Johnson Space Center Procurement

GAO has identified NASA's contract management practices as one of 16 government areas highly vulnerable to waste, fraud, and abuse. The Johnson Space Center in Houston, Texas, has various internal controls over the management of computer contracts, grants, and purchase orders. Those used for paying contractors, however, put the Center at risk. Specifically, contracting officers and technical representatives at the Center do not link the receipt of products and services actually received against the cost vouchers that contractors submit for payment. Although the Center relies on a series of internal controls to ensure that contractors deliver high-quality goods and services, none of these mechanisms is a substitute for periodic linking of contractors' cost vouchers with products actually received. As a result, it is possible that the Center may be billed--and end up paying--for goods and services never received.

GAO found that: (1) while existing controls were sufficient to monitor contractor performance, JSC management directives did not require end users to verify that contractors had actually delivered the goods and services being billed before authorizing contractor payments; (2) contracting officers and financial management officials relied on the Defense Contract Audit Agency (DCAA) for assurance that goods and services were actually provided, and that contractors' cost vouchers had been adequately reviewed and approved for payment; (3) although DCAA reviewed and approved cost vouchers, it was not required to link performance to vouchers; (4) DCAA must review vouchers in 5 or fewer days, and therefore, only checked them for accuracy and conformity before provisionally approving them for payment; (5) DCAA auditors could catch unsupported, unreasonable, or unallowable costs during incurred cost audits, but did those audits several years after the contracts expired; (6) JSC procurement officials believed that their management controls were adequate, and that linking vouchers to receipts would lead to greater costs and administrative burdens; (7) one high JSC procurement official conceded that it probably could not prevent or be able to detect fraudulent acts; and (8) federal regulations require agencies to match requisition, purchase orders, receiving and authorization documents, and invoices before payment.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone: