Audit Report: DOE-OIG-21-28

June 11, 2021

Subcontractor-Performed Commercial Grade Dedication at Los Alamos National Laboratory

The Department of Energy is responsible for the construction and operation of nuclear facilities across its complex.  To ensure these facilities operate safely, the Department and the contractor managing and operating Los Alamos National Laboratory (LANL) are required by 10 Code of Federal Regulations 830 and by Department Order 414.1D, Quality Assurance, to develop and implement a quality assurance program.  The LANL quality assurance program requires nuclear facilities operate in accordance with the NQA-1 Standard.  LANL maintains an Institutional Evaluated Supplier List (IESL) that specifies which suppliers have been evaluated and have met the requirements of the NQA-1 Standard.  When LANL needs to procure a structure, system, or component that serves a safety function for a high-hazard nuclear facility, LANL policies, P840-1, Quality Assurance for Procurements, and AP-341-703, Commercial Grade Dedication, require that LANL either procure it from a qualified supplier on the IESL or ensure that it receives Commercial Grade Dedication.

Commercial Grade Dedication is the process by which LANL obtains reasonable assurance that an item procured from a commercial vendor meets the critical characteristics for the item to serve its safety function.  The process requires a responsible engineer to identify which characteristics are critical to an item’s intended safety function and to develop an acceptance plan to evaluate whether an item can reasonably be expected to perform as intended.  The requirements in this process allow LANL to attest to the quality of items from companies that are not on the IESL.  

We initiated this audit to determine whether LANL had ensured that subcontractor-performed Commercial Grade Dedication fully identified and evaluated critical characteristics in accordance with the NQA-1 Standard.

We could not determine whether LANL ensured that subcontractor-performed Commercial Grade Dedication fully identified and evaluated critical characteristics in accordance with the NQA-1 Standard.  We could not determine this because LANL could not provide us with a list of Commercial Grade Dedication procurements.

This occurred because LANL procedures were insufficient to clearly identify the contract files related to Commercial Grade Dedication and how the Commercial Grade Dedication was completed.  Although there is no specific requirement for them to maintain the information this way, this lack of documentation on Commercial Grade Dedication procurements contrasts with established principles of transparency and accountability allowing for appropriate internal oversight as well as oversight from external entities such as the Office of Inspector General and Government Accountability Office.  Other sites across the Department maintain information that allows for transparency and accountability; therefore, we made a recommendation to improve data availability for LANL Commercial Grade Dedication.