Observation No. 7 ANL is not receiving approval from DOE Chicago Operations Office prior to adjusting records for physical inventory results. ANL's Response: ANL agrees with the finding. ANL will obtain the approval of DOE-CH prior to the adjustment of property records. Please note our comments related to ANL's response to Observation No. 1 related to the lengthening of the approval process. Observation No. 8 Management support is required for the recently activated walk-through program. Lack of management attention may result in possible excess or idle equipment not being identified as a potential source of supply for new procurement. ANL's Response: ANL agrees with the finding. ANL has a walk-through program but agrees that it does not fully meet the requirements of DOE-PMR 109-25.109-1. ANL is preparing a walk-through schedule for the remainder of calendar 1994 which will bring ANL into compliance with the DOE-PMR 10925.109-1 by January 1995. The root cause of this deficiency was the lack of management support of this program. Observation No. 9 Deficiencies exist with the ANL loaned property program that showed inadequacies in the Justification and extension of loans. ANL's Response: ANL agrees with the finding. ANL will update its procedures to be in compliance with DOE-PMR 109-1.5104. ANL realizes that a strong management commitment to the loaned property function is essential. The current ANL ban procedure allows for approval by a non-management person. In order to increase management oversight over this area, ANL will add an additional level of approval for loans and extensions. ANL wik update Supply Procedure 3.07, which covers the property management loan function, to include the Property Manager signature before a loan justification or extension of a loan is approved. The updated procedure will be submitted to DOECH for approval, prior to implementation, by September 1, 1994. ANL feels that a lack of management oversight is the root cause of this deficiency. Observation No. 10 The review team found no working EHFFP program at ANL. This precludes an appropriate Justification, reporting, control, and utilization of such equipment. ANL's Response: ANL agrees with the finding. ANL Property Management has re-instated this program and will stress the importance of EHFFP to the DPR's and Division Directors when doing a walk-through of their storage areas. The policy will be revised and provided to DOE-CH for approval prior to Implementation by October 1, 1994. The root cause of this deficiency is the lack of management support and commitment to this program. Observation No. 11 Proper housekeeping and storage practices are not being abserved. ANL's Response: ANL agrees in principle with the finding. Division Property Representatives and Division Directors will be instructed in proper housekeeping and storage practices so that file cabinets, boxes of records etc., are not mixed with stored property. Photographs will be utilized during walkthroughs to help enforce housekeeping issues. Observation No. 12 ANL does not have an effective equipment purchase planning program which documents maximum effective and economical utilization of property available at the Laboratory and from other DOE/Federal sources. ANL's Response: ANL agrees that our program is not effective enough to meet the DOE-PMR requirements. The new ANL Property Management Database allows ANL Divisional Property Representatives (DPR's) to view all excess items before acquisition of new items. The ANL DPR is responsible for reviewing all requests for new property and determining if excess property can be utilized. ANL Property Management also has a "browse" time Monday through Friday for DPR's throughout the Laboratory to review other DOE/Federal sources such as REAPS. Our procedure will be reviewed and updated and a copy supplied to DOE-CH for approval prior to implementation by October 1. 1994. Observation No. 13 Problems exist in ANL's management of motor vehicles in the areas of utilization and the use of a standard Vehicle Preventative Maintenance Service Order form for all types of motor equipment. ANL's Response: ANL agrees with the finding. A hand written preventive maintenance work order form has been The form includes developed for each specific type of vehicle and heavy equipment. manufacturers PM requirements for each type of vehicle and equipment. The above manufacturers PM requirement data is presently being transferred to a new computerized maintenance work order system program (Probe H. Updated procedures will be provided to DOECH by August 1, 1994, for approval prior to implementation. Standard utilization goals have been established for 1993 and approved by DOE Chicago Operations Office. The FY93 and mid year FY94 motor vehicle utilization review has been conducted. Review results. have been documented and sent to DOE Chicago Operations Office. Observation No. 14 ANL's motor equipment program lacks adequately documented utilization reviews. ANL's Response: ANL agrees with the finding. A review of this area found that utilization data is not formally documented and that procedures need to be formalized to reflect utilization practices. ANL also found that the analysis of utilization needs to be formalized. Procedures will be updated to reflect formal utilization reviews and analysis and will be submitted to DOE-CH for approval by September 1, 1994. Summary We want to thank the CPPSR reviewers for their professional conduct and helpfulness. ANL is committed to having a best-in-class property management system. We feel that the primary root causes of the deficiencies identified by the CPPSR team stem from a lack of management oversight of the property management function. Changes have been made in order to increase the magnitude of management oversight. Other changes are being considered. In some cases we have been lax in compliance with current DOE-PMR regulations. ANL has recently upgraded its property management database. This database is working effectively as evidenced by the sample of 178 items which were all located and identified. Nonetheless, ANL is committed to correcting the balance of deficiencies identified in the CPPSR. Mrs. THURMAN. OK. Last set of questions. As we have discussed, DOE contractors can be held responsible for lost, damaged, or stolen government property, both through DOE regulations and through the property clauses of their contracts. But it also appears that contractors are routinely exempted from this responsibility by DOE through deviations in their contracts. The most obvious case of exempting the contractor from responsibility was the Sandia National Laboratory contract held by AT&T, which was in effect from 1949 until 1993, which explicitly exempted AT&T from any liability for damage, loss, or theft of property. This particular contract is no longer in effect, but other contract deviations continue to exist. Of the 50 existing M&O contracts at the Department, how many have deviations from the standard property clauses? Mr. MICHELSEN. What do you refer to as a standard property clause? Mrs. THURMAN. Exhibit 29. Mr. MICHELSEN. Exhibit 29 is drawn from the Department of Energy regulations, and it is a clause that is the base clause from which waivers or deviations can be granted. That clause has been used in one form or another historically for years. For instance, the example that you gave about Sandia, Sandia was a contract awarded in the late 1940's. That contractor was performing at little or no fee. And the reason they were exempted from liability associated with lost property was because of the fact they were earning no fee on the contract. With regard to how this clause has been applied at our 52 other contractor sites, there have been some minor deviations granted with regard to the application for specific purposes based on the facilities that were being-that were involved. Certain facilities require have certain unusual risks in the Department of Energy and required certain-that recognition of that risk in the clause. Mrs. THURMAN. How many deviations? Do you have any idea? Mr. MICHELSEN. Not specifically. I could get the exact number. But there are many deviations. Mrs. THURMAN. And you will provide that for the record? Mr. MICHELSEN. Yes, we will. [The information referred to follows:] The attached list identifies contracts that have deviations to the Department of Energy Acquisition Regulations standard property clause. M&O CONTRACTS WITH DEVIATIONS TO DEAR PROPERTY CLAUSE University of Chicago - Argonne National Laboratory Contract No. W-31-109-ENG-38 Universities Research Association, Inc. - Fermi National Accelerator Contract No. DE-AC02-89ER40486 GOLDEN FIELD OFFICE Midwest Research Institute - National Renewable Energy Laboratory - HEADQUARTERS OFFICE OF HEADQUARTERS PROCUREMENT OPERATIONS Fluor Daniel Services, Inc. Naval Petroleum and Oil Shale Reserves in Contract No. DE-AC01-92FE62316 TRW Environmental Safety Systems, Inc. National Civilian Radioactive Contract No. DE-AC01-91RW00134 Stanford University - Stanford Linear Accelerator Center |