Audit finds excessive bonuses at INL
DOE inspection cites lab’s contractor; other officials defend subjective nature of awarding fees
Idaho Statesman
The Associated Press
September 20, 2006

IDAHO FALLS — The contractor running the Idaho National Laboratory has received more than $2 million in overly liberal bonus money, an audit has found.

The audit by the U.S. Department of Energy’s Office of Inspector General found that Battelle Energy Alliance received the money in reward fees since February 2005 when it took over operations at INL, the 890-square-mile federal nuclear research area in eastern Idaho.

The audit, released in August, also found that goals set by the department were months late, and on some occasions came after the work was done.

Officials at the department acknowledged that due dates had been missed, but said deciding whether reward fees were reasonable was subjective.

“It may be impossible to ever consistently meet the expectations of the (inspector general) regarding fee allocations,” Dennis Spurgeon, the department’s assistant secretary for nuclear energy, said in a written response.

The audit report cited seven cases of bonus fees that were too large. Four of the cases gave Battelle a “sales commission” for getting new projects.

The contractor, in one case, could earn $499,000 for getting $100,000 worth of work.

In another example, the audit found that the cost of completing some steps to establish the Center for Advanced Energy Studies would be $220,000 for labor. But Battelle could earn $600,000 for completing the steps.

John Lindsay, a Battelle spokesman, said the report on the Center for Advanced Energy Studies work was unfair because the collaborative work with the state, universities and others was not considered.

Battelle, in a written response, also said that the fees were based on the value of the work to the government, and that the fees were a good value to the department and taxpayers.

The audit blamed the department for releasing performance plans months after the fiscal year started.

At least one performance deadline had passed by the time the department had told Battelle of its priorities.