DOE contractor had a stake in another contractor it was hired to oversee


A nuclear facility contractor had a financial stake in a fellow contractor whose work it was hired to oversee, the Energy Department office of inspector general says.

As part of the department's decontamination-and-decommissioning project at the Portsmouth Gaseous Diffusion Plant near Piketon, Ohio, it contracted with a company called RSI to oversee the work that another contractor, VETCO, performed at the site. Auditors say in a Nov. 5 report (.pdf) that they were able to confirm a conflict of interest existed between RSI and VETCO--because RSI had a financial stake in VETCO.

The companies signed an agreement to divest RSI's financial interest in VETCO, but RSI had yet to abide by that agreement 8 months later, auditors say. The agreement didn't require immediate divestiture, but in those 8 months, VETCO hadn't paid RSI any of the installments it was supposed to pay in order to end the relationship.

The 1,200-acre Portsmouth plant produced enriched uranium starting in 1954 to support the U.S. nuclear weapons program, and later enriched uranium for commercial reactors.

At the Oak Ridge Reservation in Oak Ridge, Tennessee, RSI was also hired to review and approve VETCO's work. On top of that, another potential conflict of interest existed between RSI and UCOR, the company that RSI was a subcontractor for at Oak Ridge.

In that case, UCOR oversaw RSI. The problem was that one senior RSI official also held a senior position at UCOR and, auditors say, was in a position to review and approve RSI's work.

Auditors also note that this senior official is a relative of RSI's owner.

UCOR was responsible for the cleanup of Oak Ridge's East Tennessee Technology Park, formerly the site of enriched uranium production for use in atomic weapons during World War II.

DOE is projected to spend $4.3 billion on nuclear decontamination-and-decommissioning projects at Oak Ridge and Portsmouth over 5 years, auditors say.

For more:
- download the report, INS-O-13-01 (.pdf)

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