Audit: DOE-OIG-26-26

March 24, 2026

Fluor Federal Petroleum Operations, LLC’s Costs Incurred and Claimed for Fiscal Years 2017 Through 2020 Under Contract No. DE-FE0011020

This audit was performed by CohnReznick LLP (CohnReznick) 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 2017 through 2020 under management and operating contract No. DE-FE0011020.

The audit’s objective was to determine if costs charged to Department contract No. DE-FE0011020 for fiscal years 2017 through 2020 were allowable, allocable, and reasonable in accordance with applicable laws, regulations, and contract terms.

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

CohnReznick questioned approximately $122,000 of fiscal year 2020-claimed operating expenses per the Federal Acquisition Regulation (FAR) 31.201-2, “Determining allowability,” and FAR 31.201-6, “Accounting for unallowable costs.” The questioned amounts were identified as subcontract costs and represented potential monthly home office expense allocations from Fluor Government Group Headquarters.

CohnReznick recommended that FFPO amend its policies and procedures to ensure compliance with contract terms, the FAR cost principles, and standards promulgated by the Cost Accounting Standards Board. We also recommend that the contractor work with the contracting officer to resolve the questioned costs.

FFPO nonconcurred that the questioned costs are home office allocations and considers these costs to be in compliance with contract terms, FAR cost principles, and standards promulgated by the Cost Accounting Standards Board. FFPO should work with the Strategic Petroleum Reserve Project Office to address the concerns and questioned costs.