Fluor Federal Petroleum Costs Audit Under Contract DE-FE0011020

DOE OIG Reports

Filed March 24th, 2026

Detected March 31st, 2026

Summary

The DOE Office of Inspector General audited Fluor Federal Petroleum Operations LLC's costs under contract DE-FE0011020 for fiscal years 2017-2020. The audit identified approximately $122,000 in questioned operating expenses related to potential improperly allocated home office expenses. FFPO nonconcurred with the findings and maintains the costs comply with FAR requirements and Cost Accounting Standards Board standards.

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What changed

CohnReznick LLP performed the audit on behalf of DOE OIG to determine if FFPO's costs were allowable, allocable, and reasonable under FAR cost principles. The audit questioned $122,000 in FY2020 claimed operating expenses representing subcontract costs and potential monthly home office expense allocations from Fluor Government Group Headquarters. The findings cite FAR 31.201-2 (Determining allowability) and FAR 31.201-6 (Accounting for unallowable costs).

FFPO must work with the contracting officer to resolve the $122,000 in questioned costs. The contractor should amend its policies and procedures to ensure compliance with contract terms, FAR cost principles, and Cost Accounting Standards Board standards. FFPO is also directed to engage with the Strategic Petroleum Reserve Project Office to address the identified concerns and resolve the non-concurrence on the questioned costs.

What to do next

Coordinate with the contracting officer to resolve approximately $122,000 in questioned FY2020 operating expenses
Amend policies and procedures to ensure compliance with FAR 31.201-2 and FAR 31.201-6 cost principles and Cost Accounting Standards Board standards
Engage with the Strategic Petroleum Reserve Project Office to address concerns raised in the audit findings

Source document (simplified)

Audit: DOE-OIG-26-26

Fluor Federal Petroleum Operations, LLC’s Costs Incurred and Claimed for Fiscal Years 2017 Through 2020 Under Contract No. DE-FE0011020

Office of Inspector General

March 30, 2026

March 24, 2026

Fluor Federal Petroleum Operations, LLC’s Costs Incurred and Claimed for Fiscal Years 2017 Through 2020 Under Contract No. DE-FE0011020

This audit was performed by CohnReznick LLP (CohnReznick) on behalf of the Department of Energy’s Office of Inspector General and examined Fluor Federal Petroleum Operations, LLC’s (FFPO) costs incurred and claimed for fiscal years 2017 through 2020 under management and operating contract No. DE-FE0011020.

The audit’s objective was to determine if costs charged to Department contract No. DE-FE0011020 for fiscal years 2017 through 2020 were allowable, allocable, and reasonable in accordance with applicable laws, regulations, and contract terms.

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

CohnReznick questioned approximately $122,000 of fiscal year 2020-claimed operating expenses per the Federal Acquisition Regulation (FAR) 31.201-2, “Determining allowability,” and FAR 31.201-6, “Accounting for unallowable costs.” The questioned amounts were identified as subcontract costs and represented potential monthly home office expense allocations from Fluor Government Group Headquarters.

CohnReznick recommended that FFPO amend its policies and procedures to ensure compliance with contract terms, the FAR cost principles, and standards promulgated by the Cost Accounting Standards Board. We also recommend that the contractor work with the contracting officer to resolve the questioned costs.

FFPO nonconcurred that the questioned costs are home office allocations and considers these costs to be in compliance with contract terms, FAR cost principles, and standards promulgated by the Cost Accounting Standards Board. FFPO should work with the Strategic Petroleum Reserve Project Office to address the concerns and questioned costs.