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GAO-04-148R 1 (2003-11-26)

handle is hein.gao/gaobaamjp0001 and id is 1 raw text is: I Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 November 26, 2003 The Honorable Edward J. Markey House of Representatives Subject: Department of Energy: Reimbursement of Contractor Litigation Costs Dear Mr. Markey: The Department of Energy (DOE) contracts with not-for-profit universities and private companies to operate its facilities. As part of the cost of operating these facilities, DOE can reimburse its contractors for the litigation costs associated with cases brought against them. Each year the department spends millions of dollars in such reimbursements. For the most part, litigation expenses involve the costs of outside counsel and resulting judgments and settlements for a variety of types of cases, such as equal employment opportunity, radiation and/or toxic exposure, personal injury, wrongful termination of employment, and whistleblower protections. You asked us to study the extent to which DOE reimburses its contractors' litigation costs and the process for doing so. As agreed with your staff, we obtained information on (1) how much DOE spends to reimburse litigation costs for its contractors, (2) what major criteria DOE uses to reimburse its contractors for litigation costs and how it implements these criteria, (3) what major criteria the Department of Defense and the National Aeronautics and Space Administration use to reimburse their contractors for litigation costs, (4) the extent to which a state university that is a DOE contractor has a valid immunity defense to a lawsuit, and (5) the extent to which state universities that are DOE contractors have invoked immunity as a defense. We provided your staff with a formal briefing on our findings on October 16, 2003. (See encl. I.) This report presents the results of that briefing. In summary, we found the following: * DOE reimbursed contractors for $330.5 million in litigation costs associated with 1,895 cases from fiscal year 1998 through March 2003, including $249.4 million for litigation costs and $81.1 million for judgments and settlements. During the same period, DOE estimates that contractors spent about $12 million without being reimbursed. GAO-04-148R Contractor Litigation Costs

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