National Technology & Engineering Solutions of Sandia, LLC’s Statement of Costs Incurred and Claimed for Fiscal Years 2019 and 2020 Under Contract No. DE-NA0003525

August 6, 2026

National Technology & Engineering Solutions of Sandia, LLC's Statement of Costs Incurred and Claimed for Fiscal Years 2019 and 2020 Under Contract No. DE-NA0003525

The Office of Inspector General initiated this audit to evaluate $7,369,374,522 of costs claimed by National Technology & Engineering Solutions of Sandia, LLC (NTESS) to manage and operate Sandia National Laboratories for fiscal years 2019 and 2020.

NTESS served as the management and operating contractor for the Department of Energy's National Nuclear Security Administration at Sandia National Laboratories

Specifically, our audit objective was to determine if costs charged to Department contract No. DE-NA0003525 for fiscal years 2019 and 2020 were allowable, allocable, and reasonable in accordance with contract terms, applicable laws, and regulations.

Our audit identified one instance of material noncompliance and two control deficiencies. We found no material unallowable costs in the NTESS Statements of Costs Incurred and Claimed for fiscal years 2019 and 2020. However, NTESS dispositioned its Year-End Spread of Variation in a manner that did not comply with Cost Accounting Standard 418, Allocation of Direct and Indirect Costs. According to NNSA, this noncompliance was resolved and closed in 2022 via approved corrective actions; the Office of Inspector General will verify the effectiveness of these corrective actions during our next scheduled audit.

Additionally, due to control deficiencies in subcontract administration, NTESS improperly classified certain subcontracts as firm-fixed-price. We also found that NTESS claimed an immaterial amount of unallowable travel costs because of a control deficiency in travel voucher administration.

To address the issues identified in this report, we have made three recommendations that, if fully implemented, should help ensure that costs charged to the Department are allowable, allocable, and reasonable in accordance with contract terms.

Management concurred with two recommendations and nonconcurred with the remaining recommendation regarding subcontract administration. Management's formal comments are included in the report.

• DOE-OIG-26-45.pdf (665.96 KB)