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<classification authority="sudocs">GA 1.13:T-RCED-94-128</classification>
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 <subject>Contract monitoring</subject>
 <subject>Internal controls</subject>
 <subject>Prime contractors</subject>
 <subject>Financial management systems</subject>
 <subject>Irregular procurement practices</subject>
 <subject>Competitive procurement</subject>
 <subject>Nuclear facilities</subject>
 <subject>Contractor performance</subject>
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 <title>Energy Management: Inadequate DOE Monitoring of Contractors&apos; Acquisitions From Affiliates</title>
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<abstract>The Energy Department&apos;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&apos; subsidiaries. GAO&apos;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.</abstract>
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<note>Testimony</note>
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 <topic>Contract monitoring</topic>
 <topic>Internal controls</topic>
 <topic>Prime contractors</topic>
 <topic>Financial management systems</topic>
 <topic>Irregular procurement practices</topic>
 <topic>Competitive procurement</topic>
 <topic>Nuclear facilities</topic>
 <topic>Contractor performance</topic>
 <topic>Subcontractors</topic>
 <topic>Government Reform and Savings Act of 1993</topic>
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