DOE-OIG-25-10

December 30, 2024

Savannah River Nuclear Solutions, LLC’s Use of Corporate Reachback at the Savannah River Site

Savannah River Nuclear Solutions, LLC (SRNS) operates the Savannah River Site under a management and operating (M&O) contract which contains provisions and requirements governing the purchase of services from contractor-affiliated sources such as parent companies (i.e., corporate reachback).

We conducted this audit to determine whether: (1) SRNS’ use of corporate reachback at the Savannah River Site was in compliance with its M&O contract provisions and requirements governing the use of corporate reachback; and (2) the overall costs incurred for these activities were reasonable, allocable, and allowable.

We found that SRNS did not comply with its M&O contract requirements to use competition in purchasing services from contractor-affiliated sources; therefore, we are questioning the costs incurred for numerous corporate reachback activities as unallowable.

The issues we identified occurred, in part, because of the Department of Energy’s lack of oversight in ensuring SRNS followed the M&O contract requirements to: (1) sufficiently document the special expertise for each seconded corporate reachback acquisition when not using competition; and (2) sufficiently document the reasonableness of the costs incurred.

This report contains five recommendations that, if fully implemented, should help ensure SRNS follows its M&O contract requirements to use competition when purchasing services from a contractor-affiliated source.  Although management concurred with our recommendations, we consider the action taken to address our recommendations unresponsive to the underlying concerns that prompted the recommendations.