documents in the contract file but was unable to determine with certainty if the contractor submitted and DOE had paid for claims for compensation or damages resulting from the stop work order. A similar request was made of a SAN financial official, with the same result. Recommendation We recommend that the Manager of the San Francisco Operations Office include in the stop work order the specific budget and reporting codes that will not be charged by the contractor when the order is issued for failure to follow safety and health regulations. The SAN Manager concurred with the intent of the recommendation. However, he did not believe the identification in the stop work order of specific budget and reporting (B&R) codes would achieve the desired result. He believed the intent of the IG recommendation could best be met as follows: SAN MD 4210.1E, "Acquisition and Assistance Authorities, Responsibilities, and Delegation," dated April 3, 1990, covers stop work orders for M&O contractors as part of the Safety and Health Clause discussions. During the next revision of the Directive, SAN will insert language that provides guidelines as to what should be in a stop work order, including a statement that only essential DOE Security, Environment, Health and Safety efforts should continue and should be costed and billed under the contract. We agree with this approach. Cost and Schedule Clause The omission of the Cost and Schedule Control Systems clause from the LLNL contract relieved LLNL from contractual responsibility to follow certain requirements of the DOE project management order. The U-AVLIS program, which was estimated to cost $1.4 billion through the research phase, was designated a major systems acquisition. Under DEAR Clause 970.5204-50, Cost and Schedule Control Systems, any contract with a total estimated cost over $50 million required full implementation of the DOE cost and schedule control systems criteria. However, LLNL was not in compliance with DOE Order 4700.1, Project Management System, regarding management of the project. Because the LLNL contract did not contain the Cost and Schedule Control Systems clause, LLNL was not contractually obligated to follow DOE Order 4700.1. Recommendation We recommend that the Manager of the San Francisco Operations Office include in all future contracts the standard DEAR Cost and Schedule Control Systems clause. The SAN Manager concurred and will incorporate the clause in all future contracts where applicable. The Assistant Secretary for Nuclear Energy agreed with the recommendation. LLNL Program Oversight A project management agreement with LLNL for the U-AVLIS program was not approved. DOE Order 4700.1, Project Management System, required, among other things, the implementation of a project management agreement with LLNL for the U-AVLIS program. However, an agreement was not finalized at the time of our inspection. There was no contractual requirement for LLNL to implement the Department's project management system. Recommendation We recommend that the Manager of the San Francisco Operations Office implement the Department's project management system for the U-AVLIS program. The SAN Manager concurred. The program has been operating under an informal, draft project management system agreement. The draft is being formalized and, upon approval by all parties, will be issued and implemented. The Assistant Secretary for Nuclear Energy agreed with the recommendation. INTRODUCTION F. ASSISTANT MANAGER FOR DEFENSE PROGRAMS The Office of the Assistant Manager for Defense Programs (AMDP) at the San Francisco Operations Office (SAN) has primary responsibility for defense programs activities managed by SAN, including program and management oversight of Lawrence Livermore National Laboratory (LLNL). Programs at LLNL under the purview of AMDP received funding of about $910.8 million in FY 1989. MISSION AND FUNCTIONS Mission AMDP was responsible for overseeing the management, implementation, and administration of all defense-related programs assigned to SAN. Functions The primary functions of AMDP were to: --Provide appropriate management and internal oversight --Assure that all applicable DOE orders and directives --Keep the SAN Manager and the Assistant Secretary for --Interface with SAN contractors on all matters relating to defense programs. --Maintain a DOE management focus at LLNL to ensure that major management issues were identified and appropriately resolved. --Assure that priorities stressed security, environment, and safety and were appropriately weighted against program accomplishments. These functions were conducted by the following AMDP subordinate organizations. Office of Special Programs The Office of Special Programs provides a SAN management intelligence and counterintelligence programs, arms control Weapons Development Division The Weapons Development Division provides field management and an onsite presence at LLNL for DOE defense programs assigned to SAN for implementation and administration including weapons research, development and testing; work for other Federal agencies; and nuclear explosive safety. The division manages the execution of the Defense Programs Management Agreement and also had institutional management responsibility for LLNL. Laboratory Operations Division The Laboratory Operations Division has line management oversight responsibility for environmental programs and facility operational safety at LLNL, and hazardous materials transportation at all SAN contractor facilities. The division provides AMDP with an onsite presence at LLNL for programs related to environmental restoration, environmental compliance, waste management, operational safety, nuclear materials production (Special Isotope Separation/Engineering Development System), and transportation of hazardous materials. Safeguards and Security Division This The Safeguards and Security Division has responsibility for inspections and surveys, preparation of the Master Safeguards and Security Agreement, special nuclear material control and accountability, and physical security. AUTHORITIES Under the headquarters approved SAN organization plan of January 23, 1989, AMDP was authorized to implement, through subordinate divisions, the functions stipulated in the plan in a manner consistent with Departmental policy. AMDP authorities, policies, and procedures for program and management oversight of SAN and contractors' activities are contained in various documents such as DOE orders, SAN Management Directives, the LLNL M&O contract with the University of California, memorandums of understanding, management/project management agreements, and a federal facility agreement. include, for example: They --A Defense Programs Management Agreement between the ASDP --The FY 1990 SDI Program Management Agreements with SAN governing approval oversight of individual SDI programs at LLNL. --The November 2, 1988, Federal Facility Agreement Under CERCLA Section 120, between DOE, the U.S. Environmental Protection Agency, the California Department of Health Services, and the California Regional Water Quality Control Board. A primary purpose of the Agreement was to establish a framework to comply with the statutory and regulatory performance of remedial investigations to fully assess the nature and extent of any threat to the public health, welfare, or environment that is caused by any release of hazardous substances, pollutants or contaminants at LLNL and surrounding areas. |