The Energy Department has failed to operate "effectively and efficiently" in administering billions of dollars in contracts for goods and services with private contracting companies, according to a congressional report.

A General Accounting Office review of 124 DOE contracts issued during fiscal year 1978 found the department failed "to adhere to sound procurement practices." Further, the GAO said that the agency, with 20,000 employes, had not taken action to ensure that "competition for department contracts is maximized."

The DOE issues more private contracts than any other non-defense agency in the federal government and during fiscal 1978 issued $8.5 billion in contracts.

Since its formation in 1977, DOE has drawn continuing fire from Congress on its contracting practices.

During a recent Senate hearing, for example, Sen. David H. Pryor (D-Ark.) told recently named Energy Secretary Charles Duncan that "the department isbecoming a mere laundering operation" for so-called "beltway bandits" -- companies that depend almost soley on government contracts.

The 18-page GAO report, issued last week, said that of 124 contracts examined, 38 were awarded because only one company had the needed capabilities. eGAO auditors, however, concluded that 29 of these contracts "did not adequately document" the sole-source criteria.

The congressional auditing arm also found that, in some cases, DOE appeared to be contracting out its policy-making functions, offering "the potential" for the "contractor to determine energy policy."

GAO also questioned the need for some of the Energy Department's contracts. In one instance, according to the report, the agency contracted to have a private company indentify the department's responsibilities "for dealing with an energy emergency."