Audit Report: DOE-OIG-19-48

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September 9, 2019

Subcontracts for Consulting Services at Fermi National Accelerator Laboratory

Since January 2007, Fermi Research Alliance, LLC (FRA) has been the management and operating contractor at the Fermi National Accelerator Laboratory for the Department of Energy’s Office of Science.  In support of the laboratory’s mission to drive discovery by building and operating world-leading accelerator and detector facilities, performing pioneering research, and developing new technologies for science, FRA often relied on consultants to obtain specialized services.  FRA used subcontracts to commit resources and formalize its relationships with consultants.  The Department relied on FRA to conform to applicable acquisition regulations and the terms and conditions of its management and operating contract when managing and administering its subcontracts for consulting services.  We initiated this audit to determine if FRA had managed a select sample of its subcontracts for consulting services in compliance with applicable requirements.

Based on our analysis of 19 subcontracts awarded for consulting services valued at $2.2 million, we determined that FRA had not fully complied with applicable requirements in administering these subcontracts, and we questioned the allowability of $46,033.27 in costs associated with certain noncompliances.  Specifically, we found that FRA, which used subcontracts to obtain consulting services, had accepted invoices from its consultants that often lacked sufficient detail to support the services rendered, had not ensured that sole source justifications were clearly documented and approved, and had inappropriately allowed consultant services to be performed prior to a valid subcontract being in place, otherwise referred to as “after-the-fact” procurement actions.  Additionally, we noted that FRA had not always included the required conflict of interest provisions or certificates of insurance in the subcontracts.  Finally, FRA had not ensured that it had appropriately documented the scopes of work for consulting services.  We made four recommendations to ensure that costs incurred are reasonable and allowable and to ensure that subcontracts for consulting services are in compliance with applicable requirements.

Topic: Management and Adminstration