Audit of Jefferson Science Associates Costs FY2022-2023

DOE OIG Reports

Filed March 11th, 2026

Detected March 28th, 2026

Summary

The DOE Office of Inspector General, through the Defense Contract Audit Agency, audited Jefferson Science Associates' costs for FY2022-2023. The audit questioned approximately $6.3 million in performance award fees included in the General and Administrative pool, finding them improperly classified as costs.

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What changed

The Department of Energy Office of Inspector General (DOE OIG), in conjunction with the Defense Contract Audit Agency (DCAA), has released an audit report (DOE-OIG-26-21) concerning costs incurred by Jefferson Science Associates, LLC (JSA) under contract No. DE-AC05-06OR23177 for fiscal years 2022 and 2023. The audit identified one significant finding, questioning $6.3 million in performance award fees that JSA included within its General and Administrative cost pool. While the DCAA questioned these fees, the Department ultimately determined that JSA was entitled to the earned fee, reconciling the amount to performance evaluation reports.

This audit highlights the importance of proper cost classification and adherence to contract terms for government contractors. While the questioned costs were ultimately deemed allowable, the finding suggests a need for enhanced internal controls and coordination between contractors and contracting officers to ensure accurate cost reporting. The DOE OIG recommends that JSA coordinate with the contracting officer to formally resolve the questioned costs. Failure to properly address such findings could lead to future disallowances or penalties, impacting future contract awards and payments.

What to do next

Coordinate with the contracting officer to resolve the questioned costs identified in the report.

Source document (simplified)

Audit: DOE-OIG-26-21

Jefferson Science Associates, LLC’s Costs Incurred and Claimed for Fiscal Years 2022 and 2023 Under Contract No. DE-AC05-06OR23177

Office of Inspector General

March 11, 2026

March 6, 2026

Jefferson Science Associates, LLC’s Costs Incurred and Claimed for Fiscal Years 2022 and 2023 Under Contract No. DE-AC05-06OR23177

This audit was performed by the Defense Contract Audit Agency (DCAA) on behalf of the Department of Energy’s Office of Inspector General and examined Jefferson Science Associates, LLC’s (JSA) costs incurred and claimed for fiscal years 2022 and 2023 at the Thomas Jefferson National Accelerator Facility, under management and operating contract No. DE-AC05-06OR23177.

The audit’s objective was to determine if costs charged were allowable, allocable, and reasonable in accordance with applicable laws, regulations, and contract terms.

The DCAA performed the audit in accordance with generally accepted government auditing standards.

The DCAA identified one audit finding and questioned approximately $6.3 million in performance award fees included in the General and Administrative pool. The performance fees represented a contractual incentive paid by the Department and were questioned by the DCAA because JSA included the fee as a cost in the General and Administrative pool. The DCAA reconciled the proposed fee amount to performance evaluation reports, and the Department determined that the contractor was entitled to the earned fee.

If the issue identified by the DCAA are fully addressed, it should help ensure that costs charged to the Department are allowable, allocable, and reasonable in accordance with contract terms. We recommend that the contractor coordinate with the contracting officer to resolve the questioned costs identified in this report.