Inspection Report: DOE-OIG-19-36

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June 25, 2019

Management of Consultant Services at Los Alamos National Laboratory

From June 1, 2006, to October 31, 2018, Los Alamos National Security, LLC (LANS) operated Los Alamos National Laboratory (Los Alamos) for the National Nuclear Security Administration.  Los Alamos’ primary mission is its national security responsibilities, which include the design, qualification, certification, and assessment of nuclear weapons.  Los Alamos is one of the largest science and technology institutes in the world, and it conducts multidisciplinary research in fields such as national security, space exploration, renewable energy, medicine, nanotechnology, and supercomputing.  To accomplish its mission, LANS procures consultant services through the Acquisition Services Management division.

LANS had 74 active consultant agreements during fiscal years 2014, 2015, and 2016, with associated incurred costs totaling approximately $3.4 million.  The Federal Acquisition Regulations require specific controls for consultant services, such as examining reasonableness of cost, monitoring contract limitations, and ensuring invoices include sufficient detail as to the nature of actual services performed.  The Office of Inspector General has identified issues with consultant services at Los Alamos in the past.  We initiated this inspection to determine whether LANS effectively managed its consultant services.

We found that LANS did not always effectively manage its consultant services.  During our review of pre-award activities for all 74 consultant agreements, nothing came to our attention that would indicate significant concerns or weaknesses.  However, during our review of post-award activities in a sample of consultant agreements, we found that LANS did not did not always monitor consultant agreements for contract limitations and did not always ensure that invoices included sufficient detail as to the nature of the actual services provided prior to approval.  Additionally, we found that LANS procured consultant services through guest agreements and task orders, which did not have internal controls to ensure the costs were allowable per Federal Acquisition Regulations.  We questioned a total of $324,498 in consultant service costs, directly relating to these concerns.

These conditions occurred due to lack of adherence to internal policies and Federal regulations.  Further, the Federal Los Alamos Field Office did not provide adequate oversight over LANS’ use of consultant services.  We made six recommendations to improve controls and oversight of consultant agreements and to determine the allowability of questioned costs.

Topic: Management & Administration