Energy Management: Inadequate DOE Monitoring of Contractors' Acquisitions
From Affiliates (Testimony, 03/17/94, GAO/T-RCED-94-128).

The Energy Department's (DOE) monitoring of its main contractors at the
Savannah River Site in South Carolina--Westinghouse and Bechtel--do not
ensure that DOE pays fair and reasonable prices for acquisitions of
goods and services from the contractors' subsidiaries. GAO's review of
Westinghouse and Bechtel acquisitions uncovered inadequate cost controls
and performance problems, unallowable and questionable costs, and
inappropriate contract approvals and contract payments. Poor
Westinghouse management and limited DOE internal controls were
contributing factors. DOE has not complied with its own regulations
requiring competition for acquisitions from affiliates. Furthermore,
Westinghouse and Bechtel have been able to acquire items from its
subsidiaries without the same level of scrutiny that DOE would apply if
the purchases were made from nonaffiliated third parties. Various DOE
studies point out that problems with acquisitions from affiliates exist
elsewhere in the agency.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-94-128
     TITLE:  Energy Management: Inadequate DOE Monitoring of 
             Contractors' Acquisitions From Affiliates
      DATE:  03/17/94
   SUBJECT:  Contract monitoring
             Internal controls
             Prime contractors
             Financial management systems
             Irregular procurement practices
             Competitive procurement
             Nuclear facilities
             Contractor performance
             Subcontractors
IDENTIFIER:  Government Reform and Savings Act of 1993
             
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