Review of Contracting Issues at Los Alamos National Laboratory

 

 

Summary - . .i Detaii -
Category 4: Record of Work Done:
User Category: Statement:
Category 5
Category 5 0 Our examination reveoied that this officioi rocked the information necessary to support the oppro vcilF
ofpovments to HWC, ttC.
SCORECARD:
Rating:
Sample Size: SUQEQW

The paragraph and section of the report that this statement is located in is the Los Alamos Deliverables and
Invoices section.

  



This section is discussing that the Los Names official, referring to the 
the invoices submitted on for this contract for pavment 
para 12, green highlight) lacked the necessary information to support the approval of payments to HWC,

33(6) MU para 15, yellow highlight}

In the interview with c) 6] he said that he was uncertain if he approved the invoices payment. A.1ELPRG
,veilow highlight] In a ow-up email to the 16 he then stated that he had approved the invoices. [Al?l?

 

 

 

 

 

 

 

 

 



Conciusion:

Notes:

Resuits 4:
H.1.PRG - Summaries ?u'rpose: 
Procedure Step: Task Order REQ SourCe:
To: Egg Scope:

 

 

?attered By.- gs; 2G 14

 

 

 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

 

highlight}. A531:

Enron-13?. - Detail,

Reviewed By: {None} Methodoiogy:
PROPERTIES: Detaiis:

Location:

Frequency: Record of Work Done:

Category 4: To support the statement in the report: "It was deer that the task order requirement related to invoicing

User Category: was not enforced.?

Categorys

Category 5

This is an DEG conciusion statement based on: 1. Although the LANL task order called for detail 1 

SCORECARD: bookmark 8} The invoices submitted by Heather Wiiso little or no detail as to the services
Rating: provided 10. PEG para 5 red. .highlightl- tor.- the LAN-ML.
Sample Size: consulting task order told us that the' Invoices were approved without the required detail (A. 10. PRG yellow

 

(bite) .(b.l(7l(Cl

 

 

 

 

 

 

Conciusion:
Notes:
Resuits 4:
H.1-PRG - Summaries Purpose: 
Procedure Step: STR Evidence Source:
Typo:
Assigned To: (Weill?) Scope:
Prepared By: THC) 6f6f2014
Reviewed By: [None] Methodoiogy:
PROPERTIES: Detoiis:
Location:
Frequency: Record of Work Done: [bj?ij 

_Eateeorr 

 

To support the statement in the report:

 



 

 

 

was not able to provide evidence of deliverables or details

 

 

 

 

Review of Contracting issues at Los Alamos National Laboratory

 

 

 

 

 

 

 

 

 

 

 

 

 

l?Summ'arv - . Detail-i .- . 
User Category: on invoices. 
Category 5 
Category 5 With reg; rd: to dfiiuerabies, th for LAN L, toid us that there were no deiiverabies 
A.10.PRG EEJJEGJ 2, para In addition, after conducting a review of e-maiis and other documents at the
SCORECARD: Lab, LANE. officials still could not provide evidence ofdeliverables 1.
Rating:
Sompie Size: With regards to invoices, a review of the invoices did not reveal anv evidence of the nature and scope of

service furnished 13.1-1, Col In addition, the Istated that he was not sure that he even approved the

invoices A.1CI.PRQEEJEGJ EEJETJ lg, para 12}, much lees provide anv details associated with these

invoices.A33.c 

 

 



 

 

 

 

 

 

 

Conciusion:
Notes:
Resoits 4:
H.1.PRG Summaries Purpose:
Procedure Step: LANL Contract File Source:
e:
(bite): 
Assigned To. (W7) Scope.
Prepared By: EIEIZOM
Reviewed By: None) Methodoiogy:
PROPERTIES: Detoiis:
Location:
Frequency: Record of Work Done:
Category 4: To support the statement in the report: our review confirmed that the contract file did not contain
User Category: information on deiiverabies.?
Category 5
Category 6 At the beginning of the inspection, Los Alamos National Laboratorv provided us with a contract file i 

included in this centract file was the task order and agreement and e?maiis from the Contracting

 

 

 

[diummanr

Review of Contracting Issues at Loe Alamos National Laboratory

Detail



 

 

distu rbin

issues an

level of 

 

The failure of Los Alamos officials to adequately manage the HWC, LLC consulting task is particularly
the agreement. In particular, we found that a senior Los Alamos management official learned of a number of

the consulting agreement was risky because it contained a vague statement of work, there was inadequate
data to justify that the price for the services was fair and reasonable, and there was a lack of specificity of

While we noted some early attempts to establish specific deliverables for the HWC, LLC task
assignment, such spacificity was never included in the fin istatenent of work{ H.1.PRGJ. The
language was deleted from the final task order hi hli ht even though a Los
Alamos contracting official informed the NNSA Contracting Officer that deliverables would be
established in individual task assignments bookmark 1 The designated Los Alamos
Subcontract Technical Representative (STR) did not require that HWC, LLC provide deliverables as
evidence of the nature and scope of the service furnished. The STR told us that during the period of
performance there was no expectation that deliverables would be provided. The STR also told us
that the interactions with HWC, LLC were more about relationships and trust, and therefore, they
relied on the principal's reputation bTue?titg?iighti The STR a"knowle_dited that
payments were authorized without requesting the required deliverables 33(6) said that, in
hindsight, Los Alamos probably should have at least requested reports from HWC, LLC
(ascents i

i emcee}.

Despite task order requirements to do so, none of the 19 invoices submitted by HWC, H.1.FRG
for 19 invoices} contained sufficient detail as to the time expended and nature of the actual services
provided (0.1.1, column as required by the FAR {w i. it was clear that the task order
requirement related to invoicing was not enforced. -told us that in the first two or three
months of the agreement there was a lot of dialogue with HWC, LLC regarding hours, but that this
discipline was not maintained for the rest of the invoices. The STR also told us that the invoices
were approved without the required detail. Was not able to provide evidence of
deliverables or details on invoices, and our review confirmed that the contract file did not contain
information on deliverables l.

 

 

 

 

 

 

 

 

in light of information we uncovered related to prior knowledge regarding potential problems with

risks with the HWC, LLC agreement as early as March 2009 A107). That official was advised that

 

ffort required. The official was also advised that because of these issues, there was potential for

 

Review of Contracting Issues at Los Alamos National Laboratory

 

Euthmary

Datail -

disapproval of the agreement by Federal officials, disallowance of costs incurred, and adverse publicity
J. That official told us that he was unaware of what action had been taken to address these concerns


 

Procedure Step: Task order seperate
Type:

Assigned To: gig
Prepared By: (C) 6f6f2014
Reviewed By: {No ne}

 

 

 

 

PROPERTIES:
Location:
Frequency:
Category 43':
User Category:
Category 5
Category 6

SCORECARD:
Rating:
Sampie Size:

 

 

Conciusion:

Notes:

Resuits 4:
H.1.PRG - Summaries Purpose:

To support the statement in the report: "We found that the Los Alamos task order was issued separate and
apart from Sandia."

Source:
Scope:

Me thodofogy:
Detoiis:

Record of Work Done:
Su ort:

When Los Alamos requested to enter into a separate consultant agreement with HWC, LLC the request was
denied by the Los Alamos Site Office Contracting Officer M). We noted that one of the concerns raised
by the Site Office was that the Government could be at risk of making duplicate payments to HWC, LLC for

the same services at both Los elamos and Sandia red box}. To address this concern. Los Alamos was
directed to use Sandia's Purchase Agreement that was already in place for the services of HWCJ LLC (w 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

rSummarf-a-

 

 

However, the Los Alamos task order was issued separate and apart from Sandie- Specificallyy Los Alamos was
authorized to issue task orders against the Sandia Purchase Agreement; but funding, task order issuance; and
task order administration were to be the responsibility of authorized LANL representatives not Sandie.
Clause 23, AUTHORIZATION FOR USE OF CONTRACTPURCHASE AGREEMENT stated:

Los Alamos National Security operator of Los Alamos National Laboratory is authorized to
issue task orders against Contract Purchase Agreement (CPA) 9051?1. Funding, task order issuance, and task
order administration will be the responsibility of authorized LANL representatives and shall be pursuant to
LANL's terms and conditions incorporated into the task A318 bookmark 

 

 

03)
The Los AlamosEEJ assumed that Sandia would be aware of the work HWCJ LLC was performing for Los

ti"-
Alamos in order to avoid any possibility of duplication, and the STR was surprised to learn that the Los
Alamos task order was not issued through Sandia yeliow highlights}. However, nothing in the
agreement required the task order to be issued through Sandia. A contracting official confirmed that Sandie

was not aware of the speci?c tasks HWC, LLC was performing at Los Alamos Lassa

 

 

 

 

Procedure Step: email Sandie Concerns
Type:

 

Assigned To: ?g
Prepared By: (C) (if-Sf 2914

 

 

 

RevieWed By: [None]

 

 

Conclusion:
Notes:
Results 
- Summaries Purpose: 

To support the statement in the report: "The content of the email communications provided to us and the
acknowledgement by Los Alamos regarding business development reflect elements that directly coincide
with the very concerns raised by the?then Sandia Site Office Manager in March 2010."



 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

summaryPROPERTIES: 5 cope:

Location:

Frequency: Methodology:

Category 

User Category: Details:

Category 5

Category 6 Record I Work Done.-
During the course of our inspection, it became clear that Department officials were concerned that the tasks
Ronny: undertaken as part of the HWC, LLC engagements could violate, or could be perceived as violating
Sample Size:

 

contractual prohibitions relating to business development We noted one of the most direct
manifestations of this concern in a March 3, 2010. memorandum from NNSA's Sandia Site Office Manager to
the Sandie Laboratorv Executive Vice President. 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 and cvber arenas 

 

The email communications provided to us bv Los Alamos showed evidence of potential business
development activities. Specificallv, at Los Alamos, HWC, LLC arranged meetings with andfor site visits bv
senior Federal officials who had the ability to impact both funding and future work at the Laboratorv in the
intelligence arena and A312, page In additionra senior contractor of?cial at L05 Alamos. also
designated as the Los Alamosgi for the HWC, LLC agreement, told us in an interview that the HWC. LLC
principal approached the then Laboratory Director and offered the services of the companv . The same Los
Alamos official acknowledged. as well, that Los Ala mos 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 Laboratorv Director believed the consultant's background could help with this initi"tive (AIQPRG
The email communications and the statements of the Los Alamo gig reflect elements of
business development activities that directly coincide with the verv concerns raised by tie-then Sandie Site
Office Manager in March 2016. 

 

 

 

 

 

 

 

 

Con clusio n: ..

 

 

Review of Contracting issues at Los Alamos National Laboratory

Summarv-. -. Detail-

In attendanc fr _he Oi rslpai?j 031(7) landlibJEGthJUJKCJ land
Inspection J6) 

. 5J TJ CJ 

 

 

 

 

 

   
    

Office Sandie
and in attendance bv telephone were: MG) (bitr'JECJ
I

 

 

 

 

 

 

 

1-de 

 

 

The meeting took place at the NNSA, Site of?ce conference room in building 802 at Sandia National
Laboratory. The following are details of the briefing:

-tarted the briefing by explaining that our office has Completed the inspEction review
and is preparing to isSUe a coordination draft report soon. As such, we wanted to provide them with
the details of the results of ur ins ectiofi and Our current recommendations.

At the close oithe hriefingl??ng EEJEUECJ provided information on an effort by NNSA to issue a

Notice of intent to Disaliow Costs on the HWC, LLC consulting contracts to the Laboratory

(Sandiai. In addition, that the; had also requested information from Sandie on all contracts with

HWC, LLC and anticipated motion would be provided soon.
- uttered to $anme (MENU he transmittal letter on the MCI and let us know when they!
have received the response to their request for documentation.
The briefing then endedi?g

 

 

1?



 

Conclusion:

Notes:

Res Hits 4:
PRG riefin gs Purpose:

 

 

To document the out?briefing to NNSA Officials on the results of the inspection. 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

pecan-=2 -. - . .. . 

 

 

 

 

 

@maw .. . .-
Procedure Step: Oak Ridge Outbriefing
TYPE: Source:
Assigned To: gig
Prepared By: (C) Scope:
Reviewed By: (None)
Methodofogy:
PROPERTIES:
Location: Def-oils:
Frequency:
Category 4: Record Work Done:
User Category: Oakridge Out brie?ng
Category 5 
Category 6 On March 6, 2013, inspectorsiggtm (bit?) lanclEbJE?J Ibriefed ORNL Site Office personnel on the
preliminary findings of the inspection 0Concerns with Consultino Contract Administration of Various
SCORECARD: DegertmentSites?. The Oakridge National Laboratory comes under the Department of Energy,
Rating: Office of Science.
Sample Size:

 

 

 

Present from the ORNL Site Office were: 
(bios) 

 

 

laminate I

 

 

The purpose of the meeting was to provide the Site Office with the results of the inspection ?eldwork and
the Current preliminarv findings and recommendations on the above mentioned inspection. The following is
what was discussed and any further information that the Site Office personnel provided:

Inspecto tarted the briefing bv reading from the inspection draft report. Information provided was
specific to the Oaic RicLe Site as follows: Results of the impaction, contract information, details of findings.
and recommendations-tasted that he believed the Oak Ridge contracts with HW. LLC were with
the Global Securitv Directorates office. He recalled that there were oniv a few and they were issued as an
honorarium. We stated that in lieu ofs eakin with the contract representative, since thev were no longer
at the site; we spoke directlv EEJETJECJ Istated that he would have been the best contact

since he worked with Ms. Wilson.

 

We continued to discuss the details in the report regarding the Oakridge Site and provided information on 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

summary

Detaii' .

 

the four recommendations. We stated that a coordination draft would he issued soon and explained the
process of comments to the report. asked if their site, since thev are not an NNSA site, could be
given the coordination draft directly ?stated that he was concerned that thev Id receive the
report in time to respond with comments within the five day requirements. lnspecto a) E) tated that
thev wouid inform their management of these concerns and make the necessarv arrangements to see that
their office received the report timelv.

   

 

The briefing ended.AS3.g
A53.g

Conciusion:
Notes:

Resuits 4:

 

Lg?tG Briefings

Procedure Step: Nevada Exit
Type:

Assigned To: Egg
Prepared By: (C) Elia/2i) 14
Raviewed By: (Nor e]

 

 

 

 

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

SCORECAR D:
Rating:

 

Purpose:

To document the exit briefing provided to the NNSA Nevada Field Office and the M810 contractor, of the
Nevada National Securitv Site, Las Vegas, Nevada regarding the issuance of the final draft report for
this impaction.

Source.-

Scope:

Methodoiogv:
Detoiis:

Record of Work Done:

(in April 91 2013 an exit briefing was provided to the NNSA Nevada Fieid Office and the M310 contractor, of
the Nevada National Securitv Site, Las Vegas, Nevada personnel.

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

 

 

Sun-smart?. Detail
Resuits 4:
I.1.PRG - Brie?ngs Purpose:

Procedure Step: LANL Guthrie-ting
Type: 
Assigned To: 
Prepared By: 6! 6f 20 14
Reuie wed By: {No nei

 

 

 

 

PROP ERTI ES:
Location:
Frequency:
Category 4:
User Category:
Category 5
Category 6

SCORECARD:
Rating:
Sample Size:

To document the out?briefing provided to the Los Alamos Site Office NNSA Officials.
Source:

Scope:

Methodoiogy:

Detoiis:

Record of Work Done:
Alamos Field Office Briefing

On February 28, 2013, Staff members with the Office of Inspections, Western Region Office, Albuquerque,
NM, meet with NNSA officials at the Los Alamos Field Office. The purpose of the meeting was to brief the
NNSA of?cials on the results of our review of Concerns with regard to Consuitino Contract Administration at
Various Department Sites.

In attendance from the DIG:

 

 

 

 

 

 

 

 

 

 

Inspectors (biisiibiioim nd Inspections {biislibimici
Ibit?ltb)
(TiiCi
In attendance from 
(Internets) and in
attendance our telephone; from NNSA Headquarters.

 

 

 

 

 

The meeting took place at the Fieid Office conference room. The following are highlights of the
meeting:

 

 

Review of Contracting Issues at Los Alamos National Laboratory

Summary.

Detail 

 

 

 

bei?J 

 

uestlons reE? rding the invoices, the lack of deliverables and other
re ated contract information: M63 commented that their office has taken steps to disallow
costs on the consulting contract with ?bjt63 1301C) inquired as to the status of our
review and any issues relating to lobbying??g?) (W7) provided a response that another entitv of
the DIG is currentlv looking at this issue.

a ?then discussed that our office would be issuing a coordination draft report soon and
exp ained the process for review of the report.

It The brie?ng ended with NNSA officiais stating that they appreciate the assistance with this


 

 

 

 

 

 

 

 

 

 



Conclusion:
Notes:

Resui?ts 4:

 

 

 

- Briefings

Procedure Step: Nevada Dutbriefing

 

 

 

 

 

Purpose:
To document the briefing provided to the Nevada Field Office NNSA Officials

Type: Source:
Assigned To: {Eng}!
Prepared 33;: Scope:
Reviewed By: {None}
Methodoiogy:
PROP ERTIES:
Location: Detours:
Frequency:
Cotegory 4: Record of Wo rk Done:
User Category: Nevada?it- Briefing 

 

 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Detail . - . 
CategoryS 
CatEQOryb? On March 6; 2013} Inspector 93(6) 03)? an $1]wa briefed NNSA Nevada Field Office 
personnel on the preliminarv findings of the inspection 0Concerns with Consulting Contract Administration
at Various Department Sites? Present at the meetin from the NFO was WW
Rating: Emil?I and (bite I
Sampie Size:

The purpose of the meeting was to provide the Site Office with the reSuits of the inspection fieldwork and
the current preliminary findings and recommendations on the above mentioned inspection. The following is
what was discussed and anv further information that the Field Office personnel provided:

0315) [bl . . .
Inspector tated that the DIS would be issuing a coordination draft report soon and as a result thev
wanted to brief them on the results of the inspection, details on the Nevada portion of the report and the
recommendations contained in the report. The NNSA officials were receptive to the information briefed and
said that they appreciated the efforts of the OIG and the recommendations in the report since they too felt
that there was not enough guidance available to both them and the contractors on consulting contracts.

The briefing then endedASBgASSg

Conclusion:

 

Procedure Step: Exit Conference Oak Ridge

 

 

 

 

(103(6)th

Assigned To: (73ch

Propared By: 6l6f2014
Reviewed By: {Nan e}

 

PROPERTIES:

 

Notes:
Results 4:
- Briefings Purpose:

To document an exit conference held with Oak Ridge National Laboratorv
Source:
Scope:

Math ontology:

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

Summary

Detail 

 

 

 

that a reporter from the Santa Fe newspaper was inquiring about Heather Wilson?s involvement at Sandia
and that they had requested copies of her invoices. Sandie officials informed the reporter that the
information was proprietary,

We clarified the dollar amounts associated with Sandia. SpECi?Caliv, we informed them that we combined
the CPA amounts with the dollar amounts associated with initial consulting agreement and a onetime
payment {$4,500} made to Ms. Wilson while the revision to the CPA was being finalized.

We stated that once the draft report was issued, that.r would have 15 business days to respond.

Condosfon:
Notes:

Resoits 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emma? .- - -_Detaii'
Notes:
Resuits 4:
H.1.PRG - Summaries Purpose: 
To support the statement in the report: Certain matters in this area are under further review bv the Office of
Procedure Step: Further review 016 Inspector General.
Type:
Assigned To: gig
Prepared By: (C) 6153014 Source:
Reviewed By: {None}
Scope:
PROPERTIES:
Location: Methodoiogy:
Frequency:
Category 4: Detoiis:
User Category:
Catt-?9?? 5 Record of Work Done:
Category 5 Supgott:
2:32:3?530: (W) Februarv 6, 2013, e-mail to Sandra Bruce on Possibie Prohibited Activities #1522}-
Sompie E: in February a, 2013, e-mail tJoGJRicjke C(ll-lass on Possible Prohibited Activities {A52g}.
Rickev Hass February 8, 2013, e-mail tomindicating Investigations would be making
contact on Possibie Prohibited Activities
1' IKEJEGJ EEJEUECJ IFebruarv 11, 2013, email to Rickey Hess regarding contact with Investigations on
Februarv 8, (b30333 liinvestigationsl was briefed on the issues and was provided with
the appropriate documentation and criteria related to the e?mails and prohibited activities {?it
IEEJEESJ EEJEUECJ Ilviarch 18, 2013, e?rnail EEJETJECJ Ion the Status of referral to AUSA 
0 On March 20, 2012, @03th was provided documents from Sandia regarding Possioie
Prohibited Activitieslihtarch 19, 2013, e-mait to Sandra Bruce tor an example of
the type of documentation provided AS2_hl.
. Per 3 discussion with (W) on March 28, 2013, theissues are still under review bv the

 

 

 

 

 

 

 

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 

Emma?" - . -Detaili,_-

 

6] 7] ?red Activities {A52.g 
. March 19, 2013, e?mail to Sandra Bruce regarding documentation from Sandia
regarding Possible Prohibited Activities 

 

 

(W) 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." ,l These two
statements indicate that this was not a complete record. However, aspects of this documentation

 

 

 

 

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 

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
{9.10.18 and A1021. A1023 and 

 

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

 

 

 

Conclusion:
Notes:
Results 4:
Summaries Purpose:
asaaTo support the statement in the report: Issue a Policy Flash on the intent and implementation of FAR
Procedure Step: Recommendation One 31205?33, Professional and consultant service costs, with a particular focus on the requirements for
TYPE: deliverables and details on invoices.
Assigned To: EEJEEJ Eb)
Prepared av.- Elli-[2014

 

 

 

Reviewed By: {None} Source:

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

 


n+2

. Detatl . .- . - -. . . a

through the Department of Energy Acouisition Regulations Payments and advances i

egg) (A.4.1A.4.2A.4.3A.4.4 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 they obtained the required evidence necessary to support the payments for the services

 

rendered 

 

0 At Sandie, contracting officials initially argued that the FAR did not apply bookmark 3, and
for con?rmation of discussion with contracting of?cials ,and A.3.PRG, A.9.PRG for i-
Then we were told that the process to confirm that HWC, 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 Leg). 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 

a At Los Alamos, old us that during the period of performance there was no expectation that
deliverables war a - rovided and A43, bookmark 3 J. 525,6}be also told us that the
interactions with HWC, LLC were more about relationships and trust, and therefore, they relied on
the principal's reputation EEJ lacknowledged that payments were authorized
without requesting the required deliverables 

0 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 

9 During the exit briefing with Oak Ridge, it was stated that they did not have to followe the FAR
provisions This comment was later recinded 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Review of Contracting Issues at Loa Alamos National Laboratory

 

 

summary 

 

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 312135-33, Professional and
consuitontservice costs, with a particular focus on the requirements for deliverables and details on invoices.

A533

Conclusion:
Notes:

Results 4:

 

H.1.PRG .. Summaries

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

PROPERTIES:
Location:
Frequency.-
Cotegory 4:
User Category:
Category 5
Category 5

5CD RECARD:
Rotting:
Sompie Size:

 

 

Procedure Step: Recommendation Two

 

 

(bite
(bio)
(C) sic-i2 014

 

 

[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

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

- Summary 3-.



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

Con ciusion:
No tes:

Resuits 4:

 

H.1.PRG - Summaries

 

Procedure Step: Summarv on Sandia
Type:

Assigned To: gig
Prepared By: ECJ creams
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 subsequently failed to adequately:r
respond to the Sandia Site Office's directions regarding the agreement."

Source:
Scope:
Methodoiogy:
Detoiis:

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

1' Sandia did not initaliv 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 HWC, earners)

Therefore, we can state that "The issues regarding Sandia's inabilitv to substantiate that it received value
for pavments made to HWC, LLC occurred because contracting of?cials at Sandia did not initially require
that the agreement comply with FAR requirements and subsequentlv failed to adequatelv respond to the
Sandia Site Office?s directions regarding the agreement." ?g

 

Type:
Assigned To:
Prepared By:
Ravr'ewed By:

PROPERTI E5:
Location:
Frequency:
Category 4:

Category 5
Category 5

SCORECA D:
Rating:
Sample Size:



 

Procedure Step: NNSA Request

 

 

03(6)

EIEIZU 14

 

 

User Category:

{None}

 

Conciusr?on:

Notes:

Resuits at:
Summaries Purpose:

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

Source:

Scope:

Methodoiogy:

Details:

 

Record of Work Done: [th?J (bf)
. . . .EJ 6) JETJECJ 
te?nber 2612, the Inspector General 5 Office recerved a request fro 
1J6) to look into issues associated with one or more contracts with Heather Wilson (AS213 bookmark 2 
Within His request were specific questions bookmark These questions formed the basis of the
inspection's objective, listed in the bodv ofthe report 

 

 

 

 

 

 

Conclusion:

 

 

 

 

Review of Contracting issues at Los Alamos National Laboratory

 

Summary

Detail; 

 

{0.4.1 D.5.PRG and D.4.PRG At Nevada. the individual taskings stated that the deliverables would consist
of "verbal updates? as deemed nestle-searsf by the Nevada Director (A43 bookmark 2 i, Homeland Securitl,r
and Defense Applications e48, bookmark or the National Security Technologies, LLC, President (ML
bookmark 1 J. However, the FAR does not reference nor allow for "verbal"

deliverables A.4.6).

 

?g
Conclusion:
Notes:
Results 4:
H.1.PRG - Summaries Purpose:

Procedure Step: Recom mendation Three
(bite).
To: 
Prepared By: 5f6l2014
Reviewed By: (None)

 

 

 

 

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

 

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

Source:

Scope:

Methodology:

De tolls:

 

 

 

 

Review of Contracting Issues at Los Alamos National Laboratory

Detail:

 

Show -- 

 

 

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 ailowability 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 
Mt 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 Sandia 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 A912, 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