Energy staffing hasn’t kept pace with acquisition workload, IG says

A recent increase in hiring contract specialists at the Energy Department has done little to offset a growing demand for their skills and meet the unprecedented requirements of the 2009 American Recovery and Reinvestment Act, according to a special report by the department's inspector general.

Energy is responsible for about $40 billion in Recovery Act funds. In February, Energy Secretary Steven Chu announced plans to expedite stimulus spending at the department, citing a sense of urgency created by rising unemployment.

But the latest report in a series of recent audits by Inspector General Gregory Friedman casts doubt on the department's ability to adequately manage those funds along with an already overwhelming acquisition workload.

Previous IG audits found that between 1998 and 2006, the dollar value, impact and complexity of Energy's procurement efforts increased nearly 50 percent while the overall number of contract specialists decreased slightly during the same period.

In the most recent report, Friedman found that since September 2007, Energy had boosted the number of contract specialists at the department by 20 percent, to 522, mostly at the National Nuclear Security Administration.

While those gains represent important progress in expanding the department's ability to oversee contracts adequately, they will do little to address the looming requirements related to all the contracts and loan guarantees expected to be let under the Recovery Act. That's because NNSA, which is responsible for managing nuclear weapons, nonproliferation and the naval reactor programs, isn't likely to see any program expansion under the economic stimulus plan.

"From our perspective, the overall increase in personnel was an incremental improvement from 2006," Friedman wrote. "As was the case at the time of our original review, procurement obligations within the department have continued to rise steadily in recent years, increasing demands on the procurement workforce."

"Recent progress in adding contact specialists notwithstanding, from 1998 to 2008, department procurement obligations increased approximately 61 percent, while the number of contract specialists increased only 20 percent," the report said.

What's more, annual attrition rates of contract specialists exceed 9 percent when retirement and other factors are considered, auditors found. In 2008, nearly 20 percent of the department's contract specialists were eligible to retire. Should they all decide to exercise their retirement options, the already high attrition rate would skyrocket in the near future.

Energy has taken a number of steps to recruit and retain contract specialists, including exercising special authority to rehire former employees who can return to federal service without losing pension benefits. Nonetheless, procurement officials told auditors on the IG's staff that recruiting sufficient personnel remains a significant challenge.

Concerns about the size and adequacy of the acquisition workforce aren't limited to Energy. On March 4, President Obama issued a memorandum to all federal agencies outlining a number of steps they should be taking to address shortcomings in government contracting operations, including the size and capability of the workforce.

"The federal government must have sufficient capacity to manage and oversee the contracting process from start to finish so as to ensure that taxpayer funds are spent wisely and are not subject to excessive risk," Obama said in the memo.

The president directed the Office of Management and Budget to develop governmentwide guidance to ensure appropriate management and oversight of acquisitions by Sept. 30.