Tip of the MOX debacle mismanagement: “Subcontract Administration at the Mixed Oxide Fuel Fabrication Facility”
– by DOE Inspector General, released December 17, 2019
Report linked on IG website: https://www.energy.gov/ig/downloads/audit-report-doe-oig-20-16
We continue to ask: where are needed investigations into waste, fraud, abuse and mismanagement?
“The MOX Services, LLC (MOX Services) contract with the National Nuclear Security Administration (NNSA) for the design, construction, operation, and deactivation of the Mixed Oxide Fuel Fabrication Facility (MOX Facility) at the Savannah River Site was established in March 1999. The MOX Facility was intended to be a major component in the United States’ program to dispose of surplus weapons-grade plutonium. In fiscal year (FY) 2007, NNSA authorized the start of MOX Facility construction activities, which were estimated at a total project cost of about $4.8 billion, with an FY 2017 projected start of operations date. In FY 2016, the Department of Energy’s Office of Project Management Oversight, in partnership with the U.S. Army Corps of Engineers, estimated the total project cost for MOX Facility construction to be at about $17.2 billion, with operations starting as late as 2048. The significant remaining lifecycle cost of the MOX Facility led, in part, to NNSA terminating the MOX Services contract in October 2018.
We found that MOX Services did not consistently administer the subcontracts selected for review in accordance with Federal Acquisition Regulation requirements for contract cost principles and procedures in the areas of subcontract modifications, labor premiums, supporting documentation, overtime billings, rework material costs, rework labor profits, and material reconciliations. As a result, we identified $8.5 million in questioned costs and, based on the control weaknesses that led to the questioned costs, there is an increased risk that other unallowable subcontract costs may have been incurred by MOX Services and reimbursed by the National Nuclear Security Administration.
These issues occurred, in part, because MOX Services did not always perform or document invoice reviews in accordance with Federal Acquisition Regulation requirements or MOX Services’ internal procurement procedures. In our opinion, MOX Services management’s culture regarding cost allowability also contributed to these issues.
Because the Federal Government reached a settlement agreement substantially addressing outstanding incurred costs, which includes the questioned costs cited in this report, we did not make any recommendations.”
full report: https://www.energy.gov/ig/downloads/audit-report-doe-oig-20-16
photo: Scene of the MOX crime, Sept. 2019, by High Flyer