E&C Democrats Seek Answers from DOE Inspector General on Unusual Contract Award

Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), Energy, Climate, and Grid Security Subcommittee Ranking Member Diana DeGette (D-CO), and Oversight and Investigations Subcommittee Ranking Member Kathy Castor (D-FL) sent a letter to the Department of Energy’s (DOE) Office of Inspector General (OIG) today seeking answers for the recent award of a sole source contract without apparent cause or justification.

Typically, when federal agencies seek outside expertise, organizations bid to win the contract, ensuring that taxpayer dollars are spent efficiently. In this case, however, the DOE OIG awarded the contract directly to a single organization without making clear why there was a need to seek outside legal counsel at all – much less why it was necessary to bypass the traditional competition process and award the contract directly to a sole source.

“On June 11, 2024, your office issued a notice of intent to award a sole source contract to provide legal support to OIG’s review of DOE’s Loan Programs Office (LPO),” the three Committee leaders wrote to Inspector General Teri L. Donaldson. “The notice of intent, however, does not make clear why OIG needed to pursue legal services outside its own capabilities or why it was necessary to award the contract to a specific team without any competition.”

The lawmakers continued by explaining that LPO helps spur the development and deployment of new technologies that can lower energy bills and improve our energy security. By providing loans and loan guarantees, LPO is helping American companies to rebuild America’s manufacturing base, develop and deploy cutting-edge technologies, and reduce dangerous greenhouse gas pollution. Over its lifetime, projects supported by LPO have created more than 47,000 permanent jobs and generated $5.3 billion in interest payments for taxpayers.

“While oversight can help deter bad actors, no OIG reports have identified any waste, fraud, or abuse at LPO. And yet your office has determined it is imperative to spend taxpayer dollars on outside legal assistance to conduct further reviews of LPO without soliciting competitive bids or providing any justification as to why outside legal assistance is needed so urgently,” Pallone, DeGette, and Castor continued.

“The description of the work to be conducted under the award does not, on its face, suggest that only one specific team of legal advisers is uniquely qualified to provide these services,” they concluded. “To the contrary, there are many law firms and consulting groups that would be capable of providing the advice and due diligence described in the notice. Given the use of taxpayer funds to supplement your office’s work, additional justification for providing this sole-source award is necessary under the Federal Acquisition Regulation (FAR) and DOE’s guidance.”

In an effort to better understand the OIG’s decision to award this contract without soliciting competitive bids, the three Committee leaders requested documents and answers to a series of questions, including:

• Why the OIG decided to hire outside counsel rather than rely on its own staff and internal expertise;
• Copies of the justification the OIG was required to submit to explain the need to bypass the usual competition process;
• How the OIG determined that the Robert Rabalais Team – the awardee of this sole contract – is the only possible source for the services needed;
• What kind of work the contractor is being asked to perform; and
• Details of the contract and its terms, including the minimum and maximum allowable costs.

A copy of the letter is available HERE.

###