Audit: DOE-OIG-26-15

March 2, 2026

UChicago Argonne, LLC's Costs Incurred and Claimed for Fiscal Years 2021 and 2022 Under Contract No. DE-AC02-06CH11357

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 UChicago Argonne, LLC's costs incurred and claimed for fiscal years 2021 and 2022 at the Argonne National Laboratory, under management and operating contract No. DE-AC02-06CH11357.

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 four audit findings and questioned over $13 million in indirect and direct costs, including $11,487,044 in performance fees. The performance fees represented a contractual incentive paid by the Department and were questioned by the DCAA because UChicago Argonne, LLC included the fee as a cost in the General and Administrative pool. The DCAA reconciled the performance fees to the general ledger, and the Department determined that the contractor was entitled to the earned fee. The DCAA also questioned: (1) $1,176,949 in Board of Governors expenses that were greater than the final approved expenses; (2) $47,183 in executive salaries that were more than the statutory compensation ceiling; and (3) $511,724 of direct laboratory purchase order/subcontract costs with universities because the costs were not incurred specifically for the contract.

If the issues 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.

UChicago Argonne, LLC did not concur with the questioned costs and stated that like all management and operating contractors, it follows longstanding practices and Departmental guidance on performance fees and handles Board of Governors expenses per its contract.

• DOE-OIG-26-15.pdf (433.16 KB)