Fermi Research Alliance LLC’s Costs Incurred and Claimed for Fiscal Years 2021 and 2022 Under Contract No. DE-AC02-07CH11359
March 11, 2026
minute read time
March 6, 2026
Fermi Research Alliance LLC’s Costs Incurred and Claimed for Fiscal Years 2021 and 2022 Under Contract No. DE-AC02-07CH11359
This audit was performed by the Defense Contract Audit Agency (DCAA) on behalf of the Department of Energy’s Office of Inspector General, which examined Fermi Research Alliance, LLC’s costs incurred and claimed for fiscal years 2021 and 2022 at the Fermi National Accelerator Laboratory, under management and operating contract No. DE-AC02-07CH11359.
The audit’s objective was to determine if costs charged to Department Contract No. DE-AC02-07CH11359 for fiscal years 2021 and 2022 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 and questioned approximately $9.9 million in performance award fees and $142,463 in direct costs. Specifically, the DCAA questioned performance award fees in the General and Administrative pool. The DCAA questioned the performance award fees, which represented a contractual incentive paid by the Department because the fee was included as a cost in the General and Administrative pool. The DCAA reconciled the proposed fee amount to the general ledger, and the Department determined that the contractor was entitled to the earned fee. The DCAA also questioned labor costs due to claimed triple-time pay for employees working on holidays, which exceeded allowable pay of double-time. In addition to the questioned costs noted, the DCAA reported two scope limitations because real-time testing was not performed, which resulted in unresolved risk that could materially affect: (1) labor costs and (2) direct materials and supplies costs.
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 contract terms. We recommend that the contractor coordinate with the contracting officer to resolve the questioned costs identified in this report.