Review of Contracting issues at Los Alamos National Laboratory

 

 

 

Procedure Step: Summ 1

TYPE: auto
Assigned To: Eat?)
Prepared By: 2014
Reviewed By: (None)

 

 

 

 

PROPE RTIES:
Location:
Frequency:
Category 4:
User Category:
Category 5
Category 6

SCORECARD:
Rating:
Sample Site:

 

 

- - - Detail-3'  I I
Category 6 Notes:
503 RECAR D: Resuits 4:
Rating:
Sample Size:
H.1.PRG Summaries Purpose:

To provide support for statement in report.
Source:

Scope:

Methodoiogy:

Detoiis:

Record 1? We rt Done:
Statement in report:

0 we found that, between August 2009 and February 2011, Los Aiomos National Laboratory (Los
Alomos) authorized 19 payments totaling 5.195, ?18for the services 

Support:
A spreadsheet was prepared 0.1.1 of activities for HW, LLC under the LANL contract (second tab located

at the bottom of the Spreadsheet Column {Ali?1) dated 8/12f2009, starts the listing of invoices
submitted bv {Column C14 identi?es the ?rst invoice embedded in the spreadsheet M1 
of this document shows that HW, LLC submitted invoice No. 266??) dated August 2009 for payment to Los
Alamos National Laboratorv. Column A39 identified as February Consulting Services with embedded invoice
[11.20) No. 3216 dated Februaryr 2Gll, from HW, LLC for consulting servcies billed to Los Alamos National

Laboratory.

if you count each invoice highlighted in blue, there are a total oft: 19 invoices column 14? 39) with a dollar

amount of  H752 (column L40). H.1.PRG 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

Summer?  fl-    ,-Detatl  .   
Conclusion:
Notes:
Results 4:

H.1.PRG - Summaries Purpose:

Procedure Step: prohibited activities summ
Type: (bite):
Assigned To: {mg}
Pro-pared By: 6ft}! 20 14
Reviewed By: {Non e}

 

 

 

 

ES:
location:
Frequency:
Category 4:
User Category:
Category 5
Category 6

SCORECAR D:
Rating:
Sompte Size:

 

Support for the statement in the report: During the course of our inspection, it became clear that
Department officials were concerned that the tasks undertaken as part of the HWC, LLC engagements could
violate, or could be perceived as violating contractual prohibitions relating to business development-

Source:
Scope:

Me rhodoiogy:
Details:

Record of Work Done:
Su ort:

0 Both the Sandia Purchase Agreement and the Los Alamos task order stated that HWC, LLC shall not
engage in any activity specifically related to obtaining, retaining, or facilitating business or business
opportunities for the respective National Laboratories bookmark 1 and A43, bookmark 

We noted one of the most direct manifestations of this concern in a March 8, 2010, memorandum
from Sandia Site Office Manager to the Sandie Laboratory Executive Vice President l.

0 Specifically, the Site Office Manager warned that an inference could be drawn that the services of
HWC, LLC would be used for the purposes of developing new business for Sandia in the intelligence

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

and cvoer arenas. The Sole-Source Justification cited, in part, the need for . high-level
connections and critical engagement with key individuals." In addition, in the same memorandum,
the Site Office Manager stated that the proposed extension to the consultant agreement suggests
that HWC, LLC would be providing advice and making potentially prohibited contacts on behalf of

Sandia highlights).
- The March 3, 2013, Notice of intent to Disoitow signed by the NNSA Sandia Field Office Contracting

Office states, in part:

Moreover, the "services" provided were predominantlv of the tvpe barred under the Prohibited Activities
provision of the CPA and inconsistent with the terms of the prime contract highlight


 

Conciusr'on:

Notes:

Results 4:
Summaries Purpose:

To document support for statement in report.
Procedure Step: SummZ

 

 

 

 

Type: Source:
Assigned To: 
Prepared By: (C) 6! EDD 14 Scope:
Reviewed By: {None}
Math odoiogy:
PRO ERTIES:
Location: Detoits:
Frequency:
Category 4: Record 1? Work Done:
User Cotego ry: Statem nts:

 

Cotegory? Los Names authorized a 19 pavments totallv $195,?18 for services of HWC, LLC . -.

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

Summary. I I DetaiE
Category 6
SCORECARD: . . . .without the evidence ofdeliverobles
Rating:
Sample Size: Su 

 


In an interview conducted on October 11, 2012, with the WE 

 

C) i lessees) he stated that he had there were no deiiverabies required of Ms.
Wilson. in an email follow?up to this (mum Iapproved the invoices. [13.10.16

 

 

 


. . . .ortd detoiied invoices to support the aiowahil'ity of these payments
Suggort:

Filth 31.20533 Professional and consultant service costs rat?4-6 hightlighted area, pg. 2} states: . . Fees
for services rendered are allowable onlv whiz-n supported bv evidence of the nature and scope of the service
furnished. The invoices submitted by the contractor This spreadsheet has the invoices em bedded
and identified as D.1.2 through 20 highiighted in blue in column C. The IG determined that the invoices
did not contain the necessarv detaiied as stated in FAR 31205.33. Invoice 

is an example to show the lack of detail necessarv and bv opening all of the invoices it will be claer that none
of them contain the necessarv detail to support: . . .dicl not contain evidence as stated aboveo?g

 

 

Procedure Step: Su rn 3
_Type:

 

Con ciusion:
Notes:
Resuits 4:
mm; Purpose: 

To support statement in report

 

?ource:

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

 

 

 

 

 

Summary} -  . . -. Detail - 
Assigned To: 
Prepared By: mm) Scope:
Reviewed By: {Nan e]
Methodology:
PROPERTIES:
Location: Details:
Frequency:
Category 4: Record of Work Done:
User Category: w:
Category 5
Category 5
- While we noted some early attempts to establish speci?c dellverables for the WC, task
SCORECARD: assignment
Rating:
Sample Size:
Suggort:
in a draft Statement of Work (BOW) A1013 bookmark 1) prepared by the LANL contract representative
he added detailed language regarding deliverables that did not

make it into the final 50W. A.10.P?doc blue highlighted area} IG conclusion was that this was an

early attempt {are contract} to establish sdecific deliverable-s.
(bite (ethic)

Same?mag

- such specificity was never included in the final statement of work

Su art:

A comparison of the final 50W contained in the contract A48 bookmark 1 corn ment box page 2 i and the
draft 50W ?510.13 bookmark 1} confirms the lG conclusion that the draft deliverable language did not make 
it into the final SDW. {has bookmark 1 pg 2 comment 

 

 

 

Conclusion: 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

Procedure Step: Further review 016
Type:

Assigned To: 
Prepared By: 6f5f2014
Reviewed By: {None}

 

 

 

 

PROPE RTI E5:
Location:
Frequency:
Category 4:
User Category:
Category 5
Category 5

SCOR ECARD:
Rating:
Sample Size:

 

 

Emma? -_oetai1'  ..
Notes:
Resuits 4:
Mme?s Purpose: 

To support the statement in the report: Certain matters in this area are under further review bv the Office of
Inspector General.

Source:
Scope:

Me thodoiogy:
Detoiis:

Record of Work Done:
Support:

 

(W05) . . . .
(mum Februarv 6, 2013, e-mail to Sandra Bruce on Possibie Prohibited Activities 
in February 6, 2013, e-ma to Ricke Hass on Possible Prohibited Activities {A52.gi.

Rickev Hass February 8, 2013, e-mail t4 ?1?ch indicating Investigations would be making

6) C) ibie Prohibited Activities (A52.gi.
February 11, 2013, email to Rickey Hess regarding contact with Investigations on

Februarv 8, 0317133 Itinvestigationsi was briefed on the issues and was provided with

the a roriate documentation and criteri ted - e?mails and prohibited activities {?it
March 1 2013 e?rnail tn the Status of referral to AUSA 
0 On March 20, 2012 provided documents from Sandia regarding 
Prohibited Activities. Se 5i March 19, 2013, e-mait to Sandra Bruce tor an example of

the tvpe of documentation provided i 
- Per a discussion with (W) 0330333) on March 28, 2013, the_issues are still under review bv the

 

 

 

 

 

I.

 

   
  

 

   

 

 

 

 

 

 

 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

Summary 

Detail

 

A  

Conciusion:
Notes:

Resaits 4:

 

H.1.PRG Summaries

 

Procedure Step: occur of prohibited activities
Type: (bits)!
Assigned To: {bjli?}
Prepared By: 

Reviewed By;

 

{Ii/6,9914
(None)

 

 

 

PROPERTIES:
Location:
Frequency:
Category 4:
User Category:
Category 5
Category 6

SCORECARD:
Rating:
Sampie Size:

 

 

Purpose:
To support the statement in the report: Deepite these prohibitions, our examination of relevant
documentation at both Sandie and Los Alamos tend to indicate such activities did occur.

Source:
Scope:
Methodoiogy:
Detaiis:

Record of Work Done:
Su ort:

5 II a
February 6, 2013,e?maii regarding documentation from Los alemos regarding

Possibie Prohibited Activities (M 

it March 19, 2013, e~maii to Sandra Bruce regarding documentation from Sandie
regarding Possibie Prohibited Activities i.

For example, at Sandie, HWC, LLC provided advice and insights with regard to strategies related to
ensuring that the Sandie Management and Operating Contractor receive a contract extension


 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

summsw' -

 Detail    

 

For example, at Los Alamos. HWC, LLC arranged meetings with and/or site visits by senior Federal
officials who had the ability to impact both funding and future work at the Laboratory in the
intelligence arena (?10.18, A1021 A1022 A1823 and 

Conclusion:
Notes:

Results 4:

 

H.1.PRG - Summaries

 

Procedure Step: raised concerns
Type:

Assigned To: 
Prepared By: (C) 6 i 20 14
Reviewed By: {None}

 

 

 

 

PROPE RTIES:
Location:
Frequency:
Category 4:
User Category:
Category 5
Category 6

SCORECAR D:
Rating:
Samoie Size:

 

Purpose:
To support the statement in the report: While certainly not a complete record, there were aspects of this

documentation which raised concerns as to whether the prohibitions regarding business development had
been violated.

Source:
Scepe:
Methodology:
Details:

Record of We Hit Done:
SL1 art:

I. 6) I. anuarllI 111 2013, e-rnail to 6) responding to 016 request for information

that LANS had collected in regard to services performed by Heather Wilson pursuant to the LANE
task order on the Sandia contract A.10.1?l.

 

 

[55355) EEJETJECJ IFebruary 5, 2013, email regarding documentation from Los Alamos regarding
I?l

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

i?Sdimmarv' 

pecan? . .. 

 

 

Possihie Prohibited Activities 
IEbjE?j March 19, 2013, e?mail to Sandra Bruce regarding documentation from Sandia
regarding Possioie Prohibited Activities 

6] C) stated that ?we have collected records (primarily emails) that demonstrate in part the

services provided," and that "While time records were not maintained by Wilson, the records
demonstrate some level of activity in everv month ofthe task order." ,i These two
Statements indicate that this was not a complete record. However, aspects of this documentation

 

 

 

 

 

raised concerns as to whether the prohibitions regarding business development had been violated.

For example:

- at Sandia, HWC, LLC provided advice and insights with regard to strategies related to ensuring that
the Sandie Management and Operating Contractor receive a contract extension 

it At Los Alamos, HWC, LLC arranged meetings with andfor site visits bv senior Federai officials who
had the abilitv to impact both funding and future work at the Laboratory in the intelligence arena
{9.10.18 and A1021. A1023 and 

 

 

Type:
Assigned To:
Prepared By:
Reviewed By:

 

Procedure Step: Recommendation One

 

 

CW5) 
(TJECJ

 

?iEIZUlli

 

{None}

 

Conciusion:

Notes:

Resuits 4:
Summaries Purpose:

ASlaTo support the statement in the report: Issue a Policy Flash on the intent and implementation of FAR
31.205?33, Professionoi and consuitont service costs, with a particular focus on the requirements for
deliverables and details on invoices.

Source:

 

 

 

 

Review of Contracting Issues at Loe Alamos National Laboratory

 

 

[Eu-moiety  -  -. - .. .-   
PRUPERTEES: Scope:
Location:
Frequency: Methodofogy:
Category 4:
User Category: Details:
Category 5
Category 6 Record of Work Done:
Support:
SCORECARD:
3mm?" 0 At Sandia, the evidence of the nature and SCope of the services furnished was signi?Cantlv lacking.
sample Srze: Specifically, 22 payments totaling $226,3?8 19 were authorized for the services of HWC, LLC with?ut

 

the evidence of deliverables and detailed invoices to support the allowahilitv of these pavments
and A.9.9, bookmark 2.

It At Los Alamos, the evidence of the nature and scope of the services furnished was signi?cantly:
lacking- Specificallv, 19 payments totaling $195,585 were authorized for the services of HWC, LLC
without the evidence of deliverables and detailed invoices to support the allowabilitv of these
pavments andA.4.8, bookmark 3 i.

a We determined that between July 2010 and December 2011, Nevada National Schritv Site
{Nevada} and Oak Ridge National Lahoratorv (Oak Ridge} paid approximater $30,000 for services
rendered by? HWC, LLC D.5.PRG 1.

Federal Acquisition Regulation 31.205-33, Professionoi' and consultant service costs, Section states
that fees for services rendered are allowable onlv when supported bv evidence of the nature and SCODE 0f
the service furnished. Evidence necessarv to determine that work performed is proper and does not violate
law or regulation includes: Section invoices or billings submitted bv consultants, including suf?cient
detail as to the time expended and nature of the actual services provided; and Section if} Consultants'
work products and related documents, Such as trip reports indicating persons visited and subjects discussed;
minutes of meetings, and collateral memoranda and reports gig 

We noted that these requirements were incorporated into the Management and Operating Contracts

 

 

Summary

Review of Contracting Issues at Los Alamos National Laboratory 

Detail - - - 

 

 

through the Department of Energy Acquisition Regulations 97'05232?2, Payments and odvoncesf

However, we found that responsible contracting officials either did not
incorporate the requirements of the FAR into the agreements with HWC, andfor failed to exercise due
diligence to ensure they obtained the required evidence necessary to SUpport the payments for the services

rendered 



 

At Sandia, contracting of?cials initially argued that the FAR did not apply (A32, bookmark 3, and
A.8.PRG for con?rmation of discussion with contracting officials ,and A.8.PRG, ABPRG for SDR's 
Then we were told that the process to con?rm that HWC, LtC?s tasks were completed was informal,
and that the SDR would occasionally have conversations or receive e?mails regarding the activities of
HWC, LLC at Sandia and In addition, we were told that the statement of work for
each new task issued and agreed upon formed the basis for the required "Progress Reports" leg. .
the deliverables} highlight l.

a At Los Alamos,old us that during the period of performance there was no expectation that
deliverables wou - provided and Act-1.8, bookmark 8 }l.lso told us that the
interactions with HWC, LLC were more about relationships and trust, and therefore, they relied on
the principal's reputation acknowledged that payments were authorized
without requesting the required deliverables 

- At Nevada, the individual taskings stated that the deliverables would consist of "verbal updates" as
deemed necessary by the Nevada Director, Homeland Security and Defense Applications, or the
National Security Technologies, LLC, President I: However, the FAR does not reference nor
allow for "verbal" deliverables 

- During the exit briefing with Oak Ridge, it was stated that they did not have to followe the FAR
provisions (A.1.PRG This comment was later retinded 

 

The Office of Management web-site shows that Policy Flashes have been used since at least FY 2001 to

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

sun'imary' 

 

address acquisition and contracting issues. Therefore, we are recommending that the Director, Office of
Management issue a Policy Flash on the intent and implementation of MR 31.2G5-33, Professional and
consultentservice costs, with a particular focus on the requirements for deliverables and details on invoices.

A533

Conciusion:
No te's:

Results 4:

 

 

 

H.1.PRG Summaries

 

Procedure Step: Recommendation Two

Type:
Assigned To:
Prepared 31::
Reviewed By:

PROPERTIES:
Location:
Frequency:
Category 4:
User Category:
Category 5
Category 5

5CD RECARD:
Hurting:
Sumpie Size:

 

 

(bite
(bio)
arc-r2014

 

 

[None]

 

Purpose: ?l

support the statement in the report: Issue a Policy Flash designed to improve awareness of
prohibitions against business development activities lav contractors.

Source:

Scope:

Methodoiogy:

Details:

Record of Work Done:

Su ort:

During the course of our inspection, it became clear that Department officials were concerned that the tasks
undertaken as part ofthe HWC, LLC engagements could violate, or could be perceived as violating

 

contractual prohibitions relating to business development We noted one of the most direct

 

 

 

 

jSui?nmary"  --

Review of Contracting Issues at Los Alamos National Laboratory





Detail

 

 

manifestations of this concern in a March 8, 2010, memorandum from Sandia Site Office Manager to
the Sandia Laboratorv Executive Vice President A33, date box, address box, signiture bores Specifically,
because of concerns with the sole?source justifications, the Site Office Manager returned the redUest
without action [no.3 bookmarks 1 and 2) . The Site Office Manager warned that an inference could be
drawn that the services of HWC, LLC would be used for the purposes of developing new business for Sandie
in the intelligence and cvber arenas page 1, highlight}. The Sole-Source Justification cited, in part, the
need for . high-level connections and critical engagement with key individuals." In addition, in the same
memorandum, the Site Of?ce Manager stated that the proposed extension to the consultant agreement
suggests that HWC, LLC would be providing advice and making potentiallv prohibited contacts on behalf of

Sandie highlight 

 

In addition, both the Sandia Purchase Agreement and the Los Alamos task order stated that HWC, LLC shall
not engage in any activitv specifically related to obtaining, retaining, or facilitating business or business
opportunities for the respective National Laboratories was, bookmark 1 A43, bookmark Despite these
prohibitions, our examination of relevant documentation at both Sandia and Los Alamos tend to indicate
such activities did occur (H.1.PRG While certainlv not a complete record, there were aspects of this
documentation which raised concerns as to whether the prohibitions regarding business development had
been violated i At Los Alamos, HWC, LLC arranged meetings with andfor site visits by senior
Federal officials who had the ability to impact both funding and future work at the Laboratorv in the
intelligence arena (limit! and A312. page In fact, a senior contractor official at Los Alamos, also
designated as the Los Alamosgig for the HWC, LLC agreement, told us in an interview that the HWC, LLC
principal approached the then Laboratorv Director and offered the services of the companv 
l. The same Los Alamos of?cial acknowledged, as well, that Los Alamos had made a strategic deciSion to
increase the market share of work-for-others involving the Department of Defense and the Intelligence
Communitv and that the then Laboratoryr Director believed the consultant?s background could help with this

initiative A.10.PRG and 

 

 

 

 

The Office of Management web-site shows that Policv Flashes have been used since at least FY 2001 to
address acquisition and contracting issues red boxes 1. Therefore, we are recommending that the

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

- Seminary 3-.



Detail . .- .- -   ..  . .  - -  .
Director; Office of Management issue a Policy Flash designed to improve awareness of prohibitions against
business development activities bv contractorsASBa

Cori ciusion:
No res:

Resuits 4:

 

H.1.PRG - Summaries

 

Procedure Step: Summary on Sandia
Type:

Assigned To: 
Prepared By: ECJ
Reviewed By:

 


{None}

 

 

 

PROPERTIES:
Location:
Frequency:
Category 4:
User Category:
Category 5
Category 6

SCORECARD:
Rating:
Sampie Size:

 

Purpose:
Support for the statement in the report: "The issues regarding Sandia's inability to substantiate that it

received value for payments made to HWC, LLC occurred because contracting of?cials at Sandia did not
initiallyf require that the agreement comply with FAR requirements and failed to adequately:r
respond to the Sandie Site Office's directions regarding the agreement."

Soorce:
Scope:
Methodoiogy:
Detoiis:

Record of Work Done:
This is a summarv/conclusionarv statement based on the following information:

1' Sandia did not initallv requrie that the CPA cornva with the FAR. 

1' After the Sandie Site Office had Sandie change the CPA that would have put them in compliance
with the PAR, Sandie failed to incorporate the changes into the subsequent task ordersl E.3.PRG)

I Sandia did not require the invoices compiv with the FAR. (DEPRGJ

- Because of these failures, Sandia could not substantiate what it received {deliverablesj for it?s

 



 

 

Summary .:

Review of Contracting Issues at Los Alamos National Laboratory

Detail 

 

payments

to Him; some)

Therefore, we can state that "The issues regarding Sandia's inability to substantiate that it received value
for payments made to HWC, LLC occurred because contracting officials at Sandia did not initially require
that the agreement comply with FAR requirements and subsequently failed to adequater respond to the
Saudis Site Office?s directions regarding the agreement." ?g

 

Procedure Step: NNSA Request

Type:
Assigned To:
Prepared By:
Raviewed By:

PROPERTI E5:
Location:
Frequency:
Category 4:

User Category:

Category 5
Category 5

SCORECA D:
Rating:
Sampie Size:



 

 


T)
(C) 

 

 

{None}

Conciusion:

Notes:

Resuits 4:
Summaries Purpose:

The National Nuclear Security Administration requested that we conduct a review to determine
whether a consulting agreement awarded to Heather Wilson and Company, LLC) by Los Alamos
National Laboratory {Los Alamosl was appropriately administered and managedASBe

Source:
Scope:
Methodoiogy:

Detaiis:

 

 

Record of Work DONE: I I 5) a) 033(7)
in September 2612, the Inspector General 5 Office received a request fro NNSA (C)

 

031053 
(71th

 

 

 

 

 

 

to look into issues associated with one or more contracts with Heather Wilson (AS213 bookmark 2 

Witnin t'ilS request were specific questions bookmark These questions formed the basis of the
inspection's objective, listed in the body ofthe report 

Conciusion:

 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

 

S?mmarv .  .  "Detail 
Notes:
Resuits 4:

Summaries Purpose:

Procedure Stepvoices

Tpr' sate
To: (mm
Prepared By: (C) 5f6f2014
Reviewed By: (No ne}

 

 

 

 

PRO 
Location:
Frequency:
Category 4:
User Co tegory:
Eateryory 5
Category Ei

SCORECAR D:
Rating:
Sample Size:

 

To support the statement in the report: "Our inspection identified a number of issues with regard to the
deliverables and invoices necessary to support the approximately paid to Heather Wilson and
Companv, LLC for advice and consultation provided to senior managers at four Department

contractor?operated sites."

Source:
Scope:
Methodology:
Detofis:

Record of Work Done:
A833

ASBgFirst, the inspection identified a number of issues with regard to the deliverables and invoices:
Concerning deliverables with Sandia, see and and E.3.PRG. For LANL, see 

 

vellovv highiight and 

 

For Oak Ridge, see E.5.PRG. For Nevada, see E.4.PRG . Concerning

invoices with Sandie, see D.3.PRG . For LANL, see LANL sheet, column a. For Nevada, see 

For Oak Ridge, see D.5.PRG

necessarv to support approximater sasopoo paid to Heather Wilson and Company, LLC (HWC, 

see (3.1.PRG for dollaramounts.H.l.PRG

for advice and consultation provided to senior managers at four Department contractor?operated sites; see

Statements of Works: Sandie A310, page 4 and A3313. page 4; LANL

A43 bookmark 1 Oak Ridge 31.4.10,



 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

Summary

ti?taii 

 

red box and Nevada A.11.1, bookmark 3 
H.1.PRG


Conclusion:
Notes:

Results 4:

 

 

 

 

H.1.PRG Summaries

Procedure Step: Responsible [Us
Type:

Assigned To: 
Prepared By.- ECJ 6/6f2014
Reviewed By: {None}

 

 

 

 

PRO PERTIES:
Location:
Frequency:
Category 4:
User tego ry:
Category 5
Category 6

SCORECARD:
Rating;
Sompie Size:

 

Purpose:
To support the statement in the report: "However, we found that responsible contracting officials either did

not incorporate the requirements of the FAR into the agreements with HWC, LLC andfor failed to exercise
due diligence to ensure the; obtained the required evidence necessary to support the pavments for the
services rendered."H.1.PRG

Scarce:
Scope:
Methodology:
Details:

Record of Work Done:

?gSandia provided the Inspector General a spreadsheet that compiled the various activities that Heather
Wilson conducted (ABE). In addition, the primarv SDR stated that Heather Wilson's deliverables were
meetings, discussions {manv which were classified}, participation in advisorv panels, planning sessions, and
the National Security Speaker Series 1. However, the FAR 31.205-33, Professional and consuitont
service costs, Section if], States that fees for services rendered are allowable onlv when supported by
evidence of the nature and scope of the service furnished. Speci?cally, Section requires that
con5uitants provide work products and related documents, such as trip reports indicating persons visited
and subjects discussed, minutes of meetings, and collateral memoranda and reports (has i. The primary 

 

 

 

 

Review of Contracting issues at Los Alamos National Laboratory

 

Summary- 

SDR stated that there wasn't a white paper, reports or hard copv deliverables associated with the
and W). No tangible deliverables that meet FAR requirements were provided
to the Inspector General?s Office. The evidence of the nature and scope of the services furnished was
significantlv lacking. Specifically, 23 pavments totaling $226,3?3 19 were authorized for the services of HWC,
LLC without the evidence of deliverables and detailed invoices to support the allowahilitv of these pavments
(G.1.PRG The contracting officials at Sandia initially argued that the FAR did not apva bookmark
3). Then we were told that the process to confirm that HWC, tasks were completed was informal, and
that the Sort would occasionallv have conversations or receive e-mails regarding the activities of HWC, LLC at
Sandia l. In addition, we were told that the statement of work for each new task issued and agreed
upon formed the basis for the required "Progress Reports? leg. the deliverables] highlight 

At Los Alamos, the evidence of the nature and scope of the services furnished was signi?cantlv lacking.
Specifically, 19 pavments totaling $195,?18 were authorized for the services of HWC, LLC without the
?ow of deliverables and detailed invoices to support the of these pavments (6.1.PRG l. The
4, a for Los Alamos told us that during the peri armance there was no expectation that deliverables
would be provided smears vellow highlightlIE?Egi? also ton us that the interactions with HWC, LLC
were more about relationshi and trust, and therefore, they relied on the principal's reputation 
A.10.PRG  a) 6) cknowledged that payments were authorized without requesting the
required deliverables yellow highlight), in addition, the Inspector Generat's Office noted that in
the (Draft) Statement of Work dated March 31, 2009, which was part of the proposed Heather Wilson
consulting contract, there was language on Deliverables (A1013 l. However, in the final Statement of Work
the deliverable language was removed (A48 bookmark i asked who removed the language. the
Contracting Officer replied that he couldn't remember exactlv who removed the language. He Stated that
officials within procurement, legal and the Director's office all worked on the Statement of Work. The
Contracting of?cer stated that he was unsure who actuallv removed the language. i asked if the decision to
remove the language was a conscience effort. He replied that they were trying to follow what Sandie did
when their set up their arrangement. The Contracting Officer that thev did attempt to draft a montth
Statement of Workr?Task Order. However, thev couldn't find an individual who would act as a technical
sponsor to commit on a montth basis, He stated that a decision was made to have a broad Statement of
Work that would cover all areas l.

 

 

 

 

 

We determined that between July 2G1fl and December 2011, Nevada National Securitv Site [Nevada]! and
Oak Ridge National Laboratory (Oak Ridge) paid approximater $30,000 for services rendered bv HWC, LLC

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

Summary

Detail; 

 

{0.4.1 D.5.PRG and D.4.PRG At Nevada} the individuai taskings stated that the deliverables wouid consist
of "verbal updates? as deemed necessary by the Nevada Director (A43 bookmark 2 Hometand Security
and Defense Applications ?1.48, bookmark or the National Security Technologies, LLC, President (ML
bookmark 1 J. However, the FAR does not reference nor allow for "verbal"

deliverabies A.4.6).

 

?g
Conciusr'on:
Notes:
Resorts 4:
H.1.PRG - Summaries Purpose:

Procedure Step: Recom mendation Three

Type:
Assigned To:
Prepared By:
Reviewed By:

PROPERTI E5:
Location:
Frequency:
Category 4:
User Category:
Category 5

 


(tut?)

 

 

(C) sisrzom

 

(None)

 

To support the recommendation in the report: "Determine the allowability of fees paid to Heather Wiison
and Company, LLC, both in terms of FAR 31.205-33 and FAR 31.205?22, and recover any costs determined to
be unelioweble."

Source:

Scope:

Methodoiogy:

Details:

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

 

 

@mary Detaii .. 
Category 5 Record of Work Done:
Support:

Retina: FAR 31.205-33
Sampie Size:

 

Federal Acquisition Regulation 31.205-33, Professionoi end consuitont service costs, Sectio?Ilt), states
that fees for services rendered are allowable only when supported by evidence of the nature and scope of
the service furnished, Evidence necessary to determine that work performed is proper and does not violate
law or regulation includes: Section it) Invoices or billings submitted by consultants, including sufficient
detail as to the time expended and nature of the actual services provided,- and Section if) Corsu ltants'
work products and related documents, such as trip reports indicating persons visited and 
minutes of meetings, and collateral memoranda and reports egg 

However, we determined that:

- Between January 2009 and March 2011, Sandia National Laboratories {Sandie} authorized 23
payments totaling $226,3?8 for services rendered by HWC, LLC without the evidence ofdeliverahles
and detailed invoices to support the allowability of these payments gig

in Between August 2009 and February 2011, Los Alamos National Laboratory {Los Alamos} authorized
19 payments totaling $195,?18 for the services of HWC, LLC without the evidence of deliverables
and detailed invoices to support the allowability of these payments 

Between Juiy 20112] and December 2311, HWC, was paid approximately at the Nevada
National Security Site {Nevada} and Oak Ridge National Laboratory {Oak Ridge} without the evidence
of deliverables and detailed invoices necessary to support the of those payments
(6.1.FRG 

Fees for services rendered are allowable only when supported by evidence of the nature and scope of the
service furnished [Ar-1.6 Since we determined invoices were paid without the evidence of delive rabies and
detailed invoices necessary to support the allowability of those payments i, we are recommending 

 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

that the Department Contracting Of?cers at Sandia National Laboratories, Los Alamos National Laboratory,
the Nevada National Security Site and Oak Ridge National Laboratory determine the allowability of fees paid
to Heather Wilson and Company, LLC, in terms of provisions of FAR 31.205?33, and that the Department

Contracting Officers recover any costs determined to be unallowable under these provisions.

FAR 31.205-22

FAR 31.205-22, Lobbying and political activity costs, states that costs associated with the following activities
are unallowable: Any attempts to influence the introduction of Federal, state, or local legislation, or 
Anv attempts to influence the enactment or modification of any pending Federal, state, or local legislation
through communication with any member or employee of the Congress or state legislature {including efforts
to influence state or local officials to engage in similar lobbying activity}, or with any government official or
employee in connection with a decision to sign or veto enrolled legislation. Also, costs incurred in
attempting to improperly influence, either directly or indirectly, an employee or officer of the Executive
branch of the Federal Government to give consideration to or act regarding a regulatory or contract matter,
are unallowabie. in addition, both the Sandia CPA and the LANE Task Order with Heather Wilson and
Company, LLC, states that HWC, LLC, shall not engage in any activity specifically relating to obtaining,
retaining, or facilitating business or business opportunities for the respective National Laboratories 1.

Despite these prohibitions, our examination of relevant documentation at both Sandie and Los Alamos tend
to indicate such activities did occur While certainly not a complete record, there were aspects of
this documentation which raised concerns as to whether the prohibitions regarding business development
had been violated i. At Los Alamos, HWC, LLC arranged meetings with andfor site visits by senior
Federal officials who had the ability to impact both funding and future work at the Laboratory in the
intelligence arena and A3312l page 1 i. in fact, a senior contractor official at Los Alamos, also
designated as the Los Alamos STR for the HWC, LLC agreement, toid us in an interview that the HWC, LLC
principal approached the then Laboratory Director and offered the services of the company The
same Los Alamos official acknowledged, as well, that Los Alamos had made a strategic decision to increase
the market share of work?for-others involving the Department of Defense and the Intelligence Community

 

 

 

 

 

Review of Contracting issues at Los Alamos National Laboratory

SurnMarv

Detail 



 

and that the then Laboratorv Director believed the consultant's backgroUnd could help with this initiative i

  



Since we determined invoices were paid for services possiva relating to obtaining, retaining, or facilitating
business or business opportunities for the respective National Laboratories, we are recommending that the
Department Contracting Officers at Sandia National Laboratories, Los Aiamos National Laboratory, the
Nevada National Securitv Site and Oak Ridge National Laboratorv determine the offees paid to
Heather Wilson and Company, LLC, in terms of the provisions of FAR 31.295?22, and that the Department
Contracting Officers recover any costs determined to be unallowabie under these provisions.

 

Procedure Stop: Recommendation Four

 

 

 

 

 

 


Concrusion:
Notes:
Resorts 4:
H.1.PRG - Summaries Purpose: 

To support the recommendation in the report: "Determine whether adjustments to previouslv awarded
performance fees are appropriate to address the consulting agreement administration and management

Type: 031(6) issues we observed relative to the HWC, LLC agreements."
Assigned To: [1330]
Prepared By: (Cl arena 14
Reviewed By: {Non e} Source:
PROPERTIES: Scope:
Location:
Frequency: Methodoro gv:
Category 4:
User Category: Details:
Category 5
Category 6 Record of Work Done: 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

bummer?; .. Detail
Su ort:
SCORECARD: A53.a
Rama" Management and Operating Contracts have provisions for the contractor to earn fee based on the
Sample Size:

contractor's performance. Specifically, there is an award?fee contract that utilizes a subjective method to
evaluate performance and the conditions under which it was achieved to determine the award fee earned.
{n.4.13, bookmark 2 The contractor is evaluated on a set of pre?estabiished performance measures and
receives a rating such as "Very Good," "Good," and Satisfactory bookmark 1 These ratings
translate into an overall percentage of the total available fee that the contractor will receive. [see 

For exampie, from the Performance Evaluation Report at Los Alamos:

2012 Los Alamos National Security, LLC, PER Summary
Los ALAtvros NATIONAL secualw, nirvana 

Total Fee Earned  

$59,743:,oea 30%

Total Available Fee

$14,510,294 
Los Alamos National Security, contractor for the-Les Alamo-s. National
Laboratory, earned a "Very Good" rating in Program, a "Good" in Operations, a ?Satisfactory? in institutional
Management and Business, and 80 percent of the possible incentive fee from the National Nuclear Security

Administration for its fiscal year 2012 performance 

Also, from the Performance Evaluation Report (PER) at Sandia:
FY 2012 Sandie Corporation PER Summary
serve convenes AWARD FEE 

Total Available Fee Total Fee Earned . 

915%

 

521399.114 $3,093,335

Sandie Corporation, the management and operating contractor for Sandia National Laboratories, earned a
?very Good? rating in Program and Institutional Management and Business, a "Good" in Operations, and

 

 

 

 

 

 

 

Review of Contracting Issues at Los Aiamos National Laboratory

 

Summary -  Detail9?.5 percent of the possible incentive fee from the National Nuclear Security Administration for its fiscal year

2012 performance J.

Because we identified serious concerns with the administration and management of agreements with
HWC, LLC for advice and consultation provided to senior managers at four Department contractor-operated
sites (H.1.PRG our testing revealed that the four facility contractors paid approximately $450,000 to
HWC, LLC even though they did not receive evidence that work performed under the agreements had been
completed and, these payments were fully reimbursed by the Government, we are
recommending that the appropriate Fee Determination Authorities {from Acquisition and Project
Management?see A310. red box and determine whether adjustments to previously awarded
performance fees are appropriate to address the consulting agreement administration and management

issues we observedASBa

 

 

Conciusion:
Notes:
Hesuits 4:

H.1.PRG - Summaries Purpose:

To provide support for statements made in report.
Procedure Step: Summit

 

 

 

 

Type: Source:
Assigned To:  Eb]
Prepared By: 36,0014 Scope:
Reviewed By: {None}
Merh odoa?ogy:

PRO 

location: Detoiis:

Frequency:

 

 

Catego? 4: Record of Work Done:  

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

Summary - Detail
User Category: Statements:
Category 5
category 5 Simiiar to the conditions we observed at Sandia . . .
- As with Sandie. . .
Simiiar to aarfindings at Sandia. . .
Emmy" However, as with Sandie . . .
Sampie Size:

In the section of the report that discusses Los Aiarnes Deliverables and invoices these statements are made
relating to the information and details contained in the Sandie Deliverables and invoices section ofthe
report. The intent of the statements above was to inform the reader that similar conditions and findings
were also made in the Sandie section of the report.

Conclusion: So the referencer when reading the Los Ala mos section of the report will draw the inference to
the same or similar information contained in the Sandie section of the report.

 

 

Type:

Procedure Step: Summ 5

 

Assigned To:

 

Prepared By:

(bit?i Cb]
UJECJ

 

EXEIZDM

 

Reviewed By:

PROPERTIES:
Location:
Frequency:

 

{None}

 

Conciasion:

Notes:

Fiesaits 
H.1.PRG - Summaries Purpose:

To provide support for a statement made in the report.

Searce:

Scope:

Meihadoiogy:

Detaiis: