Audit Report: DOE-OIG-22-42

August 24, 2022

Allegation Regarding Cost Savings Claimed at the Kansas City National Security Campus

The Kansas City National Security Campus is a multi-mission facility serving the Department of Energy’s National Nuclear Security Administration.  The primary mission of The Kansas City National Security Campus is to support the warfighter and keep our nation’s nuclear deterrent safe, secure, and reliable.  Since fiscal year 2015, Honeywell Federal Manufacturing & Technologies, LLC (Honeywell) has managed and operated the Kansas City National Security Campus under a cost-plus-award-fee contract.  Honeywell’s contract requires Honeywell to integrate the concepts of continuous improvement into all aspects of plant operations and to recommend and implement innovative business management improvements that enhance efficiencies.

Cost savings initiatives contribute to the National Nuclear Security Administration’s efficiency and cost effectiveness goals.  However, in October 2021, we received an allegation that Honeywell was falsely claiming cost savings.  Specifically, the complainant alleged that the calculation used to identify savings was fundamentally flawed.  We conducted this audit to determine the validity of an allegation that Honeywell was falsely claiming cost savings and whether it could support cost savings claimed.

We did not substantiate the allegation that Honeywell was falsely claiming cost savings.  Specifically, we concluded that the method used to identify savings was reasonable, and executing a baseline change for each savings resulting from time saved by employees, as suggested in the allegation, may be unreasonable and cost prohibitive.  Additionally, we concluded that Honeywell generally had sufficient documentation to support its cost savings claimed.

We did not identify any issues that need to be addressed; therefore, we did not make any recommendations or suggested actions.