The U.S. Government Accountability Office could not find direct evidence to back up private firm claims of unfairness in U.S. Dept. of Energy contracting processes, but it recommends more openness to ensure its procurements can continue to draw bidders, the agency says in a new report.
DOE is one of the largest federal civilian contracting agencies, relying on contractors for everything from energy development and weapons system management to massive legacy waste cleanup projects.
GAO conducted the performance audit after the Consolidated Appropriations Act of 2021 directed it to assess DOE’s contracting process. It also is the agency that handles and rules on bidder protests over federal contract awards. The report examines competitions for DOE’s 15 largest contracts awarded between 2015 and 2020—each with a potential value of $750 million or more.
Auditors interviewed representatives from 24 entities, including companies and universities, which had expressed interest in the competitions. Most of the interviewees shared concerns about the fairness of parts of the award process—such as whether officials were fairly rating past performance. The report’s authors wrote that they found nothing to verify the concerns, but noted that perceptions of unfairness exist that could cause some contractors to shun bidding.
“Improved information sharing could help these components address industry perceptions about fairness, which could in turn remove barriers to a more competitive acquisition environment,” the report states.
Between 2017 and 2021, 90% of DOE dollars obligated for contracting were awarded on a competitive basis, according to the report. Among the 15 largest contracts studied in the audit, DOE received a median of three offers per competition, and as many as nine offers in one case. In one other case, there was only one offer.
DOE evaluated offers on different combinations of 14 factors, with the office preparing a given solicitation responsible for choosing between three and eight evaluation factors for a particular competition, according to GAO. They all considered price and past performance, but varied on other factors like key personnel, management approaches and small business participation.
The report did not delve into bid protests on DOE projects, although there have been several in recent years. As ENR previously reported, GAO in 2020 ruled against a Bechtel Corp.-led team's protest of the award of a $10-billion cleanup contract at the Hanford nuclear site in Washington state. Later that year, DOE canceled the contract anyway with plans to issue another RFQ with a new scope of work.
Industry groups contacted by ENR said they were still evaluating the report. A spokesperson for the Associated General Contractors of America says the group is “eager to work with officials at the Department of Energy to discuss ways to further improve their efforts to procure world-class construction services.”
Some DOE offices already have taken action in line with recommendations from the Office of Management and Budget, such as sharing information with contractors about the award process during quarterly meetings, the auditors wrote.
The auditors made eight recommendations for DOE and for the National Nuclear Security Administration, a semi-autonomous agency within the department that accounted for five contracts in the audit. Both should hold periodic meetings to share information with industry about how they conduct competitions and evaluate offers, the auditors say. Contracting officials should also use structured mechanisms such as reverse industry day events to solicit information on how businesses decide whether to submit for a job, and they should document scoping alternatives to consider as part of acquisition planning for management and operation contracts.
A spokesperson for DOE says it "communicates clearly and often with industry about contracting opportunities to ensure a competitive acquisition environment." The department is implementing the recommendations along with its own actions to strengthen the competitive process, they add.
