Support Service Contracts: NNSA Could Better Manage Potential Risks of Contractors Performing Inherently Governmental Functions
Fast Facts
The National Nuclear Security Administration has increasingly used support service contracts to carry out its mission. NNSA obligated about $193 million in FY 2018 for support service contracts (which include program management services and more).
However, NNSA may not be effectively managing the risk that some of its contractors could perform inherently governmental functions—which federal contractors are not allowed to do.
We recommended that NNSA require its contracting officers to document their oversight plans for certain contracts and verify that they’re following through with those plans.
National Nuclear Security Administration’s Support Service Contracts, Fiscal Years 2010-2018
Bar chart starting at $139 million in FY 2010 and ending at $193 million in FY 2018
Highlights
What GAO Found
The National Nuclear Security Administration (NNSA) obligated about $193 million in fiscal year 2018 for support service contracts (SSC), an increase of nearly 40 percent since 2010. These contracts provide a variety of professional support services, such as program management support. Officials attribute the increased use of SSCs to increases in appropriations and workload for the modernization of nuclear weapons and related infrastructure and decreases in the number of authorized federal staff due to the decrease in the statutory cap from fiscal year 2014 to 2015.
Information on SSCs in NNSA's congressional budget justification materials is not complete or fully useful for congressional decision-making because, among other things, NNSA did not include information on all of its professional SSCs. NNSA is required to report annually certain information about SSCs, including the number and cost of SSCs, in its materials. NNSA reported information on its SSCs in its materials for fiscal years 2017 through 2020. However, NNSA's reporting was not complete because NNSA excluded information on 31 to 42 contracts each year (see fig. for fiscal year 2020). According to officials, they excluded contracts that expired during the fiscal year. By reporting information on all professional SSCs to which funds were obligated during the fiscal year, NNSA could provide more complete information to Congress that it could use to make better informed decisions about NNSA's annual appropriations levels.
Number of Contracts Reported in the Fiscal Year 2020 Congressional Budget Justification
NNSA may not be effectively managing the potential risks of contractors performing inherently governmental functions—those that must be performed by a government employee—for contracts NNSA identifies as having the potential for providing such functions. NNSA identifies such SSCs through required assessments. However, contracting officers are not required to document planned steps to oversee these contracts, and the agency does not verify that planned oversight is performed. Contracting officers who oversee SSCs can change during the life of a contract. By documenting steps that contracting officers plan to take to oversee contracts with a high risk of including inherently governmental functions—and verifying that the planned oversight occurs—NNSA can better ensure over the life of the contract that the functions contractors are performing do not evolve into inherently governmental functions and that planned oversight is completed.
Why GAO Did This Study
The Department of Energy's NNSA relies on federal employees and contractor personnel to carry out its mission. SSCs fill essential needs, and their use requires special diligence to ensure applicable statutes, regulations, and management practices are followed.
The House report on the National Defense Authorization Act for Fiscal Year 2018 included a provision for GAO to report on NNSA's use of SSCs. This report examines the extent to which: (1) NNSA used SSCs for professional support in fiscal years 2010 through 2018; (2) the information about SSCs in NNSA's annual congressional budget justification materials for fiscal years 2017 through 2020 is complete and useful to support congressional decision-making; and (3) NNSA manages the potential risks of SSCs that it determines are at high risk for providing inherently governmental functions. GAO analyzed agency data; reviewed documentation; and interviewed federal and contractor officials representing a non-generalizable sample of 12 SSCs out of 407, selected to represent a range of years and contract obligations.
Recommendations
GAO is making six recommendations to NNSA, including that NNSA: (1) report information on all professional SSCs to which funds were obligated during the fiscal year; (2) document plans to oversee SSCs that have a high risk of including inherently governmental functions, and (3) verify that the planned oversight occurs. NNSA generally agreed with the recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| National Nuclear Security Administration | The Associate Administrator for Acquisition and Project Management should report information on all professional SSCs to which funds were obligated during the fiscal year in its annual congressional budget justification materials. (Recommendation 1) |
NNSA concurred with our recommendation. NNSA updated its methodology for reporting on its support service contracts in the fiscal year 2021 budget justification materials submitted in February 2020. Based on our review of the contracts listed in the budget justification materials, NNSA reported information on all of the professional support service contracts to which funds were obligated during fiscal year 2019.
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| National Nuclear Security Administration | The Associate Administrator for Acquisition and Project Management should collect and report all required data regarding the number of FTE contractor personnel employed under an SSC for more than 2 years. (Recommendation 2) |
NNSA concurred in principle with the recommendation and planned to meet with congressional staff to discuss ways to further enhance the reported data. NNSA provided additional information in its budget justifications beginning in fiscal year 2021 to explain that it did not have access to the information needed to report required data regarding the number of FTE contractor personnel employed under a support service contract for more than 2 years. NNSA's fiscal year 2025 Congressional Budget Request, released in March 2024, did not provide information on the number of personnel on a contract for multiple years. The budget request for fiscal year 2025 stated that there are data limitations that prevent accurate, reliable reporting of this information. According to the request, NNSA does not have access to contractor personnel systems and collecting and reporting such data could run counter to regulations and statutes regarding employer-employee relationships. NNSA also stated that the agency will, upon request, meet with congressional staff on ways to further enhance the reported data to meet their needs.
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| National Nuclear Security Administration | The Associate Administrator for Acquisition and Project Management, in coordination with NNSA's Office of Management and Budget, as appropriate, should report annual obligations data by fiscal year, as part of its reporting on SSCs in annual congressional budget justification materials. (Recommendation 3) |
NNSA concurred with the recommendation. In its fiscal year 2021 budget justification materials, NNSA reported the amounts that it obligated for support service contracts, as opposed to data on obligations to date that it had reported in the budget justification materials for prior years.
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| National Nuclear Security Administration | The Associate Administrator for Acquisition and Project Management should report in NNSA's annual congressional budget justification materials the program appropriations account—Weapons Activities or Defense Nuclear Nonproliferation—used to fund each SSC and total the amounts obligated by appropriations account. (Recommendation 4) |
NNSA concurred with the recommendation. NNSA's Congressional Budget Justification for fiscal year 2023, released in April 2022, included total amounts by appropriation account for the support service contracts funded through each account.
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| National Nuclear Security Administration | The Associate Administrator for Acquisition and Project Management should take steps to ensure that contracting officers document—in the required determination form or elsewhere in the contract file—information on the steps that the contracting officers plan to take to oversee SSCs that NNSA has determined to be at high risk of including inherently governmental functions. (Recommendation 5) |
In response to our recommendation, NNSA developed a Contracting Officer's Representative Designation form that outlines the responsibilities of the contracting staff. The form also contains a section that calls attention to the need to ensure that contractors are not performing inherently government functions in violation of the law. In addition, NNSA modified its determination form to call heightened attention to areas for improvement in response to GAO's report. The form also includes an oversight plan to avoid contractor performance of inherently governmental functions, and it also provides links to relevant policy documents.
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| National Nuclear Security Administration |
Priority Rec.
The Associate Administrator for Acquisition and Project Management should develop a process to verify that contracting officers are carrying out the steps identified to oversee contracts at risk of including inherently governmental functions throughout the term of the contract. (Recommendation 6) |
As with Recommendation 5, NNSA developed a Contracting Officer's Representative Designation form that outlines the responsibilities of the contracting staff. The form also contains a section that calls attention to the need to ensure that contractors are not performing inherently government functions in violation of the law. In addition, NNSA modified its determination form to call heightened attention to areas for improvement in response to GAO's report. The form also includes an oversight plan to avoid contractor performance of inherently governmental functions, and it also provides links to relevant policy documents.
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