performed by the Defense Contract Audit Agency (DCAA) on behalf of the Department of Energy’s Office of Inspector General and examined Fluor Federal Petroleum Operations, LLC’s (FFPO) costs incurred and claimed for fiscal years 2022 and 2023 under management and operating contract No. DE-FE0011020.

The audit’s objective was to determine if costs charged to Department Contract No. DE-FE0011010 for fiscal years 2022 and 2023 were allowable, allocable, and reasonable in accordance with applicable laws, regulations, and contract terms. 

The DCAA performed the audit in accordance with generally accepted government auditing standards.

The DCAA identified three audit findings and questioned over $2.5 million in: (1) direct labor costs associated with unallowable recruitment costs for a seconded employee, unreasonable labor costs, and overtime premiums unallowable per contract terms; (2) travel costs associated with relocation and per diem expenses; and (3) other direct costs associated with home office expenses that were unallowable per contract terms. In addition to the questioned costs noted, the DCAA reported two scope limitations, which prevented it from determining whether certain subcontract costs were fair and reasonable. 

If the issues identified by the DCAA are fully addressed, it should help ensure that costs charged to the Department are allowable, allocable, and reasonable in accordance with applicable laws, regulations, and contract terms.

FFPO responded to the audit findings during an exit conference and provided a written response that is included in the DCAA’s audit report. FFPO concurred with the portion of the questioned direct labor costs pertaining to a retention bonus but did not concur with the other questioned costs related to direct labor, direct travel, and other direct costs.