DOE Has Performed About $2 Billion of Work under the WFO Program Annually, but the Amount and Sponsors of Work Varied Among Laboratories

The total amount of work performed under the WFO program, as  measured by costs incurred for WFO projects, has remained relatively  constant over the last 5 fiscal years overall, but the amount of WFO work  performed and the sponsors of the work varied widely among the  laboratories. 2). As a result, the proportion of  WFO performed as a percentage of total work performed declined from  17 percent in fiscal year 2008 to about 13 percent in fiscal year 2012. In  fiscal year 2012, more than 6,500 WFO projects were carried out at  DOE’s laboratories. 3). Private industry. Foreign entities. DOE Has Not Ensured That WFO Program Requirements Are Consistently Met

DOE has not ensured that WFO program requirements are consistently  met. A DOE contracting officer or other authorized DOE designee is  required to determine whether a proposed WFO project has met all of  these requirements before approving or certifying the work. However, DOE  officials from site offices at 8 of the 17 laboratories told us that the  laboratories provide written justification in the WFO package to support,  or determine, that some or all of the requirements are met and that the  DOE officials have often accepted the laboratories’ determinations  without taking steps to independently verify them. DOE has not  ensured, however, that all laboratories have formal, written procedures for  developing WFO project budgets or charging costs to ongoing projects,  two important steps for recovering the full costs of materials and services  provided.procedures for developing WFO project budgets and charging costs to  projects that include, among other things, detailed instructions on the  types of costs to include in a WFO project budget and specific instructions  for calculating the costs and for ensuring that the costs of the work are  charged to the sponsor. For example,  a 2013 review at Lawrence Berkeley National Laboratory found that costs  of administering WFO projects were allocated in part to other DOE  projects, resulting in estimated $400,000 in project costs that the sponsor  did not reimburse to the laboratory. DOE Did Not Consistently Conduct Required Annual WFO Program Reviews

DOE’s WFO order requires each DOE program office to annually review  the WFO program at each of its laboratories to ensure compliance with  WFO policies and procedures. The order does not specify what the  reviews should include. As a result, the program offices varied in what  they consider to be their annual review. DOE Has Not Measured WFO Program Performance against Established Objectives

DOE has not measured the extent to which WFO program objectives are  being met, even though DOE site offices are required under the WFO  order to measure their laboratories’ WFO program performance. Some  DOE site offices and laboratories have taken steps to evaluate WFO  program processes, but these steps are not consistent across the  laboratories, generally do not address the program objectives in the WFO  order, and do not incorporate key attributes of successful performance  measures. performance measures provide organizations with  Recent external and internal reviews of the DOE laboratories have  recommended that clear performance measures are needed to measure  laboratory WFO program performance against the WFO program  objectives. DOE officials told us that, because WFO agreements  are unique to each laboratory, they do not believe it is appropriate to  develop one set of measures for all laboratories and that they have no  plans to do so. DOE’s WFO program has allowed  the department to share these capabilities with both other federal  agencies and nonfederal entities. Choosing to report  data on a case-by-case basis, rather than in an annual report, may make  it difficult for those providing oversight and some users of the data, and  because the data are not readily available, DOE will need to generate  them, which is time-consuming, and the data may not be comparable  across laboratories or over time. Specify in the WFO order what the annual WFO program reviews  should include. For example, in response to the first three recommendations (i.e., ensure  compliance with the requirements in the WFO order for project approval;  require laboratories to establish and follow written procedures for  developing WFO project budgets and for charging costs to WFO projects;  and ensure compliance with the requirements for conducting biennial  pricing reviews), DOE stated that it will issue a policy flash, or notice, on  the requirements of the WFO program. GAO staff who made key contributions to  this report are listed in appendix V.

Appendix I: Scope and Methodology

To determine the amount and type of work conducted at the laboratories  under the Department of Energy’s (DOE) Work for Others (WFO)  program, we requested and obtained DOE data on WFO costs from  DOE’s Office of the Chief Financial Officer (CFO) for fiscal years 2008  through 2012, including WFO program costs by sponsor and by  laboratory, as measured in costs incurred. No material weaknesses were reported.
Why GAO Did This Study

DOE's 17 national laboratories house cutting-edge scientific facilities and equipment, ranging from high-performance computers to ultra-bright X-ray sources for investigating fundamental properties of materials. DOE allows the capabilities of the laboratories to be made available to perform work for other federal agencies and nonfederal entities through its WFO program, provided that the work does not hinder DOE's mission or compete with the private sector, among other things. GAO was asked to review the WFO program. GAO examined (1) the amount and type of work conducted under the program, (2) the extent to which DOE has ensured that WFO program requirements are met, and (3) the extent to which program performance is measured against WFO program objectives. GAO reviewed DOE and laboratory data and documents, internal and external review reports, and interviewed officials from DOE and the laboratories.

What GAO Found

In fiscal years 2008 through 2012, the Department of Energy (DOE) performed about $2 billion annually of Work for Others (WFO) projects, as measured by the costs incurred. Although the amount of WFO performed has remained relatively constant over the last 5 years overall, WFO as a percentage of the total work performed at the laboratories--measured in total laboratory costs incurred--has declined from 17 percent in fiscal year 2008 to about 13 percent in fiscal year 2012. In fiscal year 2012, the WFO program included more than 6,500 projects. About 88 percent of this work was for other federal agencies, with the majority of it performed for the Department of Defense. For example, one project for the Army applies a laboratory's expertise in laser decontamination of surfaces to develop a system that will remove chemical agent residues from equipment. The remaining WFO work was sponsored by nonfederal entities, including state and local governments, universities, private industry, and foreign entities.
DOE officials have not ensured that WFO program requirements are consistently met. For example, a DOE official is required to determine whether a proposed WFO project has met DOE requirements for accepting work before approving, or certifying, the work and this responsibility may not be delegated to the laboratories. However, DOE officials from site offices at 8 of the 17 laboratories reported that these determinations were made by the laboratories and that the DOE officials did not take steps to independently verify the determinations prior to approving the work. DOE also cannot ensure that the full costs of materials and services for WFO projects are charged to sponsors because 12 of 17 laboratories have limited or no written procedures for developing WFO project budgets or charging costs to ongoing projects, two important steps for recovering the full costs of materials and services. A 2013 DOE Office of Inspector General report found that the costs of administering WFO projects at one laboratory were allocated to DOE projects, resulting in an estimated $400,000 in WFO project costs that were not reimbursed to the laboratory. DOE requires that its program offices annually review the WFO program at each of its laboratories. However, DOE requirements do not specify what the reviews should include, and DOE program offices varied in what they consider to be an annual review. DOE also requires the department's Chief Financial Officer to report annually on the activities conducted under the WFO program, but DOE officials told GAO that they no longer produce the report because the requirement is outdated, choosing instead to fulfill data requests on a case-by-case basis. As a result, DOE does not have data that are comparable across laboratories or over time.
DOE has not measured the extent to which WFO program performance is measured against program objectives and has not established performance measures to do so. Some DOE site offices and laboratories have taken steps to evaluate the performance of the WFO program, but these steps are not consistent across the laboratories, do not incorporate key attributes of successful performance measures, and do not address the WFO program objectives. Recent internal and external reviews of the laboratories have recommended that DOE establish clear measures to evaluate laboratory WFO program performance against the WFO program objectives. DOE officials told GAO that they do not believe it is appropriate to develop one set of measures for all laboratories and that they do not plan to do so.

What GAO Recommends

GAO recommends, among other things, that DOE take steps to ensure compliance with project approval requirements; require laboratories to establish written procedures for charging costs to projects; specify what the annual program reviews should include; produce annual reports on WFO activities; and establish performance measures for the WFO program. DOE generally agreed with the report and its recommendations.