Audit: DOE-OIG-26-14

February 19, 2026

Lawrence Livermore National Laboratory’s Costs Incurred and Claimed for Fiscal Year 2021 Under Contract No. DE-AC52-07NA27344

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 Lawrence Livermore National Security, LLC’s (LLNS) costs incurred and claimed for fiscal year 2021 at the Lawrence Livermore National Laboratory under management and operating contract No. DE-AC52-07NA27344.

The audit’s objective was to determine if costs charged to Department Contract No. DE-AC52-07NA27344 for fiscal year 2021 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 two audit findings. First, the DCAA questioned over $63 million in management fee in the Laboratory Directed Research and Development allocation base. The DCAA questioned the management fee, which represents a contractual incentive paid by the Department, because LLNS included it as a cost in the Laboratory Directed Research and Development allocation base. The DCAA validated that the proposed fee amount did not exceed the amount in the contract, and the Department determined that the contractor was entitled to the earned fee. Second, the DCAA increased LLNS’ proposed allocation bases for one indirect cost pool because LLNS did not include all activity that had a causal or beneficial relationship to the cost pool. In addition to the two audit findings, the DCAA reported scope limitations regarding: (1) real-time testing was being performed, which resulted in unresolved risk that could materially affect labor and material costs; and (2) unresolved subcontract costs.  

If the issues identified by the DCAA are fully addressed, it should help ensure that costs charged to the Department are appropriately allocated. Accordingly, the DCAA recommends that LLNS conduct a study to determine the method or allocation base that represents a causal or beneficial relationship and results in an equitable allocation of the Site Support costs.

LLNS did not concur with the DCAA’s findings and asserted that its allocation bases were compliant with cost accounting standards.