Audit Report: OAS-M-06-04

February 8, 2006

Management Controls over BWXT’s Teaming Partner Arrangement at Pantex

BWXT Pantex, L.L.C. (BWXT) did not always act to minimize costs to the Department of Energy (Department) when administering the Bechtel North Texas, Inc. (Bechtel) subcontract. Specifically, BWXT included Bechtel employees in its Government-funded post-retirement health benefits plan without Department approval. In addition, BWXT paid indirect charges from Bechtel's parent company, Bechtel National Incorporated (Bechtel National) in excess of contractual amounts.