The contractor building the mixed oxide fuel plant at Savannah River Site might have overbilled the government as much as $3.7 million for temporary subcontractor living expenses, according to a new report.
The payments to Shaw AREVA MOX Services, made from 2007 to 2012, were identified in an audit released Monday by the U.S. Energy Department’s Office of Inspector General.
The audit disclosed that MOX Services had not effectively managed its temporary living expense program and could have overbilled the National Nuclear Security Administration.
“Specifically, we concluded that, since January 2007, MOX Services was reimbursed about $3.7 million for inappropriate temporary living expenses for staff augmentation employment,” auditors said, calling those expenses “excessive and inconsistent with MOX Services’ policies.”
The MOX project, designed to dispose of surplus plutonium by blending it into commercial reactor fuel, has suffered from a shortage of qualified personnel, prompting a greater need for “temporary” subcontract employees, the report said.
However, auditors found many instances of temporary subcontractors who exceeded the two-year limit for temporary living expenses, with some workers exceeding that limit by as much as 2.5 additional years. “In fact, we determined that collectively these subcontractors could have been paid more than $2.31 million for temporary living expenses after passing the two-year limit applied to corporate employees.”
An additional $1.4 million was paid for subcontractor employees who had not met established requirements for receiving temporary living expenses.
“As a result, NNSA unnecessarily paid as much as $3.7 million to MOX Services for staff augmentation subcontractor temporary living expenses that could have been devoted to other critical mission areas or returned to the taxpayers,” auditors wrote.
In addition to more scrutiny to make sure MOX Services complies with reimbursement policies, the auditors recommended that the government re-examine the expenses questioned in the report to determine their allowability, and to “identify and recover any additional unallowable costs paid to staff augmentation subcontractor employees.”
Company officials are working with the Energy Department to resolve the issues raised in the audit.
“MOX Services disagrees with the conclusion,” a Shaw AREVA spokesman said in an email. “We are reviewing the report and are working with NNSA to determine the best path forward.”