SSC Contract Management is the Focus of Dingell Hearing
Six days after the House voted to kill it, the Superconducting Super Collider experienced another bad day on Capitol Hill. In a June 30 hearing, the project’s management was examined by House energy committee chairman, John Dingell (D-Michigan), who is renown for ferreting out fraud and abuse in science projects. Dingell (who voted against the SSC last week) announced that “the SSC ranks among the worst projects we have seen in terms of contract mismanagement. . . rivaling Stanford University in their lavish spending of taxpayer money on luxuries and entertainment.” While the marathon eight-hour hearing produced no “smoking gun” pointing to outright fraud, it raised examples of poor accounting practices, sloppy documentation, and some questionable expenditures by subcontractors. It is unknown how the publicity generated by the hearing might affect the Senate vote on SSC appropriations, upcoming in September.
Concerns about management of the SSC project by Universities Research Associates (URA) have been raised in a series of reviews and audits by the General Accounting Office (GAO), the Department of Energy’s Inspector General, and the Defense Contract Audit Agency (DCAA). Investigators have also reported overclassification of documents and employees’ resistance to their inquiries.
GAO has frequently criticized URA’s lack of an adequate cost and schedule control system to reflect changes in the cost or scope of the project. URA has recently implemented such a system, over a year behind the target date, and hopes to gain DOE approval within the next few months. Another point of controversy was URA’s method of keeping track of anticipated areas of cost growth. GAO found at least $53 million in expected increases that URA hoped to offset with projected future savings in other areas. GAO challenged that this “manager’s reserve,” as URA called the account, would result in cost growth or a drain on contingency funds; the laboratory management stressed that the increases were only potential.
In addition, the DOE Inspector General’s Office found a variety of questionable subcontractor expenditures, including office furniture, plants, and entertainment. Although the expenditures were not disallowed by contract, and many “were relatively small in amount,” the Inspector General concluded that “management did not exercise prudent business judgment” in making them. DCAA reported that many subcontractor fees could not be audited because of URA’s poor documentation of the negotiations process.
Energy Secretary Hazel O’Leary testified forcefully that she found URA’s management, and its attitude of resistance to the investigations, “unacceptable.” She has initiated a 30-day review, at the end of which she intends to take one of three options: either terminate the URA contract, renegotiate it to give DOE greater authority and oversight, or divide the contract into two, a conventional construction contract and a contract for design and scientific work.
