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Friday, February 13, 2015

DOE makes GAO highest risk list for 25 consecutive years

DOE makes GAO highest risk list for 25 consecutive years, due mostly to NNSA contracting

The Department of Energy (DOE), the largest civilian contracting agency in the federal government, relies primarily on contractors to carry out its diverse missions and operate its laboratories and other facilities. Approximately 90 percent of DOE’s budget is spent on contracts and large capital asset projects. We designated DOE’s contract management—which includes both contract administration and project management—as a high-risk area in 1990 because DOE’s record of inadequate management and oversight of contractors has left the department vulnerable to fraud, waste, abuse, and mismanagement. In January 2009, to recognize progress made by DOE’s Office of Science, we narrowed the focus of its high-risk designation to two DOE program elements—the Office of Environmental Management (EM) and the National Nuclear Security Administration (NNSA). Together, these two programs accounted for almost 63 percent of DOE’s fiscal year 2015 discretionary funding of more than $26 billion. In February 2013, we further narrowed the focus of the high-risk designation to EM and NNSA’s major contracts and projects, those with an estimated cost of $750 million or more, to acknowledge progress made in managing projects with an estimated cost of less than $750 million. Our 2013 assessment found that DOE satisfied 3 of the 5 criteria needed for removal from the High Risk List. This year, we did not observe similar progress in DOE’s management of major projects. EM and NNSA struggled to stay within cost and schedule estimates for most of their major projects.

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