DOE relies on contractors to operate its  facilities and accomplish its missions. The Federal Acquisition Regulation provides the basic guidelines that all  federal agencies must follow in planning for and carrying out the process  for awarding contracts. Delays Occurred in Most of the Contract Awards We Reviewed

Most of DOE’s 31 contract awards that we reviewed experienced delays  when comparing the planned and actual award dates for the contracts. The  24 contracts awarded with competition faced delays of months to years; of  the 7 contracts awarded without competition, 6 were awarded on time or  nearly so. The other contract was  awarded 2 months late. 1.) Delays Occurred Because DOE Had to Modify Its Approach after Beginning the Contract Award Process

Delays in awarding contracts occurred when DOE modified its approach  after the start of the contract award process. Delays in Awarding Contracts Could Increase Costs to the Government and Industry and Affect Future Competition

Delays in awarding contracts could increase costs both to DOE and the  companies that are competing for the potential contracts and could also  affect whether companies are willing to compete for DOE contracts in the  future. However, these costs cannot be readily  quantified since the department does not accumulate or track the costs  associated with individual contract awards. For DOE’s contracts, once companies  submit proposals, DOE generally requires the companies to ensure that key  personnel identified in the proposals continue to be available until the  award decision has been made. Efforts to Address the Causes of Delays Are in Early Stages, but Concerns Remain about the Potential Effectiveness of DOE’s Planned Actions

When we began our review in July 2005, DOE officials generally were not  addressing delays in awarding contracts because DOE’s data was showing  that its contracts were being awarded in a timely manner. It is unclear the extent to which  these delays may have been avoidable with better oversight or  management, but at least some of the delays were avoidable, such as when  DOE had to rework parts of the contract award process to correct errors. As  DOE goes forward with its efforts to improve its contract award process, it  will be important to ensure that performance measures address the  timeliness of all of the department’s contract awards that require written  plans and schedules, and that lessons learned and best practices are  consistently shared with DOE staff that will plan for and carry out future  contract awards. Scope and Methodology

In response to a congressional request, we determined (1) the extent to  which the Department of Energy (DOE) adhered to its planned dates for  awarding contracts and the factors contributing to any delays, (2) the  impacts of any delays in awarding contracts, and (3) the extent to which  DOE has taken steps to address delays in its contract award process. To determine the extent to which DOE adhered to its planned dates for  awarding contracts, we analyzed 31 contracts from seven DOE locations  that (1) were affiliated with the department’s three largest component  organizations—the Office of Environmental Management, Office of  Science, and the National Nuclear Security Administration—and (2) had  awarded a large share of the department’s contracts valued at $5 million or  greater in fiscal years 2002 through 2005, including facility management  contracts.
Why GAO Did This Study

The Department of Energy (DOE), the largest civilian contracting agency in the federal government, spends over 90 percent of its annual budget on contracts to operate its facilities and carry out its diverse missions. Federal law and regulations outline the steps DOE must follow in planning and carrying out the contract award process and emphasize the importance of awarding contracts in a timely manner. Several of DOE's recent contracts have taken much longer than anticipated to award. GAO was asked to determine (1) the extent to which DOE has experienced delays in awarding contracts and factors contributing to delays, (2) the impacts of any such delays, and (3) the extent to which DOE has taken steps to address the delays.

What GAO Found

Delays in awarding DOE contracts occurred in most of the 31 contracts that GAO reviewed. In fiscal years 2002 through 2005, DOE awarded 131 contracts valued at $5 million or greater; the 31 of these contracts GAO reviewed were affiliated with DOE's three largest component organizations and represented about 73 percent of the dollars awarded. None of the 24 contracts awarded competitively was awarded by the date planned in DOE's schedule, with 23 of the contracts awarded between several weeks and 4-1/2 years later than the planned date. Of the 7 contracts awarded without competition, 6 were awarded on time or nearly so, with the remaining contract awarded 2 months late. Delays in awarding contracts occurred, in part, because DOE had to modify its approach after beginning the contract award process. At least some of the delays were avoidable, such as when DOE reworked contract awards to correct errors. Delays in awarding contracts could increase costs both to DOE and companies competing for DOE work. Because the department does not track its costs for awarding contracts, it was not feasible to quantify the impact of these delays. Companies competing for DOE's work may also face increased costs when contract awards are delayed, such as the costs associated with ensuring that key personnel identified in proposals continue to be available. Increased costs and delays may affect the willingness of companies to compete for future DOE work, although the actual impact is unknown. Until recently, DOE had not been addressing delays in awarding contracts because incomplete performance data indicated that most of the contracts were awarded in a timely manner. In late 2005, DOE began several efforts to improve its contract award process, including implementing improved measures of contract award timeliness and restructuring the Office of Environmental Management to strengthen management of the contracting process. However, two concerns could limit the effectiveness of these efforts: (1) the efforts do not encompass all of DOE's contract awards and (2) DOE does not have a systematic method of identifying and disseminating lessons learned and best practices from past or current contract awards.